AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2022

Rhea-AI Summary

AMCON Distributing Company (NYSE American: DIT) reported fully diluted earnings per share of $10.27, with a net income of $6.0 million for the third fiscal quarter ending June 30, 2022. The wholesale distribution segment generated $539.2 million in revenue, while the retail health food segment reported $11.4 million. The company acquired a controlling interest in Team Sledd, recording a $2.4 million gain, and expanded its revolving credit facility for strategic growth. AMCON ended the quarter with $99.1 million in consolidated shareholders’ equity.

Positive

• Fully diluted earnings per share reached $10.27.
• Net income available to common shareholders was $6.0 million.
• Wholesale distribution segment generated $539.2 million in revenues.
• Acquired controlling interest in Team Sledd, leading to a $2.4 million gain.
• Expanded revolving credit facility to support strategic growth.

Negative

• Retail health food segment revenues were relatively low at $11.4 million.

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 $10.27 on net income available to common shareholders of $6.0 million for its third fiscal quarter ended June 30, 2022.

“We are pleased with our results for the third fiscal quarter. Our strategic plan, with its consistent focus on customer service, has furthered AMCON’s industry leadership in a highly challenging operating environment,” 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 food service distributors who want to align with the Company’s growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $539.2 million and operating income of $9.4 million for the third quarter of fiscal 2022 which includes $108.7 million of revenue and $1.6 million of operating income related to the Company’s majority investment in Team Sledd, LLC (“Team Sledd”). The retail health food segment reported revenues of $11.4 million and operating income of $0.2 million for the third quarter of fiscal 2022.

“After a considerable search, we have acquired and are developing a new 160,000 square foot distribution center located near Springfield, Missouri to support the growth of our customer base,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “We continue to search for facilities in, and adjacent to, the geographic markets we serve.”

“AMCON acquired a controlling interest in Team Sledd during the period. As a result, we are now consolidating Team Sledd into our financial statements and recorded a $2.4 million gain related to the Company’s ownership interest in Team Sledd. We have been delighted with our partnership with Team Sledd since our initial investment,” said Charles J. Schmaderer, AMCON’s Chief Financial Officer. Mr. Schmaderer further noted, “During the period, AMCON amended and expanded its revolving credit facility with Bank of America and BMO Harris Bank to support strategic growth initiatives including the development of our new warehouse facility near Springfield, Missouri. As a core operating principle, we continue to maintain high levels of liquidity and ended the quarter with $99.1 million of consolidated shareholders’ equity.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. 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 refrigerated foods, automotive supplies and health and beauty care products with distribution locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. AMCON, through its Healthy Edge Retail Group, operates nineteen (19) 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
June 30, 2022 and September 30, 2021
		June				September
		2022				2021
		(Unaudited)
ASSETS
Current assets:
Cash		$	600,936			$	519,591
Accounts receivable, less allowance for doubtful accounts of $2.6 million at June 2022 and $0.9 million September 2021			66,500,582				35,844,163
Inventories, net			142,093,610				95,212,085
Income taxes receivable			468,289				—
Prepaid expenses and other current assets			10,343,497				4,999,125
Total current assets			220,006,914				136,574,964
Property and equipment, net			48,452,634				16,012,524
Operating lease right-of-use assets, net			19,672,900				17,846,529
Note receivable, net of current portion			—				3,325,000
Goodwill			5,277,950				4,436,950
Other intangible assets, net			2,135,645				500,000
Equity method investment			—				9,380,343
Other assets			2,749,360				334,819
Total assets		$	298,295,403			$	188,411,129
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	40,975,820			$	24,235,042
Accrued expenses			13,339,837				11,468,955
Accrued wages, salaries and bonuses			7,346,300				4,489,852
Income taxes payable			—				867,160
Current operating lease liabilities			6,204,257				5,513,390
Current maturities of long-term debt			1,204,348				561,202
Total current liabilities			69,070,562				47,135,601
Credit facilities			101,228,521				43,650,865
Deferred income tax liability, net			2,938,240				1,531,228
Long-term operating lease liabilities			13,759,819				12,669,157
Long-term debt, less current maturities			12,159,895				5,054,265
Other long-term liabilities			66,694				757,387
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized			—				—
Common stock, $.01 par value, 3,000,000 shares authorized, 584,789 shares outstanding at June 2022 and 551,369 shares outstanding at September 2021			9,168				8,834
Additional paid-in capital			26,729,124				24,918,781
Retained earnings			92,210,760				83,552,298
Treasury stock at cost			(30,867,287	)			(30,867,287	)
Total parent shareholders’ equity			88,081,765				77,612,626
Non-controlling interest			10,989,907				—
Total shareholders’ equity			99,071,672				77,612,626
Total liabilities and shareholders’ equity		$	298,295,403			$	188,411,129

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and nine months ended June 30, 2022 and 2021
		For the three months ended June								For the nine months ended June
		2022				2021				2022				2021
Sales (including excise taxes of $129.2 million and $104.9 million, and $315.5 million and $297.4 million, respectively)		$	550,584,152			$	438,313,030			$	1,365,043,621			$	1,221,571,294
Cost of sales			516,907,540				412,771,324				1,277,757,425				1,149,594,823
Gross profit			33,676,612				25,541,706				87,286,196				71,976,471
Selling, general and administrative expenses			25,862,325				20,501,117				70,168,415				58,123,100
Depreciation and amortization			912,501				741,180				2,514,968				2,295,390
			26,774,826				21,242,297				72,683,383				60,418,490
Operating income			6,901,786				4,299,409				14,602,813				11,557,981
Other expense (income):
Interest expense			655,811				329,929				1,222,829				1,016,902
Other (income), net			(2,417,252	)			(43,437	)			(2,518,320	)			(169,525	)
			(1,761,441	)			286,492				(1,295,491	)			847,377
Income from operations before income taxes			8,663,227				4,012,917				15,898,304				10,710,604
Income tax expense			2,397,000				1,076,000				4,987,000				2,916,000
Equity method investment earnings, net of tax			307,973				754,293				1,670,133				1,403,124
Net income			6,574,200				3,691,210				12,581,437				9,197,728
Less: Net income attributable to non-controlling interest			(591,369	)			—				(591,369	)			—
Net income available to common shareholders		$	5,982,831			$	3,691,210			$	11,990,068			$	9,197,728
Basic earnings per share available to common shareholders		$	10.50			$	6.69			$	21.15			$	16.71
Diluted earnings per share available to common shareholders		$	10.27			$	6.48			$	20.62			$	16.37
Basic weighted average shares outstanding			569,689				551,369				567,026				550,276
Diluted weighted average shares outstanding			582,370				569,481				581,578				561,940
Dividends paid per common share		$	0.18			$	0.18			$	5.54			$	5.54

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Shareholders’ Equity
for the three and nine months ended June 30, 2022 and 2021
		Common Stock								Treasury Stock							Additional Paid-in				Retained				Non-controlling
		Shares				Amount				Shares			Amount				Capital				Earnings				Interest				Total
THREE MONTHS ENDED JUNE 2021
Balance, April 1, 2021			883,589			$	8,834			(332,220	)		$	(30,867,287	)		$	24,917,765			$	73,724,722			$	—			$	67,784,034
Dividends on common stock, $0.18 per share			—				—			—				—				—				(105,586	)			—				(105,586	)
Compensation expense and settlement of equity-based awards			—				—			—				—				25,527				—				—				25,527
Net income			—				—			—				—				—				3,691,210				—				3,691,210
Balance, June 30, 2021			883,589			$	8,834			(332,220	)		$	(30,867,287	)		$	24,943,292			$	77,310,346			$	—			$	71,395,185
THREE MONTHS ENDED JUNE 2022
Balance, April 1, 2022			917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,555,046			$	86,336,525			$	—			$	82,033,452
Dividends on common stock, $0.18 per share			—				—			—				—				—				(108,596	)			—				(108,596	)
Compensation expense and settlement of equity-based awards			—				—			—				—				174,078				—				—				174,078
Fair value measurement of non-controlling interest			—				—			—				—				—				—				10,419,138				10,419,138
Distributions			—				—			—				—				—				—				(20,600	)			(20,600	)
Net income			—				—			—				—				—				5,982,831				591,369				6,574,200
Balance, June 30, 2022			917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,729,124			$	92,210,760			$	10,989,907			$	99,071,672

		Common Stock								Treasury Stock							Additional Paid-in				Retained				Non-controlling
		Shares				Amount				Shares			Amount				Capital				Earnings				Interest				Total
NINE MONTHS ENDED JUNE 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, $5.54 per share			—				—			—				—				—				(3,249,716	)			—				(3,249,716	)
Compensation expense and settlement of equity-based awards			13,722				137			—				—				661,234				—				—				661,371
Repurchase of common stock			—				—			(68	)			(5,738	)			—				—				—				(5,738	)
Net income			—				—			—				—				—				9,197,728				—				9,197,728
Balance, June 30, 2021			883,589			$	8,834			(332,220	)		$	(30,867,287	)		$	24,943,292			$	77,310,346			$	—			$	71,395,185
NINE MONTHS ENDED JUNE 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, $5.54 per share			—				—			—				—				—				(3,331,606	)			—				(3,331,606	)
Compensation expense and settlement of equity-based awards			33,420				334			—				—				1,810,343				—				—				1,810,677
Fair value measurement of non-controlling interest			—				—			—				—				—				—				10,419,138				10,419,138
Distributions			—				—			—				—				—				—				(20,600	)			(20,600	)
Net income			—				—			—				—				—				11,990,068				591,369				12,581,437
Balance, June 30, 2022			917,009			$	9,168			(332,220	)		$	(30,867,287	)		$	26,729,124			$	92,210,760			$	10,989,907			$	99,071,672

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the nine months ended June 30, 2022 and 2021
		June				June
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	12,581,437			$	9,197,728
Adjustments to reconcile net income to net cash flows from (used in) operating activities:
Depreciation			2,486,613				2,295,390
Amortization			28,355				—
Equity method investment earnings, net of tax			(1,670,133	)			(1,403,124	)
Gain on re-valuation of equity method investment to fair value			(2,387,411	)			—
Gain on sales of property and equipment			(133,639	)			(8,057	)
Equity-based compensation			1,903,884				1,819,272
Deferred income taxes			1,407,012				(220,693	)
Provision for losses on doubtful accounts			83,000				86,000
Inventory allowance			688,902				238,148
Changes in assets and liabilities net of effects of business acquisition:
Accounts receivable			(1,215,238	)			(2,334,341	)
Inventories			(4,674,292	)			3,093,184
Prepaid and other current assets			(2,986,167	)			(3,677,421	)
Equity method investment distributions			1,095,467				828,466
Other assets			(728,596	)			34,647
Accounts payable			1,313,711				2,680,540
Accrued expenses and accrued wages, salaries and bonuses			1,926,479				804,983
Other long-term liabilities			(690,693	)			(169,854	)
Income taxes payable and receivable			(1,890,449	)			(537,548	)
Net cash flows from (used in) operating activities			7,138,242				12,727,320
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(13,940,428	)			(1,254,958	)
Proceeds from sales of property and equipment			145,500				39,728
Principal payment received on note receivable			175,000				—
Cash acquired in business acquisition			7,958				—
Net cash flows from (used in) investing activities			(13,611,970	)			(1,215,230	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities			1,393,048,057				1,217,375,073
Repayments under revolving credit facilities			(1,381,508,745	)			(1,227,854,771	)
Proceeds from borrowings on long-term debt			—				3,000,000
Principal payments on long-term debt			(524,874	)			(373,216	)
Proceeds from exercise of stock options			173,590				—
Repurchase of common stock			—				(5,738	)
Dividends on common stock			(3,331,606	)			(3,249,716	)
Settlement and withholdings of equity-based awards			(1,280,749	)			(365,022	)
Distributions to non-controlling interest			(20,600	)			—
Net cash flows from (used in) financing activities			6,555,073				(11,473,390	)
Net change in cash			81,345				38,700
Cash, beginning of period			519,591				661,195
Cash, end of period		$	600,936			$	699,895
Supplemental disclosure of cash flow information:
Cash paid during the period for interest		$	1,201,073			$	1,031,457
Cash paid during the period for income taxes			5,468,488				3,667,036
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable		$	123,801			$	—
Effect of business acquisition (see Note 2)			23,308,624				—
Issuance of common stock in connection with the vesting and exercise of equity-based awards			2,280,783				949,812

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220718005507/en/

Christopher H. Atayan

AMCON Distributing Company

Ph 402-331-3727

Source: AMCON Distributing Company

FAQ

What were AMCON's earnings per share for the third fiscal quarter of 2022?

AMCON's fully diluted earnings per share for the third fiscal quarter of 2022 were $10.27.

What is AMCON's net income for the third fiscal quarter of 2022?

AMCON reported a net income of $6.0 million for the third fiscal quarter of 2022.

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

The wholesale distribution segment generated $539.2 million in revenue for the third fiscal quarter of 2022.

What acquisition did AMCON make recently?

AMCON acquired a controlling interest in Team Sledd during the third fiscal quarter of 2022.

What was the gain recorded from AMCON's interest in Team Sledd?

AMCON recorded a $2.4 million gain related to its ownership interest in Team Sledd.

What is AMCON's consolidated shareholders' equity as of June 30, 2022?

AMCON ended the quarter with $99.1 million of consolidated shareholders' equity.