AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $2.77 on net income available to common shareholders of $1.6 million for its third fiscal quarter ended June 30, 2020.
“AMCON continues to fulfill our role as an essential service provider and a key component of the United States supply chain as a distributor to convenience stores, truck stops, and rural grocery stores. In addition, our retail health food segment provides nutritional supplements that are an important component of health, wellness and immunity support,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. “We continue to be focused on our long-term strategic plan and are actively seeking acquisitions and other opportunities to expand the enterprise.”
“Our management team and associates have worked around the clock to secure product and position the organizational and operational assets that are at the foundation of our philosophy as a customer focused service organization. We have many long-term relationships with our key vendors which enabled us to navigate a challenging operational environment and minimize disruptions from the pandemic,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer added, “We were pleased to close June 30, 2020 with shareholders’ equity of $64.0 million and consolidated debt of $59.6 million.”
The wholesale distribution segment reported revenues of $385.3 million and operating income of $4.4 million for the third quarter of fiscal 2020. The retail health food segment reported revenues of $11.5 million and an operating loss of $0.2 million for the third quarter of fiscal 2020.
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’s Healthy Edge Retail Group 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 Condensed Consolidated Balance Sheets June 30, 2020 and September 30, 2019 | ||||||||
June | September | |||||||
2020 | 2019 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 596,564 | $ | 337,704 | ||||
Accounts receivable, less allowance for doubtful accounts of $1.2 million at June 2020 and $0.9 million at September 2019 | 33,626,042 | 24,665,620 | ||||||
Inventories, net | 82,009,219 | 102,343,517 | ||||||
Income taxes receivable | — | 350,378 | ||||||
Prepaid and other current assets | 7,259,528 | 7,148,459 | ||||||
Total current assets | 123,491,353 | 134,845,678 | ||||||
Property and equipment, net | 18,236,033 | 17,655,415 | ||||||
Operating lease right-of-use assets, net | 19,705,044 | — | ||||||
Note receivable | 3,500,000 | — | ||||||
Goodwill | 4,436,950 | 4,436,950 | ||||||
Other intangible assets, net | 500,000 | 500,000 | ||||||
Equity method investment | 6,648,666 | — | ||||||
Other assets | 399,943 | 273,579 | ||||||
Total assets | $ | 176,917,989 | $ | 157,711,622 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 20,719,129 | $ | 18,647,572 | ||||
Accrued expenses | 7,067,083 | 8,577,972 | ||||||
Accrued wages, salaries and bonuses | 2,968,148 | 3,828,847 | ||||||
Income taxes payable | 480,649 | — | ||||||
Current operating lease liabilities | 5,486,963 | — | ||||||
Current maturities of long-term debt | 546,657 | 532,747 | ||||||
Total current liabilities | 37,268,629 | 31,587,138 | ||||||
Credit facility | 56,384,002 | 60,376,714 | ||||||
Deferred income tax liability, net | 1,820,511 | 1,823,373 | ||||||
Long-term operating lease liabilities | 14,578,728 | — | ||||||
Long-term debt, less current maturities | 2,713,798 | 3,125,644 | ||||||
Other long-term liabilities | 167,755 | 42,011 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, $.01 par value, 1,000,000 shares authorized | — | — | ||||||
Common stock, $.01 par value, 3,000,000 shares authorized, 564,878 shares outstanding at June 2020 and 552,614 shares outstanding at September 2019 | 8,697 | 8,561 | ||||||
Additional paid-in capital | 24,250,873 | 23,165,639 | ||||||
Retained earnings | 68,657,375 | 66,414,397 | ||||||
Treasury stock at cost | (28,932,379 | ) | (28,831,855 | ) | ||||
Total shareholders’ equity | 63,984,566 | 60,756,742 | ||||||
Total liabilities and shareholders’ equity | $ | 176,917,989 | $ | 157,711,622 | ||||
AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and nine months ended June 30, 2020 and 2019 | |||||||||||||||
For the three months ended June | For the nine months ended June | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Sales (including excise taxes of $103.6 million and $98.0 million, and $285.1 million and $274.0 million, respectively) | $ | 396,854,324 | $ | 369,981,516 | $ | 1,094,841,943 | $ | 1,025,431,309 | |||||||
Cost of sales | 375,202,044 | 349,455,624 | 1,031,651,499 | 963,683,859 | |||||||||||
Gross profit | 21,652,280 | 20,525,892 | 63,190,444 | 61,747,450 | |||||||||||
Selling, general and administrative expenses | 18,377,641 | 18,513,048 | 55,843,266 | 53,861,943 | |||||||||||
Depreciation and amortization | 801,683 | 620,142 | 2,318,045 | 1,869,378 | |||||||||||
19,179,324 | 19,133,190 | 58,161,311 | 55,731,321 | ||||||||||||
Operating income | 2,472,956 | 1,392,702 | 5,029,133 | 6,016,129 | |||||||||||
Other expense (income): | |||||||||||||||
Interest expense | 461,581 | 381,469 | 1,321,267 | 1,100,995 | |||||||||||
Other (income), net | (42,525 | ) | (15,446 | ) | (79,222 | ) | (55,081 | ) | |||||||
419,056 | 366,023 | 1,242,045 | 1,045,914 | ||||||||||||
Income from operations before income taxes | 2,053,900 | 1,026,679 | 3,787,088 | 4,970,215 | |||||||||||
Income tax expense | 586,000 | 361,000 | 1,168,000 | 1,536,000 | |||||||||||
Equity method investment earnings, net of tax | 111,666 | — | 111,666 | — | |||||||||||
Net income available to common shareholders | $ | 1,579,566 | $ | 665,679 | $ | 2,730,754 | $ | 3,434,215 | |||||||
Basic earnings per share available to common shareholders | $ | 2.79 | $ | 1.12 | $ | 4.84 | $ | 5.65 | |||||||
Diluted earnings per share available to common shareholders | $ | 2.77 | $ | 1.10 | $ | 4.79 | $ | 5.56 | |||||||
Basic weighted average shares outstanding | 565,483 | 592,768 | 564,578 | 607,505 | |||||||||||
Diluted weighted average shares outstanding | 569,902 | 606,278 | 569,873 | 617,887 | |||||||||||
Dividends declared and paid per common share | $ | 0.18 | $ | 0.18 | $ | 0.82 | $ | 0.82 | |||||||
AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and nine months ended June 30, 2020 and 2019 | |||||||||||||||||||||||
Additional | |||||||||||||||||||||||
Common Stock | Treasury Stock | Paid-in | Retained | ||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Total | |||||||||||||||||
THREE MONTHS ENDED JUNE 2019 | |||||||||||||||||||||||
Balance, April 1, 2019 | 856,039 | $ | 8,561 | (263,271 | ) | $ | (24,511,598 | ) | $ | 23,148,372 | $ | 66,203,466 | $ | 64,848,801 | |||||||||
Dividends on common stock, $0.18 per share | — | — | — | — | — | (111,766 | ) | (111,766 | ) | ||||||||||||||
Compensation expense and issuance of stock in connection with equity-based awards | — | — | — | — | 36,801 | — | 36,801 | ||||||||||||||||
Repurchase of common stock | — | — | (1 | ) | (141 | ) | — | — | (141 | ) | |||||||||||||
Net income | — | — | — | — | — | 665,679 | 675,679 | ||||||||||||||||
Balance, June 30, 2019 | 856,039 | $ | 8,561 | (263,272 | ) | $ | (24,511,739 | ) | $ | 23,185,173 | $ | 66,757,379 | $ | 65,439,374 | |||||||||
THREE MONTHS ENDED JUNE 2020 | |||||||||||||||||||||||
Balance, April 1, 2020 | 869,367 | $ | 8,692 | (303,841 | ) | $ | (28,863,654 | ) | $ | 24,224,145 | $ | 67,184,900 | $ | 62,554,083 | |||||||||
Dividends on common stock, $0.18 per share | — | — | — | — | — | (107,091 | ) | (107,091 | ) | ||||||||||||||
Compensation expense and issuance of stock in connection with equity-based awards | 500 | 5 | — | — | 26,728 | — | 26,733 | ||||||||||||||||
Repurchase of common stock | — | — | (1,148 | ) | (68,725 | ) | — | — | (68,725 | ) | |||||||||||||
Net income | — | — | — | — | — | 1,579,566 | 1,579,566 | ||||||||||||||||
Balance, June 30, 2020 | 869,867 | $ | 8,697 | (304,989 | ) | $ | (28,932,379 | ) | $ | 24,250,873 | $ | 68,657,375 | $ | 63,984,566 | |||||||||
Additional | |||||||||||||||||||||||
Common Stock | Treasury Stock | Paid-in | Retained | ||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Total | |||||||||||||||||
NINE MONTHS ENDED JUNE 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, $0.82 per share | — | — | — | — | — | (524,866 | ) | (524,866 | ) | ||||||||||||||
Compensation expense and issuance of stock in connection with equity-based awards | 11,950 | 120 | — | — | 1,116,075 | — | 1,116,195 | ||||||||||||||||
Repurchase of common stock | — | — | (34,960 | ) | (3,186,987 | ) | — | — | (3,186,987 | ) | |||||||||||||
Net income | — | — | — | — | — | 3,434,215 | 3,434,215 | ||||||||||||||||
Balance, June 30, 2019 | 856,039 | $ | 8,561 | (263,272 | ) | $ | (24,511,739 | ) | $ | 23,185,173 | $ | 66,757,379 | $ | 65,439,374 | |||||||||
NINE MONTHS ENDED JUNE 2020 | |||||||||||||||||||||||
Balance, October 1, 2019 | 856,039 | $ | 8,561 | (303,425 | ) | $ | (28,831,855 | ) | $ | 23,165,639 | $ | 66,414,397 | $ | 60,756,742 | |||||||||
Dividends on common stock, $0.82 per share | — | — | — | — | — | (487,776 | ) | (487,776 | ) | ||||||||||||||
Compensation expense and issuance of stock in connection with equity-based awards | 13,828 | 136 | — | — | 1,085,234 | — | 1,058,370 | ||||||||||||||||
Repurchase of common stock | — | — | (1,564 | ) | (100,524 | ) | — | — | (100,524 | ) | |||||||||||||
Net income | — | — | — | — | — | 2,730,754 | 2,730,754 | ||||||||||||||||
Balance, June 30, 2020 | 869,867 | $ | 8,697 | (304,989 | ) | $ | (28,932,379 | ) | $ | 24,250,873 | $ | 68,657,375 | $ | 63,984,566 | |||||||||
AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the nine months ended June 30, 2020 and 2019 | ||||||||
June | June | |||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 2,730,754 | $ | 3,434,215 | ||||
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities: | ||||||||
Depreciation | 2,318,045 | 1,827,711 | ||||||
Amortization | — | 41,667 | ||||||
Equity method investment earnings, net of income tax | (111,666 | ) | — | |||||
Loss (gain) on sales of property and equipment | 17,042 | (15,376 | ) | |||||
Equity-based compensation | 765,704 | 1,035,128 | ||||||
Deferred income taxes | (2,862 | ) | 112,439 | |||||
Provision for losses on doubtful accounts | 349,000 | 179,000 | ||||||
Inventory allowance | 182,218 | 454,357 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (9,309,422 | ) | (3,209,941 | ) | ||||
Inventories | 20,152,080 | 11,468,718 | ||||||
Prepaid and other current assets | (373,414 | ) | (5,698,021 | ) | ||||
Other assets | (126,364 | ) | 19,712 | |||||
Accounts payable | 2,040,386 | 2,485,721 | ||||||
Accrued expenses and accrued wages, salaries and bonuses | (1,424,472 | ) | (1,460,935 | ) | ||||
Other long-term liabilities | 125,744 | 2,967 | ||||||
Income taxes payable and receivable | 794,027 | 157,836 | ||||||
Net cash flows from (used in) operating activities | 18,126,800 | 10,835,198 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (2,901,134 | ) | (3,385,977 | ) | ||||
Proceeds from sales of property and equipment | 16,600 | 56,200 | ||||||
Investment in equity method investee | (6,500,000 | ) | — | |||||
Issuance of note receivable | (3,500,000 | ) | — | |||||
Net cash flows from (used in) investing activities | (12,884,534 | ) | (3,329,777 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings under revolving credit facility | 1,083,878,207 | 1,022,309,940 | ||||||
Repayments under revolving credit facility | (1,087,870,919 | ) | (1,025,624,006 | ) | ||||
Principal payments on long-term debt | (397,936 | ) | (686,139 | ) | ||||
Proceeds from exercise of stock options | 25,750 | — | ||||||
Repurchase of common stock | (100,524 | ) | (3,186,987 | ) | ||||
Dividends on common stock | (487,776 | ) | (524,866 | ) | ||||
Settlement and withholdings of equity-based awards | (30,208 | ) | — | |||||
Net cash flows from (used in) financing activities | (4,983,406 | ) | (7,712,058 | ) | ||||
Net change in cash | 258,860 | (206,637 | ) | |||||
Cash, beginning of period | 337,704 | 520,644 | ||||||
Cash, end of period | $ | 596,564 | $ | 314,007 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 1,387,381 | $ | 1,140,562 | ||||
Cash paid during the period for income taxes | 376,835 | 1,265,725 | ||||||
Supplemental disclosure of non-cash information: | ||||||||
Equipment acquisitions classified in accounts payable | $ | 100,424 | $ | 91,838 | ||||
Issuance of common stock in connection with the vesting and exercise of equity-based awards | 990,653 | 1,005,792 | ||||||
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Contacts:
AMCON Distributing Company
Ph 402-331-3727
