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 $2.62 on net income available to common shareholders of $1.8 million for the fiscal quarter ended June 30, 2016.

“The convenience sector continues to embrace fresh and on-the-go food offerings that enhance their ability to effectively compete against quick service restaurants for consumer dollars,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Atayan continued, “AMCON has developed robust programs and expanded its capabilities in foodservice and technology to support our customers as they continue to evolve their stores. We have a long-term commitment to building partnerships with our customers and suppliers alike.” He further noted, “we are actively seeking acquisitions that can benefit from our extensive platform of customer service.”

For the third fiscal quarter, the wholesale distribution segment reported revenues of $326.9 million, operating income of $4.9 million, and operating income before depreciation and amortization of $5.3 million. Our retail health food segment reported revenues of $6.5 million, an operating loss of $0.1 million, and break even operating income before depreciation and amortization for the same period.

“Our customers can count on our sales and marketing teams’ expertise in store design, product and program selection, and product placement to help them maximize sales and profitability particularly during the critical peak sales season. The investments we’ve made in our refrigerated trucking fleet have proven to be a competitive advantage as we are increasingly placing more emphasis on our foodservice offerings,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution segment.

“We are proactively taking steps to respond to the competitive environment that we operate in. We are focused on developing an enhanced shopping experience that builds on our key historical strengths of customer service and product selection,” said Eric Hinkefent, President of AMCON’s Retail Health Food Segment.

“We take a conservative approach to managing our balance sheet. The emphasis we place on working capital and liquidity provides us a competitive advantage in both of our business segments. We are able to move decisively when opportunities manifest themselves,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. “We were pleased to close the June 30, 2016 quarter with shareholders’ equity of $62.2 million and consolidated debt of $17.2 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 fifteen (15) 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, 2016 and September 30, 2015

    June September 2016 2015 (Unaudited) ASSETS Current assets: Cash $ 414,997 $ 219,536 Accounts receivable, less allowance for doubtful accounts of $0.8 million at June 2016 and $0.9 million at September 2015 33,932,942 31,866,787 Inventories, net 50,670,660 60,793,478 Deferred income taxes 1,404,470 1,553,726 Income taxes receivable — 113,238 Prepaid and other current assets   5,446,628     2,125,908   Total current assets 91,869,697 96,672,673   Property and equipment, net 12,362,980 12,753,145 Goodwill 6,349,827 6,349,827 Other intangible assets, net 3,825,561 4,090,978 Other assets   289,287     317,184   $ 114,697,352   $ 120,183,807   LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 17,997,838 $ 17,044,726 Accrued expenses 6,847,950 7,224,963 Accrued wages, salaries and bonuses 3,423,813 3,282,354 Income taxes payable 363,114 — Current maturities of long-term debt   359,737     351,383   Total current liabilities 28,992,452 27,903,426   Credit facility 13,708,439 20,902,207 Deferred income taxes 3,785,570 3,696,098 Long-term debt, less current maturities 3,113,288 3,384,319 Other long-term liabilities 29,826 34,860   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 June 2016 and September 2015 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 2016 and September 2015, and a total liquidation preference of $0.4 million at both June 2016 and September 2015 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, 587,185 shares outstanding and issued at June 2016 and 621,104 shares outstanding and issued at September 2015 7,197 7,061 Additional paid-in capital 16,676,738 15,509,199 Retained earnings 57,209,248 53,527,606 Treasury stock at cost   (11,725,406 )   (7,680,969 ) Total shareholders’ equity   62,167,777     61,362,897   $ 114,697,352   $ 120,183,807    

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2016 and 2015

          For the three months ended June For the nine months ended June 2016 2015 2016 2015 Sales (including excise taxes of $98.9 million and $101.5 million, and $284.9 million and $285.9 million, respectively) $ 333,398,723 $ 334,456,509 $ 951,856,098 $ 937,333,849 Cost of sales   314,235,192     314,957,889     896,190,425     880,575,362   Gross profit   19,163,531     19,498,620     55,665,673     56,758,487   Selling, general and administrative expenses 15,335,808 15,405,676 45,951,300 47,072,555 Depreciation and amortization   512,543     542,307     1,655,173     1,709,469     15,848,351     15,947,983     47,606,473     48,782,024   Operating income   3,315,180     3,550,637     8,059,200     7,976,463     Other expense (income): Interest expense 188,798 242,266 562,654 673,783 Other (income), net   (35,552 )   (20,853 )   (98,634 )   (63,907 )   153,246     221,413     464,020     609,876   Income from operations before income tax expense 3,161,934 3,329,224 7,595,180 7,366,587 Income tax expense   1,310,000     1,333,000     3,241,000     3,055,000   Net income 1,851,934 1,996,224 4,354,180 4,311,587 Preferred stock dividend requirements   (48,642 )   (48,643 )   (146,462 )   (145,928 ) Net income available to common shareholders $ 1,803,292   $ 1,947,581   $ 4,207,718   $ 4,165,659     Basic earnings per share available to common shareholders $ 3.03 $ 3.16 $ 6.91 $ 6.78 Diluted earnings per share available to common shareholders $ 2.62 $ 2.69 $ 6.07 $ 5.85   Basic weighted average shares outstanding 596,112 615,822 609,240 614,723 Diluted weighted average shares outstanding 707,300 741,183 717,875 737,325   Dividends declared and paid per common share $ 0.18 $ 0.18 $ 0.82 $ 0.54  

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2016 and 2015

      2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,354,180 $ 4,311,587 Adjustments to reconcile net income from operations to net cash flows from operating activities: Depreciation 1,389,756 1,435,719 Amortization 265,417 273,750 (Gain) loss on sale of property and equipment (69,215 ) 5,103 Equity-based compensation 1,050,644 910,920 Deferred income taxes 238,728 133,493 Provision (recovery) for losses on doubtful accounts (39,000 ) 193,000 Provision for losses on inventory obsolescence 2,014 132,793 Other (5,034 ) (6,034 )   Changes in assets and liabilities: Accounts receivable (2,027,155 ) (207,224 ) Inventories 10,120,804 (6,393,734 ) Prepaid and other current assets (3,320,720 ) 942,531 Other assets 27,897 118,531 Accounts payable 924,567 242,760 Accrued expenses and accrued wages, salaries and bonuses 2,825 1,505,917 Income taxes payable   476,352     (1,022,572 ) Net cash flows from operating activities 13,392,060 2,576,540   CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (1,013,988 ) (812,624 ) Proceeds from sales of property and equipment   112,157     24,000   Net cash flows from investing activities (901,831 ) (788,624 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net payments on bank credit agreements (7,193,768 ) (774,559 ) Principal payments on long-term debt (262,677 ) (255,157 ) Repurchase of common stock (4,044,437 ) — Dividends paid on convertible preferred stock (146,462 ) (145,928 ) Dividends on common stock (526,076 ) (348,732 ) Withholdings on the exercise of equity-based awards   (121,348 )   (213,605 ) Net cash flows from financing activities   (12,294,768 )   (1,737,981 )   Net change in cash 195,461 49,935   Cash, beginning of period   219,536     99,922   Cash, end of period $ 414,997   $ 149,857     Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 576,681 $ 677,163 Cash paid during the period for income taxes 2,525,920 3,944,080   Supplemental disclosure of non-cash information: Equipment acquisitions classified as accounts payable 51,874 8,483 Issuance of common stock in connection with the vesting and exercise of equity-based awards 1,174,981 1,240,842

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