AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2021

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported fully diluted earnings per share of $4.33 and net income of $2.4 million for Q2 of fiscal 2021, ending March 31. The wholesale distribution segment earned revenues of $366.2 million and operating income of $4.4 million, while the retail health food segment generated $12.3 million in revenues and $0.7 million in operating income. The company remains focused on growth through acquisitions and maintaining high liquidity levels, concluding the quarter with $67.8 million in shareholders' equity.

Positive

• Fully diluted earnings per share of $4.33.
• Net income of $2.4 million for the second quarter.
• Wholesale segment revenues of $366.2 million.
• Operating income of $4.4 million reported in the wholesale segment.
• Retail health food segment revenues reached $12.3 million.
• Shareholders' equity of $67.8 million.
• Ongoing search for acquisitions to enhance growth.

Negative

• Operating income of $0.7 million in the retail health food segment may indicate limited profitability.

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $4.33 on net income available to common shareholders of $2.4 million for its second fiscal quarter ended March 31, 2021.

“We are pleased with our results for the second fiscal quarter. AMCON takes a long-term strategic view to the operation of our business. Providing our valued partners with the highest level of service guides our focus on a daily basis. Our outstanding team of associates work tirelessly to provide value to the customers and communities we serve,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for distributors who want to align with our growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $366.2 million and operating income of $4.4 million for the second quarter of fiscal 2021. The retail health food segment reported revenues of $12.3 million and operating income of $0.7 million for the second quarter of fiscal 2021.

“Supply chain management is an essential element of servicing our customers in this challenging environment. Our proprietary technology platforms and state-of-the-art foodservice programs are tools we use to enhance our customers’ profitability. Our customer base continues to grow geographically and AMCON is deploying the capital and human resources necessary to support this growth in a collaborative fashion,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “We are actively searching for facilities in, and adjacent to, the geographic markets we serve.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “AMCON is pleased with the progress of our strategic investment in Team Sledd, LLC. We ended the quarter with $67.8 million of shareholders’ equity and continue to relentlessly focus on maintaining high levels of liquidity in our business to support operations and our growth initiatives.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. Throughout the pandemic, our management team has worked diligently to offer a continuous and safe shopping experience for customers. Our long term relationship with the organic/natural products vendor community has enabled our stores to meet the demands of our customers for total wellness solutions. Our strategy is to offer a broad selection of the highest quality organic and natural merchandise available supported by a high degree of customer service not found at other big box retailers within our industry.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and chilled foods, and health and beauty care products with locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota and Tennessee. AMCON also operates twenty (20) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Akin’s Natural Foods www.akins.com in its Midwest market, and Chamberlin's Natural Foods www.chamberlins.com and Earth Origins Market www.earthoriginsmarket.com in its Florida market.

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, 2021 and September 30, 2020
		March				September
		2021				2020
		(Unaudited)
ASSETS
Current assets:
Cash		$	616,109			$	661,195
Accounts receivable, less allowance for doubtful accounts of $0.9 million at March 2021 and September 2020			32,883,402				34,278,429
Inventories, net			81,088,400				98,971,773
Income taxes receivable			85,705				—
Prepaid and other current assets			6,188,097				2,091,645
Total current assets			120,861,713				136,003,042
Property and equipment, net			16,670,297				17,497,274
Operating lease right-of-use assets, net			17,588,664				18,936,126
Note receivable			3,500,000				3,500,000
Goodwill			4,436,950				4,436,950
Other intangible assets, net			500,000				500,000
Equity method investment			7,606,925				6,744,095
Other assets			360,459				383,786
Total assets		$	171,525,008			$	188,001,273
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	22,553,918			$	22,108,299
Accrued expenses			8,737,907				8,306,160
Accrued wages, salaries and bonuses			3,656,777				4,761,020
Income taxes payable			—				567,408
Current operating lease liabilities			5,744,143				5,607,098
Current maturities of long-term debt			516,189				516,850
Total current liabilities			41,208,934				41,866,835
Credit facility			42,109,177				61,971,682
Deferred income tax liability, net			1,854,823				1,806,575
Long-term operating lease liabilities			12,438,764				14,028,606
Long-term debt, less current maturities			5,371,889				2,608,794
Other long-term liabilities			757,387				927,241
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 551,369 shares outstanding at March 2021 and 537,715 shares outstanding at September 2020			8,834				8,697
Additional paid-in capital			24,917,765				24,282,058
Retained earnings			73,724,722				71,362,334
Treasury stock at cost			(30,867,287	)			(30,861,549	)
Total shareholders’ equity			67,784,034				64,791,540
Total liabilities and shareholders’ equity		$	171,525,008			$	188,001,273

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and six months ended March 31, 2021 and 2020
		For the three months ended March								For the six months ended March
		2021				2020				2021				2020
Sales (including excise taxes of $92.0 million and $87.5 million, and $192.5 million and $181.5 million, respectively)		$	378,513,490			$	337,886,516			$	783,258,263			$	697,987,619
Cost of sales			355,540,704				317,193,063				736,823,498				656,449,455
Gross profit			22,972,786				20,693,453				46,434,765				41,538,164
Selling, general and administrative expenses			19,022,167				18,512,890				37,621,983				37,465,626
Depreciation and amortization			779,925				790,901				1,554,210				1,516,361
			19,802,092				19,303,791				39,176,193				38,981,987
Operating income			3,170,694				1,389,662				7,258,572				2,556,177
Other expense (income):
Interest expense			310,543				387,263				686,973				859,686
Other (income), net			(84,265	)			(29,920	)			(126,088	)			(36,697	)
			226,278				357,343				560,885				822,989
Income from operations before income taxes			2,944,416				1,032,319				6,697,687				1,733,188
Income tax expense			829,000				333,000				1,840,000				582,000
Equity method investment earnings, net of tax			313,492				—				648,831				—
Net income available to common shareholders		$	2,428,908			$	699,319			$	5,506,518			$	1,151,188
Basic earnings per share available to common shareholders		$	4.41			$	1.24			$	10.02			$	2.04
Diluted earnings per share available to common shareholders		$	4.33			$	1.22			$	9.87			$	2.02
Basic weighted average shares outstanding			551,369				565,697				549,729				564,129
Diluted weighted average shares outstanding			560,941				571,852				557,741				569,856
Dividends declared and paid per common share		$	5.18			$	0.46			$	5.36			$	0.64

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and six months ended March 31, 2021 and 2020
														Additional
		Common Stock					Treasury Stock							Paid-in				Retained
		Shares		Amount			Shares			Amount				Capital				Earnings				Total
THREE MONTHS ENDED MARCH 2020
Balance, January 1, 2020		869,367		$	8,692		(303,534	)		$	(28,840,011	)		$	24,192,954			$	66,592,637			$	61,954,272
Dividends on common stock, $0.18 per share		—			—		—				—				—				(107,056	)			(107,056	)
Compensation expense and issuance of stock in connection with equity-based awards		—			—		—				—				31,191				—				31,191
Repurchase of common stock		—			—		(307	)			(23,643	)			—				—				(23,643	)
Net income		—			—		—				—				—				699,319				699,319
Balance, March 31, 2020		869,367		$	8,692		(303,841	)		$	(28,863,654	)		$	24,224,145			$	67,184,900			$	62,554,083
THREE MONTHS ENDED MARCH 2021
Balance, January 1, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	25,007,239			$	71,401,400			$	65,550,186
Dividends on common stock, $0.18 per share		—			—		—				—				—				(105,586	)			(105,586	)
Compensation expense and issuance of stock in connection with equity-based awards		—			—		—				—				(89,474	)			—				(89,474	)
Repurchase of common stock		—			—		—				—				—				—				—
Net income		—			—		—				—				—				2,428,908				2,428,908
Balance, March 31, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,917,765			$	73,724,722			$	67,784,034
														Additional
		Common Stock					Treasury Stock							Paid-in				Retained
		Shares		Amount			Shares			Amount				Capital				Earnings				Total
SIX MONTHS ENDED MARCH 2020
Balance, October 1, 2019		856,039		$	8,561		(303,425	)		$	(28,831,855	)		$	23,165,639			$	66,414,397			$	60,756,742
Dividends on common stock, $0.64 per share		—			—		—				—				—				(380,685	)			(380,685	)
Compensation expense and issuance of stock in connection with equity-based awards		13,328			131		—				—				1,058,506				—				1,058,637
Repurchase of common stock		—			—		(416	)			(31,799	)			—				—				(31,799	)
Net income		—			—		—				—				—				1,151,188				1,151,188
Balance, March 31, 2020		869,367		$	8,692		(303,841	)		$	(28,863,654	)		$	24,224,145			$	67,184,900			$	62,554,083
SIX MONTHS ENDED MARCH 2021
Balance, October 1, 2020		869,867		$	8,697		(332,152	)		$	(30,861,549	)		$	24,282,058			$	71,362,334			$	64,791,540
Dividends on common stock, $5.36 per share		—			—		—				—				—				(3,144,130	)			(3,144,130	)
Compensation expense and issuance of stock in connection with equity-based awards		13,722			137		—				—				635,707				—				635,844
Repurchase of common stock		—			—		(68	)			(5,738	)			—				—				(5,738	)
Net income		—			—		—				—				—				5,506,518				5,506,518
Balance, March 31, 2021		883,589		$	8,834		(332,220	)		$	(30,867,287	)		$	24,917,765			$	73,724,722			$	67,784,034

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the six months ended March 31, 2021 and 2020
		March				March
		2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	5,506,518			$	1,151,188
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:
Depreciation			1,554,210				1,516,361
Equity method investment earnings, net of tax			(648,831	)			—
(Gain) loss on sales of property and equipment			(1,374	)			33,642
Equity-based compensation			833,624				446,114
Deferred income taxes			48,248				102,163
Provision for losses on doubtful accounts			5,000				390,000
Inventory allowance			110,769				55,746
Other			—				(42,011	)
Changes in assets and liabilities:
Accounts receivable			1,390,027				(3,535,875	)
Inventories			17,772,604				17,375,263
Prepaid and other current assets			(4,096,452	)			(100,883	)
Other assets			23,327				(133,074	)
Accounts payable			429,389				4,401,077
Accrued expenses and accrued wages, salaries and bonuses			(610,589	)			(1,432,939	)
Other long-term liabilities			(169,854	)			—
Income taxes payable and receivable			(867,112	)			178,013
Net cash flows from (used in) operating activities			21,279,504				20,404,785
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(720,567	)			(2,245,139	)
Proceeds from sales of property and equipment			10,938				—
Net cash flows from (used in) investing activities			(709,629	)			(2,245,139	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility			771,182,879				680,161,101
Repayments under revolving credit facility			(791,045,384	)			(697,319,735	)
Proceeds from borrowings on long-term debt			3,000,000				—
Principal payments on long-term debt			(237,566	)			(264,275	)
Repurchase of common stock			(5,738	)			(31,799	)
Dividends on common stock			(3,144,130	)			(380,685	)
Settlement and withholdings of equity-based awards			(365,022	)			—
Net cash flows from (used in) financing activities			(20,614,961	)			(17,835,393	)
Net change in cash			(45,086	)			324,253
Cash, beginning of period			661,195				337,704
Cash, end of period		$	616,109			$	661,957
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	690,134			$	927,322
Cash paid during the period for income taxes			2,658,865				301,824
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	16,230			$	6,583
Issuance of common stock in connection with the vesting and exercise of equity-based awards			949,812				990,653

 

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FAQ

What were AMCON's earnings per share for Q2 fiscal 2021?

AMCON reported fully diluted earnings per share of $4.33 for Q2 fiscal 2021.

What is AMCON's net income for the second quarter of fiscal 2021?

AMCON's net income for Q2 fiscal 2021 was $2.4 million.

How much revenue did AMCON's wholesale distribution segment generate in Q2 2021?

The wholesale distribution segment generated revenues of $366.2 million in Q2 2021.

What were the operating income figures for AMCON's retail health food segment?

The retail health food segment reported an operating income of $0.7 million for Q2 2021.

What is the current shareholders' equity for AMCON?

AMCON ended the quarter with shareholders' equity of $67.8 million.