AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2023

OMAHA, Neb.--(BUSINESS WIRE)--AMCON Distributing Company (“AMCON” or “Company”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $6.59 on net income available to common shareholders of $3.9 million for its third fiscal quarter ended June 30, 2023.

“We have begun the integration of an expanded foodservice platform now available for our customer base as a result of our recent acquisition of Henry’s Foods,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for convenience and foodservice distributors who want to align with the Company’s growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $685.7 million and operating income of $11.8 million for the third quarter of fiscal 2023. The retail health food segment reported revenues of $10.7 million and an operating loss of $0.3 million for the third quarter of fiscal 2023.

“Foodservice and our technology suite of services are strategic areas of focus. Our customer base is growing, and we continue to search for facilities in and adjacent to our current service area,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “We are actively seeking to hire industry leading talent in all areas of our organization to support our growth.”

“Our working capital position is strong. As a core operating principle, we are highly liquid and able to take advantage of strategic opportunities in the marketplace,” said Charles J. Schmaderer, AMCON’s Chief Financial Officer. Mr. Schmaderer further noted, “AMCON ended the quarter with $100.9 million of consolidated shareholders’ equity.”

AMCON is a leading convenience distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products servicing approximately 6,800 retail stores through distribution centers in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. AMCON, through its Healthy Edge Retail Group, also operates seventeen (17) health and natural product retail stores in the Midwest and Florida.

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, 2023 and September 30, 2022
	June			September
	2023			2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	739,013		$	431,576
Accounts receivable, less allowance for doubtful accounts of $2.5 million at both June 2023 and September 2022		78,640,187			62,367,888
Inventories, net		162,567,117			134,654,637
Income taxes receivable		—			819,595
Prepaid expenses and other current assets		13,630,317			12,702,084
Total current assets		255,576,634			210,975,780
Property and equipment, net		78,872,876			48,085,520
Operating lease right-of-use assets, net		19,739,321			19,941,009
Goodwill		5,778,325			5,277,950
Other intangible assets, net		5,419,361			2,093,113
Other assets		3,320,838			2,751,155
Total assets	$	368,707,355		$	289,124,527
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	51,853,159		$	39,962,363
Accrued expenses		15,960,945			14,446,210
Accrued wages, salaries and bonuses		7,799,903			7,811,207
Income taxes payable		752,658			—
Current operating lease liabilities		6,300,102			6,454,473
Current maturities of long-term debt		2,738,524			1,595,309
Current mandatorily redeemable non-controlling interest		1,641,612			1,712,095
Total current liabilities		87,046,903			71,981,657
Credit facilities		143,375,961			91,262,438
Deferred income tax liability, net		3,138,204			2,328,588
Long-term operating lease liabilities		13,737,167			13,787,721
Long-term debt, less current maturities		12,229,486			7,384,260
Mandatorily redeemable non-controlling interest, less current portion		7,976,499			9,446,460
Other long-term liabilities		289,672			103,968
Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized		—			—
Common stock, $.01 par value, 3,000,000 shares authorized, 608,689 shares outstanding at June 2023 and 584,789 shares outstanding at September 2022		9,431			9,168
Additional paid-in capital		30,175,977			26,903,201
Retained earnings		102,000,218			96,784,353
Treasury stock at cost		(31,272,163	)		(30,867,287	)
Total shareholders’ equity		100,913,463			92,829,435
Total liabilities and shareholders’ equity	$	368,707,355		$	289,124,527

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and nine months ended June 30, 2023 and 2022
	For the three months ended June						For the nine months ended June
	2023			2022			2023			2022
Sales (including excise taxes of $153.7 million and $129.2 million, and $414.9 million and $315.5 million, respectively)	$	696,489,427		$	550,584,152		$	1,847,472,782		$	1,365,043,621
Cost of sales		649,623,651			516,907,540			1,724,504,862			1,277,757,425
Gross profit		46,865,776			33,676,612			122,967,920			87,286,196
Selling, general and administrative expenses		36,851,520			25,862,325			99,227,695			70,168,415
Depreciation and amortization		2,103,429			912,501			4,982,068			2,514,968
		38,954,949			26,774,826			104,209,763			72,683,383
Operating income		7,910,827			6,901,786			18,758,157			14,602,813
Other expense (income):
Interest expense		2,385,842			655,811			6,249,540			1,222,829
Change in fair value of mandatorily redeemable non-controlling interest		698,571			705,392			864,684			705,392
Other (income), net		(931,765	)		(2,417,252	)		(1,159,021	)		(2,518,320	)
		2,152,648			(1,056,049	)		5,955,203			(590,099	)
Income from operations before income taxes		5,758,179			7,957,835			12,802,954			15,192,912
Income tax expense		1,813,800			2,221,000			4,164,000			4,811,000
Equity method investment earnings, net of tax		—			307,973			—			1,670,133
Net income available to common shareholders	$	3,944,379		$	6,044,808		$	8,638,954		$	12,052,045
Basic earnings per share available to common shareholders	$	6.74		$	10.61		$	14.78		$	21.25
Diluted earnings per share available to common shareholders	$	6.59		$	10.38		$	14.56		$	20.72
Basic weighted average shares outstanding		585,625			569,689			584,359			567,026
Diluted weighted average shares outstanding		598,590			582,370			593,480			581,578
Dividends paid per common share	$	0.18		$	0.18		$	5.54		$	5.54

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Shareholders’ Equity
for the three and nine months ended June 30, 2023 and 2022
									Additional
	Common Stock			Treasury Stock					Paid-in		Retained
	Shares	Amount		Shares		Amount			Capital		Earnings			Total
THREE MONTHS ENDED JUNE 2022
Balance, April 1, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,555,046	$	86,336,525		$	82,033,452
Dividends on common stock, $0.18 per share	—		—	—			—			—		(108,596	)		(108,596	)
Compensation expense related to equity-based awards	—		—	—			—			174,078		—			174,078
Net income available to common shareholders	—		—	—			—			—		6,044,808			6,044,808
Balance, June 30, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,729,124	$	92,272,737		$	88,143,742
THREE MONTHS ENDED JUNE 2023
Balance, April 1, 2023	943,272	$	9,431	(332,220	)	$	(30,867,287	)	$	29,766,566	$	98,167,058		$	97,075,768
Dividends on common stock, $0.18 per share	—		—	—			—			—		(111,219	)		(111,219	)
Compensation expense related to equity-based awards	—		—	—			—			409,411		—			409,411
Committed repurchase of treasury stock	—		—	(2,363	)		(404,876	)		—		—			(404,876	)
Net income available to common shareholders	—		—	—			—			—		3,944,379			3,944,379
Balance, June 30, 2023	943,272	$	9,431	(334,583	)	$	(31,272,163	)	$	30,175,977	$	102,000,218		$	100,913,463
									Additional
	Common Stock			Treasury Stock					Paid-in		Retained
	Shares	Amount		Shares		Amount			Capital		Earnings			Total
NINE MONTHS ENDED JUNE 2022
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, $5.54 per share	—		—	—			—			—		(3,331,606	)		(3,331,606	)
Compensation expense and settlement of equity-based awards	33,420		334	—			—			1,810,343		—			1,810,677
Net income available to common shareholders	—		—	—			—			—		12,052,045			12,052,045
Balance, June 30, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,729,124	$	92,272,737		$	88,143,742
NINE MONTHS ENDED JUNE 2023
Balance, October 1, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,903,201	$	96,784,353		$	92,829,435
Dividends on common stock, $5.54 per share	—		—	—			—			—		(3,423,089	)		(3,423,089	)
Compensation expense and settlement of equity-based awards	26,263		263	—			—			3,272,776		—			3,273,039
Committed repurchase of treasury stock	—		—	(2,363	)		(404,876	)		—		—			(404,876	)
Net income available to common shareholders	—		—	—			—			—		8,638,954			8,638,954
Balance, June 30, 2023	943,272	$	9,431	(334,583	)	$	(31,272,163	)	$	30,175,977	$	102,000,218		$	100,913,463

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the nine months ended June 30, 2023 and 2022
	June			June
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$	8,638,954		$	12,052,045
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		4,701,316			2,486,613
Amortization		280,752			28,355
Equity method investment earnings, net of tax		—			(1,670,133	)
Gain on re-valuation of equity method investment to fair value		—			(2,387,411	)
(Gain) loss on sales of property and equipment		(133,159	)		(133,639	)
Equity-based compensation		1,940,631			1,903,884
Deferred income taxes		809,616			1,231,012
Provision for losses on doubtful accounts		(7,697	)		83,000
Inventory allowance		442,603			688,902
Change in fair value of mandatorily redeemable non-controlling interest		864,684			705,392
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable		(8,026,950	)		(1,215,238	)
Inventories		(12,294,118	)		(4,674,292	)
Prepaid and other current assets		(745,490	)		(2,986,167	)
Equity method investment distributions		—			1,095,467
Other assets		(569,683	)		(728,596	)
Accounts payable		10,360,228			1,313,711
Accrued expenses and accrued wages, salaries and bonuses		1,487,971			1,926,479
Other long-term liabilities		185,704			(690,693	)
Income taxes payable and receivable		1,572,253			(1,890,449	)
Net cash flows from (used in) operating activities		9,507,615			7,138,242
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(6,759,929	)		(13,940,428	)
Proceeds from sales of property and equipment		151,307			145,500
Principal payment received on note receivable		—			175,000
Cash acquired in business combination		—			7,958
Acquisition of Henry's		(54,865,303	)		—
Net cash flows from (used in) investing activities		(61,473,925	)		(13,611,970	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		1,863,027,754			1,393,048,057
Repayments under revolving credit facilities		(1,810,914,231	)		(1,381,508,745	)
Proceeds from borrowings on long-term debt		7,000,000			—
Principal payments on long-term debt		(1,011,559	)		(524,874	)
Proceeds from exercise of stock options		—			173,590
Dividends on common stock		(3,423,089	)		(3,331,606	)
Settlement and withholdings of equity-based awards		—			(1,280,749	)
Redemption and distributions to non-controlling interest		(2,405,128	)		(20,600	)
Net cash flows from (used in) financing activities		52,273,747			6,555,073
Net change in cash		307,437			81,345
Cash, beginning of period		431,576			519,591
Cash, end of period	$	739,013		$	600,936
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	5,824,144		$	1,201,073
Cash paid during the period for income taxes, net of refunds		1,780,000			5,468,488
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	$	1,622,224		$	123,801
Effect of business acquisition		—			23,308,624
Committed repurchase of treasury stock		404,876			—
Issuance of common stock in connection with the vesting and exercise of equity-based awards		2,044,805			2,280,783