U.S. Markets close in 3 hrs 29 mins

AMCON Distributing Company Reports Results for the Fiscal Year Ended September 30, 2020

·13 min read

AMCON Distributing Company ("AMCON") (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $9.76 on net income available to common shareholders of $5.5 million for the fiscal year ended September 30, 2020. AMCON earned $5.00 per fully diluted share on net income available to common shareholders of $2.8 million for the fourth fiscal quarter ended September 30, 2020.

"We are pleased with our fiscal 2020 results. AMCON’s associates and managers have fully embraced our role as an essential service provider as the nation navigates the COVID-19 pandemic. Our longstanding philosophy and tradition of sustained excellence in customer service has enabled AMCON to provide a consistent and timely flow of goods and services to our customers," said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, "Notwithstanding the challenging macroeconomic environment, we were able to close on a key long-term strategic investment in Team Sledd, LLC, a leading convenience distributor in the Appalachian region of the United States. This investment has brought a very talented group of associates into the AMCON family and has significantly expanded our geographic footprint. We continue to seek strategic acquisition opportunities for operators who want to align with our customer centric management philosophy."

The wholesale distribution segment reported revenues of $1.5 billion and operating income of $17.3 million for fiscal 2020, and revenues and operating income of $415.1 million and $6.4 million, respectively, for the fourth fiscal quarter of fiscal 2020. The retail health food segment reported revenues of $46.0 million and an operating loss of $1.8 million for fiscal 2020, and revenues of $11.4 million and an operating loss of $0.6 million for the fourth fiscal quarter of fiscal 2020.

"We continue to anticipate a heightened level of capital expenditures in the coming years as we make targeted investments in our foodservice and technology platforms, expand our geographic reach, and continue to redevelop our retail health food store portfolio. As our customer base grows, we are expanding the territories we serve in support of this growth," said Andrew C. Plummer, AMCON’s President and Chief Operating Officer.

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, "At September 30, 2020, our shareholders’ equity was $64.8 million, resulting in adjusted book value per share of $115.50. During fiscal 2020, we turned our inventory 19 times and ended the year with $65.1 million of consolidated debt. At its lowest point during fiscal 2020, the Company’s total consolidated debt was approximately $22.2 million." Mr. Schmaderer also added, "We were delighted to renew our long term credit facility with our existing banking group during fiscal 2020. Our banking group has been a long-term partner and supporter of the Company’s strategic growth and expansion 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-one (21) 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

CONSOLIDATED BALANCE SHEETS

September

September

2020

2019

ASSETS

Current assets:

Cash

$

661,195

$

337,704

Accounts receivable, less allowance for doubtful accounts of $0.9 million at September 2020 and September 2019

34,278,429

24,665,620

Inventories, net

98,971,773

102,343,517

Income taxes receivable

350,378

Prepaid and other current assets

2,091,645

7,148,459

Total current assets

136,003,042

134,845,678

Property and equipment, net

17,497,274

17,655,415

Operating lease right-of-use assets, net

18,936,126

Note receivable

3,500,000

Goodwill

4,436,950

4,436,950

Other intangible assets, net

500,000

500,000

Equity method investment

6,744,095

Other assets

383,786

273,579

Total assets

$

188,001,273

$

157,711,622

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

22,108,299

$

18,647,572

Accrued expenses

8,306,160

8,577,972

Accrued wages, salaries and bonuses

4,761,020

3,828,847

Income taxes payable

567,408

Current operating lease liabilities

5,607,098

Current maturities of long-term debt

516,850

532,747

Total current liabilities

41,866,835

31,587,138

Credit facility

61,971,682

60,376,714

Deferred income tax liability, net

1,806,575

1,823,373

Long-term operating lease liabilities

14,028,606

Long-term debt, less current maturities

2,608,794

3,125,644

Other long-term liabilities

927,241

42,011

Shareholders’ equity:

Preferred stock, $.01 par value, 1,000,000 shares authorized

Common stock, $.01 par value, 3,000,000 shares authorized, 537,715 shares outstanding at September 2020 and 552,614 shares outstanding at September 2019

8,697

8,561

Additional paid-in capital

24,282,058

23,165,639

Retained earnings

71,362,334

66,414,397

Treasury stock at cost

(30,861,549

)

(28,831,855

)

Total shareholders’ equity

64,791,540

60,756,742

Total liabilities and shareholders’ equity

$

188,001,273

$

157,711,622

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Years Ended September

2020

2019

Sales (including excise taxes of $393.3 million and $370.2 million, respectively)

$

1,521,278,763

$

1,392,388,157

Cost of sales

1,433,544,831

1,308,364,726

Gross profit

87,733,932

84,023,431

Selling, general and administrative expenses

75,051,227

72,182,883

Depreciation and amortization

3,116,449

2,617,591

Impairment charges

485,270

2,873,269

78,652,946

77,673,743

Operating income

9,080,986

6,349,688

Other expense (income):

Interest expense

1,693,251

1,598,864

Other (income), net

(114,276

)

(61,119

)

1,578,975

1,537,745

Income from operations before income taxes

7,502,011

4,811,943

Income tax expense

2,143,000

1,609,000

Equity method investment earnings, net of tax

183,579

Net income available to common shareholders

$

5,542,590

$

3,202,943

Basic earnings per share available to common shareholders

$

9.88

$

5.36

Diluted earnings per share available to common shareholders

$

9.76

$

5.25

Basic weighted average shares outstanding

561,166

597,961

Diluted weighted average shares outstanding

567,961

609,836

Dividends declared and paid per common share

$

1.00

$

1.00

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

Balance, October 1, 2018

844,089

$

8,441

(228,312)

$

(21,324,752)

$

22,069,098

$

63,848,030

$

64,600,817

Dividends on common stock, $1.00 per share

(636,576)

(636,576)

Compensation expense and issuance of stock in connection with equity-based awards

11,950

120

1,096,541

1,096,661

Repurchase of common stock

(75,113)

(7,507,103)

(7,507,103)

Net income

3,202,943

3,202,943

Balance September 30, 2019

856,039

$

8,561

(303,425)

$

(28,831,855)

$

23,165,639

$

66,414,397

$

60,756,742

Dividends on common stock, $1.00 per share

(594,653)

(594,653)

Compensation expense and issuance of stock in connection with equity-based awards

13,828

136

1,116,419

1,116,555

Repurchase of common stock

(28,727)

(2,029,694)

(2,029,694)

Net income

5,542,590

5,542,590

Balance, September 30, 2020

869,867

$

8,697

(332,152)

$

(30,861,549)

$

24,282,058

$

71,362,334

$

64,791,540

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended September

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

5,542,590

$

3,202,943

Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:

Depreciation

3,116,449

2,575,924

Amortization

41,667

Equity method investment earnings, net of tax

(183,579

)

Impairment charges

485,270

2,873,269

Loss (gain) on sales of property and equipment

105,039

(13,775

)

Equity-based compensation

1,085,287

1,299,792

Deferred income taxes

(16,798

)

40,572

Provision for losses on doubtful accounts

(21,000

)

21,000

Inventory allowance

(322,240

)

560,610

Changes in assets and liabilities:

Accounts receivable

(9,591,809

)

6,742,225

Inventories

3,693,984

(24,034,512

)

Prepaid and other current assets

4,794,469

(2,207,684

)

Other assets

(110,207

)

28,214

Accounts payable

3,529,980

(2,247,262

)

Accrued expenses and accrued wages, salaries and bonuses

1,353,113

(262,330

)

Other long-term liabilities

885,230

3,956

Income taxes payable and receivable

857,270

(78,266

)

Net cash flows from (used in) operating activities

15,203,048

(11,453,657

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(3,356,573

)

(4,438,280

)

Proceeds from sales of property and equipment

43,600

57,200

Investment in equity method investee

(6,500,000

)

Issuance of note receivable

(3,500,000

)

Net cash flows from (used in) investing activities

(13,312,973

)

(4,381,080

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility

1,515,476,055

1,427,544,804

Repayments under revolving credit facility

(1,513,881,087

)

(1,402,596,687

)

Principal payments on long-term debt

(532,747

)

(1,096,306

)

Proceeds from exercise of stock options

25,750

Repurchase of common stock

(2,029,694

)

(7,507,103

)

Dividends on common stock

(594,653

)

(636,576

)

Settlement and withholdings of equity-based awards

(30,208

)

(56,335

)

Net cash flows from (used in) financing activities

(1,566,584

)

15,651,797

Net change in cash

323,491

(182,940

)

Cash, beginning of period

337,704

520,644

Cash, end of period

$

661,195

$

337,704

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

1,743,098

$

1,561,531

Cash paid during the period for income taxes

1,302,528

1,646,694

Supplemental disclosure of non-cash information:

Equipment acquisitions classified in accounts payable

$

$

69,253

Issuance of common stock in connection with the vesting and exercise of equity-based awards

990,653

1,005,792

AMCON Distributing Company and Subsidiaries

FISCAL YEAR 2020

(dollars in thousands, except per share data)

First

Second

Third

Fourth

Sales

$

360,101

$

337,887

$

396,854

$

426,437

Gross profit

20,845

20,693

21,652

24,543

Income from operations before income tax expense

701

1,032

2,054

3,715

Net income available to common shareholders

$

452

$

699

$

1,580

$

2,812

Basic earnings per share available to common shareholders

$

.80

$

1.24

$

2.79

$

5.10

Diluted earnings per share available to common shareholders

$

.80

$

1.22

$

2.77

$

5.00

FISCAL YEAR 2019

(dollars in thousands, except per share data)

First

Second

Third

Fourth

Sales

$

344,734

$

310,716

$

369,982

$

366,957

Gross profit

20,632

20,589

20,526

22,276

Income (loss) from operations before income tax expense

1,747

2,196

1,027

(158

)

Net income (loss) available to common shareholders

$

1,245

$

1,523

$

666

$

(231

)

Basic earnings (loss) per share available to common shareholders

$

2.02

$

2.49

$

1.12

$

(.41

)

Diluted earnings (loss) per share available to common shareholders

$

1.99

$

2.45

$

1.10

$

(.41

)

The Company’s quarterly earnings per share are based on weighted average shares outstanding for the quarter; therefore the sum of the quarters may not equal the full year earnings per share amount.

AMCON Distributing Company and Subsidiaries

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

The financial measure of adjusted book value per share included in this press release ("adjusted book value per share") has been determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Management believes that this non-GAAP financial measurement reflects an additional way of viewing aspects of the Company’s business that, when viewed together with its financial results computed in accordance with GAAP, provides a more complete understanding of factors affecting historical financial performance of the Company. This measure is important to investors interested in determining the amount of book value per share if all potentially dilutive shares were exercised or vested and outstanding. This non-GAAP financial measurement is not intended to be a substitute for the comparable GAAP measurements and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

The Company has defined the non-GAAP financial measure of adjusted book value per share as follows:

  • "Adjusted book value per share" is defined as total shareholders’ equity increased by the impact of proceeds from the exercise of all stock options and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options and vesting of restricted stock units."

September 2020

Number of common shares outstanding at September 30, 2020

537,715

Total shareholders’ equity at September 30, 2020

$

64,791,540

Book value per share at September 30, 2020

$

120.49

September 2020

Number of common shares outstanding at September 30, 2020

537,715

Add: common shares potentially issuable for stock options and unvested restricted stock units /1/

63,321

601,036

Total shareholders’ equity at September 30, 2020

$

64,791,540

Equity impact if all potential common shares were exercised or vested /1/

4,630,487

$

69,422,027

Adjusted book value per share at September 30, 2020

$

115.50

____________

/1/

Assumes the exercise of all vested and unvested stock options and vesting of all outstanding restricted stock units at September 30, 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006135/en/

Contacts

Christopher H. Atayan
AMCON Distributing Company
Ph 402-331-3727