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 $0.56 on net income available to common shareholders of $0.4 million for our third fiscal quarter ended June 30, 2017.

“Both of the industries in which we operate are undergoing transformative changes based on a number of factors including increased competition, shifts in consumer shopping habits, and new technologies. These developments have resulted in consolidation across all segments of the food and convenience store supply chains including manufacturers, distributors, and retailers. Given this operating environment, we remain committed to our focused strategic plan which calls for ongoing investments in new programs, services, and technologies to enhance and support our leadership position in the convenience distribution industry,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “We are actively seeking acquisitions that can benefit from our extensive platform of customer service. We are also looking carefully at a number of geographic growth opportunities as our customer base expands.”

For the third fiscal quarter of 2017, our Wholesale Distribution Segment reported revenues of $326.5 million and operating income of $3.1 million. Our Retail Health Food Segment reported revenues of $6.4 million and an operating loss of $0.6 million for the same period.

“Convenience store operators are increasingly looking to AMCON for easy to use technology solutions that assist them in areas such as category and profitability management and to enhance efficiency. Additionally, interest in building new non-tobacco revenue streams continues to accelerate amongst our customer base,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution segment. She further noted, “We are implementing the investments we’ve made in our trucking fleet and technology to further support our customers’ geographic growth.”

“We are pleased with the recent extensive renovations and update to our store in Oviedo, Florida. Our management team is developing market driven enhancements to our core business model in order for us to compete in this highly challenging retail environment,” said Clifford Ginn, President of AMCON’s Retail Health Food Segment. He further noted, “We are working diligently on building our next generation store in the Lakeland, Florida market.”

“We actively manage our working capital and liquidity which provides AMCON the ability to respond quickly to the dynamic environments in which both of our business segments operate. This conservative approach provides us significant flexibility to act in the long term best interest of the many constituencies we serve. Both of our business segments are utilizing financial resources in the course of making the capital and operational investments necessary for long term competitive success,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. “We were pleased to close the June 30, 2017 quarter with shareholders’ equity of $67.3 million and consolidated debt of $13.4 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, 2017 and September 30, 2016

    June September 2017 2016 (Unaudited)

ASSETS

Current assets: Cash $ 121,790 $ 605,380

Accounts receivable, less allowance for doubtful accounts of $0.7 million at June 2017 and $0.7 million at September 2016

31,035,527 30,033,104 Inventories, net 49,101,309 48,404,882 Deferred income taxes 1,352,383 1,441,919 Income taxes receivable 157,900 164,959 Prepaid and other current assets   7,836,179     8,608,049   Total current assets 89,605,088 89,258,293   Property and equipment, net 12,867,402 12,607,877 Goodwill 6,349,827 6,349,827 Other intangible assets, net 3,560,561 3,759,311 Other assets   326,440     288,082   Total assets $ 112,709,318   $ 112,263,390  

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities: Accounts payable $ 18,329,745 $ 18,164,983 Accrued expenses 7,106,294 6,792,884 Accrued wages, salaries and bonuses 2,415,122 3,580,996 Current maturities of long-term debt   370,803     362,495   Total current liabilities 28,221,964 28,901,358   Credit facility 10,328,098 10,537,226 Deferred income taxes 4,052,400 4,021,569 Long-term debt, less current maturities 2,742,485 3,021,824 Other long-term liabilities 33,111 30,815   Shareholders’ equity: Preferred stock, $.01 par value, 1,000,000 shares authorized — —

Common stock, $.01 par value, 3,000,000 shares authorized, 678,938 shares outstanding and issued at June 2017 and 677,057 shares outstanding and issued at September 2016

8,314 8,184 Additional paid-in capital 20,803,998 19,525,554 Retained earnings 60,033,389 58,693,241 Treasury stock at cost   (13,514,441 )   (12,476,381 ) Total shareholders’ equity   67,331,260     65,750,598   Total liabilities and shareholders' equity $ 112,709,318   $ 112,263,390    

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2017 and 2016

        For the three months ended June For the nine months ended June 2017 2016 2017 2016 Sales (including excise taxes of $95.1 million and $98.9 million, and $271.8 million and $284.9 million, respectively) $ 332,842,200 $ 333,398,723 $ 936,994,299 $ 951,856,098 Cost of sales   314,818,453     314,235,192     883,180,664     896,190,425   Gross profit   18,023,747     19,163,531     53,813,635     55,665,673   Selling, general and administrative expenses 16,587,055 15,335,808 48,105,878 45,951,300 Depreciation and amortization   474,890     512,543     1,531,292     1,655,173     17,061,945     15,848,351     49,637,170     47,606,473   Operating income   961,802     3,315,180     4,176,465     8,059,200     Other expense (income): Interest expense 180,266 188,798 545,719 562,654 Other (income), net   (16,513 )   (35,552 )   (37,250 )   (98,634 )   163,753     153,246     508,469     464,020   Income from operations before income tax expense 798,049 3,161,934 3,667,996 7,595,180 Income tax expense   413,000     1,310,000     1,748,000     3,241,000   Net income 385,049 1,851,934 1,919,996 4,354,180 Preferred stock dividend requirements   —     (48,642 )   —     (146,462 ) Net income available to common shareholders $ 385,049   $ 1,803,292   $ 1,919,996   $ 4,207,718     Basic earnings per share available to common shareholders $ 0.57 $ 3.03 $ 2.82 $ 6.91 Diluted earnings per share available to common shareholders $ 0.56 $ 2.62 $ 2.78 $ 6.07   Basic weighted average shares outstanding 678,938 596,112 679,858 609,240 Diluted weighted average shares outstanding 691,701 707,300 690,840 717,875   Dividends declared and paid per common share $ 0.18 $ 0.18 $ 0.82 $ 0.82  

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2017 and 2016

    June June 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,919,996 $ 4,354,180 Adjustments to reconcile net income from operations to net cash flows from operating activities: Depreciation 1,332,542 1,389,756 Amortization 198,750 265,417 Gain on sale of property and equipment (30,854 ) (69,215 ) Equity-based compensation 1,193,005 1,050,644 Deferred income taxes 120,367 238,728 Provision (recovery) for losses on doubtful accounts 42,000 (39,000 ) Provision for losses on inventory obsolescence 4,852 2,014 Other 2,296 (5,034 ) Changes in assets and liabilities: Accounts receivable (1,044,423 ) (2,027,155 ) Inventories (701,279 ) 10,120,804 Prepaid and other current assets 771,870 (3,320,720 ) Other assets (38,358 ) 27,897 Accounts payable 322,325 924,567 Accrued expenses and accrued wages, salaries and bonuses (659,813 ) 2,825 Income taxes receivable   7,059     476,352   Net cash flows from operating activities   3,440,335     13,392,060     CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (1,761,431 ) (1,013,988 ) Proceeds from sales of property and equipment   42,655     112,157   Net cash flows from investing activities   (1,718,776 )   (901,831 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net payments on bank credit agreements (209,128 ) (7,193,768 ) Principal payments on long-term debt (271,031 ) (262,677 ) Repurchase of common stock (1,038,060 ) (4,044,437 ) Dividends paid on convertible preferred stock — (146,462 ) Dividends on common stock (579,848 ) (526,076 ) Withholdings on the exercise of equity-based awards   (107,082 )   (121,348 ) Net cash flows from financing activities   (2,205,149 )   (12,294,768 ) Net change in cash (483,590 ) 195,461 Cash, beginning of period   605,380     219,536   Cash, end of period $ 121,790   $ 414,997     Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 545,719 $ 576,681 Cash paid during the period for income taxes 1,620,574 2,525,920   Supplemental disclosure of non-cash information: Equipment acquisitions classified in accounts payable 9,881 51,874 Issuance of common stock in connection with the vesting and exercise of equity-based awards 1,262,763 1,174,981  

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