DIT AMCON Distributing Co

AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $2.69 on net income available to common shareholders of $1.9 million for the fiscal quarter ended June 30, 2015.

“We are diligently implementing our focused business strategy. The central elements of this plan are liquidity management, technology development, and foodservice expansion. Our goal is to enhance our customers’ experience and increase their profitability. We believe our philosophy has enabled us to build long-term relationships and maintain a leadership position in the industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We are committed to making the capital investments necessary to compete at the highest level and are actively seeking acquisitions that can benefit from our extensive platform of services.”

“Our recent investments in facilities and our refrigerated fleet have positioned us well as we enter the seasonally strong summer months for the industry. Our management team remains highly engaged with our customers as we develop programs and services designed to grow their revenues and profitability,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment.

“The retail health food environment in the markets we operate remains highly competitive. Both national and regional chains are pursuing aggressive expansion efforts and continue to open new stores. Our management team has been focused on a variety of initiatives designed to enhance the operating economics of each retail store. These efforts include a targeted focus on the major business drivers such as inventory rationalization, merchandising, store staffing mix, and expense management,” said Eric Hinkefent, President of AMCON’s Retail Health Food Segment.

Each of AMCON’s business segments reported solid quarters. The wholesale distribution segment reported revenues of $326.7 million and operating income before depreciation and amortization of $5.5 million for the third fiscal quarter of 2015. The retail health food segment reported revenues of $7.7 million and operating income before depreciation and amortization of $0.2 million for the same period.

“Solid working capital management is critical in the industries in which we operate which is why we make significant investments in operations, logistics, technology, financial reporting and cash management,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. Plummer added, “These investments support our working capital growth as we seek opportunities to continue to use our liquidity to our benefit.” We were pleased to close the June 30, 2015 quarter with shareholders’ equity of $60.4 million and consolidated debt of $18.1 million.”

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 Condensed Consolidated Balance Sheets June 30, 2015 and September 30, 2014         June September 2015 2014 (Unaudited) ASSETS Current assets: Cash $ 149,857 $ 99,922 Accounts receivable, less allowance for doubtful accounts of $1.0 million and $0.8 million at June 2015 and September 2014, respectively 33,301,156 33,286,932 Inventories, net 49,896,207 43,635,266 Deferred income taxes 1,550,877 1,606,168 Prepaid and other current assets   4,092,039     5,034,570   Total current assets 88,990,136 83,662,858   Property and equipment, net 13,084,440 13,763,140 Goodwill 6,349,827 6,349,827 Other intangible assets, net 4,182,228 4,455,978 Other assets   329,618     448,149   $ 112,936,249   $ 108,679,952   LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 16,629,153 $ 16,412,895 Accrued expenses 7,350,570 6,891,308 Accrued wages, salaries and bonuses 3,335,949 2,647,969 Income taxes payable 581,042 1,603,614 Current maturities of long-term debt   348,710     341,190   Total current liabilities 28,245,424 27,896,976   Credit facility 14,307,224 15,081,783 Deferred income taxes 3,562,406 3,484,204 Long-term debt, less current maturities 3,473,025 3,735,702 Other long-term liabilities 36,871 139,003

Series A cumulative, convertible preferred stock, $.01 par value 100,000 shares authorized, issued, and outstanding, and a total liquidation preference of $2.5 million at both June 2015 and September 2014

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 both June 2015 and September 2014, and a total liquidation preference of $0.4 million at both June 2015 and September 2014

400,000 400,000  

Shareholders’ equity:

Preferred stock, $.01 par value, 1,000,000 shares authorized, 116,000 shares outstanding and issued in Series A and B referred to above

— —

Common stock, $.01 par value, 3,000,000 shares authorized, 615,822 shares outstanding at June 2015 and 602,411 shares outstanding at September 2014

6,811 6,677 Additional paid-in capital 14,723,863 13,571,909 Retained earnings 51,646,128 47,829,201 Treasury stock at cost   (5,965,503 )   (5,965,503 ) Total shareholders’ equity   60,411,299     55,442,284   $ 112,936,249   $ 108,679,952       AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and nine months ended June 30, 2015 and 2014         For the three months For the nine months ended June ended June 2015     2014 2015     2014 Sales (including excise taxes of $101.5 million and $100.4 million, and $285.9 million and $283.5 million, respectively) $ 334,456,509 $ 322,647,624 $ 937,333,849 $ 900,694,969 Cost of sales   314,957,889     303,353,020     880,575,362     844,139,340   Gross profit   19,498,620     19,294,604     56,758,487     56,555,629    

Selling, general and administrative expenses

15,405,676 16,295,082 47,072,555 48,599,519 Depreciation and amortization   542,307     557,736     1,709,469     1,810,610     15,947,983     16,852,818     48,782,024     50,410,129   Operating income   3,550,637     2,441,786     7,976,463     6,145,500     Other expense (income): Interest expense 242,266 228,827 673,783 753,446 Other (income), net   (20,853 )   (37,473 )   (63,907 )   (106,659 )   221,413     191,354     609,876     646,787   Income from operations before income tax expense 3,329,224 2,250,432 7,366,587 5,498,713 Income tax expense   1,333,000     990,000     3,055,000     2,419,000   Net income 1,996,224 1,260,432 4,311,587 3,079,713 Preferred stock dividend requirements   (48,643 )   (48,643 )   (145,928 )   (145,928 ) Net income available to common shareholders $ 1,947,581   $ 1,211,789   $ 4,165,659   $ 2,933,785       Basic earnings per share available to common shareholders $ 3.16 $ 2.00 $ 6.78 $ 4.79 Diluted earnings per share available to common shareholders $ 2.69 $ 1.73 $ 5.85 $ 4.18   Basic weighted average shares outstanding 615,822 605,319 614,723 613,032 Diluted weighted average shares outstanding 741,183 729,978 737,325 736,531     AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the nine months ended June 30, 2015 and 2014         2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,311,587 $ 3,079,713

Adjustments to reconcile net income from operations to net cash flows from operating activities:

Depreciation 1,435,719 1,536,860 Amortization 273,750 273,750 (Gain) loss on sale of property and equipment 5,103 (42,745 ) Equity-based compensation 910,920 1,025,694 Deferred income taxes 133,493 421,934 Provision for losses on doubtful accounts 193,000 63,000 Provision for losses on inventory obsolescence 132,793 15,878 Other (6,034 ) (6,034 )   Changes in assets and liabilities: Accounts receivable (207,224 ) (1,379,031 ) Inventories (6,393,734 ) (1,572,589 ) Prepaid and other current assets 942,531 (2,048,389 ) Other assets 118,531 31,892 Accounts payable 242,760 598,939 Accrued expenses and accrued wages, salaries and bonuses 1,505,917 805,286 Income tax payable   (1,022,572 )   (1,589,747 ) Net cash flows from operating activities   2,576,540     1,214,411  

 

CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (812,624 ) (2,337,626 ) Proceeds from sales of property and equipment 24,000 47,969 Acquisition   —     (996,803 ) Net cash flows from investing activities   (788,624 )   (3,286,460 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net (payments) borrowings on bank credit agreements (774,559 ) 6,322,689 Principal payments on long-term debt (255,157 ) (915,350 ) Repurchase of Series B Convertible Preferred Stock and common stock — (2,648,318 ) Dividends paid on convertible preferred stock (145,928 ) (145,928 ) Dividends on common stock (348,732 ) (353,806 ) Withholdings on the exercise of equity-based awards   (213,605 )   (128,523 ) Net cash flows from financing activities   (1,737,981 )   2,130,764     Net change in cash 49,935 58,715

Cash, beginning of period

  99,922     275,036   Cash, end of period $ 149,857   $ 333,751       2015 2014 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 677,163 $ 751,909 Cash paid during the period for income taxes 3,944,080 3,586,813   Supplemental disclosure of non-cash information: Equipment acquisitions classified as accounts payable 8,483 62,414

Issuance of common stock in connection with the vesting and exercise of equity-based awards

1,240,842 1,154,869  

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AMCON Distributing CompanyChristopher H. Atayan, 402-331-3727