AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha,
Nebraska based consumer products company is pleased to announce
fully diluted earnings per share of $6.75 on net income available
to common shareholders of $4.8 million for the fiscal year ended
September 30, 2014. AMCON earned $2.57 per fully diluted share on
net income available to common shareholders of $1.8 million for the
fourth fiscal quarter ended September 30, 2014.
“We are pleased with our results for fiscal 2014. Our relentless
focus on customer service and reliability has enabled us to
maintain our leadership position in the convenience distribution
industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief
Executive Officer. He further noted, “We believe our focused
strategic plan and customer centric philosophy are essential
elements critical to navigating this challenging business
environment. Our objective is to deliver attractive risk adjusted
rates of return on the capital we employ. To support this objective
we continue to invest in foodservice and information technology
which drives the profitability of our customers.”
The wholesale distribution segment reported revenues of $1.2
billion and operating income before depreciation and amortization
of $15.6 million for fiscal 2014, and revenues and operating income
before depreciation and amortization of $328.0 million and $4.6
million, respectively, for the fourth fiscal quarter of fiscal
2014. The retail health food segment reported revenues of $34.3
million and operating income before depreciation and amortization
of $1.3 million for fiscal 2014, and revenue of $8.1 million and
operating income before depreciation and amortization of $0.2
million for the fourth fiscal quarter of 2014.
“Our emphasis on building long term relationships continues to
provide us with a significant competitive advantage,” said Kathleen
Evans, President of AMCON’s Wholesale Distribution Segment. Evans
continued, “This is clearly evident based on our positive fall
trade show response which will provide considerable momentum as we
enter fiscal 2015. We are very excited about the completion of our
plant expansion in Rapid City, South Dakota that will serve our
foodservice growth plans in the region.”
“The Retail Health Food industry continues to grow. However,
with this growth there has been substantial new competition enter
our markets which has pressured revenues,” said Eric Hinkefent,
President of AMCON’s Retail Health Food segment. “We have taken an
aggressive approach to rationalize our operating expenses in light
of the competitive environment and are looking at alternative ways
to maintain our margins,” added Hinkefent.
“We are very focused on increasing our shareholders’ equity per
share and maintaining high levels of balance sheet liquidity. Debt
reduction is an important priority for us because it improves our
debt to equity ratio. At September 30, 2014 our shareholders’
equity was $55.4 million, resulting in adjusted book value per
share of $80.62. We turned our inventory twenty-six times and
consolidated debt was reduced to $19.2 million. This was after
share repurchases and plant expansions totaling $5.5 million,” said
Andrew Plummer, AMCON’s Chief Financial Officer. “The Rapid City
plant expansion brings a number of important benefits including
increased efficiencies and the enhanced ability to service the
thriving foodservice sector. We continue to place a high priority
on the development of information technology for internal and
external purposes. These are important investments in the future of
our business,” added Plummer.
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 sixteen (16) health and
natural product retail stores in the Midwest and Florida. The
retail stores operate under the names Chamberlin's Market &
Cafe www.chamberlins.com and Akin’s Natural Foods Market
www.akins.com
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 30, 2014 2013
ASSETS Current assets: Cash $ 99,922 $ 275,036 Accounts
receivable, less allowance for doubtful accounts of $0.8 million at
2014 and $1.1 million at 2013 33,286,932 28,383,205 Inventories,
net 43,635,266 46,125,187 Deferred income taxes 1,606,168 1,831,933
Prepaid and other current assets 5,034,570
5,001,992 Total current assets 83,662,858 81,617,353
Property and equipment, net 13,763,140 13,088,859 Goodwill
6,349,827 6,349,827 Other intangible assets, net 4,455,978
4,820,978 Other assets 448,149 497,882
$ 108,679,952 $ 106,374,899
LIABILITIES AND
SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $
16,412,895 $ 15,859,636 Accrued expenses 6,891,308 6,714,444
Accrued wages, salaries and bonuses 2,647,969 2,754,136 Income
taxes payable 1,603,614 1,922,351 Current maturities of long-term
debt 341,190 998,788 Total current
liabilities 27,896,976 28,249,355 Credit facility 15,081,783
14,841,712 Deferred income taxes 3,484,204 3,327,010 Long-term
debt, less current maturities 3,735,702 4,076,892 Other long-term
liabilities 139,003 239,396 Series A cumulative, convertible
preferred stock, $.01 par value 100,000 shares authorized and
issued, and a total liquidation preference of $2.5 million at both
September 2014 and September 2013 2,500,000 2,500,000 Series B
cumulative, convertible preferred stock, $.01 par value 80,000
shares authorized, 16,000 shares issued and outstanding at
September 30, 2014 and September 30, 2013, and a total liquidation
preference of $0.4 million at both September 2014 and September
2013 400,000 400,000
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized,
116,000 shares outstanding and issued in Series A and B referred to
above — — Common stock, $0.01 par value, 3,000,000 shares
authorized, 602,411 shares issued and outstanding at September 2014
and 623,115 shares issued and outstanding at September 2013 6,677
6,543 Additional paid-in capital 13,571,909 12,502,135 Retained
earnings 47,829,201 43,532,812 Treasury stock at cost
(5,965,503 ) (3,300,956 ) Total shareholders’ equity
55,442,284 52,740,534 $ 108,679,952 $
106,374,899
AMCON Distributing Company and
Subsidiaries
CONSOLIDATED STATEMENTS OF
OPERATIONS
Fiscal Years Ended September 2014
2013 Sales (including excise taxes of $387.8 million and
$386.4 million, respectively) $ 1,236,755,388 $ 1,211,052,634 Cost
of sales 1,160,248,793 1,133,695,309
Gross profit 76,506,595 77,357,325
Selling, general and administrative expenses 64,723,824 63,880,109
Depreciation and amortization 2,386,402
2,412,613 67,110,226 66,292,722
Operating income 9,396,369 11,064,603 Other expense (income):
Interest expense 935,360 1,108,146 Other (income), net
(130,519 ) (277,215 ) 804,841 830,931
Income from operations before income tax expense 8,591,528
10,233,672 Income tax expense 3,632,000
4,375,000 Net income 4,959,528 5,858,672 Preferred stock
dividend requirements (195,105 ) (205,218 ) Net
income available to common shareholders $ 4,764,423 $
5,653,454
Basic earnings per share available to
common shareholders:
$ 7.81 $ 9.08
Diluted earnings per share available to
common shareholders:
$ 6.75 $ 7.79
Basic weighted average shares
outstanding
610,392 622,904 Diluted weighted average shares outstanding 735,227
751,812
AMCON Distributing Company and
Subsidiaries
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Fiscal Years Ended September 2014
2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $
4,959,528 $ 5,858,672 Adjustments to reconcile income from
operations to net cash flows from operating activities:
Depreciation 2,021,402 2,047,613 Amortization 365,000 365,000 Gain
on sale of property and equipment (59,449 ) (56,829 ) Equity-based
compensation 1,406,033 1,303,310 Deferred income taxes 382,959
(221,694 ) Recoveries for losses on doubtful accounts (317,000 )
(55,000 ) Provision (recoveries) for losses on inventory
obsolescence 44,695 (91,494 ) Other (8,045 ) (93,328 ) Changes in
assets and liabilities: Accounts receivable (4,586,727 ) 4,353,630
Inventories 3,403,156 (7,669,072 ) Prepaid and other current assets
(32,578 ) 1,474,710 Other assets 49,733 232 Accounts payable
591,478 (1,391,539 ) Accrued expenses and accrued wages, salaries
and bonuses (238,994 ) 181,294 Income taxes payable (318,737
) (272,615 ) Net cash flows from operating activities
7,662,454 5,732,890 CASH FLOWS FROM INVESTING
ACTIVITIES: Purchase of property and equipment (2,796,326 )
(2,113,426 ) Proceeds from sales of property and equipment 192,373
179,662 Acquisitions (996,803 ) — Net cash
flows from investing activities (3,600,756 )
(1,933,764 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings
on bank credit agreements 240,071 487,980 Principal payments on
long-term debt (998,788 ) (1,182,829 ) Repurchase of common stock
and Series B Convertible Preferred Stock (2,664,547 ) (2,572,085 )
Dividends paid on convertible preferred stock (195,105 ) (205,218 )
Dividends on common stock (468,034 ) (469,895 ) Withholdings on the
exercise of equity-based awards (150,409 ) (73,430 )
Net cash flow from financing activities (4,236,812 )
(4,015,477 ) Net change in cash (175,114 ) (216,351 ) Cash,
beginning of year 275,036 491,387 Cash,
end of year $ 99,922 $ 275,036 Supplemental
disclosure of cash flow information: Cash paid during the year for
interest $ 946,881 $ 1,115,991 Cash paid during the year for income
taxes 3,567,778 4,867,986
Supplemental disclosure of non-cash
information:
Equipment acquisitions classified as accounts payable $ 34,985 $
73,204 Issuance of common stock in connection with the vesting and
exercise of equity-based awards 1,154,869 1,389,258 Conversion by
holders of Series B Convertible Preferred Stock to common stock —
100,000 Common stock acquired with other consideration — 760,871
AMCON Distributing Company and
Subsidiaries
FISCAL YEAR 2014
(dollars in thousands, except per share data)
First Second
Third Fourth Sales $
305,626 $ 272,422 $ 322,648 $ 336,060
Gross profit
19,641 17,620
19,295 19,951
Income from operations before income tax
expense
2,253 995
2,250 3,093
Net income
1,288 531 1,260 1,880
Preferred stock dividend requirements
(49 )
(48 )
(49 )
(49 )
Net income available to common
shareholders
$ 1,239 $
483 $ 1,211
$ 1,831
Basic earnings per share available to
common shareholders
$ 1.99 $
0.79 $ 2.00
$ 3.04
Diluted earnings per share available to
common shareholders
$ 1.73 $
0.72 $ 1.73
$ 2.57
FISCAL YEAR 2013
(dollars in thousands, except per share data)
First Second
Third Fourth Sales $
302,218 $ 274,568 $ 316,031 $ 318,235
Gross profit
19,230 18,297
19,811 20,020
Income from operations before income tax
expense
2,533 2,125
2,887 2,689
Net income
1,463 1,214 1,632 1,549
Preferred stock dividend requirements
(59 )
(48 )
(49 )
(49 )
Net income available to common
shareholders
$ 1,403 $
1,166 $ 1,584
$ 1,500
Basic earnings per share available to
common shareholders
$ 2.26 $
1.87 $ 2.54
$ 2.41
Diluted earnings per share available to
common shareholders
$ 1.90 $
1.63 $ 2.19
$ 2.07
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 converted. 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, conversion of
convertible preferred stock and vesting of restricted stock units
divided by total common shares outstanding plus common shares
issuable upon the exercise of all stock options, conversion of
convertible preferred stock and vesting of restricted stock
units.”
September 2014
Number of common shares outstanding at September 30, 2014 602,411
Total shareholders’ equity at September 30, 2014
$
55,442,284 Book value per share at September
30, 2014 $ 92.03
September 2014
Number of common shares outstanding at September 30, 2014 602,411
Add: common shares potentially issuable for stock options,
convertible preferred stock, and unvested restricted stock units
/1/
173,208 775,619
Total shareholders’ equity at September 30, 2014 $ 55,442,284
Equity impact if all potential common shares were converted /1/
7,089,656 $
62,531,940 Adjusted book value per share at
September 30, 2014 $ 80.62 /1/ Assumes the exercise
of all vested and unvested stock options, conversion of all
preferred stock, and vesting of all outstanding restricted stock
units at September 30, 2014.
AMCON Distributing CompanyChristopher H. Atayan,
402-331-3727
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