AMCON Distributing Company Reports Fully Diluted Earnings Per Share of $1.73 for the Quarter Ended December 31, 2013

OMAHA, Neb.--()--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

Contacts

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

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Contacts

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