AMCON Distributing Company Reports Results for the Quarter Ended March 31, 2023

OMAHA, Neb.--(BUSINESS WIRE)--April 18, 2023--AMCON Distributing Company (“AMCON” or “Company”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $3.49 on net income available to common shareholders of $2.1 million for its second fiscal quarter ended March 31, 2023.

“AMCON’s leadership position in Convenience Distribution is a function of our relentless focus on customer service. We faced historic levels of severe weather in the markets we serve during the quarter, and our operations teams made the extra effort necessary to ensure continuity of service across our customer base,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Mr. Atayan further noted, “AMCON continues to seek out acquisition opportunities for convenience and foodservice distributors who want to align with the Company’s growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $573.6 million and operating income of $8.9 million for the second quarter of fiscal 2023. The retail health food segment reported revenues of $11.3 million and operating income of $0.2 million for the second quarter of fiscal 2023.

“As a result of our recent acquisition of Henry’s Foods, we have begun the integration of an expanded foodservice platform now available to the Company and our customer base,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “Foodservice and our technology suite of services are strategic focus areas. Our customer base is growing, and we continue to search for facilities in, and adjacent to our current service area.”

“We are actively managing our working capital position to take advantage of strategic opportunities in the marketplace,” said Charles J. Schmaderer, AMCON’s Chief Financial Officer. Mr. Schmaderer further noted, “As a core operating principle, we maintain high levels of liquidity and ended the quarter with $97.1 million of consolidated shareholders’ equity.”

AMCON is a leading convenience distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and refrigerated foods, automotive supplies and health and beauty care products servicing approximately 6,800 retail stores through distribution centers in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. AMCON, through its Healthy Edge Retail Group, also operates eighteen (18) health and natural product retail stores in the Midwest and Florida.

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 March 31, 2023 and September 30, 2022
	March			September
		2023			2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	781,761		$	431,576
Accounts receivable, less allowance for doubtful accounts of $2.1 million at March 2023 and $2.5 million September 2022		65,886,561			62,367,888
Inventories, net		130,878,576			134,654,637
Income taxes receivable		879,122			819,595
Prepaid expenses and other current assets		13,296,012			12,702,084
Total current assets		211,722,032			210,975,780

Property and equipment, net		75,366,996			48,085,520
Operating lease right-of-use assets, net		18,913,326			19,941,009
Goodwill		5,871,659			5,277,950
Other intangible assets, net		5,553,786			2,093,113
Other assets		3,026,951			2,751,155
Total assets	$	320,454,750		$	289,124,527

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	50,460,856		$	39,962,363
Accrued expenses		15,204,328			14,446,210
Accrued wages, salaries and bonuses		5,070,513			7,811,207
Current operating lease liabilities		6,496,935			6,454,473
Current maturities of long-term debt		2,758,738			1,595,309
Current mandatorily redeemable non-controlling interest		1,812,558			1,712,095
Total current liabilities		81,803,928			71,981,657

Credit facilities		103,064,246			91,262,438
Deferred income tax liability, net		3,318,290			2,328,588
Long-term operating lease liabilities		12,743,653			13,787,721
Long-term debt, less current maturities		12,715,890			7,384,260
Mandatorily redeemable non-controlling interest, less current portion		9,512,111			9,446,460
Other long-term liabilities		220,864			103,968

Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized		—			—
Common stock, $.01 par value, 3,000,000 shares authorized, 611,052 shares outstanding at March 2023 and 584,789 shares outstanding at September 2022		9,431			9,168
Additional paid-in capital		29,766,566			26,903,201
Retained earnings		98,167,058			96,784,353
Treasury stock at cost		(30,867,287	)		(30,867,287	)
Total shareholders’ equity		97,075,768			92,829,435
Total liabilities and shareholders’ equity	$	320,454,750		$	289,124,527

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and six months ended March 31, 2023 and 2022
	For the three months ended March						For the six months ended March
		2023			2022			2023			2022
Sales (including excise taxes of $130.9 and $89.1 million, and $261.3 million and $186.2 million, respectively)	$	584,993,848		$	391,888,192		$	1,150,983,356		$	814,459,469
Cost of sales		543,861,287			365,211,270			1,074,881,211			760,849,885
Gross profit		41,132,561			26,676,922			76,102,145			53,609,584
Selling, general and administrative expenses		33,996,988			21,915,351			62,376,176			44,306,090
Depreciation and amortization		1,807,753			818,222			2,878,639			1,602,467
		35,804,741			22,733,573			65,254,815			45,908,557
Operating income		5,327,820			3,943,349			10,847,330			7,701,027

Other expense (income):
Interest expense		2,169,541			244,920			3,863,698			567,018
Change in fair value of mandatorily redeemable non-controlling interest		221,030			—			166,114			—
Other (income), net		(173,725	)		(60,958	)		(227,257	)		(101,068	)
		2,216,846			183,962			3,802,555			465,950
Income from operations before income taxes		3,110,974			3,759,387			7,044,775			7,235,077
Income tax expense		1,045,400			1,345,000			2,350,200			2,590,000
Equity method investment earnings, net of tax		—			591,795			—			1,362,161
Net income available to common shareholders	$	2,065,574		$	3,006,182		$	4,694,575		$	6,007,238

Basic earnings per share available to common shareholders	$	3.53		$	5.29		$	8.04		$	10.62
Diluted earnings per share available to common shareholders	$	3.49		$	5.19		$	7.94		$	10.33

Basic weighted average shares outstanding		585,885			567,889			583,725			565,694
Diluted weighted average shares outstanding		592,448			578,751			591,249			581,328

Dividends paid per common share	$	5.18		$	0.18		$	5.36		$	5.36

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Shareholders’ Equity for the three and six months ended March 31, 2023 and 2022
									Additional
	Common Stock			Treasury Stock					Paid-in			Retained
	Shares	Amount		Shares		Amount			Capital			Earnings			Total
THREE MONTHS ENDED MARCH 2022
Balance, January 1, 2022	915,009	$	9,148	(332,220	)	$	(30,867,287	)	$	26,999,735		$	83,438,578		$	79,580,174
Dividends on common stock, $0.18 per share	—		—	—			—			—			(108,235	)		(108,235	)
Compensation expense and settlement of equity-based awards	2,000		20	—			—			(444,689	)		—			(444,669	)
Net income available to common shareholders	—		—	—			—			—			3,006,182			3,006,182
Balance, March 31, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,555,046		$	86,336,525		$	82,033,452

THREE MONTHS ENDED MARCH 2023
Balance, January 1, 2023	943,272	$	9,431	(332,220	)	$	(30,867,287	)	$	29,357,154		$	96,212,704		$	94,712,002
Dividends on common stock, $0.18 per share	—		—	—			—			—			(111,220	)		(111,220	)
Compensation expense related to equity-based awards	—		—	—			—			409,412			—			409,412
Net income available to common shareholders	—		—	—			—			—			2,065,574			2,065,574
Balance, March 31, 2023	943,272	$	9,431	(332,220	)	$	(30,867,287	)	$	29,766,566		$	98,167,058		$	97,075,768


									Additional
	Common Stock			Treasury Stock					Paid-in		Retained
	Shares	Amount		Shares		Amount			Capital		Earnings			Total
SIX MONTHS ENDED MARCH 2022
Balance, October 1, 2021	883,589	$	8,834	(332,220	)	$	(30,867,287	)	$	24,918,781	$	83,552,298		$	77,612,626
Dividends on common stock, $5.36 per share	—		—	—			—			—		(3,223,011	)		(3,223,011	)
Compensation expense and settlement of equity-based awards	33,420		334	—			—			1,636,265		—			1,636,599
Net income available to common shareholders	—		—	—			—			—		6,007,238			6,007,238
Balance, March 31, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,555,046	$	86,336,525		$	82,033,452

SIX MONTHS ENDED MARCH 2023
Balance, October 1, 2022	917,009	$	9,168	(332,220	)	$	(30,867,287	)	$	26,903,201	$	96,784,353		$	92,829,435
Dividends on common stock, $5.36 per share	—		—	—			—			—		(3,311,870	)		(3,311,870	)
Compensation expense and settlement of equity-based awards	26,263		263	—			—			2,863,365		—			2,863,628
Net income available to common shareholders	—		—	—			—			—		4,694,575			4,694,575
Balance, March 31, 2023	943,272	$	9,431	(332,220	)	$	(30,867,287	)	$	29,766,566	$	98,167,058		$	97,075,768

AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the six months ended March 31, 2023 and 2022
	March			March
		2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$	4,694,575		$	6,007,238
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		2,732,312			1,602,467
Amortization		146,327			—
Equity method investment earnings, net of tax		—			(1,362,161	)
(Gain) loss on sales of property and equipment		(133,159	)		(76,220	)
Equity-based compensation		1,061,383			1,208,655
Deferred income taxes		989,702			1,099,199
Provision for losses on doubtful accounts		(378,302	)		(3,000	)
Inventory allowance		(6,947	)		155,534
Change in fair value of mandatorily redeemable non-controlling interest		166,114			—
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable		5,097,281			2,290,562
Inventories		19,843,973			4,807,756
Prepaid and other current assets		(411,185	)		(651,979	)
Equity method investment distributions		—			744,118
Other assets		(275,796	)		(79,301	)
Accounts payable		10,457,273			1,465,370
Accrued expenses and accrued wages, salaries and bonuses		(1,094,009	)		(700,748	)
Other long-term liabilities		116,896			(721,318	)
Income taxes payable and receivable		(59,527	)		(1,990,394	)
Net cash flows from (used in) operating activities		42,946,911			13,795,778

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(2,760,586	)		(974,424	)
Proceeds from sales of property and equipment		137,500			79,000
Principal payment received on note receivable		—			175,000
Acquisition of Henry's		(54,958,637	)		—
Net cash flows from (used in) investing activities		(57,581,723	)		(720,424	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		1,184,888,842			819,125,190
Repayments under revolving credit facilities		(1,173,087,034	)		(827,584,508	)
Proceeds from borrowings on long-term debt		7,000,000			—
Principal payments on long-term debt		(504,941	)		(277,902	)
Proceeds from exercise of stock options		—			173,590
Dividends on common stock		(3,311,870	)		(3,223,011	)
Settlement and withholdings of equity-based awards		—			(1,280,749	)
Net cash flows from (used in) financing activities		14,984,997			(13,067,390	)
Net change in cash		350,185			7,964
Cash, beginning of period		431,576			519,591
Cash, end of period	$	781,761		$	527,555

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	3,527,737		$	582,394
Cash paid during the period for income taxes, net of refunds		1,419,354			3,481,196

Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	$	132,876		$	29,047
Issuance of common stock in connection with the vesting and exercise of equity-based awards		2,044,805			2,280,783

Contacts

Christopher H. Atayan
AMCON Distributing Company
Ph 402-331-3727