AMCON Distributing Company Reports Results for the Quarter Ended December 31, 2021

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $5.18 on net income available to common shareholders of $3.0 million for its first fiscal quarter ended December 31, 2021.

“We are pleased with our results for the first fiscal quarter. AMCON continues to navigate a challenging operating environment. Our management team was able to deliver our customers a safe, consistent and seamless level of customer service,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON remains focused on our long-term strategic initiatives. We continue to seek out acquisition opportunities for distributors who want to align with our growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $410.6 million and operating income of $7.4 million for the first quarter of fiscal 2022. The retail health food segment reported revenues of $11.9 million and operating income of $0.5 million for the first quarter of fiscal 2022.

“We work collaboratively with our customers to develop customized foodservice and technology platforms. This approach enables our customers to enhance their efficiencies and profitability, which is especially important in light of rapidly changing market conditions. Our customer base is growing geographically, and we are deploying the capital and human resources necessary to support this growth,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer also noted, “AMCON’s associates and management did an outstanding job of securing the products and staffing necessary to best serve our customers in these challenging conditions.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “We are pleased with the progress of our strategic investment in Team Sledd, LLC. We ended the quarter with $79.6 million of shareholders’ equity and continue to work closely with our banking group to optimize our capital structure. We maintain consistently high levels of liquidity to support the growth of the enterprise.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. Throughout the pandemic, our management team has worked diligently to offer a continuous and safe shopping experience for customers. Our long-term relationship with the organic/natural products vendor community has enabled our stores to meet the demands of our customers for total wellness solutions. Our strategy is to offer a broad selection of the highest quality organic and natural merchandise available supported by a high degree of customer service not found at other big box retailers within our industry.

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 (20) 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

December 31, 2021 and September 30, 2021

December

September

2021

2021

(Unaudited)

ASSETS

Current assets:

Cash

$

840,961

$

519,591

Accounts receivable, less allowance for doubtful accounts of $0.8 million at December 2021 and $0.9 million at September 2021

30,861,247

35,844,163

Inventories, net

97,742,318

95,212,085

Prepaid expenses and other current assets

4,830,698

4,999,125

Total current assets

134,275,224

136,574,964

Property and equipment, net

15,449,705

16,012,524

Operating lease right-of-use assets, net

16,942,549

17,846,529

Note receivable, net of current portion

3,325,000

3,325,000

Goodwill

4,436,950

4,436,950

Other intangible assets, net

500,000

500,000

Equity method investment

10,406,708

9,380,343

Other assets

312,635

334,819

Total assets

$

185,648,771

$

188,411,129

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

18,372,775

$

24,235,042

Accrued expenses

9,686,140

11,468,955

Accrued wages, salaries and bonuses

2,892,772

4,489,852

Income taxes payable

1,194,512

867,160

Current operating lease liabilities

5,555,582

5,513,390

Current maturities of long-term debt

566,624

561,202

Total current liabilities

38,268,405

47,135,601

Credit facility

48,447,738

43,650,865

Deferred income tax liability, net

2,704,876

1,531,228

Long-term operating lease liabilities

11,723,408

12,669,157

Long-term debt, less current maturities

4,910,559

5,054,265

Other long-term liabilities

13,611

757,387

Shareholders’ equity:

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

Common stock, $.01 par value, 3,000,000 shares authorized, 582,789 shares outstanding at December 2021 and 551,369 shares outstanding at
September 2021

9,148

8,834

Additional paid-in capital

26,999,735

24,918,781

Retained earnings

83,438,578

83,552,298

Treasury stock at cost

(30,867,287

)

(30,867,287

)

Total shareholders’ equity

79,580,174

77,612,626

Total liabilities and shareholders’ equity

$

185,648,771

$

188,411,129

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three months ended December 31, 2021 and 2020

For the three months ended December

2021

2020

Sales (including excise taxes of $97.1 million and $100.5 million, respectively)

$

422,571,278

$

404,744,774

Cost of sales

395,638,615

381,282,795

Gross profit

26,932,663

23,461,979

Selling, general and administrative expenses

22,390,740

18,599,816

Depreciation

784,245

774,285

23,174,985

19,374,101

Operating income

3,757,678

4,087,878

Other expense (income):

Interest expense

322,097

376,430

Other (income), net

(40,109

)

(41,823

)

281,988

334,607

Income from operations before income taxes

3,475,690

3,753,271

Income tax expense

1,245,000

1,011,000

Equity method investment earnings, net of tax

770,365

335,339

Net income available to common shareholders

$

3,001,055

$

3,077,610

Basic earnings per share available to common shareholders

$

5.33

$

5.61

Diluted earnings per share available to common shareholders

$

5.18

$

5.57

Basic weighted average shares outstanding

563,546

548,125

Diluted weighted average shares outstanding

578,964

552,059

Dividends paid per common share

$

5.18

$

0.18

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three months ended December 31, 2021 and 2020

Additional

Common Stock

Treasury Stock

Paid-in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

THREE MONTHS ENDED DECEMBER 2020

Balance, October 1, 2020

869,867

$

8,697

(332,152

)

$

(30,861,549

)

$

24,282,058

$

71,362,334

$

64,791,540

Dividends on common stock, $5.18 per share

(3,038,544

)

(3,038,544

)

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

13,722

137

725,181

725,318

Repurchase of common stock

(68

)

(5,738

)

(5,738

)

Net income

3,077,610

3,077,610

Balance, December 31, 2020

883,589

$

8,834

(332,220

)

$

(30,867,287

)

$

25,007,239

$

71,401,400

$

65,550,186

THREE MONTHS ENDED DECEMBER 2021

Balance, October 1, 2021

883,589

$

8,834

(332,220

)

$

(30,867,287

)

$

24,918,781

$

83,552,298

$

77,612,626

Dividends on common stock, $5.18 per share

(3,114,775

)

(3,114,775

)

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

31,420

314

2,080,954

2,081,268

Repurchase of common stock

Net income

3,001,055

3,001,055

Balance, December 31, 2021

915,009

$

9,148

(332,220

)

$

(30,867,287

)

$

26,999,735

$

83,438,578

$

79,580,174

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the three months ended December 31, 2021 and 2020

December

December

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

3,001,055

$

3,077,610

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

operating activities:

Depreciation

784,245

774,285

Equity method investment earnings, net of tax

(770,365

)

(335,339

)

(Gain) loss on sales of property and equipment

(31,000

)

(2,000

)

Equity-based compensation

710,056

346,891

Deferred income taxes

1,173,648

132,736

Provision for losses on doubtful accounts

(102,000

)

(24,000

)

Inventory allowance

99,304

172,137

Changes in assets and liabilities:

Accounts receivable

5,084,916

4,589,579

Inventories

(2,629,537

)

30,967,449

Prepaid and other current assets

(6,573

)

(5,792,622

)

Other assets

22,184

40,193

Accounts payable

(5,750,609

)

(5,069,889

)

Accrued expenses and accrued wages, salaries and bonuses

(1,519,848

)

(1,793,704

)

Other long-term liabilities

(743,776

)

(169,854

)

Income taxes payable and receivable

71,352

(211,854

)

Net cash flows from (used in) operating activities

(606,948

)

26,701,618

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(333,084

)

(432,505

)

Proceeds from sales of property and equipment

31,000

2,000

Principal payment received on note receivable

175,000

Net cash flows from (used in) investing activities

(127,084

)

(430,505

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility

439,039,482

385,943,710

Repayments under revolving credit facility

(434,242,609

)

(414,863,443

)

Proceeds from borrowings on long-term debt

3,000,000

Principal payments on long-term debt

(138,284

)

(136,119

)

Repurchase of common stock

(5,738

)

Dividends on common stock

(3,114,775

)

(105,599

)

Settlement and withholdings of equity-based awards

(488,412

)

(250,021

)

Net cash flows from (used in) financing activities

1,055,402

(26,417,210

)

Net change in cash

321,370

(146,097

)

Cash, beginning of period

519,591

661,195

Cash, end of period

$

840,961

$

515,098

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

333,941

$

426,655

Cash paid during the period for income taxes

1,090,119

Supplemental disclosure of non-cash information:

Equipment acquisitions classified in accounts payable

$

16,591

$

16,007

Dividends declared, not paid

2,932,945

Issuance of common stock in connection with the vesting and exercise of

equity-based awards

2,280,783

949,812

Contacts:

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

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