Business Wire | Nov 9, 2020 04:19PM EST

AMCON Distributing Company Reports Results for the Fiscal Year Ended September 30, 2020

Nov. 09, 2020

OMAHA, Neb.--(BUSINESS WIRE)--Nov. 09, 2020--AMCON Distributing Company ("AMCON") (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $9.76 on net income available to common shareholders of $5.5 million for the fiscal year ended September 30, 2020. AMCON earned $5.00 per fully diluted share on net income available to common shareholders of $2.8 million for the fourth fiscal quarter ended September 30, 2020.

"We are pleased with our fiscal 2020 results. AMCON's associates and managers have fully embraced our role as an essential service provider as the nation navigates the COVID-19 pandemic. Our longstanding philosophy and tradition of sustained excellence in customer service has enabled AMCON to provide a consistent and timely flow of goods and services to our customers," said Christopher H. Atayan, AMCON's Chairman and Chief Executive Officer. He further noted, "Notwithstanding the challenging macroeconomic environment, we were able to close on a key long-term strategic investment in Team Sledd, LLC, a leading convenience distributor in the Appalachian region of the United States. This investment has brought a very talented group of associates into the AMCON family and has significantly expanded our geographic footprint. We continue to seek strategic acquisition opportunities for operators who want to align with our customer centric management philosophy."

The wholesale distribution segment reported revenues of $1.5 billion and operating income of $17.3 million for fiscal 2020, and revenues and operating income of $415.1 million and $6.4 million, respectively, for the fourth fiscal quarter of fiscal 2020. The retail health food segment reported revenues of $46.0 million and an operating loss of $1.8 million for fiscal 2020, and revenues of $11.4 million and an operating loss of $0.6 million for the fourth fiscal quarter of fiscal 2020.

"We continue to anticipate a heightened level of capital expenditures in the coming years as we make targeted investments in our foodservice and technology platforms, expand our geographic reach, and continue to redevelop our retail health food store portfolio. As our customer base grows, we are expanding the territories we serve in support of this growth," said Andrew C. Plummer, AMCON's President and Chief Operating Officer.

Charles J. Schmaderer, AMCON's Chief Financial Officer said, "At September 30, 2020, our shareholders' equity was $64.8 million, resulting in adjusted book value per share of $115.50. During fiscal 2020, we turned our inventory 19 times and ended the year with $65.1 million of consolidated debt. At its lowest point during fiscal 2020, the Company's total consolidated debt was approximately $22.2 million." Mr. Schmaderer also added, "We were delighted to renew our long term credit facility with our existing banking group during fiscal 2020. Our banking group has been a long-term partner and supporter of the Company's strategic growth and expansion initiatives."

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 Subsidiaries

CONSOLIDATED BALANCE SHEETS

September September

2020 2019

ASSETS

Current assets:

Cash $ 661,195 $ 337,704

Accounts receivable, less allowance fordoubtful accounts of $0.9 million at 34,278,429 24,665,620 September 2020 and September 2019

Inventories, net 98,971,773 102,343,517

Income taxes receivable - 350,378

Prepaid and other current assets 2,091,645 7,148,459

Total current assets 136,003,042 134,845,678



Property and equipment, net 17,497,274 17,655,415

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

Note receivable 3,500,000 -

Goodwill 4,436,950 4,436,950

Other intangible assets, net 500,000 500,000

Equity method investment 6,744,095 -

Other assets 383,786 273,579

Total assets $ 188,001,273 $ 157,711,622



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 22,108,299 $ 18,647,572

Accrued expenses 8,306,160 8,577,972

Accrued wages, salaries and bonuses 4,761,020 3,828,847

Income taxes payable 567,408 -

Current operating lease liabilities 5,607,098 -

Current maturities of long-term debt 516,850 532,747

Total current liabilities 41,866,835 31,587,138



Credit facility 61,971,682 60,376,714

Deferred income tax liability, net 1,806,575 1,823,373

Long-term operating lease liabilities 14,028,606 -

Long-term debt, less current maturities 2,608,794 3,125,644

Other long-term liabilities 927,241 42,011



Shareholders' equity:

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

Common stock, $.01 par value, 3,000,000shares authorized, 537,715 shares 8,697 8,561 outstanding at September 2020 and 552,614shares outstanding at September 2019

Additional paid-in capital 24,282,058 23,165,639

Retained earnings 71,362,334 66,414,397

Treasury stock at cost (30,861,549 ) (28,831,855 )

Total shareholders' equity 64,791,540 60,756,742

Total liabilities and shareholders' equity $ 188,001,273 $ 157,711,622

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Years Ended September

2020 2019

Sales (including excise taxes of $393.3million and $370.2 million, $ 1,521,278,763 $ 1,392,388,157 respectively)

Cost of sales 1,433,544,831 1,308,364,726

Gross profit 87,733,932 84,023,431

Selling, general and administrative 75,051,227 72,182,883 expenses

Depreciation and amortization 3,116,449 2,617,591

Impairment charges 485,270 2,873,269

78,652,946 77,673,743

Operating income 9,080,986 6,349,688



Other expense (income):

Interest expense 1,693,251 1,598,864

Other (income), net (114,276 ) (61,119 )

1,578,975 1,537,745

Income from operations before income 7,502,011 4,811,943 taxes

Income tax expense 2,143,000 1,609,000

Equity method investment earnings, net 183,579 - of tax

Net income available to common $ 5,542,590 $ 3,202,943 shareholders



Basic earnings per share available to $ 9.88 $ 5.36 common shareholders

Diluted earnings per share available to $ 9.76 $ 5.25 common shareholders



Basic weighted average shares 561,166 597,961 outstanding

Diluted weighted average shares 567,961 609,836 outstanding



Dividends declared and paid per common $ 1.00 $ 1.00 share

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, 844,089 $ 8,441 (228,312) $ (21,324,752) $ 22,069,098 $ 63,848,030 $ 64,600,8172018

Dividends oncommon - - - - - (636,576) (636,576)stock, $1.00per share

Compensationexpense andissuance ofstock in 11,950 120 - - 1,096,541 - 1,096,661connectionwithequity-basedawards

Repurchaseof common - - (75,113) (7,507,103) - - (7,507,103)stock

Net income - - - - - 3,202,943 3,202,943

BalanceSeptember 856,039 $ 8,561 (303,425) $ (28,831,855) $ 23,165,639 $ 66,414,397 $ 60,756,74230, 2019

Dividends oncommon - - - - - (594,653) (594,653)stock, $1.00per share

Compensationexpense andissuance ofstock in 13,828 136 - - 1,116,419 - 1,116,555connectionwithequity-basedawards

Repurchaseof common - - (28,727) (2,029,694) - - (2,029,694)stock

Net income - - - - - 5,542,590 5,542,590

Balance,September 869,867 $ 8,697 (332,152) $ (30,861,549) $ 24,282,058 $ 71,362,334 $ 64,791,54030, 2020

AMCON Distributing Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended September

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 5,542,590 $ 3,202,943

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

Depreciation 3,116,449 2,575,924

Amortization - 41,667

Equity method investment earnings, (183,579 ) - net of tax

Impairment charges 485,270 2,873,269

Loss (gain) on sales of property and 105,039 (13,775 )equipment

Equity-based compensation 1,085,287 1,299,792

Deferred income taxes (16,798 ) 40,572

Provision for losses on doubtful (21,000 ) 21,000 accounts

Inventory allowance (322,240 ) 560,610



Changes in assets and liabilities:

Accounts receivable (9,591,809 ) 6,742,225

Inventories 3,693,984 (24,034,512 )

Prepaid and other current assets 4,794,469 (2,207,684 )

Other assets (110,207 ) 28,214

Accounts payable 3,529,980 (2,247,262 )

Accrued expenses and accrued wages, 1,353,113 (262,330 )salaries and bonuses

Other long-term liabilities 885,230 3,956

Income taxes payable and receivable 857,270 (78,266 )

Net cash flows from (used in) 15,203,048 (11,453,657 )operating activities



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (3,356,573 ) (4,438,280 )

Proceeds from sales of property and 43,600 57,200 equipment

Investment in equity method investee (6,500,000 ) -

Issuance of note receivable (3,500,000 ) -

Net cash flows from (used in) (13,312,973 ) (4,381,080 )investing activities



CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit 1,515,476,055 1,427,544,804 facility

Repayments under revolving credit (1,513,881,087 ) (1,402,596,687 )facility

Principal payments on long-term debt (532,747 ) (1,096,306 )

Proceeds from exercise of stock 25,750 - options

Repurchase of common stock (2,029,694 ) (7,507,103 )

Dividends on common stock (594,653 ) (636,576 )

Settlement and withholdings of (30,208 ) (56,335 )equity-based awards

Net cash flows from (used in) (1,566,584 ) 15,651,797 financing activities

Net change in cash 323,491 (182,940 )

Cash, beginning of period 337,704 520,644

Cash, end of period $ 661,195 $ 337,704



Supplemental disclosure of cash flow information:

Cash paid during the period for $ 1,743,098 $ 1,561,531 interest

Cash paid during the period for 1,302,528 1,646,694 income taxes



Supplemental disclosure of non-cash information:

Equipment acquisitions classified in $ - $ 69,253 accounts payable

Issuance of common stock inconnection with the vesting and 990,653 1,005,792 exercise of equity-based awards

AMCON Distributing Company and Subsidiaries

FISCAL YEAR 2020



(dollars in thousands, except per First Second Third Fourthshare data)



Sales $ 360,101 $ 337,887 $ 396,854 $ 426,437

Gross profit 20,845 20,693 21,652 24,543

Income from operations before 701 1,032 2,054 3,715 income tax expense

Net income available to common $ 452 $ 699 $ 1,580 $ 2,812 shareholders



Basic earnings per share $ .80 $ 1.24 $ 2.79 $ 5.10 available to common shareholders

Diluted earnings per share $ .80 $ 1.22 $ 2.77 $ 5.00 available to common shareholders



FISCAL YEAR 2019



(dollars in thousands, except per First Second Third Fourthshare data)



Sales $ 344,734 $ 310,716 $ 369,982 $ 366,957

Gross profit 20,632 20,589 20,526 22,276

Income (loss) from operations 1,747 2,196 1,027 (158 )before income tax expense

Net income (loss) available to $ 1,245 $ 1,523 $ 666 $ (231 )common shareholders



Basic earnings (loss) per share $ 2.02 $ 2.49 $ 1.12 $ (.41 )available to common shareholders

Diluted earnings (loss) per share $ 1.99 $ 2.45 $ 1.10 $ (.41 )available to common shareholders

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 2020

Number of common shares outstanding at September 30, 2020 537,715

Total shareholders' equity at September 30, 2020 $ 64,791,540

Book value per share at September 30, 2020 $ 120.49

September 2020

Number of common shares outstanding at September 30, 2020 537,715

Add: common shares potentially issuable for stock options and 63,321unvested restricted stock units /1/

601,036



Total shareholders' equity at September 30, 2020 $ 64,791,540

Equity impact if all potential common shares were exercised or 4,630,487vested /1/

$ 69,422,027



Adjusted book value per share at September 30, 2020 $ 115.50

____________

/1 Assumes the exercise of all vested and unvested stock options and vesting of/ all outstanding restricted stock units at September 30, 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006135/en/

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