AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $6.75 on net income available to common shareholders of $4.8 million for the fiscal year ended September 30, 2014. AMCON earned $2.57 per fully diluted share on net income available to common shareholders of $1.8 million for the fourth fiscal quarter ended September 30, 2014.
“We are pleased with our results for fiscal 2014. Our relentless focus on customer service and reliability has enabled us to maintain our leadership position in the convenience distribution industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We believe our focused strategic plan and customer centric philosophy are essential elements critical to navigating this challenging business environment. Our objective is to deliver attractive risk adjusted rates of return on the capital we employ. To support this objective we continue to invest in foodservice and information technology which drives the profitability of our customers.”
The wholesale distribution segment reported revenues of $1.2 billion and operating income before depreciation and amortization of $15.6 million for fiscal 2014, and revenues and operating income before depreciation and amortization of $328.0 million and $4.6 million, respectively, for the fourth fiscal quarter of fiscal 2014. The retail health food segment reported revenues of $34.3 million and operating income before depreciation and amortization of $1.3 million for fiscal 2014, and revenue of $8.1 million and operating income before depreciation and amortization of $0.2 million for the fourth fiscal quarter of 2014.
“Our emphasis on building long term relationships continues to provide us with a significant competitive advantage,” said Kathleen Evans, President of AMCON’s Wholesale Distribution Segment. Evans continued, “This is clearly evident based on our positive fall trade show response which will provide considerable momentum as we enter fiscal 2015. We are very excited about the completion of our plant expansion in Rapid City, South Dakota that will serve our foodservice growth plans in the region.”
“The Retail Health Food industry continues to grow. However, with this growth there has been substantial new competition enter our markets which has pressured revenues,” said Eric Hinkefent, President of AMCON’s Retail Health Food segment. “We have taken an aggressive approach to rationalize our operating expenses in light of the competitive environment and are looking at alternative ways to maintain our margins,” added Hinkefent.
“We are very focused on increasing our shareholders’ equity per share and maintaining high levels of balance sheet liquidity. Debt reduction is an important priority for us because it improves our debt to equity ratio. At September 30, 2014 our shareholders’ equity was $55.4 million, resulting in adjusted book value per share of $80.62. We turned our inventory twenty-six times and consolidated debt was reduced to $19.2 million. This was after share repurchases and plant expansions totaling $5.5 million,” said Andrew Plummer, AMCON’s Chief Financial Officer. “The Rapid City plant expansion brings a number of important benefits including increased efficiencies and the enhanced ability to service the thriving foodservice sector. We continue to place a high priority on the development of information technology for internal and external purposes. These are important investments in the future of our business,” 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 30, | ||||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 99,922 | $ | 275,036 | ||||
| Accounts receivable, less allowance for doubtful accounts of $0.8 million at 2014 and $1.1 million at 2013 | 33,286,932 | 28,383,205 | ||||||
| Inventories, net | 43,635,266 | 46,125,187 | ||||||
| Deferred income taxes | 1,606,168 | 1,831,933 | ||||||
| Prepaid and other current assets | 5,034,570 | 5,001,992 | ||||||
| Total current assets | 83,662,858 | 81,617,353 | ||||||
| Property and equipment, net | 13,763,140 | 13,088,859 | ||||||
| Goodwill | 6,349,827 | 6,349,827 | ||||||
| Other intangible assets, net | 4,455,978 | 4,820,978 | ||||||
| Other assets | 448,149 | 497,882 | ||||||
| $ | 108,679,952 | $ | 106,374,899 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 16,412,895 | $ | 15,859,636 | ||||
| Accrued expenses | 6,891,308 | 6,714,444 | ||||||
| Accrued wages, salaries and bonuses | 2,647,969 | 2,754,136 | ||||||
| Income taxes payable | 1,603,614 | 1,922,351 | ||||||
| Current maturities of long-term debt | 341,190 | 998,788 | ||||||
| Total current liabilities | 27,896,976 | 28,249,355 | ||||||
| Credit facility | 15,081,783 | 14,841,712 | ||||||
| Deferred income taxes | 3,484,204 | 3,327,010 | ||||||
| Long-term debt, less current maturities | 3,735,702 | 4,076,892 | ||||||
| Other long-term liabilities | 139,003 | 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 September 2014 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 September 30, 2014 and September 30, 2013, and a total liquidation preference of $0.4 million at both September 2014 and September 2013 | 400,000 | 400,000 | ||||||
Commitments and contingencies | ||||||||
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, $0.01 par value, 3,000,000 shares authorized, 602,411 shares issued and outstanding at September 2014 and 623,115 shares issued and outstanding at September 2013 | 6,677 | 6,543 | ||||||
| Additional paid-in capital | 13,571,909 | 12,502,135 | ||||||
| Retained earnings | 47,829,201 | 43,532,812 | ||||||
| Treasury stock at cost | (5,965,503 | ) | (3,300,956 | ) | ||||
| Total shareholders’ equity | 55,442,284 | 52,740,534 | ||||||
| $ | 108,679,952 | $ | 106,374,899 | |||||
AMCON Distributing Company and Subsidiaries | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| Fiscal Years Ended September | ||||||||
| 2014 | 2013 | |||||||
| Sales (including excise taxes of $387.8 million and $386.4 million, respectively) | $ | 1,236,755,388 | $ | 1,211,052,634 | ||||
| Cost of sales | 1,160,248,793 | 1,133,695,309 | ||||||
| Gross profit | 76,506,595 | 77,357,325 | ||||||
| Selling, general and administrative expenses | 64,723,824 | 63,880,109 | ||||||
| Depreciation and amortization | 2,386,402 | 2,412,613 | ||||||
| 67,110,226 | 66,292,722 | |||||||
| Operating income | 9,396,369 | 11,064,603 | ||||||
| Other expense (income): | ||||||||
| Interest expense | 935,360 | 1,108,146 | ||||||
| Other (income), net | (130,519 | ) | (277,215 | ) | ||||
| 804,841 | 830,931 | |||||||
| Income from operations before income tax expense | 8,591,528 | 10,233,672 | ||||||
| Income tax expense | 3,632,000 | 4,375,000 | ||||||
| Net income | 4,959,528 | 5,858,672 | ||||||
| Preferred stock dividend requirements | (195,105 | ) | (205,218 | ) | ||||
| Net income available to common shareholders | $ | 4,764,423 | $ | 5,653,454 | ||||
Basic earnings per share available to common shareholders: | $ | 7.81 | $ | 9.08 | ||||
Diluted earnings per share available to common shareholders: | $ | 6.75 | $ | 7.79 | ||||
Basic weighted average shares outstanding | 610,392 | 622,904 | ||||||
| Diluted weighted average shares outstanding | 735,227 | 751,812 | ||||||
AMCON Distributing Company and Subsidiaries | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Fiscal Years Ended September | ||||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 4,959,528 | $ | 5,858,672 | ||||
| Adjustments to reconcile income from operations to net cash flows from operating activities: | ||||||||
| Depreciation | 2,021,402 | 2,047,613 | ||||||
| Amortization | 365,000 | 365,000 | ||||||
| Gain on sale of property and equipment | (59,449 | ) | (56,829 | ) | ||||
| Equity-based compensation | 1,406,033 | 1,303,310 | ||||||
| Deferred income taxes | 382,959 | (221,694 | ) | |||||
| Recoveries for losses on doubtful accounts | (317,000 | ) | (55,000 | ) | ||||
| Provision (recoveries) for losses on inventory obsolescence | 44,695 | (91,494 | ) | |||||
| Other | (8,045 | ) | (93,328 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (4,586,727 | ) | 4,353,630 | |||||
| Inventories | 3,403,156 | (7,669,072 | ) | |||||
| Prepaid and other current assets | (32,578 | ) | 1,474,710 | |||||
| Other assets | 49,733 | 232 | ||||||
| Accounts payable | 591,478 | (1,391,539 | ) | |||||
| Accrued expenses and accrued wages, salaries and bonuses | (238,994 | ) | 181,294 | |||||
| Income taxes payable | (318,737 | ) | (272,615 | ) | ||||
| Net cash flows from operating activities | 7,662,454 | 5,732,890 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (2,796,326 | ) | (2,113,426 | ) | ||||
| Proceeds from sales of property and equipment | 192,373 | 179,662 | ||||||
| Acquisitions | (996,803 | ) | — | |||||
| Net cash flows from investing activities | (3,600,756 | ) | (1,933,764 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net borrowings on bank credit agreements | 240,071 | 487,980 | ||||||
| Principal payments on long-term debt | (998,788 | ) | (1,182,829 | ) | ||||
| Repurchase of common stock and Series B Convertible Preferred Stock | (2,664,547 | ) | (2,572,085 | ) | ||||
| Dividends paid on convertible preferred stock | (195,105 | ) | (205,218 | ) | ||||
| Dividends on common stock | (468,034 | ) | (469,895 | ) | ||||
| Withholdings on the exercise of equity-based awards | (150,409 | ) | (73,430 | ) | ||||
| Net cash flow from financing activities | (4,236,812 | ) | (4,015,477 | ) | ||||
| Net change in cash | (175,114 | ) | (216,351 | ) | ||||
| Cash, beginning of year | 275,036 | 491,387 | ||||||
| Cash, end of year | $ | 99,922 | $ | 275,036 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the year for interest | $ | 946,881 | $ | 1,115,991 | ||||
| Cash paid during the year for income taxes | 3,567,778 | 4,867,986 | ||||||
Supplemental disclosure of non-cash information: | ||||||||
| Equipment acquisitions classified as accounts payable | $ | 34,985 | $ | 73,204 | ||||
| Issuance of common stock in connection with the vesting and exercise of equity-based awards | 1,154,869 | 1,389,258 | ||||||
| Conversion by holders of Series B Convertible Preferred Stock to common stock | — | 100,000 | ||||||
| Common stock acquired with other consideration | — | 760,871 | ||||||
AMCON Distributing Company and Subsidiaries | ||||||||||||||||
FISCAL YEAR 2014 | ||||||||||||||||
| (dollars in thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
| Sales | $ | 305,626 | $ | 272,422 | $ | 322,648 | $ | 336,060 | ||||||||
Gross profit | 19,641 | 17,620 | 19,295 | 19,951 | ||||||||||||
Income from operations before income tax expense | 2,253 | 995 | 2,250 | 3,093 | ||||||||||||
Net income | 1,288 | 531 | 1,260 | 1,880 | ||||||||||||
Preferred stock dividend requirements | (49 | ) | (48 | ) | (49 | ) | (49 | ) | ||||||||
Net income available to common shareholders | $ | 1,239 | $ | 483 | $ | 1,211 | $ | 1,831 | ||||||||
Basic earnings per share available to common shareholders | $ | 1.99 | $ | 0.79 | $ | 2.00 | $ | 3.04 | ||||||||
Diluted earnings per share available to common shareholders | $ | 1.73 | $ | 0.72 | $ | 1.73 | $ | 2.57 | ||||||||
FISCAL YEAR 2013 | ||||||||||||||||
| (dollars in thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
| Sales | $ | 302,218 | $ | 274,568 | $ | 316,031 | $ | 318,235 | ||||||||
Gross profit | 19,230 | 18,297 | 19,811 | 20,020 | ||||||||||||
Income from operations before income tax expense | 2,533 | 2,125 | 2,887 | 2,689 | ||||||||||||
Net income | 1,463 | 1,214 | 1,632 | 1,549 | ||||||||||||
Preferred stock dividend requirements | (59 | ) | (48 | ) | (49 | ) | (49 | ) | ||||||||
Net income available to common shareholders | $ | 1,403 | $ | 1,166 | $ | 1,584 | $ | 1,500 | ||||||||
Basic earnings per share available to common shareholders | $ | 2.26 | $ | 1.87 | $ | 2.54 | $ | 2.41 | ||||||||
Diluted earnings per share available to common shareholders | $ | 1.90 | $ | 1.63 | $ | 2.19 | $ | 2.07 | ||||||||
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 converted. 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, conversion of convertible preferred stock and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options, conversion of convertible preferred stock and vesting of restricted stock units.”
September 2014 | |||
| Number of common shares outstanding at September 30, 2014 | 602,411 | ||
| Total shareholders’ equity at September 30, 2014 | $ | 55,442,284 | |
| Book value per share at September 30, 2014 | $ | 92.03 | |
September 2014 | |||
| Number of common shares outstanding at September 30, 2014 | 602,411 | ||
| Add: common shares potentially issuable for stock options, convertible preferred stock, and unvested restricted stock units /1/ | 173,208 | ||
| 775,619 | |||
| Total shareholders’ equity at September 30, 2014 | $ | 55,442,284 | |
| Equity impact if all potential common shares were converted /1/ | 7,089,656 | ||
| $ | 62,531,940 | ||
| Adjusted book value per share at September 30, 2014 | $ | 80.62 | |
| /1/ | Assumes the exercise of all vested and unvested stock options, conversion of all preferred stock, and vesting of all outstanding restricted stock units at September 30, 2014. | |
Contacts:
Christopher H. Atayan, 402-331-3727
