AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2025

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported a challenging second fiscal quarter ended March 31, 2025, with a net loss of $1.6 million and diluted loss per share of $2.58. The company's wholesale distribution segment generated revenues of $607.6 million with operating income of $2.8 million, while the retail health food segment reported revenues of $11.9 million and operating income of $0.4 million.

The company faces headwinds from lagging consumer behavior, discretionary spending, and cumulative inflationary pressures affecting operating expenses across product costs, labor, employee benefits, equipment, and insurance. AMCON has become the third largest Convenience Distributor in the United States by territory covered and is actively seeking strategic acquisition opportunities.

The company is investing in a new 250,000 square foot distribution facility in Colorado City, Colorado, to support customer growth in the Intermountain Region. As of March 31, 2025, AMCON's shareholders' equity stood at $111.4 million.

Positive

• Position as third largest Convenience Distributor in US by territory covered
• Stable shareholders' equity of $111.4 million
• Strategic expansion with new 250,000 sq ft distribution facility in Colorado

Negative

• Net loss of $1.6 million in Q2 2025
• Diluted loss per share of $2.58
• Declining consumer discretionary spending
• Rising operating costs due to inflation
• Challenging operating environment in convenience retail sector

Insights

Financial Analyst

AMCON reports significant Q2 loss of $1.6M amid challenging retail environment and inflationary pressures impacting distribution operations.

AMCON Distributing's Q2 2025 financial report reveals a substantial shift from profitability to loss. The company posted a $1.6 million net loss ($2.58 per diluted share), compared to a $539,543 profit ($0.89 per share) in the same quarter last year. This represents a concerning reversal despite revenue growth to $619.5 million from $601.9 million year-over-year.

Operating income plummeted by 86% to just $461,905 from $3.34 million in Q2 2024, indicating severe margin compression. The sharp decline in profitability stems from two primary factors: escalating operating costs and changing consumer behavior. SG&A expenses increased by 9.4% to $40.1 million, significantly outpacing the 2.9% revenue growth.

The segment breakdown reveals the wholesale distribution unit generated $607.6 million in revenue with $2.8 million in operating income, while the retail health food segment contributed $11.9 million in revenue with $0.4 million in operating income. This distribution-heavy business model is particularly vulnerable to the inflationary cost pressures specifically mentioned by management.

Balance sheet metrics show shareholders' equity at $111.4 million, relatively stable from the previous quarter. However, inventory levels increased to $160.5 million from $144.3 million at fiscal year-end (September 2024), potentially indicating slowing product turnover. Credit facility utilization rose to $142.3 million from $121.3 million, representing increased leverage that could impact future financial flexibility.

Management's focus on acquisition integration, particularly the 250,000 square foot Colorado facility, suggests the company is pursuing scale to combat margin pressures. As the self-reported third-largest convenience distributor by territory in the US, AMCON is attempting to leverage its size to weather current operational challenges, but these Q2 results indicate the strategy has yet to yield financial improvements.

Distribution Industry Specialist

AMCON faces severe margin compression in convenience distribution amid rising costs and weak consumer spending despite strategic expansion efforts.

The convenience distribution sector is experiencing a profound margin squeeze, and AMCON's Q2 results exemplify this industry-wide challenge. The company's operating margin collapsed to a mere 0.07% in Q2 2025, down from 0.56% in the comparable period. This compression occurred despite the company's strategic positioning as the third-largest convenience distributor by geographic coverage in the United States.

What's particularly telling is the dichotomy between revenue growth and profitability. While sales increased by 2.9%, the company swung to a significant loss, highlighting the structural challenges facing distributors. The operational leverage that typically benefits distributors is working in reverse - fixed costs are rising faster than revenues can compensate.

AMCON's product mix shift is worth noting. The company is aggressively pursuing foodservice expansion, evidenced by management's emphasis on proprietary foodservice programs targeting competition with quick-service restaurants. This strategic pivot makes sense in the current environment as foodservice typically offers better margins than traditional convenience items like tobacco and packaged goods, which face pricing pressure and declining unit volumes.

The industry consolidation mentioned by management is a direct response to these margin pressures. Scale has become essential for survival as smaller distributors struggle with rising labor, transportation, and compliance costs. AMCON's acquisition strategy appears aligned with this trend, but the integration costs are currently outweighing the synergistic benefits.

The inventory buildup to $160.5 million (up 11.3% from September 2024) is concerning for a distribution business, as it suggests either softening demand or supply chain disruptions. The corresponding increase in credit facility usage indicates AMCON is financing this inventory expansion, creating potential working capital challenges if inventory turns don't improve. For convenience distributors operating on razor-thin margins, efficient inventory management is crucial for financial health, and these metrics suggest operational inefficiencies that must be addressed.

OMAHA, Neb.--(BUSINESS WIRE)-- AMCON Distributing Company (“AMCON” or “the Company”) (NYSE American: DIT), an Omaha, Nebraska based Convenience and Foodservice Distributor, announces fully diluted loss per share of $2.58 on a net loss available to common shareholders of $1.6 million for its second fiscal quarter ended March 31, 2025.

“The convenience retailing sector which we serve continues to experience a challenging operating environment with consumer behavior and discretionary spending lagging. At the same time, the cost structures for Convenience Distributors have been impacted by the cumulative impact of inflation over a multi-year period. These inflationary pressures have resulted in higher operating expenses in areas such as product costs, labor and employee benefits, equipment, and insurance, and in additional consolidation across our entire industry. Our management team is integrating our recent acquisitions and new facilities in order to provide our customer base AMCON’s industry leading suite of programs and services,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We continue to actively seek strategic acquisition opportunities for Convenience and Foodservice Distributors, and their families, who want to align with our customer focused approach philosophy and further the legacy of their enterprises.”

“The system integration work we are implementing across our organization, which has now become the third largest Convenience Distributor in the United States measured by territory covered, provides the foundational support for our operating philosophy centered on a superior level of customer service. Our customer-centric approach is particularly helpful in challenging weather conditions as we ensure that AMCON’s retail partners receive a consistent and timely flow of goods and services. As we grow, our customer base has been increasingly enthusiastic about our integrated state of the art advertising, design, print and electronic display programs that we believe provide our customers a competitive edge,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer continued, “Foodservice continues to be a strategic focus. We offer a breadth and depth of proprietary foodservice programs and associated store level merchandising that is unparalleled in the convenience distribution industry. We now have the capability to offer turn-key solutions that will enable our retail partners the ability to compete head-on with the Quick Service Restaurant industry.”

For the fiscal quarter ended March 2025, the wholesale distribution segment reported revenues of $607.6 million and operating income of $2.8 million and the retail health food segment reported revenues of $11.9 million and operating income of $0.4 million.

“We continue our relentless daily focus on managing the Company’s balance sheet and maximizing our liquidity position. At March 31, 2025, our shareholders’ equity was $111.4 million,” said Charles J. Schmaderer, AMCON’s Chief Financial Officer. Mr. Schmaderer also added, “We are investing capital to develop our recently acquired 250,000 square foot distribution facility in Colorado City, Colorado, which will support our customers’ growth initiatives in the Intermountain Region.”

AMCON, and its subsidiaries Team Sledd, LLC and Henry’s Foods, Inc., is a leading Convenience and Foodservice Distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products with fourteen (14) distribution centers in Colorado, Idaho, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. Through its Healthy Edge Retail Group, AMCON operates fifteen (15) health and natural product retail stores in the Midwest and Florida.

This news release contains forward-looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. A number of factors could affect the future results of the Company and could cause those results to differ materially from those expressed in the Company's forward-looking statements including, without limitation, availability of sufficient cash resources to conduct its business and meet its capital expenditures needs and the other factors described under Item 1.A. of the Company’s Annual Report on Form 10-K. Moreover, past financial performance should not be considered a reliable indicator of future performance. Accordingly, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements.

Visit AMCON Distributing Company's web site at: www.amcon.com

AMCON Distributing Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
		March				September
		2025				2024
		(Unaudited)
ASSETS
Current assets:
Cash		$	685,854			$	672,788
Accounts receivable, less allowance for credit losses of $2.2 million at March 2025 and $2.3 million at September 2024			65,081,021				70,653,907
Inventories, net			160,544,902				144,254,843
Income taxes receivable			338,291				718,645
Prepaid expenses and other current assets			13,011,905				12,765,088
Total current assets			239,661,973				229,065,271
Property and equipment, net			110,596,212				106,049,061
Operating lease right-of-use assets, net			28,485,790				25,514,731
Goodwill			5,778,325				5,778,325
Other intangible assets, net			4,478,383				4,747,234
Other assets			3,003,354				2,952,688
Total assets		$	392,004,037			$	374,107,310
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	57,221,231			$	54,498,225
Accrued expenses			14,807,437				15,802,727
Accrued wages, salaries and bonuses			4,821,368				8,989,355
Current operating lease liabilities			7,679,960				7,036,751
Current maturities of long-term debt			5,314,657				5,202,443
Current mandatorily redeemable non-controlling interest			1,812,558				1,703,604
Total current liabilities			91,657,211				93,233,105
Credit facilities			142,291,571				121,272,004
Deferred income tax liability, net			3,802,644				4,374,316
Long-term operating lease liabilities			21,060,350				18,770,001
Long-term debt, less current maturities			13,823,014				16,562,908
Mandatorily redeemable non-controlling interest, less current portion			6,866,610				6,507,896
Other long-term liabilities			1,151,765				1,657,295
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 645,462 shares outstanding at March 2025 and 630,362 shares outstanding at September 2024			9,799				9,648
Additional paid-in capital			35,715,308				34,439,735
Retained earnings			106,897,928				108,552,565
Treasury stock at cost			(31,272,163	)			(31,272,163	)
Total shareholders’ equity			111,350,872				111,729,785
Total liabilities and shareholders’ equity		$	392,004,037			$	374,107,310

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
		For the three months ended March								For the six months ended March
		2025				2024				2025				2024
Sales (including excise taxes of $126.1 and $127.4 million, and $269.5 and $265.5 million, respectively)		$	619,503,087			$	601,877,306			$	1,330,776,344			$	1,246,836,380
Cost of sales			576,475,202				559,566,439				1,240,854,907				1,161,224,591
Gross profit			43,027,885				42,310,867				89,921,437				85,611,789
Selling, general and administrative expenses			40,107,953				36,677,814				80,695,584				73,936,491
Depreciation and amortization			2,458,027				2,289,390				5,093,628				4,508,558
			42,565,980				38,967,204				85,789,212				78,445,049
Operating income			461,905				3,343,663				4,132,225				7,166,740
Other expense (income):
Interest expense			2,266,407				2,247,737				5,113,028				4,559,250
Change in fair value of mandatorily redeemable non-controlling interest			272,856				134,389				467,668				334,133
Other (income), net			(56,398	)			(191,006	)			(167,930	)			(754,147	)
			2,482,865				2,191,120				5,412,766				4,139,236
Income (loss) from operations before income taxes			(2,020,960	)			1,152,543				(1,280,541	)			3,027,504
Income tax expense (benefit)			(431,000	)			613,000				(39,000	)			1,417,000
Net income (loss) available to common shareholders		$	(1,589,960	)		$	539,543			$	(1,241,541	)		$	1,610,504
Basic earnings (loss) per share available to common shareholders		$	(2.58	)		$	0.90			$	(2.02	)		$	2.69
Diluted earnings (loss) per share available to common shareholders		$	(2.58	)		$	0.89			$	(2.02	)		$	2.66
Basic weighted average shares outstanding			615,261				600,161				613,270				597,879
Diluted weighted average shares outstanding			615,261				608,029				613,270				605,917
Dividends paid per common share		$	0.46			$	0.46			$	0.64			$	0.64

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
THREE MONTHS ENDED MARCH 2024
Balance, January 1, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	32,521,091		$	105,627,432			$	106,886,008
Dividends on common stock, $0.18 per share		—			—		—				—				—			(113,465	)			(113,465	)
Compensation expense related to equity-based awards		—			—		—				—				639,548			—				639,548
Net income available to common shareholders		—			—		—				—				—			539,543				539,543
Balance, March 31, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	33,160,639		$	106,053,510			$	107,951,634
THREE MONTHS ENDED MARCH 2025
Balance, January 1, 2025		980,045		$	9,799		(334,583	)		$	(31,272,163	)		$	35,077,446		$	108,604,071			$	112,419,153
Dividends on common stock, $0.18 per share		—			—		—				—				—			(116,183	)			(116,183	)
Compensation expense related to equity-based awards		—			—		—				—				637,862			—				637,862
Net loss available to common shareholders		—			—		—				—				—			(1,589,960	)			(1,589,960	)
Balance, March 31, 2025		980,045		$	9,799		(334,583	)		$	(31,272,163	)		$	35,715,308		$	106,897,928			$	111,350,872

														Additional
		Common Stock					Treasury Stock							Paid-in			Retained
		Shares		Amount			Shares			Amount				Capital			Earnings				Total
SIX MONTHS ENDED MARCH 2024
Balance, October 1, 2023		943,272		$	9,431		(334,583	)		$	(31,272,163	)		$	30,585,388		$	104,846,438			$	104,169,094
Dividends on common stock, $0.64 per share		—			—		—				—				—			(403,432	)			(403,432	)
Compensation expense and issuance of stock in connection with equity-based awards		21,673			217		—				—				2,575,251			—				2,575,468
Net income available to common shareholders		—			—		—				—				—			1,610,504				1,610,504
Balance, March 31, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	33,160,639		$	106,053,510			$	107,951,634
SIX MONTHS ENDED MARCH 2025
Balance, October 1, 2024		964,945		$	9,648		(334,583	)		$	(31,272,163	)		$	34,439,735		$	108,552,565			$	111,729,785
Dividends on common stock, $0.64 per share		—			—		—				—				—			(413,096	)			(413,096	)
Compensation expense and issuance of stock in connection with equity-based awards		15,100			151		—				—				1,275,573			—				1,275,724
Net loss available to common shareholders		—			—		—				—				—			(1,241,541	)			(1,241,541	)
Balance, March 31, 2025		980,045		$	9,799		(334,583	)		$	(31,272,163	)		$	35,715,308		$	106,897,928			$	111,350,872

AMCON Distributing Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
		March				March
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) available to common shareholders		$	(1,241,541	)		$	1,610,504
Adjustments to reconcile net income (loss) available to common shareholders to net cash flows from (used in) operating activities:
Depreciation			4,824,777				4,239,707
Amortization			268,851				268,851
(Gain) loss on sales of property and equipment			(44,229	)			(105,505	)
Equity-based compensation			1,275,724				1,210,685
Deferred income taxes			(571,672	)			153,444
Provision for credit losses			(164,616	)			(133,707	)
Inventory allowance			32,688				22,413
Change in fair value of contingent consideration			(1,453,452	)			—
Change in fair value of mandatorily redeemable non-controlling interest			467,668				334,133
Changes in assets and liabilities, net of effects of business combinations:
Accounts receivable			5,749,877				4,130,987
Inventories			(13,324,448	)			37,236,124
Prepaid and other current assets			(245,028	)			(1,680,438	)
Other assets			(50,666	)			104,191
Accounts payable			2,898,936				9,475,057
Accrued expenses and accrued wages, salaries and bonuses			(4,490,508	)			(4,402,600	)
Other long-term liabilities			237,652				283,553
Income taxes payable and receivable			380,354				1,009,754
Net cash flows from (used in) operating activities			(5,449,633	)			53,757,153
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(6,451,773	)			(11,084,390	)
Proceeds from sales of property and equipment			67,208				234,278
Acquisition of Arrowrock Supply			(6,131,527	)			—
Net cash flows from (used in) investing activities			(12,516,092	)			(10,850,112	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities			1,262,647,310				1,128,853,805
Repayments under revolving credit facilities			(1,241,627,743	)			(1,170,097,086	)
Principal payments on long-term debt			(2,627,680	)			(1,099,738	)
Dividends on common stock			(413,096	)			(403,432	)
Net cash flows from (used in) financing activities			17,978,791				(42,746,451	)
Net change in cash			13,066				160,590
Cash, beginning of period			672,788				790,931
Cash, end of period		$	685,854			$	951,521
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of amounts capitalized		$	5,215,092			$	4,568,790
Cash paid during the period for income taxes, net of refunds			151,318				194,902
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	841,018			$	167,913
Purchase of property financed with promissory note			—				8,000,000
Issuance of common stock in connection with the vesting of equity-based awards			—				1,296,372

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250418081279/en/

Charles J. Schmaderer

AMCON Distributing Company

Ph 402-331-3727

Source: AMCON Distributing Company

FAQ

What caused AMCON (DIT) to report a loss in Q2 2025?

AMCON reported a loss due to challenging operating environment, lagging consumer spending, and increased operating expenses from inflation affecting product costs, labor, employee benefits, equipment, and insurance.

What are AMCON's (DIT) revenue figures for Q2 2025?

The wholesale distribution segment reported revenues of $607.6 million with $2.8 million operating income, while retail health food segment had revenues of $11.9 million with $0.4 million operating income.

What expansion plans does AMCON (DIT) have for 2025?

AMCON is developing a new 250,000 square foot distribution facility in Colorado City, Colorado, to support customer growth in the Intermountain Region.

How much was AMCON's (DIT) Q2 2025 loss per share?

AMCON reported a diluted loss per share of $2.58 for the second fiscal quarter ended March 31, 2025.