AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2020

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 $1.22 on net income available to common shareholders of $0.7 million for its second fiscal quarter ended March 31, 2020.

“Both of AMCON’s business segments are open for business. We are fully committed to our employees’ and customers’ success and safety during the rapidly evolving COVID-19 situation. While many of the states in which we operate have shelter in place orders, AMCON is an essential service provider and a key component of the United States supply chain as a distributor to convenience stores, truck stops, rural grocery stores as well as our role as a health food retailer,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Atayan also noted, “Our Bank Group provided an expanded 5-year credit facility and on April 1, 2020 we successfully closed on our investment in Team Sledd, both of which further our long term strategic objectives. We welcome all the Team Sledd Associates, Customers and Vendors to the AMCON Community.”

“AMCON’s deepest sympathies go out to all who have been impacted by the coronavirus outbreaks. We want to thank our Associates who worked tirelessly during these challenging times to ensure our customers and communities had the essential products and supplies they need. Our management teams’ first priority is to maintain the continuity of our workforce and our employee’s safety in order to best serve our customers’ interests. Our team has worked diligently addressing simultaneous supply chain challenges that impacted the entire United States as several industry suppliers’ temporarily shut down during the COVID-19 crisis,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Plummer also noted, “Our team built and operated a Virtual Trade Show on short notice, as the governmental restrictions on large meetings made the traditional Spring Trade Show not possible. The customer response to the Virtual Trade Show was excellent and we built solid momentum going forward. We were pleased to close March 31, 2020 with shareholders’ equity of $62.6 million and consolidated debt of $46.6 million.”

The wholesale distribution segment reported revenues of $324.9 million and operating income of $2.9 million for the second quarter of fiscal 2020. The retail health food segment reported revenues of $13.0 million and operating income of $0.1 million for the second 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

March 31, 2020 and September 30, 2019

 

 

 

 

 

 

 

 

 

March

 

September

 

 

2020

 

2019

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

661,957

 

$

337,704

Accounts receivable, less allowance for doubtful accounts of $1.3 million at March 2020 and $0.9 million at September 2019

 

 

27,811,495

 

 

24,665,620

Inventories, net

 

 

84,912,508

 

 

102,343,517

Income taxes receivable

 

 

172,365

 

 

350,378

Prepaid and other current assets

 

 

6,986,997

 

 

7,148,459

Total current assets

 

 

120,545,322

 

 

134,845,678

 

 

 

 

 

 

 

Property and equipment, net

 

 

18,287,881

 

 

17,655,415

Operating lease right-of-use assets, net

 

 

19,689,507

 

 

Goodwill

 

 

4,436,950

 

 

4,436,950

Other intangible assets, net

 

 

500,000

 

 

500,000

Other assets

 

 

406,653

 

 

273,579

Total assets

 

$

163,866,313

 

$

157,711,622

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

22,985,979

 

$

18,647,572

Accrued expenses

 

 

6,650,445

 

 

8,577,972

Accrued wages, salaries and bonuses

 

 

3,107,209

 

 

3,828,847

Current operating lease liabilities

 

 

5,433,800

 

 

Current maturities of long-term debt

 

 

542,004

 

 

532,747

Total current liabilities

 

 

38,719,437

 

 

31,587,138

 

 

 

 

 

 

 

Credit facility

 

 

43,218,080

 

 

60,376,714

Deferred income tax liability, net

 

 

1,925,536

 

 

1,823,373

Long-term operating lease liabilities

 

 

14,597,065

 

 

Long-term debt, less current maturities

 

 

2,852,112

 

 

3,125,644

Other long-term liabilities

 

 

 

 

42,011

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

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

 

 

 

 

Common stock, $.01 par value, 3,000,000 shares authorized, 565,526 shares outstanding at March 2020 and 552,614 shares outstanding at September 2019

 

 

8,692

 

 

8,561

Additional paid-in capital

 

 

24,224,145

 

 

23,165,639

Retained earnings

 

 

67,184,900

 

 

66,414,397

Treasury stock at cost

 

 

(28,863,654)

 

 

(28,831,855)

Total shareholders’ equity

 

 

62,554,083

 

 

60,756,742

Total liabilities and shareholders’ equity

 

$

163,866,313

 

$

157,711,622

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and six months ended March 31, 2020 and 2019

 

 

 

For the three months ended March

 

For the six months ended March

2020

2019

2020

2019

Sales (including excise taxes of $87.5 million and $82.9 million, and $181.5 million and $175.9 million, respectively)

 

$

337,886,516

 

$

310,715,873

 

$

697,987,619

 

$

655,449,793

Cost of sales

 

 

317,193,063

 

 

290,126,453

 

 

656,449,455

 

 

614,228,235

Gross profit

 

 

20,693,453

 

 

20,589,420

 

 

41,538,164

 

 

41,221,558

Selling, general and administrative expenses

 

 

18,512,890

 

 

17,391,681

 

 

37,465,626

 

 

35,348,896

Depreciation and amortization

 

 

790,901

 

 

641,228

 

 

1,516,361

 

 

1,249,236

 

 

 

19,303,791

 

 

18,032,909

 

 

38,981,987

 

 

36,598,132

Operating income

 

 

1,389,662

 

 

2,556,511

 

 

2,556,177

 

 

4,623,426

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

387,263

 

 

396,576

 

 

859,686

 

 

719,526

Other (income), net

 

 

(29,920)

 

 

(36,280)

 

 

(36,697)

 

 

(39,636)

 

 

 

357,343

 

 

360,296

 

 

822,989

 

 

679,890

Income from operations before income taxes

 

 

1,032,319

 

 

2,196,215

 

 

1,733,188

 

 

3,943,536

Income tax expense

 

 

333,000

 

 

673,000

 

 

582,000

 

 

1,175,000

Net income available to common shareholders

 

$

699,319

 

$

1,523,215

 

$

1,151,188

 

$

2,768,536

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share available to common shareholders

 

$

1.24

 

$

2.49

 

$

2.04

 

$

4.50

Diluted earnings per share available to common shareholders

 

$

1.22

 

$

2.45

 

$

2.02

 

$

4.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

565,697

 

 

611,824

 

 

564,129

 

 

614,874

Diluted weighted average shares outstanding

 

 

571,852

 

 

620,769

 

 

569,856

 

 

623,848

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2020 and 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid in

 

Retained

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Total

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED MARCH 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2020

 

869,367

 

$

8,692

 

(303,534)

 

$

(28,840,011)

 

$

24,192,954

 

$

66,592,637

 

$

61,954,272

Dividends on common stock, $0.18 per share

 

 

 

 

 

 

 

 

 

 

(107,056)

 

 

(107,056)

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

 

 

 

 

 

 

 

 

31,191

 

 

 

 

31,191

Repurchase of common stock

 

 

 

 

(307)

 

 

(23,643)

 

 

 

 

 

 

(23,643)

Net income

 

 

 

 

 

 

 

 

 

 

699,319

 

 

699,319

Balance, March 31, 2020

 

869,367

 

$

8,692

 

(303,841)

 

$

(28,863,654)

 

$

24,224,145

 

$

67,184,900

 

$

62,554,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Common Stock

 

Treasury Stock

 

Paid in

 

Retained

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Total

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED MARCH 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, $0.64 per share

 

 

 

 

 

 

 

 

 

 

(380,685)

 

 

(380,685)

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

 

13,328

 

 

131

 

 

 

 

 

1,058,506

 

 

 

 

1,058,637

Repurchase of common stock

 

 

 

 

(416)

 

 

(31,799)

 

 

 

 

 

 

(31,799)

Net income

 

 

 

 

 

 

 

 

 

 

1,151,188

 

 

1,151,188

Balance, March 31, 2020

 

869,367

 

$

8,692

 

(303,841)

 

$

(28,863,654)

 

$

24,224,145

 

$

67,184,900

 

$

62,554,083

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the six months ended March 31, 2020 and 2019

 

 

 

March

 

March

 

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

1,151,188

 

$

2,768,536

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

 

 

 

 

 

 

Depreciation

 

 

1,516,361

 

 

1,217,986

Amortization

 

 

 

 

31,250

Loss (Gain) on sales of property and equipment

 

 

33,642

 

 

(17,832)

Equity-based compensation

 

 

446,114

 

 

622,390

Deferred income taxes

 

 

102,163

 

 

226,918

Provision for losses on doubtful accounts

 

 

390,000

 

 

59,000

Inventory allowance

 

 

55,746

 

 

240,699

Other

 

 

(42,011)

 

 

1,978

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,535,875)

 

 

3,353,602

Inventories

 

 

17,375,263

 

 

20,978,357

Prepaid and other current assets

 

 

(100,883)

 

 

(2,402,722)

Other assets

 

 

(133,074)

 

 

7,897

Accounts payable

 

 

4,401,077

 

 

(467,687)

Accrued expenses and accrued wages, salaries and bonuses

 

 

(1,432,939)

 

 

(2,275,795)

Income taxes receivable

 

 

178,013

 

 

273,742

Net cash flows from (used in) operating activities

 

 

20,404,785

 

 

24,618,319

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,245,139)

 

 

(2,159,232)

Proceeds from sales of property and equipment

 

 

 

 

23,700

Net cash flows from (used in) investing activities

 

 

(2,245,139)

 

 

(2,135,532)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

680,161,101

 

 

642,850,736

Repayments under revolving credit facility

 

 

(697,319,735)

 

 

(661,055,136)

Principal payments on long-term debt

 

 

(264,275)

 

 

(556,969)

Repurchase of common stock

 

 

(31,799)

 

 

(3,186,846)

Dividends on common stock

 

 

(380,685)

 

 

(413,100)

Net cash flows from (used in) financing activities

 

 

(17,835,393)

 

 

(22,361,315)

Net change in cash

 

 

324,253

 

 

121,472

Cash, beginning of period

 

 

337,704

 

 

520,644

Cash, end of period

 

$

661,957

 

$

642,116

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid during the period for interest

 

$

927,322

 

$

774,784

Cash paid during the period for income taxes

 

 

301,824

 

 

674,340

 

 

 

 

 

 

 

Supplemental disclosure of non-cash information:

 

 

 

 

 

 

Equipment acquisitions classified in accounts payable

 

$

6,583

 

$

212,800

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

 

 

990,653

 

 

1,005,792

 

Contacts

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

Contacts

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