Business Wire | Jul 20, 2020 04:10PM EDT

AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2020

Jul. 20, 2020

OMAHA, Neb.--(BUSINESS WIRE)--Jul. 20, 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 $2.77 on net income available to common shareholders of $1.6 million for its third fiscal quarter ended June 30, 2020.

"AMCON continues to fulfill our role as an essential service provider and a key component of the United States supply chain as a distributor to convenience stores, truck stops, and rural grocery stores. In addition, our retail health food segment provides nutritional supplements that are an important component of health, wellness and immunity support," said Christopher H. Atayan, AMCON's Chairman and Chief Executive Officer. "We continue to be focused on our long-term strategic plan and are actively seeking acquisitions and other opportunities to expand the enterprise."

"Our management team and associates have worked around the clock to secure product and position the organizational and operational assets that are at the foundation of our philosophy as a customer focused service organization. We have many long-term relationships with our key vendors which enabled us to navigate a challenging operational environment and minimize disruptions from the pandemic," said Andrew C. Plummer, AMCON's President and Chief Operating Officer. Mr. Plummer added, "We were pleased to close June 30, 2020 with shareholders' equity of $64.0 million and consolidated debt of $59.6 million."

The wholesale distribution segment reported revenues of $385.3 million and operating income of $4.4 million for the third quarter of fiscal 2020. The retail health food segment reported revenues of $11.5 million and an operating loss of $0.2 million for the third 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

June 30, 2020 and September 30, 2019



June September

2020 2019

(Unaudited)

ASSETS

Current assets:

Cash $ 596,564 $ 337,704

Accounts receivable, less allowance fordoubtful accounts of $1.2 million at June 33,626,042 24,665,620 2020 and $0.9 million at September 2019

Inventories, net 82,009,219 102,343,517

Income taxes receivable - 350,378

Prepaid and other current assets 7,259,528 7,148,459

Total current assets 123,491,353 134,845,678



Property and equipment, net 18,236,033 17,655,415

Operating lease right-of-use assets, net 19,705,044 -

Note receivable 3,500,000 -

Goodwill 4,436,950 4,436,950

Other intangible assets, net 500,000 500,000

Equity method investment 6,648,666 -

Other assets 399,943 273,579

Total assets $ 176,917,989 $ 157,711,622



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 20,719,129 $ 18,647,572

Accrued expenses 7,067,083 8,577,972

Accrued wages, salaries and bonuses 2,968,148 3,828,847

Income taxes payable 480,649 -

Current operating lease liabilities 5,486,963 -

Current maturities of long-term debt 546,657 532,747

Total current liabilities 37,268,629 31,587,138



Credit facility 56,384,002 60,376,714

Deferred income tax liability, net 1,820,511 1,823,373

Long-term operating lease liabilities 14,578,728 -

Long-term debt, less current maturities 2,713,798 3,125,644

Other long-term liabilities 167,755 42,011



Shareholders' equity:

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

Common stock, $.01 par value, 3,000,000shares authorized, 564,878 shares 8,697 8,561 outstanding at June 2020 and 552,614 sharesoutstanding at September 2019

Additional paid-in capital 24,250,873 23,165,639

Retained earnings 68,657,375 66,414,397

Treasury stock at cost (28,932,379 ) (28,831,855 )

Total shareholders' equity 63,984,566 60,756,742

Total liabilities and shareholders' equity $ 176,917,989 $ 157,711,622



AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2020 and 2019



For the three months ended June For the nine months ended June

2020 2019 2020 2019

Sales(includingexcise taxesof $103.6million and$98.0 million, $ 396,854,324 $ 369,981,516 $ 1,094,841,943 $ 1,025,431,309 and $285.1million and$274.0million,respectively)

Cost of sales 375,202,044 349,455,624 1,031,651,499 963,683,859

Gross profit 21,652,280 20,525,892 63,190,444 61,747,450

Selling,general and 18,377,641 18,513,048 55,843,266 53,861,943 administrativeexpenses

Depreciationand 801,683 620,142 2,318,045 1,869,378 amortization

19,179,324 19,133,190 58,161,311 55,731,321

Operating 2,472,956 1,392,702 5,029,133 6,016,129 income



Other expense (income):

Interest 461,581 381,469 1,321,267 1,100,995 expense

Other (42,525 ) (15,446 ) (79,222 ) (55,081 )(income), net

419,056 366,023 1,242,045 1,045,914

Income fromoperations 2,053,900 1,026,679 3,787,088 4,970,215 before incometaxes

Income tax 586,000 361,000 1,168,000 1,536,000 expense

Equity methodinvestment 111,666 - 111,666 - earnings, netof tax

Net incomeavailable to $ 1,579,566 $ 665,679 $ 2,730,754 $ 3,434,215 commonshareholders



Basic earningsper shareavailable to $ 2.79 $ 1.12 $ 4.84 $ 5.65 commonshareholders

Dilutedearnings pershare $ 2.77 $ 1.10 $ 4.79 $ 5.56 available tocommonshareholders



Basic weightedaverage shares 565,483 592,768 564,578 607,505 outstanding

Dilutedweighted 569,902 606,278 569,873 617,887 average sharesoutstanding



Dividendsdeclared and $ 0.18 $ 0.18 $ 0.82 $ 0.82 paid percommon share



AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders' Equity

for the three and nine months ended June 30, 2020 and 2019



Additional

Common Stock Treasury Stock Paid-in Retained

Shares Amount Shares Amount Capital Earnings Total

THREE MONTHSENDED JUNE 2019

Balance,April 1, 856,039 $ 8,561 (263,271 ) $ (24,511,598 ) $ 23,148,372 $ 66,203,466 $ 64,848,801 2019

Dividends oncommon - - - - - (111,766 ) (111,766 )stock, $0.18per share

Compensationexpense andissuance ofstock in - - - - 36,801 - 36,801 connectionwithequity-basedawards

Repurchaseof common - - (1 ) (141 ) - - (141 )stock

Net income - - - - - 665,679 675,679

Balance,June 30, 856,039 $ 8,561 (263,272 ) $ (24,511,739 ) $ 23,185,173 $ 66,757,379 $ 65,439,374 2019



THREE MONTHSENDED JUNE 2020

Balance,April 1, 869,367 $ 8,692 (303,841 ) $ (28,863,654 ) $ 24,224,145 $ 67,184,900 $ 62,554,083 2020

Dividends oncommon - - - - - (107,091 ) (107,091 )stock, $0.18per share

Compensationexpense andissuance ofstock in 500 5 - - 26,728 - 26,733 connectionwithequity-basedawards

Repurchaseof common - - (1,148 ) (68,725 ) - - (68,725 )stock

Net income - - - - - 1,579,566 1,579,566

Balance,June 30, 869,867 $ 8,697 (304,989 ) $ (28,932,379 ) $ 24,250,873 $ 68,657,375 $ 63,984,566 2020



Additional

Common Stock Treasury Stock Paid-in Retained

Shares Amount Shares Amount Capital Earnings Total

NINE MONTHSENDED JUNE 2019

Balance,October 1, 844,089 $ 8,441 (228,312 ) $ (21,324,752 ) $ 22,069,098 $ 63,848,030 $ 64,600,817 2018

Dividends oncommon - - - - - (524,866 ) (524,866 )stock, $0.82per share

Compensationexpense andissuance ofstock in 11,950 120 - - 1,116,075 - 1,116,195 connectionwithequity-basedawards

Repurchaseof common - - (34,960 ) (3,186,987 ) - - (3,186,987 )stock

Net income - - - - - 3,434,215 3,434,215

Balance,June 30, 856,039 $ 8,561 (263,272 ) $ (24,511,739 ) $ 23,185,173 $ 66,757,379 $ 65,439,374 2019



NINE MONTHSENDED JUNE 2020

Balance,October 1, 856,039 $ 8,561 (303,425 ) $ (28,831,855 ) $ 23,165,639 $ 66,414,397 $ 60,756,742 2019

Dividends oncommon - - - - - (487,776 ) (487,776 )stock, $0.82per share

Compensationexpense andissuance ofstock in 13,828 136 - - 1,085,234 - 1,058,370 connectionwithequity-basedawards

Repurchaseof common - - (1,564 ) (100,524 ) - - (100,524 )stock

Net income - - - - - 2,730,754 2,730,754

Balance,June 30, 869,867 $ 8,697 (304,989 ) $ (28,932,379 ) $ 24,250,873 $ 68,657,375 $ 63,984,566 2020



AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2020 and 2019



June June

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 2,730,754 $ 3,434,215

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

Depreciation 2,318,045 1,827,711

Amortization - 41,667

Equity method investment earnings, (111,666 ) - net of income tax

Loss (gain) on sales of property and 17,042 (15,376 )equipment

Equity-based compensation 765,704 1,035,128

Deferred income taxes (2,862 ) 112,439

Provision for losses on doubtful 349,000 179,000 accounts

Inventory allowance 182,218 454,357



Changes in assets and liabilities:

Accounts receivable (9,309,422 ) (3,209,941 )

Inventories 20,152,080 11,468,718

Prepaid and other current assets (373,414 ) (5,698,021 )

Other assets (126,364 ) 19,712

Accounts payable 2,040,386 2,485,721

Accrued expenses and accrued wages, (1,424,472 ) (1,460,935 )salaries and bonuses

Other long-term liabilities 125,744 2,967

Income taxes payable and receivable 794,027 157,836

Net cash flows from (used in) 18,126,800 10,835,198 operating activities



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (2,901,134 ) (3,385,977 )

Proceeds from sales of property and 16,600 56,200 equipment

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

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

Net cash flows from (used in) (12,884,534 ) (3,329,777 )investing activities



CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit 1,083,878,207 1,022,309,940 facility

Repayments under revolving credit (1,087,870,919 ) (1,025,624,006 )facility

Principal payments on long-term debt (397,936 ) (686,139 )

Proceeds from exercise of stock 25,750 - options

Repurchase of common stock (100,524 ) (3,186,987 )

Dividends on common stock (487,776 ) (524,866 )

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

Net cash flows from (used in) (4,983,406 ) (7,712,058 )financing activities

Net change in cash 258,860 (206,637 )

Cash, beginning of period 337,704 520,644

Cash, end of period $ 596,564 $ 314,007



Supplemental disclosure of cash flow information:

Cash paid during the period for $ 1,387,381 $ 1,140,562 interest

Cash paid during the period for 376,835 1,265,725 income taxes



Supplemental disclosure of non-cash information:

Equipment acquisitions classified in $ 100,424 $ 91,838 accounts payable

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

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