DIT AMCON Distributing Co

AMCON Distributing Company (“AMCON”) (NYSE American:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $2.45 on net income available to common shareholders of $1.5 million for its second fiscal quarter ended March 31, 2019.

“AMCON’s newly enhanced distribution facility in Bismarck, North Dakota began shipping this quarter. Our management team and associates did a tremendous job in completing this project in a challenging weather environment. We have been a long-term service provider in the northern marketplace and this new investment reinforces our commitment to the success of our customers,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “Our organization continues its close collaboration with customers to design leading edge foodservice programs that are competitive with quick-service restaurants. Additionally, we are actively seeking strategic acquisition opportunities that we believe can benefit from AMCON’s portfolio of technologies and services.”

“We are actively evaluating a number of additional strategic facility initiatives to support the growth needs of our customer base. Our emphasis on first class service and reliability is the foundation of our position as a leader in the convenience distribution industry. As such, we will continue to make investments in people, facilities and equipment necessary for sustained excellence,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. He further noted, “Our Healthy Edge Retail Group management team is implementing a comprehensive merchandising and point of sale system update to our base of retail health food stores. These initiatives are in support of our objective of being a total wellness solution for consumers.” Mr. Plummer further added, “We were pleased to close March 31, 2019 with total shareholders’ equity of $64.8 million and consolidated debt of $21.4 million.”

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-two (22) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Akin’s Natural Foods Market www.akins.com in its Midwest market, and Chamberlin's Market & Cafe 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, 2019 and September 30, 2018

    March September 2019 2018 (Unaudited) ASSETS Current assets: Cash $ 642,116 $ 520,644 Accounts receivable, less allowance for doubtful accounts of $0.9 million at March 2019 and September 2018 28,016,243 31,428,845 Inventories, net 57,650,559 78,869,615 Income taxes receivable — 272,112 Prepaid and other current assets   7,343,497     4,940,775   Total current assets 93,652,415 116,031,991   Property and equipment, net 16,915,409 15,768,484 Goodwill 4,436,950 4,436,950 Other intangible assets, net 3,383,686 3,414,936 Other assets   293,896     301,793   Total assets $ 118,682,356   $ 139,954,154     LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 20,570,694 $ 20,826,834 Accrued expenses 7,106,050 8,556,620 Accrued wages, salaries and bonuses 2,683,504 3,965,733 Income taxes payable 1,630 — Current maturities of long-term debt   803,612     1,096,306   Total current liabilities 31,165,490 34,445,493   Credit facility 17,224,197 35,428,597 Deferred income tax liability, net 2,009,719 1,782,801 Long-term debt, less current maturities 3,394,116 3,658,391 Other long-term liabilities 40,033 38,055   Shareholders’ equity: Preferred stock, $.01 par value, 1,000,000 shares authorized — — Common stock, $.01 par value, 3,000,000 shares authorized, 592,768 shares outstanding at March 2019 and 615,777 shares outstanding at September 2018 8,561 8,441 Additional paid-in capital 23,148,372 22,069,098 Retained earnings 66,203,466 63,848,030 Treasury stock at cost   (24,511,598 )   (21,324,752 ) Total shareholders’ equity   64,848,801     64,600,817   Total liabilities and shareholders’ equity $ 118,682,356   $ 139,954,154    

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and six months ended March 31, 2019 and 2018

        For the three months ended March For the six months ended March 2019 2018 2019 2018 Sales (including excise taxes of $82.9 million and $83.1 million, and $175.9 million and $171.7 million respectively) $ 310,715,873 $ 295,207,286 $ 655,449,793 $ 610,720,495 Cost of sales   290,126,453     278,141,110     614,228,235     575,462,557   Gross profit   20,589,420     17,066,176     41,221,558     35,257,938   Selling, general and administrative expenses 17,391,681 15,619,420 35,348,896 31,973,028 Depreciation and amortization   641,228     537,903     1,249,236     1,068,908     18,032,909     16,157,323     36,598,132     33,041,936   Operating income   2,556,511     908,853     4,623,426     2,216,002     Other expense (income): Interest expense 396,576 313,364 719,526 515,555 Other (income), net   (36,280 )   (27,410 )   (39,636 )   (32,543 )   360,296     285,954     679,890     483,012   Income from operations before income taxes 2,196,215 622,899 3,943,536 1,732,990 Income tax expense (benefit)   673,000     284,000     1,175,000     (86,000 ) Net income available to common shareholders $ 1,523,215   $ 338,899   $ 2,768,536   $ 1,818,990     Basic earnings per share available to common shareholders $ 2.49 $ 0.49 $ 4.50 $ 2.64 Diluted earnings per share available to common shareholders $ 2.45 $ 0.49 $ 4.44 $ 2.61   Basic weighted average shares outstanding 611,824 689,480 614,874 688,570 Diluted weighted average shares outstanding 620,769 697,406 623,848 697,563   Dividends declared and paid per common share $ 0.46 $ 0.46 $ 0.64 $ 0.64  

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three and six months ended March 31, 2019 and 2018

              Additional Common Stock Treasury Stock Paid in Retained Shares Amount Shares Amount Capital Earnings Total THREE MONTHS ENDED MARCH 2018 Balance, January 1, 2018 844,089 $ 8,441 (153,603 ) $ (13,616,477 ) $ 22,009,620 $ 62,086,133 $ 70,487,717 Dividends on common stock, $0.18 per share — — — — — (128,990 ) (128,990 ) Compensation expense and issuance of stock in connection with equity-based awards — — — — 26,942 — 26,942 Repurchase of common stock — — (6,482 ) (629,353 ) — — (629,353 ) Net income —   — —     —     —   338,899     338,899   Balance, March 31, 2018 844,089 $ 8,441 (160,085 ) $ (14,245,830 ) $ 22,036,562 $ 62,296,042   $ 70,095,215     THREE MONTHS ENDED MARCH 2019 Balance, January 1, 2019 856,039 $ 8,561 (238,744 ) $ (22,242,837 ) $ 23,110,713 $ 64,796,415 $ 65,672,852 Dividends on common stock, $0.18 per share — — — — — (116,164 ) (116,164 ) Compensation expense and issuance of stock in connection with equity-based awards — — — — 37,659 — 37,659 Repurchase of common stock — — (24,527 ) (2,268,761 ) — — (2,268,761 ) Net income —   — —     —     —   1,523,215     1,523,215   Balance, March 31, 2019 856,039 $ 8,561 (263,271 ) $ (24,511,598 ) $ 23,148,372 $ 66,203,466   $ 64,848,801     Additional Common Stock Treasury Stock Paid in Retained Shares Amount Shares Amount Capital Earnings Total SIX MONTHS ENDED MARCH 2018 Balance, October 1, 2017 831,438 $ 8,314 (153,432 ) $ (13,601,302 ) $ 20,825,919 $ 60,935,911 $ 68,168,842 Dividends on common stock, $0.64 per share — — — — — (458,859 ) (458,859 ) Compensation expense and issuance of stock in connection with equity-based awards 12,651 127 — — 1,210,643 — 1,210,770 Repurchase of common stock — — (6,653 ) (644,528 ) — — (644,528 ) Net income —   — —     —     —   1,818,990     1,818,990   Balance, March 31, 2018 844,089 $ 8,441 (160,085 ) $ (14,245,830 ) $ 22,036,562 $ 62,296,042   $ 70,095,215     SIX MONTHS ENDED MARCH 2019 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, $0.64 per share — — — — — (413,100 ) (413,100 ) Compensation expense and issuance of stock in connection with equity-based awards 11,950 120 — — 1,079,274 — 1,079,394 Repurchase of common stock — — (34,959 ) (3,186,846 ) — — (3,186,846 ) Net income —   — —     —     —   2,768,536     2,768,536   Balance, March 31, 2019 856,039 $ 8,561 (263,271 ) $ (24,511,598 ) $ 23,148,372 $ 66,203,466   $ 64,848,801    

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the six months ended March 31, 2019 and 2018

    March March   2019   2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,768,536 $ 1,818,990

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

Depreciation 1,217,986 1,020,783 Amortization 31,250 48,125 Gain on sale of property and equipment (17,832 ) (300 ) Equity-based compensation 622,390 642,785 Deferred income taxes 226,918 (423,322 ) Provision (recovery) for losses on doubtful accounts 59,000 (77,000 ) Inventory allowance 240,699 (231,625 ) Other 1,978 1,978   Changes in assets and liabilities: Accounts receivable 3,353,602 1,521,705 Inventories 20,978,357 (2,951,171 ) Prepaid and other current assets (2,402,722 ) 1,216,336 Other assets 7,897 (19,903 ) Accounts payable (467,687 ) 126,012 Accrued expenses and accrued wages, salaries and bonuses (2,275,795 ) (1,059,839 ) Income taxes payable / receivable   273,742     (368,469 ) Net cash flows from operating activities   24,618,319     1,265,085     CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (2,159,232 ) (1,366,767 ) Proceeds from sales of property and equipment   23,700     300   Net cash flows (used in) investing activities   (2,135,532 )   (1,366,467 )   CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit facility 642,850,736 623,945,799 Repayments under revolving credit facility (661,055,136 ) (622,433,675 ) Principal payments on long-term debt (556,969 ) (185,753 ) Repurchase of common stock (3,186,846 ) (644,528 ) Dividends on common stock (413,100 ) (458,859 ) Withholdings on the exercise of equity-based awards   —     (79,850 ) Net cash flows from (used in) financing activities   (22,361,315 )   143,134   Net change in cash 121,472 41,752 Cash, beginning of period   520,644     523,065   Cash, end of period $ 642,116   $ 564,817     Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 774,784 $ 489,840 Cash paid during the period for income taxes 674,340 705,790   Supplemental disclosure of non-cash information: Equipment acquisitions classified in accounts payable $ 212,800 $ 63,962

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

1,005,792 1,183,091

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Christopher H. AtayanAMCON Distributing CompanyPh 402-331-3727