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 $1.73 on net income available to common shareholders of $1.2 million for the fiscal quarter ended December 31, 2013.

“We are pleased with the start to fiscal 2014. Our relentless focus on customer service and reliability has positioned AMCON as a leader in the convenience distribution industry. We are committed to our customers’ profitability and growth which strengthens our partnership,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We actively manage our balance sheet to generate attractive risk adjusted rates of return on the assets we have deployed. We are actively seeking acquisitions that can benefit from our extensive platform of services.”

“One of our goals is to develop our business in higher margin non-traditional products. In particular, foodservice continues to be an area of high focus as our sales in this category grow. Additionally, we are enhancing our selection of electronic cigarettes as customer acceptance of these products has accelerated significantly,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment.

“Industry growth in the retail health food sector has led to greater competition from new market entrants in the Midwestern markets. The number of new market entrants has placed pressure on sales as a result,” said Eric Hinkefent, President of AMCON’s Retail Health Food Segment.

“We were able to use our balance sheet strength to achieve several corporate objectives during the quarter. We negotiated the repurchase of 25,057 shares of common stock in a private transaction while at the same time taking advantage of attractive product related opportunities. At December 31, 2013 our shareholders’ equity was $53.0 million and consolidated debt was $33.5 million,” said Andrew Plummer, AMCON’s Chief Financial Officer. “The expansion of our foodservice facilities at our Rapid City, South Dakota branch continues to progress according to plan. This expansion will provide significant additional capacity to continue meeting our customers changing needs in the Dakotas that has resulted from considerable growth in that market. In addition, we continue to invest in information technology for internal and external purposes,” added Mr. 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

Condensed Consolidated Balance Sheets

December 31, 2013 and September 30, 2013

    December September 2013 2013 (Unaudited) ASSETS Current assets: Cash $ 326,390 $ 275,036 Accounts receivable, less allowance for doubtful accounts of $1.2 million and $1.1 million at December 2013 and September 2013, respectively 32,092,060 28,383,205 Inventories, net 50,987,078 46,125,187 Deferred income taxes 1,437,481 1,831,933 Prepaid and other current assets   7,032,830     5,001,992   Total current assets 91,875,839 81,617,353   Property and equipment, net 13,527,259 13,088,859 Goodwill 6,349,827 6,349,827 Other intangible assets, net 4,729,728 4,820,978 Other assets   433,084     497,882   $ 116,915,737   $ 106,374,899   LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 15,847,759 $ 15,859,636 Accrued expenses 5,438,389 6,714,444 Accrued wages, salaries and bonuses 2,272,813 2,754,136 Income taxes payable 253,329 1,922,351 Current maturities of long-term debt   781,123     998,788   Total current liabilities 24,593,413 28,249,355   Credit facility 28,749,737 14,841,712 Deferred income taxes 3,417,396 3,327,010 Long-term debt, less current maturities 3,992,481 4,076,892 Other long-term liabilities 237,385 239,396  

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 December 2013 and September 2013.

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 both December 2013 and September 2013, and a total liquidation preference of $0.4 million at both December 2013 and September 2013.

400,000 400,000  

Shareholders’ equity:

Preferred stock, $0.01 par value, 1,000,000 shares authorized, 116,000 shares outstanding and issued in Series A and B referred to above

— —

Common stock, $.01 par value, 3,000,000 shares authorized, 611,432 shares outstanding at December 2013 and 623,115 shares outstanding at September 2013

6,677 6,543 Additional paid-in capital 13,610,519 12,502,135 Retained earnings 44,651,003 43,532,812 Treasury stock at cost   (5,242,874 )   (3,300,956 ) Total shareholders’ equity   53,025,325     52,740,534   $ 116,915,737   $ 106,374,899    

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three months ended December 31, 2013 and 2012

    2013 2012 Sales (including excise taxes of $97.3 million and $98.0 million at December 2013 and December 2012, respectively) $ 305,625,557 $ 302,218,321 Cost of sales   285,984,494     282,988,532   Gross profit   19,641,063     19,229,789     Selling, general and administrative expenses 16,492,263 15,848,472 Depreciation and amortization   624,040     593,862     17,116,303     16,442,334   Operating income   2,524,760     2,787,455   Other expense (income): Interest expense 301,995 316,052 Other (income), net   (30,231 )   (61,349 )   271,764     254,703   Income from operations before income tax expense 2,252,996 2,532,752 Income tax expense   965,000     1,070,000   Net income 1,287,996 1,462,752 Preferred stock dividend requirements   (49,177 )   (59,291 ) Net income available to common shareholders $ 1,238,819   $ 1,403,461       Basic earnings per share available to common shareholders $ 1.99 $ 2.26 Diluted earnings per share available to common shareholders $ 1.73 $ 1.90   Basic weighted average shares outstanding 622,226 622,277 Diluted weighted average shares outstanding 744,568 767,957  

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the three months ended December 31, 2013 and 2012

    2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,287,996 $ 1,462,752

Adjustments to reconcile net income from operations to net cash flows from operating activities:

Depreciation 532,790 502,612 Amortization 91,250 91,250 Gain on sale of property and equipment (7,704 ) (70,631 ) Equity-based compensation 342,160 327,476 Deferred income taxes 484,838 419,627 Provision for losses on doubtful accounts 130,000 105,000 Provision for losses on inventory obsolescence 38,803 71,603 Other (2,011 ) (2,011 )   Changes in assets and liabilities: Accounts receivable (3,838,855 ) 241,773 Inventories (4,900,694 ) (11,412,393 ) Prepaid and other current assets (2,030,838 ) (878,343 ) Other assets 64,798 56,705 Accounts payable 995 (2,021,716 ) Accrued expenses and accrued wages, salaries and bonuses (928,307 ) (500,789 ) Income tax payable   (1,669,022 )   (1,569,182 ) Net cash flows from operating activities (10,403,801 ) (13,176,267 )   CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (985,678 ) (330,228 ) Proceeds from sales of property and equipment   9,320     139,040   Net cash flows from investing activities (976,358 ) (191,188 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on bank credit agreements 13,908,025 16,025,449 Principal payments on long-term debt (302,076 ) (292,345 ) Repurchase of common stock and Series B Convertible Preferred Stock (1,941,918 ) (2,572,085 ) Dividends paid on convertible preferred stock (49,177 ) (59,291 ) Dividends on common stock (120,628 ) (117,428 ) Proceeds from exercise of stock options — 1,180 Withholdings on the exercise of equity-based awards   (62,713 )   (74,610 ) Net cash flows from financing activities   11,431,513     12,910,870   Net change in cash

51,354

(456,585 )

Cash, beginning of period

  275,036     491,387   Cash, end of period $ 326,390   $ 34,802       2013 2012 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 274,796 $ 279,667 Cash paid during the period for income taxes 2,149,184 2,219,555   Supplemental disclosure of non-cash information: Equipment acquisitions classified as accounts payable $ 60,332 $ 64,042 Issuance of common stock in connection with the vesting and exercise of equity-based awards 1,154,869 1,389,258 Conversion by holder of Series B Convertible Preferred Stock to common stock — 100,000 Common stock acquired with other consideration — 760,871

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