AMCON Distributing Company Reports Fully Diluted Earnings Per Share of $4.26 for the Fiscal Year Ended September 30, 2017

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 $4.26 on net income available to common shareholders of $2.9 million for the fiscal year ended September 30, 2017. AMCON earned $1.48 per fully diluted share on net income available to common shareholders of $1.0 million for the fourth fiscal quarter ended September 30, 2017.

“We are pleased with our results for fiscal 2017. AMCON continues to be a leader in the convenience distribution industry as a result of our relentless efforts to provide first class customer service and reliability. As the convenience store industry evolves and becomes increasingly complex, the wide variety of programs and services we offer serve to competitively differentiate our Company,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We are diligently implementing our focused strategic plan anchored by our customer centric philosophy enabling our management team to navigate a challenging business environment. Our objective is to deliver attractive risk adjusted rates of return on the capital we employ. We expect an enhanced level of capital expenditures in the coming years to support our efforts in foodservice, information technology, expansion of our territory, and the addition of retail health food stores. In addition, we are seeking acquisitions in wholesale and foodservice distribution that further our strategic objectives.”

The wholesale distribution segment reported revenues of $1.2 billion and operating income of $13.7 million for fiscal 2017, and revenues and operating income of $331.9 million and $3.9 million, respectively, for the fourth fiscal quarter of fiscal 2017. The retail health food segment reported revenues of $25.4 million and an operating loss of $1.8 million for fiscal 2017, and revenue of $6.1 million and an operating loss of $0.7 million for the fourth quarter of fiscal 2017.

“Our wholesale customers are growing both organically and from acquisitions. To support this growth, we are actively expanding our service territory,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment. Evans continued, “Our fall trade shows provided considerable momentum as we enter fiscal 2018. We embrace a long term approach to building our customers’ business which is mutually beneficial.”

“Our new flagship Chamberlin’s store, which we opened early in fiscal 2017 in the Orlando market, has been a commercial success. We have recently opened a second store in the Lakeland market which builds off the momentum we have made in the Florida market as a function of our brand reimaging and social media initiatives in this market,” said Clifford Ginn, President of AMCON’s Retail Health Food Segment. “We will continue to invest in new stores, store remodeling, and marketing as we seek to address the competitive challenges we face in the industry. Our Midwestern markets operate in a highly challenging environment.”

“We are very focused on increasing our shareholders’ equity per share, maintaining high levels of balance sheet liquidity and generating free cash flow. At September 30, 2017, our shareholders’ equity was $68.2 million, resulting in adjusted book value per share of $99.24. We turned our inventory twenty-two times and consolidated debt was $32.1 million. At its lowest point during fiscal 2017 our consolidated debt was $3.7 million,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. “We continue to place a high priority on the development of information technology for internal and external purposes. These are important investments for the future of our business. In addition, we are exploring additional upgrades and expansion of our distribution facilities and retail stores system wide,” 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 September
2017 2016
ASSETS
Current assets:
Cash $ 523,065 $ 605,380

Accounts receivable, less allowance for doubtful accounts of $0.8 million at September 2017 and $0.7 million at September 2016

30,690,403 30,033,104
Inventories, net 72,909,996 48,404,882
Income taxes receivable 164,959
Prepaid and other current assets   4,218,811   8,608,049
Total current assets 108,342,275 87,816,374
 
Property and equipment, net 13,307,986 12,607,877
Goodwill 6,349,827 6,349,827
Other intangible assets, net 3,494,311 3,759,311
Other assets   310,488   288,082
Total assets $ 131,804,887 $ 110,821,471
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 17,631,552 $ 18,164,983
Accrued expenses 7,553,089 6,792,884
Accrued wages, salaries and bonuses 3,477,966 3,580,996
Income taxes payable 544,069
Current maturities of long-term debt   373,645   362,495
Total current liabilities 29,580,321 28,901,358
 
Credit facility 29,037,182 10,537,226
Deferred income tax liability, net 2,336,263 2,579,650
Long-term debt, less current maturities 2,648,179 3,021,824
Other long-term liabilities 34,100 30,815
 
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized

Common stock, $.01 par value, 3,000,000 shares authorized, 678,006 shares outstanding at September 2017 and 677,057 shares outstanding at September 2016

8,314 8,184
Additional paid-in capital 20,825,919 19,525,554
Retained earnings 60,935,911 58,693,241
Treasury stock at cost   (13,601,302)   (12,476,381)
Total shareholders’ equity   68,168,842   65,750,598
Total liabilities and shareholders' equity $ 131,804,887 $ 110,821,471
 

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

   
Fiscal Years Ended September
2017 2016
Sales (including excise taxes of $368.8 million and $386.1 million, respectively) $ 1,274,984,408 $ 1,294,625,223
Cost of sales   1,202,536,285     1,219,855,401  
Gross profit   72,448,123     74,769,822  
Selling, general and administrative expenses 64,173,895 61,733,220
Depreciation and amortization   2,049,475     2,162,667  
  66,223,370     63,895,887  
Operating income 6,224,753 10,873,935
 
Other expense (income):
Interest expense 825,690 723,221
Other (income), net   (39,513 )   (104,959 )
  786,177     618,262  
Income from operations before income tax expense 5,438,576 10,255,673
Income tax expense   2,489,000     4,275,000  
Net income 2,949,576 5,980,673
Preferred stock dividend requirements       (160,360 )
Net income available to common shareholders $ 2,949,576   $ 5,820,313  
 
Basic earnings per share available to common shareholders $ 4.34 $ 9.37
Diluted earnings per share available to common shareholders $ 4.26 $ 8.38
 
Basic weighted average shares outstanding 679,478 621,435
Diluted weighted average shares outstanding 692,183 713,897
 
Dividends declared and paid per common share $ 1.00 $ 1.00
 

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

   
Fiscal Years Ended September
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,949,576 $ 5,980,673

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

Depreciation 1,784,475 1,831,000
Amortization 265,000 331,667
Gain on sale of property and equipment (31,622 ) (58,926 )
Equity-based compensation 1,394,879 1,403,584
Deferred income taxes (243,387 ) 437,278
Provision (recovery) for losses on doubtful accounts 98,000 (199,000 )
Recoveries for losses on inventory obsolescence (101,716 ) (57,247 )
Other 3,285 (4,045 )
Changes in assets and liabilities:
Accounts receivable (755,299 ) 2,032,683
Inventories (24,403,398 ) 12,445,843
Prepaid and other current assets 4,389,238 (6,482,141 )
Other assets (22,406 ) 29,102
Accounts payable (467,348 ) 976,142
Accrued expenses and accrued wages, salaries and bonuses 669,873 (228,552 )
Income taxes payable (receivable)   709,028     (51,721 )
Net cash flows from operating activities   (13,761,822 )   18,386,340  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,565,699 ) (1,594,848 )
Proceeds from sales of property and equipment   46,654     112,157  
Net cash flows from investing activities   (2,519,045 )   (1,482,691 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility 1,311,967,154 1,303,722,318
Repayments under revolving credit facility (1,293,467,198 ) (1,314,087,299 )
Principal payments on long-term debt (362,495 ) (351,383 )
Repurchase of common stock (1,124,921 ) (4,795,412 )
Dividends paid on convertible preferred stock (160,360 )
Dividends on common stock (706,906 ) (654,678 )
Withholdings on the exercise of equity-based awards   (107,082 )   (190,991 )
Net cash flows from financing activities   16,198,552     (16,517,805 )
Net change in cash (82,315 ) 385,844
Cash, beginning of period   605,380     219,536  
Cash, end of period $ 523,065   $ 605,380  
 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 819,969 $ 737,252
Cash paid during the period for income taxes 2,023,359 3,889,443
 
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable 101,361 167,444

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

1,262,763 1,174,981

Issuance of common stock in connection with the redemption of Series A & B convertible preferred stock

2,899,892
 

AMCON Distributing Company and Subsidiaries

       
FISCAL YEAR 2017
 
(dollars in thousands, except per share data) First Second Third Fourth
 
Sales $ 310,104 $ 294,048 $ 332,842 $ 337,990
 

Gross profit

  18,316   17,474   18,024   18,634

 

Income from operations before income tax expense

  1,879   990   798   1,771

 

Net income

1,046 488 385 1,030

 

Preferred stock dividend requirements

       

 

Net income available to common shareholders

$ 1,046 $ 488 $ 385 $ 1,030

 

 

Basic earnings per share available to common shareholders

$ 1.54 $ 0.72 $ 0.57 $ 1.52

 

Diluted earnings per share available to common shareholders

$ 1.52

 

$ 0.71 $ 0.56 $ 1.48

 

 
 
FISCAL YEAR 2016
 
(dollars in thousands, except per share data) First Second Third Fourth
 
Sales $ 322,008 $ 296,449 $ 333,399 $ 342,769
 

Gross profit

  18,962   17,540   19,164   19,104

 

Income from operations before income tax expense

  2,365   2,069   3,162   2,660

 

Net income

1,356 1,147 1,852 1,626

 

Preferred stock dividend requirements

 

(49

)

 

(49

)

 

(49

)

 

(14

)

 

Net income available to common shareholders

$ 1,307 $ 1,098 $ 1,803 $ 1,613

 

 

Basic earnings per share available to common shareholders

$ 2.09 $ 1.81 $ 3.03 $ 2.45

 

Diluted earnings per share available to common shareholders

$ 1.85 $ 1.61 $ 2.62 $ 2.32

 

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 vested and outstanding. 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 and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options and vesting of restricted stock units.”
 

September 2017

Number of common shares outstanding at September 30, 2017 678,006
Total shareholders’ equity at September 30, 2017 $ 68,168,842
 
Book value per share at September 30, 2017 $ 100.54
 

September 2017

Number of common shares outstanding at September 30, 2017 678,006
Add: common shares potentially issuable for stock options and unvested restricted stock units /1/   55,821
  733,827
 
Total shareholders’ equity at September 30, 2017 $ 68,168,842
Equity impact if all potential common shares were exercised or vested /1/   4,654,135
$ 72,822,977
 
Adjusted book value per share at September 30, 2017 $ 99.24

____________

/1/   Assumes the exercise of all vested and unvested stock options and vesting of all outstanding restricted stock units at September 30, 2017.

Contacts

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

Contacts

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