Business Wire | Jan 19, 2021 04:11PM EST

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

Jan. 19, 2021

OMAHA, Neb.--(BUSINESS WIRE)--Jan. 19, 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 $5.57 on net income available to common shareholders of $3.1 million for its first fiscal quarter ended December 31, 2020.

"We are pleased with our results for the first fiscal quarter. AMCON faced a challenging operating environment. Our management team was able to deliver to our customers a safe 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 $393.6 million and operating income of $5.8 million for the first quarter of fiscal 2021. The retail health food segment reported revenues of $11.1 million and an operating loss of $0.1 million for the first quarter of fiscal 2021.

"We work interactively with our customers to develop customized foodservice and technology platforms. This collaborative approach enables our customers to enhance their profitability, which is especially important in light of rapidly changing market conditions. Our customer base continues to grow geographically and AMCON is deploying the capital and human resources necessary to support this growth," said Andrew C. Plummer, AMCON's President and Chief Operating Officer.

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 $65.6 million of shareholders' equity and continue to work closely with our banking group to optimize our capital structure. During the quarter, we refinanced and extended the maturity of certain term loans allowing us to capitalize on the current interest rate environment."

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-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 SubsidiariesCondensed Consolidated Balance SheetsDecember 31, 2020 and September 30, 2020



December September

2020 2020

(Unaudited)

ASSETS

Current assets:

Cash $ 515,098 $ 661,195

Accounts receivable, less allowance fordoubtful accounts of $0.8 million at December 29,712,850 34,278,4292020 and $0.9 million at September 2020

Inventories, net 67,832,187 98,971,773

Prepaid and other current assets 7,884,267 2,091,645

Total current assets 105,944,402 136,003,042



Property and equipment, net 17,171,501 17,497,274

Operating lease right-of-use assets, net 18,660,239 18,936,126

Note receivable 3,500,000 3,500,000

Goodwill 4,436,950 4,436,950

Other intangible assets, net 500,000 500,000

Equity method investment 7,189,433 6,744,095

Other assets 343,593 383,786

Total assets $ 157,746,118 $ 188,001,273



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 17,054,417 $ 22,108,299

Accrued expenses 11,137,468 8,306,160

Accrued wages, salaries and bonuses 2,468,758 4,761,020

Income taxes payable 465,553 567,408

Current operating lease liabilities 5,756,176 5,607,098

Current maturities of long-term debt 512,344 516,850

Total current liabilities 37,394,716 41,866,835



Credit facility 33,051,949 61,971,682

Deferred income tax liability, net 1,939,311 1,806,575

Long-term operating lease liabilities 13,575,388 14,028,606

Long-term debt, less current maturities 5,477,181 2,608,794

Other long-term liabilities 757,387 927,241



Shareholders' equity:

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

Common stock, $.01 par value, 3,000,000shares authorized, 551,369 shares outstanding 8,834 8,697at December 2020 and 537,715 sharesoutstanding at September 2020

Additional paid-in capital 25,007,239 24,282,058

Retained earnings 71,401,400 71,362,334

Treasury stock at cost (30,867,287) (30,861,549)

Total shareholders' equity 65,550,186 64,791,540

Total liabilities and shareholders' equity $ 157,746,118 $ 188,001,273

AMCON Distributing Company and SubsidiariesCondensed Consolidated Unaudited Statements of Operationsfor the three months ended December 31, 2020 and 2019



For the three months ended December

2020 2019

Sales (including excise taxes of $100.5 million $ 404,744,774 $ 360,101,103and $94.0 million, respectively)

Cost of sales 381,282,795 339,256,392

Gross profit 23,461,979 20,844,711

Selling, general and administrative expenses 18,599,816 18,952,735

Depreciation and amortization 774,285 725,461

19,374,101 19,678,196

Operating income 4,087,878 1,166,515



Other expense (income):

Interest expense 376,430 472,423

Other (income), net (41,823) (6,778)

334,607 465,645

Income from operations before income taxes 3,753,271 700,870

Income tax expense 1,011,000 249,000

Equity method investment earnings, net of tax 335,339 -

Net income available to common shareholders $ 3,077,610 $ 451,870



Basic earnings per share available to common $ 5.61 $ 0.80shareholders

Diluted earnings per share available to common $ 5.57 $ 0.80shareholders



Basic weighted average shares outstanding 548,125 562,578

Diluted weighted average shares outstanding 552,059 567,794



Dividends declared and paid per common share $ 0.18 $ 0.18

AMCON Distributing Company and SubsidiariesCondensed Consolidated Unaudited Statements of Shareholders' Equityfor the three months ended December 31, 2020 and 2019



Additional

Common Stock Treasury Stock Paid-in Retained

Shares Amount Shares Amount Capital Earnings Total

THREE MONTHSENDED DECEMBER2019

Balance,October 1, 856,039 $ 8,561 (303,425) $ (28,831,855) $ 23,165,639 $ 66,414,397 $ 60,756,7422019

Dividends oncommon - - - - - (273,630) (273,630)stock, $0.46per share

Compensationexpense andissuance ofstock in 13,328 131 - - 1,027,315 - 1,027,446connectionwithequity-basedawards

Repurchaseof common - - (109) (8,156) - - (8,156)stock

Net income - - - - - 451,870 451,870

Balance,December 31, 869,367 $ 8,692 (303,534) $ (28,840,011) $ 24,192,954 $ 66,592,637 $ 61,954,2722019



THREE MONTHSENDED DECEMBER2020

Balance,October 1, 869,867 $ 8,697 (332,152) $ (30,861,549) $ 24,282,058 $ 71,362,334 $ 64,791,5402020

Dividends oncommon - - - - - (3,038,544) (3,038,544)stock, $5.18per share

Compensationexpense andissuance ofstock in 13,722 137 - - 725,181 - 725,318connectionwithequity-basedawards

Repurchaseof common - - (68) (5,738) - - (5,738)stock

Net income - - - - - 3,077,610 3,077,610

Balance,December 31, 883,589 $ 8,834 (332,220) $ (30,867,287) $ 25,007,239 $ 71,401,400 $ 65,550,1862020

AMCON Distributing Company and SubsidiariesCondensed Consolidated Unaudited Statements of Cash Flowsfor the three months ended December 31, 2020 and 2019



December December

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 3,077,610 $ 451,870

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

Depreciation 774,285 725,461

Equity method investment earnings, net of (335,339) -tax

Loss (gain) on sales of property and (2,000) -equipment

Equity-based compensation 346,891 129,931

Deferred income taxes 132,736 154,792

Provision (recovery) for losses on doubtful (24,000) 371,000accounts

Inventory allowance 172,137 51,587

Other - (42,011)



Changes in assets and liabilities:

Accounts receivable 4,589,579 (7,171,661)

Inventories 30,967,449 39,333,140

Prepaid and other current assets (5,792,622) (1,578,437)

Other assets 40,193 42,052

Accounts payable (5,069,889) (1,623,841)

Accrued expenses and accrued wages, (1,793,704) (2,509,401)salaries and bonuses

Other long-term liabilities (169,854) -

Income taxes payable and receivable (211,854) 95,772

Net cash flows from (used in) operating 26,701,618 28,430,254activities



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (432,505) (1,228,462)

Proceeds from sales of property and 2,000 -equipment

Net cash flows from (used in) investing (430,505) (1,228,462)activities



CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility 385,943,710 330,596,076

Repayments under revolving credit facility (414,863,443) (357,448,761)

Proceeds from borrowings on long-term debt 3,000,000 -

Principal payments on long-term debt (136,119) (131,580)

Repurchase of common stock (5,738) (8,156)

Dividends on common stock (105,599) (107,084)

Settlement and withholdings of equity-based (250,021) -awards

Net cash flows from (used in) financing (26,417,210) (27,099,505)activities

Net change in cash (146,097) 102,287

Cash, beginning of period 661,195 337,704

Cash, end of period $ 515,098 $ 439,991



Supplemental disclosure of cash flow information:

Cash paid during the period for interest $ 426,655 $ 519,459

Cash paid (refunded) during the period for 1,090,119 (1,563)income taxes



Supplemental disclosure of non-cash information:

Equipment acquisitions classified in $ 16,007 $ 234,816accounts payable

Dividends declared, not paid 2,932,945 166,546

Issuance of common stock in connection withthe vesting and exercise of equity-based 949,812 990,653awards

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