AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2023

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported net income of $2.1 million, translating to fully diluted earnings per share of $3.49 for the second fiscal quarter ending March 31, 2023. The wholesale distribution segment achieved revenues of $573.6 million with an operating income of $8.9 million, while the retail health food segment generated revenues of $11.3 million and operating income of $0.2 million. Chairman Christopher H. Atayan highlighted the company’s commitment to customer service despite challenging weather conditions. Furthermore, President Andrew C. Plummer indicated that AMCON is integrating its recent acquisition of Henry’s Foods to expand its foodservice capabilities. The company maintains strong liquidity, closing the quarter with $97.1 million in consolidated shareholders’ equity.

Positive

• Net income of $2.1 million and earnings per share of $3.49.
• Wholesale segment revenues of $573.6 million and operating income of $8.9 million.
• Integration of Henry’s Foods enhances foodservice capabilities.
• Strong liquidity with $97.1 million in consolidated shareholders' equity.

Negative

• None.

OMAHA, Neb.--(BUSINESS WIRE)-- AMCON Distributing Company (“AMCON” or “Company”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $3.49 on net income available to common shareholders of $2.1 million for its second fiscal quarter ended March 31, 2023.

“AMCON’s leadership position in Convenience Distribution is a function of our relentless focus on customer service. We faced historic levels of severe weather in the markets we serve during the quarter, and our operations teams made the extra effort necessary to ensure continuity of service across our customer base,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for convenience and foodservice distributors who want to align with the Company’s growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $573.6 million and operating income of $8.9 million for the second quarter of fiscal 2023. The retail health food segment reported revenues of $11.3 million and operating income of $0.2 million for the second quarter of fiscal 2023.

“As a result of our recent acquisition of Henry’s Foods, we have begun the integration of an expanded foodservice platform now available to the Company and our customer base,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “Foodservice and our technology suite of services are strategic focus areas. Our customer base is growing, and we continue to search for facilities in, and adjacent to our current service area.”

“We are actively managing our working capital position to take advantage of strategic opportunities in the marketplace,” said Charles J. Schmaderer, AMCON’s Chief Financial Officer. Mr. Schmaderer further noted, “As a core operating principle, we maintain high levels of liquidity and ended the quarter with $97.1 million of consolidated shareholders’ equity.”

AMCON is a leading convenience distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products servicing approximately 6,800 retail stores through distribution centers in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. AMCON, through its Healthy Edge Retail Group, also operates eighteen (18) 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 Condensed Consolidated Balance Sheets March 31, 2023 and September 30, 2022
		March				September
			2023				2022
		(Unaudited)
ASSETS
Current assets:
Cash		$	781,761			$	431,576
Accounts receivable, less allowance for doubtful accounts of $2.1 million at March 2023 and $2.5 million September 2022			65,886,561				62,367,888
Inventories, net			130,878,576				134,654,637
Income taxes receivable			879,122				819,595
Prepaid expenses and other current assets			13,296,012				12,702,084
Total current assets			211,722,032				210,975,780
Property and equipment, net			75,366,996				48,085,520
Operating lease right-of-use assets, net			18,913,326				19,941,009
Goodwill			5,871,659				5,277,950
Other intangible assets, net			5,553,786				2,093,113
Other assets			3,026,951				2,751,155
Total assets		$	320,454,750			$	289,124,527
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	50,460,856			$	39,962,363
Accrued expenses			15,204,328				14,446,210
Accrued wages, salaries and bonuses			5,070,513				7,811,207
Current operating lease liabilities			6,496,935				6,454,473
Current maturities of long-term debt			2,758,738				1,595,309
Current mandatorily redeemable non-controlling interest			1,812,558				1,712,095
Total current liabilities			81,803,928				71,981,657
Credit facilities			103,064,246				91,262,438
Deferred income tax liability, net			3,318,290				2,328,588
Long-term operating lease liabilities			12,743,653				13,787,721
Long-term debt, less current maturities			12,715,890				7,384,260
Mandatorily redeemable non-controlling interest, less current portion			9,512,111				9,446,460
Other long-term liabilities			220,864				103,968
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 611,052 shares outstanding at March 2023 and 584,789 shares outstanding at September 2022			9,431				9,168
Additional paid-in capital			29,766,566				26,903,201
Retained earnings			98,167,058				96,784,353
Treasury stock at cost			(30,867,287	)			(30,867,287	)
Total shareholders’ equity			97,075,768				92,829,435
Total liabilities and shareholders’ equity		$	320,454,750			$	289,124,527

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and six months ended March 31, 2023 and 2022
		For the three months ended March								For the six months ended March
			2023				2022				2023				2022
Sales (including excise taxes of $130.9 and $89.1 million, and $261.3 million and $186.2 million, respectively)		$	584,993,848			$	391,888,192			$	1,150,983,356			$	814,459,469
Cost of sales			543,861,287				365,211,270				1,074,881,211				760,849,885
Gross profit			41,132,561				26,676,922				76,102,145				53,609,584
Selling, general and administrative expenses			33,996,988				21,915,351				62,376,176				44,306,090
Depreciation and amortization			1,807,753				818,222				2,878,639				1,602,467
			35,804,741				22,733,573				65,254,815				45,908,557
Operating income			5,327,820				3,943,349				10,847,330				7,701,027
Other expense (income):
Interest expense			2,169,541				244,920				3,863,698				567,018
Change in fair value of mandatorily redeemable non-controlling interest			221,030				—				166,114				—
Other (income), net			(173,725	)			(60,958	)			(227,257	)			(101,068	)
			2,216,846				183,962				3,802,555				465,950
Income from operations before income taxes			3,110,974				3,759,387				7,044,775				7,235,077
Income tax expense			1,045,400				1,345,000				2,350,200				2,590,000
Equity method investment earnings, net of tax			—				591,795				—				1,362,161
Net income available to common shareholders		$	2,065,574			$	3,006,182			$	4,694,575			$	6,007,238
Basic earnings per share available to common shareholders		$	3.53			$	5.29			$	8.04			$	10.62
Diluted earnings per share available to common shareholders		$	3.49			$	5.19			$	7.94			$	10.33
Basic weighted average shares outstanding			585,885				567,889				583,725				565,694
Diluted weighted average shares outstanding			592,448				578,751				591,249				581,328
Dividends paid per common share		$	5.18			$	0.18			$	5.36			$	5.36

 

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and six months ended March 31, 2023 and 2022
																Additional
		Common Stock							Treasury Stock							Paid-in				Retained
		Shares			Amount				Shares			Amount				Capital				Earnings				Total
THREE MONTHS ENDED MARCH 2022
Balance, January 1, 2022		915,009			$	9,148			(332,220	)		$	(30,867,287	)		$	26,999,735			$	83,438,578			$	79,580,174
Dividends on common stock, $0.18 per share		—				—			—				—				—				(108,235	)			(108,235	)
Compensation expense and settlement of equity-based awards		2,000				20			—				—				(444,689	)			—				(444,669	)
Net income available to common shareholders		—				—			—				—				—				3,006,182				3,006,182
Balance, March 31, 2022		917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,555,046			$	86,336,525			$	82,033,452
THREE MONTHS ENDED MARCH 2023
Balance, January 1, 2023		943,272			$	9,431			(332,220	)		$	(30,867,287	)		$	29,357,154			$	96,212,704			$	94,712,002
Dividends on common stock, $0.18 per share		—				—			—				—				—				(111,220	)			(111,220	)
Compensation expense related to equity-based awards		—				—			—				—				409,412				—				409,412
Net income available to common shareholders		—				—			—				—				—				2,065,574				2,065,574
Balance, March 31, 2023		943,272			$	9,431			(332,220	)		$	(30,867,287	)		$	29,766,566			$	98,167,058			$	97,075,768

																Additional
		Common Stock							Treasury Stock							Paid-in				Retained
		Shares			Amount				Shares			Amount				Capital				Earnings				Total
SIX MONTHS ENDED MARCH 2022
Balance, October 1, 2021		883,589			$	8,834			(332,220	)		$	(30,867,287	)		$	24,918,781			$	83,552,298			$	77,612,626
Dividends on common stock, $5.36 per share		—				—			—				—				—				(3,223,011	)			(3,223,011	)
Compensation expense and settlement of equity-based awards		33,420				334			—				—				1,636,265				—				1,636,599
Net income available to common shareholders		—				—			—				—				—				6,007,238				6,007,238
Balance, March 31, 2022		917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,555,046			$	86,336,525			$	82,033,452
SIX MONTHS ENDED MARCH 2023
Balance, October 1, 2022		917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,903,201			$	96,784,353			$	92,829,435
Dividends on common stock, $5.36 per share		—				—			—				—				—				(3,311,870	)			(3,311,870	)
Compensation expense and settlement of equity-based awards		26,263				263			—				—				2,863,365				—				2,863,628
Net income available to common shareholders		—				—			—				—				—				4,694,575				4,694,575
Balance, March 31, 2023		943,272			$	9,431			(332,220	)		$	(30,867,287	)		$	29,766,566			$	98,167,058			$	97,075,768

 

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the six months ended March 31, 2023 and 2022
		March				March
			2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders		$	4,694,575			$	6,007,238
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation			2,732,312				1,602,467
Amortization			146,327				—
Equity method investment earnings, net of tax			—				(1,362,161	)
(Gain) loss on sales of property and equipment			(133,159	)			(76,220	)
Equity-based compensation			1,061,383				1,208,655
Deferred income taxes			989,702				1,099,199
Provision for losses on doubtful accounts			(378,302	)			(3,000	)
Inventory allowance			(6,947	)			155,534
Change in fair value of mandatorily redeemable non-controlling interest			166,114				—
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable			5,097,281				2,290,562
Inventories			19,843,973				4,807,756
Prepaid and other current assets			(411,185	)			(651,979	)
Equity method investment distributions			—				744,118
Other assets			(275,796	)			(79,301	)
Accounts payable			10,457,273				1,465,370
Accrued expenses and accrued wages, salaries and bonuses			(1,094,009	)			(700,748	)
Other long-term liabilities			116,896				(721,318	)
Income taxes payable and receivable			(59,527	)			(1,990,394	)
Net cash flows from (used in) operating activities			42,946,911				13,795,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(2,760,586	)			(974,424	)
Proceeds from sales of property and equipment			137,500				79,000
Principal payment received on note receivable			—				175,000
Acquisition of Henry's			(54,958,637	)			—
Net cash flows from (used in) investing activities			(57,581,723	)			(720,424	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities			1,184,888,842				819,125,190
Repayments under revolving credit facilities			(1,173,087,034	)			(827,584,508	)
Proceeds from borrowings on long-term debt			7,000,000				—
Principal payments on long-term debt			(504,941	)			(277,902	)
Proceeds from exercise of stock options			—				173,590
Dividends on common stock			(3,311,870	)			(3,223,011	)
Settlement and withholdings of equity-based awards			—				(1,280,749	)
Net cash flows from (used in) financing activities			14,984,997				(13,067,390	)
Net change in cash			350,185				7,964
Cash, beginning of period			431,576				519,591
Cash, end of period		$	781,761			$	527,555
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	3,527,737			$	582,394
Cash paid during the period for income taxes, net of refunds			1,419,354				3,481,196
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	132,876			$	29,047
Issuance of common stock in connection with the vesting and exercise of equity-based awards			2,044,805				2,280,783

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230418005904/en/

Christopher H. Atayan

AMCON Distributing Company

Ph 402-331-3727

Source: AMCON Distributing Company

FAQ

What were AMCON's earnings per share for Q2 2023?

AMCON reported fully diluted earnings per share of $3.49 for the second fiscal quarter of 2023.

How much revenue did AMCON's wholesale distribution segment generate in Q2 2023?

The wholesale distribution segment reported revenues of $573.6 million for the second quarter of fiscal 2023.

What is the significance of AMCON's acquisition of Henry's Foods?

The acquisition of Henry’s Foods allows AMCON to expand its foodservice platform and enhance service capabilities.

What was AMCON's net income for the second quarter of fiscal 2023?

AMCON's net income for the second quarter of fiscal 2023 was $2.1 million.

What is AMCON's current liquidity position?

AMCON ended the quarter with $97.1 million in consolidated shareholders' equity, indicating strong liquidity.