DIT AMCON Distributing Co

AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $7.79 on net income available to common shareholders of $5.7 million for the fiscal year ended September 30, 2013. AMCON earned $2.07 per fully diluted share on net income available to common shareholders of $1.5 million for the fourth fiscal quarter ended September 30, 2013.

“We are pleased with the results for fiscal 2013. AMCON has earned a leadership position in the convenience distribution industry as a result of our relentless focus on customer service and reliability. We believe these philosophies directly correlate to the positive results for the year,” said Christopher H. Atayan AMCON’s Chairman and Chief Executive Officer. He further noted, “We continue to experience highly competitive conditions in both of our operating segments. Our objective is to deliver attractive risk adjusted rates of return on the assets as we navigate this challenging environment. We believe our focused strategic plan and customer centric philosophy are essential elements as we seek to meet our short, medium, and long term objectives.”

“We take a long term approach to customer relationships and this has proven to be mutually beneficial,” said Kathleen Evans, President of AMCON’s Wholesale Distribution Segment. “Our fall trade shows have provided positive momentum as we enter fiscal 2014. Our accrual and foodservice programs as well as our new product introductions are developed with our customers’ profitability in mind,” added Ms. Evans.

“We opened two new stores during fiscal 2013 and are actively seeking additional locations that are consistent with our business model,” said Eric Hinkefent, President of AMCON’s Retail Health Food Segment. “The competition is expanding in our marketplace as a result of the industry’s growth. Margins will continue to experience pressure as a result of these new entrants,” added Hinkefent.

“We are very focused on increasing our shareholders’ equity per share and maintaining high levels of balance sheet liquidity. Debt reduction is an important priority for us because it improves our debt to equity ratio. At September 30, 2013 our shareholders’ equity was $52.7, resulting in adjusted book value per share of $74.91. We turned our inventory twenty-seven times and consolidated debt was reduced to $19.9 million. This was after share repurchases and new store investments totaling $4.4 million,” said Andrew Plummer, AMCON’s Chief Financial Officer. “We have made a commitment to expand our foodservice facilities at our Rapid City, South Dakota branch which commenced in fiscal 2014. In addition, we continue to invest in information technology for internal and external purposes,” added Plummer.

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 sixteen (16) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Chamberlin's Market & Cafe www.chamberlins.com and Akin’s Natural Foods Market www.akins.com

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 30, 2013     2012 ASSETS Current assets: Cash $ 275,036 $ 491,387 Accounts receivable, less allowance for doubtful accounts of $1.1 million at 2013 and $1.2 million at 2012 28,383,205 32,681,835 Inventories, net 46,125,187 38,364,621 Deferred income taxes 1,831,933 1,916,619 Prepaid and other current assets   5,001,992     6,476,702   Total current assets 81,617,353 79,931,164   Property and equipment, net 13,088,859 13,083,912 Goodwill 6,349,827 6,349,827 Other intangible assets, net 4,820,978 5,185,978 Other assets   497,882     1,258,985   $ 106,374,899   $ 105,809,866   LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 15,859,636 $ 17,189,208 Accrued expenses 6,714,444 6,931,859 Accrued wages, salaries and bonuses 2,754,136 2,503,361 Income taxes payable 1,922,351 2,194,966 Current maturities of long-term debt   998,788     1,182,829   Total current liabilities 28,249,355 30,002,223   Credit facility 14,841,712 14,353,732 Deferred income taxes 3,327,010 3,633,390 Long-term debt, less current maturities 4,076,892 5,075,680 Other long-term liabilities 239,396 336,186  

Series A cumulative, convertible preferred stock, $.01 par value 100,000 shares authorized and issued, and a total liquidation preference of $2.5 million at both September 2013 and September 2012

2,500,000

2,500,000 Series B cumulative, convertible preferred stock, $.01 par value 80,000 shares authorized, 16,000 shares issued and outstanding at September 30, 2013 and 58,000 shares issued and outstanding at September 30, 2012, and a total liquidation preference of $0.4 million and $1.5 million at September 2013 and September 2012, respectively 400,000 1,450,000  

Commitments and contingencies

  Shareholders’ equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized, 116,000 and 158,000 shares outstanding and issued in Series A and B referred to above — — Common stock, $0.01 par value, 3,000,000 shares authorized, 623,115 shares issued and outstanding at September 2013 and 612,327 shares issued and outstanding at September 2012 6,543 6,293 Additional paid-in capital 12,502,135 11,021,109 Retained earnings 43,532,812 38,349,253 Treasury stock at cost   (3,300,956 )   (918,000 ) Total shareholders’ equity   52,740,534     48,458,655   $ 106,374,899   $ 105,809,866      

AMCON Distributing Company and Subsidiaries

  CONSOLIDATED STATEMENTS OF OPERATIONS       Fiscal Years Ended September 2013     2012 Sales (including excise taxes of $386.4 million and $371.3 million, respectively) $ 1,211,052,634 $ 1,174,167,758 Cost of sales   1,133,695,309     1,095,105,573   Gross profit   77,357,325     79,062,185    

Selling, general and administrative expenses

63,880,109 63,250,681 Depreciation and amortization   2,412,613     2,392,414     66,292,722     65,643,095   Operating income 11,064,603 13,419,090  

Other expense (income):

Interest expense 1,108,146 1,359,241 Other (income), net   (277,215 )   (340,713 )   830,931     1,018,528   Income from operations before income tax expense 10,233,672 12,400,562 Income tax expense   4,375,000     5,033,000   Net income 5,858,672 7,367,562 Preferred stock dividend requirements   (205,218 )   (269,095 ) Net income available to common shareholders $ 5,653,454   $ 7,098,467  

 

Basic earnings per share available to common shareholders:

$ 9.08 $ 11.56

Diluted earnings per share available to common shareholders:

$ 7.79 $ 9.40   Basic weighted average shares outstanding 622,904 614,046 Diluted weighted average shares outstanding 751,812 784,108    

AMCON Distributing Company and Subsidiaries

  CONSOLIDATED STATEMENTS OF CASH FLOWS       Fiscal Years Ended September 2013     2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,858,672 $ 7,367,562 Adjustments to reconcile income from operations to net cash flows

from operating activities:

Depreciation 2,047,613 2,017,726 Amortization 365,000 374,688 Gain on sale of property and equipment (56,829 ) (36,900 ) Equity-based compensation 1,303,310 1,426,848 Deferred income taxes (221,694 ) 681,422 Recoveries of losses on doubtful accounts (55,000 ) (5,243 ) Recoveries for losses on inventory obsolescence (91,494 ) (20,512 ) Other (93,328 ) (8,045 )  

Changes in assets and liabilities:

Accounts receivable 4,353,630 287,101 Inventories (7,669,072 ) 103,873 Prepaid and other current assets 1,474,710 (403,166 ) Other assets 232 (20,160 ) Accounts payable (1,391,539 ) (1,250,790 ) Accrued expenses and accrued wages, salaries and bonuses 181,294 (710,302 ) Income taxes payable   (272,615 )   94,786   Net cash flows from operating activities   5,732,890     9,898,888    

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (2,113,426 ) (1,480,782 ) Proceeds from sales of property and equipment   179,662     129,834   Net cash flows from investing activities   (1,933,764 )   (1,350,948 )  

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings (payments) on bank credit agreements 487,980 (6,417,881 ) Principal payments on long-term debt (1,182,829 ) (1,320,311 ) Repurchase of Series B Convertible Preferred Stock and common stock (2,572,085 ) (918,000 ) Dividends paid on convertible preferred stock (205,218 ) (269,095 ) Dividends on common stock (469,895 ) (470,659 ) Proceeds from exercise of stock options 1,180 1,180 Withholdings on the exercise of equity-based awards   (74,610 )   (51,452 ) Net cash flow from financing activities   (4,015,477 )   (9,446,218 )  

Net change in cash

(216,351 ) (898,278 ) Cash, beginning of year   491,387     1,389,665   Cash, end of year $ 275,036   $ 491,387      

AMCON Distributing Company and Subsidiaries

  CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)       Fiscal Years Ended September 2013     2012 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 1,115,991 $ 1,393,470 Cash paid during the year for income taxes 4,867,986 4,256,794  

Supplemental disclosure of non-cash information:

Equipment acquisitions classified as accounts payable $ 73,204 $ 11,237 Issuance of common stock in connection with the vesting and exercise of equity-based awards 1,389,258 950,562 Conversion by holders of Series B Convertible Preferred Stock to common stock 100,000 100,000 Common stock acquired with other consideration 760,871 —    

AMCON Distributing Company and Subsidiaries

 

FISCAL YEAR 2013

                  (dollars in thousands, except per share data) First Second Third Fourth   Sales $ 302,218 $ 274,568 $ 316,031 $ 318,235  

Gross profit

  19,230     18,297     19,811     20,020    

Income from operations before income tax expense

  2,533     2,125     2,887     2,689    

Net Income

1,463 1,214 1,632 1,549  

Preferred stock dividend requirements

  (59 )   (48 )   (49 )   (49 )  

Net income available to common shareholders

$ 1,403   $ 1,166   $ 1,584   $ 1,500    

Basic earnings per share available to common shareholders

$ 2.26   $ 1.87   $ 2.54   $ 2.41    

Diluted earnings per share available to common shareholders

$ 1.90   $ 1.63   $ 2.19   $ 2.07      

FISCAL YEAR 2012

  (dollars in thousands, except per share data) First Second Third Fourth   Sales $ 283,563 $ 275,829 $ 307,113 $ 307,663  

Gross profit

  18,638     19,216     19,901     21,307    

Income from operations before income tax expense

  2,401     2,475     3,189     4,335    

Net Income

1,438 1,465 1,846 2,618  

Preferred stock dividend requirements

  (67 )   (67 )   (67 )   (67 )  

Net income available to common shareholders

$ 1,371   $ 1,398   $ 1,779   $ 2,551    

Basic earnings per share available to common shareholders

$ 2.21   $ 2.26   $ 2.92   $ 4.19    

Diluted earnings per share available to common shareholders

$ 1.83   $ 1.87   $ 2.37   $ 3.33    

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 converted. 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, conversion of convertible preferred stock and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options, conversion of convertible preferred stock and vesting of restricted stock units.”

 

September 2013

Number of common shares outstanding at September 30, 2013 623,115 Total shareholders’ equity at September 30, 2013 $ 52,740,534   Book value per share at September 30, 2013 $ 84.64    

September 2013

Number of common shares outstanding at September 30, 2013 623,115 Add: common shares potentially issuable for stock options, convertible preferred stock, and unvested restricted stock units /1/   173,308   796,423   Total shareholders’ equity at September 30, 2013 $ 52,740,534 Equity impact if all potential common shares were converted /1/   6,918,739 $ 59,659,273   Adjusted book value per share at September 30, 2013 $ 74.91   /1/   Assumes the exercise of all vested and unvested stock options, conversion of all preferred stock, and vesting of all outstanding restricted stock units at September 30, 2013.  

AMCON Distributing CompanyChristopher H. Atayan, 402-331-3727