Business Wire | Jan 18, 2022 04:10PM EST

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

Jan. 18, 2022

OMAHA, Neb.--(BUSINESS WIRE)--Jan. 18, 2022--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 fordoubtful accounts of $0.8 million at 30,861,247 35,844,163 December 2021 and $0.9 million at September2021

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, 3,000,000shares authorized, 582,789 sharesoutstanding at December 2021 and 551,369 9,148 8,834 shares outstanding atSeptember 2021

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 $ 422,571,278 $ 404,744,774 million and $100.5 million, respectively)

Cost of sales 395,638,615 381,282,795

Gross profit 26,932,663 23,461,979

Selling, general and administrative 22,390,740 18,599,816 expenses

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 770,365 335,339 tax

Net income available to common shareholders $ 3,001,055 $ 3,077,610



Basic earnings per share available to $ 5.33 $ 5.61 common shareholders

Diluted earnings per share available to $ 5.18 $ 5.57 common shareholders



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 MONTHSENDED DECEMBER2020

Balance,October 1, 869,867 $ 8,697 (332,152 ) $ (30,861,549 ) $ 24,282,058 $ 71,362,334 $ 64,791,540 2020

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

Compensationexpense andissuance ofstock in 13,722 137 - - 725,181 - 725,318 connectionwithequity-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 $ 65,550,186 2020



THREE MONTHSENDED DECEMBER2021

Balance,October 1, 883,589 $ 8,834 (332,220 ) $ (30,867,287 ) $ 24,918,781 $ 83,552,298 $ 77,612,626 2021

Dividends oncommon - - - - - (3,114,775 ) (3,114,775 )stock, $5.18per share

Compensationexpense andissuance ofstock in 31,420 314 - - 2,080,954 - 2,081,268 connectionwithequity-basedawards

Repurchaseof common - - - - - - - stock

Net income - - - - - 3,001,055 3,001,055

Balance,December 31, 915,009 $ 9,148 (332,220 ) $ (30,867,287 ) $ 26,999,735 $ 83,438,578 $ 79,580,174 2021

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 fromoperations to net cash flows from (usedin)

operating activities:

Depreciation 784,245 774,285

Equity method investment earnings, net of (770,365 ) (335,339 )tax

(Gain) loss on sales of property and (31,000 ) (2,000 )equipment

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, (1,519,848 ) (1,793,704 )salaries and bonuses

Other long-term liabilities (743,776 ) (169,854 )

Income taxes payable and receivable 71,352 (211,854 )

Net cash flows from (used in) operating (606,948 ) 26,701,618 activities



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (333,084 ) (432,505 )

Proceeds from sales of property and 31,000 2,000 equipment

Principal payment received on note 175,000 - receivable

Net cash flows from (used in) investing (127,084 ) (430,505 )activities



CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit 439,039,482 385,943,710 facility

Repayments under revolving credit (434,242,609 ) (414,863,443 )facility

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

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 (488,412 ) (250,021 )equity-based awards

Net cash flows from (used in) financing 1,055,402 (26,417,210 )activities

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 - 1,090,119 taxes



Supplemental disclosure of non-cash information:

Equipment acquisitions classified in $ 16,591 $ 16,007 accounts payable

Dividends declared, not paid - 2,932,945

Issuance of common stock in connectionwith the vesting and exercise of 2,280,783 949,812

equity-based awards

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