AMCON Distributing Company Reports Results for the Fiscal Year Ended September 30, 2019

OMAHA, Neb.--()--AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $5.25 on net income available to common shareholders of $3.2 million for the fiscal year ended September 30, 2019. AMCON incurred a loss of $0.41 per fully diluted share on a net loss available to common shareholders of $0.2 million for the fourth fiscal quarter ended September 30, 2019.

“We are pleased with our results for fiscal 2019. Our management philosophy and tradition of sustained excellence in customer service has positioned AMCON as a leader in the Convenience Distribution Industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We continue to expect a heightened level of capital expenditures in the coming years to support various strategic initiatives such as enhancements to our foodservice platform, investments in information technology, expansion of our geographic reach, and the continued redevelopment of our retail health food stores. In addition, we are seeking strategic acquisition opportunities.”

The wholesale distribution segment reported revenues of $1.3 billion and operating income of $17.3 million for fiscal 2019, and revenues and operating income of $356.7 million and $6.2 million, respectively, for the fourth fiscal quarter of fiscal 2019. The retail health food segment reported revenues of $44.2 million and an operating loss of $4.7 million for fiscal 2019, and revenues of $10.2 million and an operating loss of $4.2 million for the fourth quarter of fiscal 2019.

“Our customer base is growing and we are expanding our territories to serve them,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. He further noted, “We completed the redevelopment of our Bismarck, ND facility in the second half of the fiscal year and are proud to report the operational efficiencies and new capabilities these investments are providing to customers. The fall trade show season was well received by our customer base and enthusiastically supported by our vendor community. We are also delighted to announce the promotion of Douglas Sperry and Chad Pickel to Group Vice Presidents, reflecting their increased operational roles which span multiple branches.”

Mr. Plummer further added, “At September 30, 2019, our shareholders’ equity was $60.8 million, resulting in adjusted book value per share of $106.56. We turned our inventory 19 times and consolidated debt was $64.0 million. At its lowest point during fiscal 2019 our consolidated debt was $16.3 million.”

AMCON’s Healthy Edge Retail Group operates in a highly competitive and challenging environment. The organic and natural vendor community has supported our management team’s efforts to remerchandise our stores. Our strategy is to offer a broad selection of products supported with customer service as an alternative to the capital intensive big box retailers in the segment.

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 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

CONSOLIDATED BALANCE SHEETS

 

 

 

September

 

September

 

 

2019

 

2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

337,704

 

 

$

520,644

 

Accounts receivable, less allowance for doubtful accounts of $0.9 million at September 2019 and September 2018

 

 

24,665,620

 

 

 

31,428,845

 

Inventories, net

 

 

102,343,517

 

 

 

78,869,615

 

Income taxes receivable

 

 

350,378

 

 

 

272,112

 

Prepaid and other current assets

 

 

7,148,459

 

 

 

4,940,775

 

Total current assets

 

 

134,845,678

 

 

 

116,031,991

 

 

 

 

 

 

Property and equipment, net

 

 

17,655,415

 

 

 

15,768,484

 

Goodwill

 

 

4,436,950

 

 

 

4,436,950

 

Other intangible assets, net

 

 

500,000

 

 

 

3,414,936

 

Other assets

 

 

273,579

 

 

 

301,793

 

Total assets

 

$

157,711,622

 

 

$

139,954,154

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

18,647,572

 

 

$

20,826,834

 

Accrued expenses

 

 

8,577,972

 

 

 

8,556,620

 

Accrued wages, salaries and bonuses

 

 

3,828,847

 

 

 

3,965,733

 

Current maturities of long-term debt

 

 

532,747

 

 

 

1,096,306

 

Total current liabilities

 

 

31,587,138

 

 

 

34,445,493

 

 

 

 

 

 

Credit facility

 

 

60,376,714

 

 

 

35,428,597

 

Deferred income tax liability, net

 

 

1,823,373

 

 

 

1,782,801

 

Long-term debt, less current maturities

 

 

3,125,644

 

 

 

3,658,391

 

Other long-term liabilities

 

 

42,011

 

 

 

38,055

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Preferred stock, $.01 par value, 1,000,000 shares authorized

 

 

 

 

Common stock, $.01 par value, 3,000,000 shares authorized, 552,614 shares outstanding at September 2019 and 615,777 shares outstanding at September 2018

 

 

8,561

 

 

 

8,441

 

Additional paid-in capital

 

 

23,165,639

 

 

 

22,069,098

 

Retained earnings

 

 

66,414,397

 

 

 

63,848,030

 

Treasury stock at cost

 

 

(28,831,855

)

 

 

(21,324,752

)

Total shareholders’ equity

 

 

60,756,742

 

 

 

64,600,817

 

Total liabilities and shareholders’ equity

 

$

157,711,622

 

 

$

139,954,154

 

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Fiscal Years Ended September

 

 

2019

 

2018

Sales (including excise taxes of $370.2 million and $368.4 million, respectively)

 

$

1,392,388,157

 

 

$

1,322,306,658

 

Cost of sales

 

 

1,308,364,726

 

 

 

1,245,375,460

 

Gross profit

 

 

84,023,431

 

 

 

76,931,198

 

Selling, general and administrative expenses

 

 

72,182,883

 

 

 

66,781,234

 

Depreciation and amortization

 

 

2,617,591

 

 

 

2,318,146

 

Impairment charges

 

 

2,873,269

 

 

 

1,912,877

 

 

 

 

77,673,743

 

 

 

71,012,257

 

Operating income

 

 

6,349,688

 

 

 

5,918,941

 

 

 

 

 

 

Other expense (income):

 

 

 

 

Interest expense

 

 

1,598,864

 

 

 

1,194,373

 

Other (income), net

 

 

(61,119

)

 

 

(54,042

)

 

 

 

1,537,745

 

 

 

1,140,331

 

Income from operations before income taxes

 

 

4,811,943

 

 

 

4,778,610

 

Income tax expense

 

 

1,609,000

 

 

 

1,164,000

 

Net income available to common shareholders

 

$

3,202,943

 

 

$

3,614,610

 

 

 

 

 

 

Basic earnings per share available to common shareholders

 

$

5.36

 

 

$

5.47

 

Diluted earnings per share available to common shareholders

 

$

5.25

 

 

$

5.38

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

597,961

 

 

 

660,925

 

Diluted weighted average shares outstanding

 

 

609,836

 

 

 

672,449

 

 

 

 

 

 

Dividends declared and paid per common share

 

$

1.00

 

 

$

1.00

 

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid in

 

Retained

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Total

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, $1.00 per share

 

 

 

 

 

 

 

 

 

(702,491

)

 

 

(702,491

)

Compensation expense and issuance of stock in connection with equity-based awards

 

12,651

 

 

127

 

 

 

 

 

 

1,243,179

 

 

 

 

1,243,306

 

Repurchase of common stock

 

 

 

(74,880

)

 

 

(7,723,450

)

 

 

 

 

 

(7,723,450

)

Net income

 

 

 

 

 

 

 

 

 

3,614,610

 

 

 

3,614,610

 

Balance September 30, 2018

 

844,089

 

$

8,441

 

(228,312

)

 

$

(21,324,752

)

 

$

22,069,098

 

$

63,848,030

 

 

$

64,600,817

 

Dividends on common stock, $1.00 per share

 

 

 

 

 

 

 

 

 

(636,576

)

 

 

(636,576

)

Compensation expense and issuance of stock in connection with equity-based awards

 

11,950

 

 

120

 

 

 

 

 

 

1,096,541

 

 

 

 

1,096,661

 

Repurchase of common stock

 

 

 

(75,113

)

 

 

(7,507,103

)

 

 

 

 

 

(7,507,103

)

Net income

 

 

 

 

 

 

 

 

 

3,202,943

 

 

 

3,202,943

 

Balance, September 30, 2019

 

856,039

 

$

8,561

 

(303,425

)

 

$

(28,831,855

)

 

$

23,165,639

 

$

66,414,397

 

 

$

60,756,742

 

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

Fiscal Years Ended September

 

 

2019

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income

 

$

3,202,943

 

 

$

3,614,610

 

Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:

 

 

 

 

Depreciation

 

 

2,575,924

 

 

 

2,238,771

 

Amortization

 

 

41,667

 

 

 

79,375

 

Impairment charges

 

 

2,873,269

 

 

 

1,912,877

 

Gain on sales of property and equipment

 

 

(13,775

)

 

 

(4,070

)

Equity-based compensation

 

 

1,299,792

 

 

 

1,271,840

 

Deferred income taxes

 

 

40,572

 

 

 

(553,462

)

Provision for losses on doubtful accounts

 

 

21,000

 

 

 

90,000

 

Inventory allowance

 

 

560,610

 

 

 

(291,917

)

Other

 

 

3,956

 

 

 

3,955

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

 

6,742,225

 

 

 

(828,442

)

Inventories

 

 

(24,034,512

)

 

 

(5,056,917

)

Prepaid and other current assets

 

 

(2,207,684

)

 

 

(633,032

)

Other assets

 

 

28,214

 

 

 

8,695

 

Accounts payable

 

 

(2,247,262

)

 

 

3,295,390

 

Accrued expenses and accrued wages, salaries and bonuses

 

 

(262,330

)

 

 

1,563,964

 

Income taxes receivable

 

 

(78,266

)

 

 

(816,181

)

Net cash flows from (used in) operating activities

 

 

(11,453,657

)

 

 

5,895,456

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchase of property and equipment

 

 

(4,438,280

)

 

 

(3,226,107

)

Proceeds from sales of property and equipment

 

 

57,200

 

 

 

5,800

 

Net cash flows from (used in) investing activities

 

 

(4,381,080

)

 

 

(3,220,307

)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Borrowings under revolving credit facility

 

 

1,427,544,804

 

 

 

1,424,929,646

 

Repayments under revolving credit facility

 

 

(1,402,596,687

)

 

 

(1,418,538,231

)

Principal payments on long-term debt

 

 

(1,096,306

)

 

 

(541,844

)

Repurchase of common stock

 

 

(7,507,103

)

 

 

(7,723,450

)

Dividends on common stock

 

 

(636,576

)

 

 

(702,491

)

Withholdings on the exercise of equity-based awards

 

 

(56,335

)

 

 

(101,200

)

Net cash flows from (used in) financing activities

 

 

15,651,797

 

 

 

(2,677,570

)

Net change in cash

 

 

(182,940

)

 

 

(2,421

)

Cash, beginning of period

 

 

520,644

 

 

 

523,065

 

Cash, end of period

 

$

337,704

 

 

$

520,644

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Cash paid during the period for interest

 

$

1,561,531

 

 

$

1,137,691

 

Cash paid during the period for income taxes

 

 

1,646,694

 

 

 

2,533,643

 

 

 

 

 

 

Supplemental disclosure of non-cash information:

 

 

 

 

Equipment acquisitions classified in accounts payable

 

$

69,253

 

 

$

1,253

 

Purchase of property financed with debt

 

 

 

1,575,000

 

Acquisition of assets financed with debt

 

 

 

699,717

 

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

 

 

1,005,792

 

 

 

1,183,091

 

AMCON Distributing Company and Subsidiaries

FISCAL YEAR 2019

 

 

(dollars in thousands, except per share data)

First

Second

Third

Fourth

 

 

 

 

 

 

Sales

$

344,734

$

310,716

$

369,982

$

366,957

 

 

Gross profit

 

20,632

 

20,589

 

20,526

 

22,276

 

 

Income (loss) from operations before income tax expense

 

1,747

 

2,196

 

1,027

 

(158

)

 

Net income (loss) available to common shareholders

$

1,245

$

1,523

$

666

$

(231

)

 

 

 

 

 

 

Basic earnings (loss) per share available to common shareholders

$

2.02

$

2.49

$

1.12

$

(.41

)

 

Diluted earnings (loss) per share available to common shareholders

$

1.99

$

2.45

$

1.10

$

(.41

)

 

 

 

 

 

 

FISCAL YEAR 2018

 

 

 

 

 

(dollars in thousands, except per share data)

First

Second

Third

Fourth

 

 

 

 

 

 

Sales

$

315,513

$

295,207

$

349,043

$

362,543

 

 

Gross profit

 

18,192

 

17,066

 

19,113

 

22,560

 

 

Income from operations before income tax expense

 

1,110

 

623

 

1,247

 

1,799

 

 

Net income available to common shareholders

$

1,480

$

339

$

785

$

1,011

 

 

 

 

 

 

 

Basic earnings per share available to common shareholders

$

2.15

$

0.49

$

1.21

$

1.64

 

 

Diluted earnings per share available to common shareholders

$

2.13

$

0.49

$

1.18

$

1.60

 

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 2019

Number of common shares outstanding at September 30, 2019

 

 

552,614

Total shareholders’ equity at September 30, 2019

 

$

60,756,742

 

 

Book value per share at September 30, 2019

$

109.94

 

 

 

September 2019

Number of common shares outstanding at September 30, 2019

 

 

552,614

Add: common shares potentially issuable for stock options and unvested restricted stock units /1/

 

 

64,601

 

 

 

617,215

 

 

Total shareholders’ equity at September 30, 2019

 

$

60,756,742

Equity impact if all potential common shares were exercised or vested /1/

 

 

5,013,915

 

 

$

65,770,657

 

Adjusted book value per share at September 30, 2019

$

106.56

/1/

Assumes the exercise of all vested and unvested stock options and vesting of all outstanding restricted stock units at September 30, 2019.

 

Contacts

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

Contacts

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