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 $2.13 on net income available to common shareholders of $1.5 million for the fiscal quarter ended December 31, 2017.

“We are pleased with our start to fiscal 2018. Our business philosophy is centered on customer service and reliability which enables us to compete in a challenging environment. We expect to continue to operate the enterprise with a view toward sustained capital expenditures. This investment is necessary to maintain and enhance our strong competitive position in light of current operating conditions,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, “As a leader in the convenience distribution industry, AMCON is actively seeking acquisitions in the convenience distribution and foodservice industries that can benefit from our extensive platform of services.”

For the first fiscal quarter, the Wholesale Distribution Segment reported revenues of $309.2 million and operating income of $3.2 million. Our Retail Health Food Segment reported revenues of $6.3 million and an operating loss of $0.5 million.

“Foodservice category sales are growing industry wide. We are among the leaders in program development and strive to continue to enhance our capabilities in this category,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment.

“We opened our second store in the Lakeland, Florida market early in fiscal 2018 which has been well received,” said Clifford Ginn, President of AMCON’s Retail Health Food Segment. “We will continue to invest in brand reimaging, social media, new stores, store remodeling, and marketing as we seek to address the competitive challenges we face in the industry. Our Midwestern markets operate in a highly challenging environment.”

“We closed the December 31, 2017 quarter with shareholders’ equity of $70.5 million and consolidated debt of $15.6 million,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. Plummer added, “During the first fiscal quarter, the Company benefitted approximately $0.9 million from the implementation of the Tax Cuts and Jobs Act which was signed into law on December 22, 2017. This tax cut will facilitate our continued development in technology products for our internal and external customers in a rapidly changing environment. In addition, we have a commitment to investing in our facilities and transportation equipment to serve our long term strategic initiatives in foodservice. We continue to actively manage our working capital and liquidity which affords us the ability to invest in our businesses for the long-term which benefits our customers.”

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 December 31, 2017 and September 30, 2017         December September 2017 2017 (Unaudited) ASSETS Current assets: Cash $ 570,560 $ 523,065 Accounts receivable, less allowance for doubtful accounts of $0.8 million at both December 2017 and September 2017 30,511,104 30,690,403 Inventories, net 49,699,948 72,909,996 Prepaid and other current assets   7,982,638     4,218,811   Total current assets 88,764,250 108,342,275   Property and equipment, net 13,014,903 13,307,986 Goodwill 6,349,827 6,349,827 Other intangible assets, net 3,461,811 3,494,311 Other assets   323,643     310,488   Total assets $ 111,914,434   $ 131,804,887     LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 15,022,223 $ 17,631,552 Accrued expenses 6,735,349 7,553,089 Accrued wages, salaries and bonuses 1,555,176 3,477,966 Income taxes payable 657,095 544,069 Current maturities of long-term debt   376,478     373,645   Total current liabilities 24,346,321 29,580,321   Credit facility 12,638,221 29,037,182 Deferred income tax liability, net 1,854,151 2,336,263 Long-term debt, less current maturities 2,552,935 2,648,179 Other long-term liabilities 35,089 34,100   Shareholders’ equity: Preferred stock, $.01 par value, 1,000,000 shares authorized — — Common stock, $.01 par value, 3,000,000 shares authorized, 690,486 shares outstanding at December 2017 and 678,006 shares outstanding at September 2017 8,441 8,314 Additional paid-in capital 22,009,620 20,825,919 Retained earnings 62,086,133 60,935,911 Treasury stock at cost   (13,616,477 )   (13,601,302 ) Total shareholders’ equity   70,487,717     68,168,842   Total liabilities and shareholders' equity $ 111,914,434   $ 131,804,887       AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three months ended December 31, 2017 and 2016         For the three months ended December 2017 2016 Sales (including excise taxes of $88.6 million and $91.0 million, respectively) $ 315,513,209 $ 310,104,229 Cost of sales   297,321,447     291,788,243   Gross profit   18,191,762     18,315,986   Selling, general and administrative expenses 16,353,608 15,698,319 Depreciation and amortization   531,005     526,433     16,884,613     16,224,752   Operating income 1,307,149 2,091,234   Other expense (income): Interest expense 202,191 217,543 Other (income), net   (5,133 )   (5,773 )   197,058     211,770   Income from operations before income tax expense 1,110,091 1,879,464 Income tax expense (benefit)   (370,000 )   833,000   Net income available to common shareholders $ 1,480,091   $ 1,046,464     Basic earnings per share available to common shareholders $ 2.15 $ 1.54 Diluted earnings per share available to common shareholders $ 2.13 $ 1.52   Basic weighted average shares outstanding 687,679 681,668 Diluted weighted average shares outstanding 695,950 688,676   Dividends declared and paid per common share $ 0.18 $ 0.18     AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the three months ended December 31, 2017 and 2016         December December 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,480,091 $ 1,046,464

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

Depreciation 498,505 460,183 Amortization 32,500 66,250 Gain on sale of property and equipment (300 ) (23,559 ) Equity-based compensation 334,256 459,278 Deferred income taxes (482,112 ) 406,972 Provision (recovery) for losses on doubtful accounts (3,000 ) 183 Provision for losses on inventory obsolescence 30,660 58,776 Other 989 319 Changes in assets and liabilities: Accounts receivable 182,299 3,605,673 Inventories 23,179,388 (1,385,731 ) Prepaid and other current assets (3,763,827 ) 1,969,853 Other assets (13,155 ) 24,074 Accounts payable (2,523,433 ) (2,179,939 ) Accrued expenses and accrued wages, salaries and bonuses (2,011,951 ) (2,370,918 ) Income taxes payable   113,026     28,134   Net cash flows from operating activities   17,053,936     2,166,012     CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (291,318 ) (400,778 ) Proceeds from sales of property and equipment   300     31,478   Net cash flows from investing activities   (291,018 )   (369,300 )   CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit facility 305,522,554 319,265,456 Repayments under revolving credit facility (321,921,515 ) (319,998,237 ) Principal payments on long-term debt (92,411 ) (89,662 ) Repurchase of common stock (15,175 ) (1,038,060 ) Dividends on common stock (129,026 ) (127,713 ) Withholdings on the exercise of equity-based awards   (79,850 )   (82,456 ) Net cash flows from financing activities   (16,715,423 )   (2,070,672 ) Net change in cash 47,495 (273,960 ) Cash, beginning of period   523,065     605,380   Cash, end of period $ 570,560   $ 331,420     Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 199,423 $ 223,802 Cash paid during the period for income taxes — 397,894   Supplemental disclosure of non-cash information: Equipment acquisitions classified in accounts payable 15,465 2,128 Dividends declared, not paid 200,843 194,173

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

1,183,091 1,262,763  

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