AMCON Distributing Company Reports Results for the Fiscal Year Ended September 30, 2023

OMAHA, Neb.--(BUSINESS WIRE)--AMCON Distributing Company (“AMCON” or “the Company”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $19.46 on net income available to common shareholders of $11.6 million for the fiscal year ended September 30, 2023.

“We are pleased with our fiscal 2023 results. Our business continues to encounter numerous operating challenges resulting from a labor shortage, supply chain issues, inflation, volatility in energy prices, and rising interest rates. Navigating these headwinds is the central focus of our management team for the near term. One of the core operating philosophies that guide our daily decision-making process is a relentless focus on managing the Company’s balance sheet and maximizing our liquidity position. Another of AMCON’s long-standing core operating philosophies is providing a superior level of customer service. The customer-centric approach we embrace has guided us through these challenging times and helped ensure that AMCON’s customers receive a consistent and timely flow of goods and services,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We continue to actively seek strategic acquisition opportunities for operators who want to align with our customer-centric management philosophy and further the legacy of their enterprises.”

The wholesale distribution segment reported revenues of $2.5 billion and operating income of $39.7 million for fiscal 2023 and the retail health food segment reported revenues of $43.1 million and an operating loss of $0.7 million for fiscal 2023.

“In the medium term our primary strategic objective is to drive the growth of our foodservice business through our Henry’s Foods (“Henry’s”) subsidiary. Henry’s offers a breadth and depth of proprietary foodservice programs and associated store level merchandising that is unparalleled in the convenience distribution industry. Through Henry’s, we now have the capability to offer turn-key solutions that will enable our customer base to compete head on with the Quick Service Restaurant industry. We are investing heavily in our foodservice and technology platforms and associated staffing for these strategic focus areas,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. “We are also looking to expand our geographic reach, to better serve our customers as they grow their store footprints.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “At September 30, 2023, our shareholders’ equity was $104.2 million. We continue to prioritize high levels of daily liquidity. Our strong liquidity position provided maximum flexibility to take advantage of attractive short-term merchandising opportunities from several of our key vendor partners that materialized near our fiscal year end.” Mr. Schmaderer also added, “We are investing capital to develop our new 175,000 square foot distribution facility in Springfield, Missouri which will support our customers’ growth initiatives.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. 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. We continue to rationalize our base of stores as well as developing new store opportunities.

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 with distribution centers in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. AMCON, through its Healthy Edge Retail Group, 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 CONSOLIDATED BALANCE SHEETS
	September			September
	2023			2022
ASSETS
Current assets:
Cash	$	790,931		$	431,576
Accounts receivable, less allowance for doubtful accounts of $2.4 million at September 2023 and $2.5 million at September 2022		70,878,420			62,367,888
Inventories, net		158,582,816			134,654,637
Income taxes receivable		1,854,484			819,595
Prepaid expenses and other current assets		13,564,056			12,702,084
Total current assets		245,670,707			210,975,780
Property and equipment, net		80,607,451			48,085,520
Operating lease right-of-use assets, net		23,173,287			19,941,009
Goodwill		5,778,325			5,277,950
Other intangible assets, net		5,284,935			2,093,113
Other assets		2,914,495			2,751,155
Total assets	$	363,429,200		$	289,124,527
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	43,099,326		$	39,962,363
Accrued expenses		14,922,279			14,446,210
Accrued wages, salaries and bonuses		8,886,529			7,811,207
Current operating lease liabilities		6,063,048			6,454,473
Current maturities of long-term debt		1,955,065			1,595,309
Current mandatorily redeemable non-controlling interest		1,703,604			1,712,095
Total current liabilities		76,629,851			71,981,657
Credit facilities		140,437,989			91,262,438
Deferred income tax liability, net		4,917,960			2,328,588
Long-term operating lease liabilities		17,408,758			13,787,721
Long-term debt, less current maturities		11,675,439			7,384,260
Mandatorily redeemable non-controlling interest, less current portion		7,787,227			9,446,460
Other long-term liabilities		402,882			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 September 2023 and 584,789 shares outstanding at September 2022		9,431			9,168
Additional paid-in capital		30,585,388			26,903,201
Retained earnings		104,846,438			96,784,353
Treasury stock at cost		(31,272,163	)		(30,867,287	)
Total shareholders’ equity		104,169,094			92,829,435
Total liabilities and shareholders’ equity	$	363,429,200		$	289,124,527

AMCON Distributing Company and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS
	Fiscal Years Ended September
	2023			2022
Sales (including excise taxes of $564.6 million and $467.1 million, respectively)	$	2,539,994,999		$	2,010,798,385
Cost of sales		2,369,150,102			1,883,078,819
Gross profit		170,844,897			127,719,566
Selling, general and administrative expenses		137,301,668			101,474,359
Depreciation and amortization		7,576,646			3,643,840
		144,878,314			105,118,199
Operating income		25,966,583			22,601,367
Other expense (income):
Interest expense		8,550,431			2,249,552
Change in fair value of mandatorily redeemable non-controlling interest		1,307,599			1,476,986
Other (income), net		(1,193,840	)		(2,600,675	)
		8,664,190			1,125,863
Income from operations before income taxes		17,302,393			21,475,504
Income tax expense		5,706,000			6,473,380
Equity method investment earnings, net of tax		—			1,670,133
Net income available to common shareholders	$	11,596,393		$	16,672,257
Basic earnings per share available to common shareholders	$	19.85		$	29.37
Diluted earnings per share available to common shareholders	$	19.46		$	28.59
Basic weighted average shares outstanding		584,148			567,697
Diluted weighted average shares outstanding		595,850			583,062
Dividends paid per common share	$	5.72		$	5.72

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, 2021	883,589	$	8,834	(332,220	)	$	(30,867,287	)	$	24,918,781	$	83,552,298		$	77,612,626
Dividends on common stock, $5.72 per share	—		—	—			—			—		(3,440,202	)		(3,440,202	)
Compensation expense and issuance of stock in connection with equity-based awards	33,420		334	—			—			1,984,420		—			1,984,754
Net income available to common shareholders	—		—	—			—			—		16,672,257			16,672,257
Balance, September 30, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,903,201	$	96,784,353		$	92,829,435
Dividends on common stock, $5.72 per share	—		—	—			—			—		(3,534,308	)		(3,534,308	)
Compensation expense and issuance of stock in connection with equity-based awards	26,263		263	—			—			3,682,187		—			3,682,450
Repurchase of common stock	—		—	(2,363	)		(404,876	)		—		—			(404,876	)
Net income available to common shareholders	—		—	—			—			—		11,596,393			11,596,393
Balance, September 30, 2023	943,272	$	9,431	(334,583	)	$	(31,272,163	)	$	30,585,388	$	104,846,438		$	104,169,094

AMCON Distributing Company and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS
	September			September
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$	11,596,393		$	16,672,257
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		7,161,468			3,572,953
Amortization		415,178			70,887
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		(133,659	)		(140,139	)
Equity-based compensation		2,717,370			3,103,320
Deferred income taxes		2,589,372			797,360
Provision for losses on doubtful accounts		(133,924	)		(32,420	)
Inventory allowance		(138,820	)		212,637
Change in fair value of mandatorily redeemable non-controlling interest		1,307,599			1,476,986
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable		(138,956	)		3,032,876
Inventories		(7,728,394	)		3,240,946
Prepaid and other current assets		(679,229	)		(5,344,754	)
Equity method investment distributions		—			1,095,467
Other assets		(163,340	)		(730,391	)
Accounts payable		2,213,085			332,400
Accrued expenses and accrued wages, salaries and bonuses		1,574,050			2,482,409
Other long-term liabilities		298,914			(653,419	)
Income taxes payable and receivable		(1,034,889	)		(2,241,755	)
Net cash flows from (used in) operating activities		19,722,218			22,890,076
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(11,561,347	)		(14,691,799	)
Proceeds from sales of property and equipment		151,808			152,000
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		(66,274,842	)		(14,356,841	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		2,512,309,723			2,042,679,688
Repayments under revolving credit facilities		(2,463,134,172	)		(2,041,106,459	)
Proceeds from borrowings on long-term debt		7,000,000			—
Principal payments on long-term debt		(2,349,065	)		(4,909,548	)
Proceeds from exercise of stock options		—			173,590
Repurchase of common stock		(404,876	)		—
Dividends on common stock		(3,534,308	)		(3,440,202	)
Settlement and withholdings of equity-based awards		—			(1,280,749	)
Redemption and distributions to non-controlling interest		(2,975,323	)		(737,570	)
Net cash flows from (used in) financing activities		46,911,979			(8,621,250	)
Net change in cash		359,355			(88,015	)
Cash, beginning of period		431,576			519,591
Cash, end of period	$	790,931		$	431,576
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	8,311,375		$	2,210,828
Cash paid during the period for income taxes, net of refunds		4,141,370			7,915,225
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	$	1,015,534		$	91,656
Effect of business acquisition		—			23,308,624
Issuance of common stock in connection with the vesting and exercise of equity-based awards		2,044,805			2,280,783