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AMCON Distributing Company Reports Fully Diluted Earnings Per Share of $0.71 for the Quarter Ended March 31, 2017

OMAHA, Neb.–(BUSINESS WIRE)– AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $0.71 on net income available to common shareholders of $0.5 million for our second fiscal quarter ended March 31, 2017.

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“We continue to invest in our wholesale business to enhance our leadership position in the convenience distribution industry. We are expanding our foodservice and technology capabilities as the needs of our customers grow in complexity. This approach has served to differentiate us from our competition,” 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 and are evaluating several geographic growth opportunities as our customer base expands.”

For the second fiscal quarter of 2017, our Wholesale Distribution Segment reported revenues of $287.3 million and operating income of $2.7 million. Our Retail Health Food Segment reported revenues of $6.7 million and an operating loss of $0.2 million for the same period.

“Our annual spring trade show in Kansas City was well received by our customers and vendors. This annual event provides momentum as we enter our customers’ peak selling season,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment. She further noted, “As we expand into new territories we are implementing the logistics investments and technology necessary to support our customers’ geographic growth.”

“We are pleased with the progress of our new store in Orlando. Our management team is developing market driven enhancements to our core business model in order to compete in this highly challenging retail environment,” said Clifford Ginn, President of AMCON’s Retail Health Food Segment.

“We actively manage our working capital and liquidity which provides an 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 investments necessary for long term competitive success,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. “We were pleased to close the March 31, 2017 quarter with shareholders’ equity of $67.1 million and consolidated debt of $8.3 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

March 31, 2017 and September 30, 2016

   
March September
2017 2016
(Unaudited)

ASSETS

Current assets:
Cash $ 248,760 $ 605,380

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

27,737,863 30,033,104
Inventories, net 45,707,269 48,404,882
Deferred income taxes 1,182,299 1,441,919
Income taxes receivable 282,435 164,959
Prepaid and other current assets   7,829,685     8,608,049  
Total current assets 82,988,311 89,258,293
 
Property and equipment, net 12,373,290 12,607,877
Goodwill 6,349,827 6,349,827
Other intangible assets, net 3,626,812 3,759,311
Other assets   340,936     288,082  
Total assets $ 105,679,176   $ 112,263,390  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Accounts payable $ 17,255,595 $ 18,164,983
Accrued expenses 6,299,199 6,792,884
Accrued wages, salaries and bonuses 2,653,577 3,580,996
Current maturities of long-term debt   367,982     362,495  
Total current liabilities 26,576,353 28,901,358
 
Credit facility 5,102,578 10,537,226
Deferred income taxes 4,080,631 4,021,569
Long-term debt, less current maturities 2,836,070 3,021,824
Other long-term liabilities 32,123 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 March 2017 and 677,057 shares outstanding and issued at September 2016

8,314 8,184
Additional paid-in capital 20,782,045 19,525,554
Retained earnings 59,775,503 58,693,241
Treasury stock at cost   (13,514,441 )   (12,476,381 )
Total shareholders’ equity   67,051,421     65,750,598  
Total liabilities and shareholders’ equity $ 105,679,176   $ 112,263,390  
 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

 for the three and six months ended March 31, 2017 and 2016

       
For the three months ended March For the six months ended March
2017 2016 2017 2016
Sales (including excise taxes of $85.7 million and $88.7 million, and $176.7 million and $186.0 million, respectively) $ 294,047,870 $ 296,449,126 $ 604,152,099 $ 618,457,375
Cost of sales   276,573,968     278,908,888     568,362,211     581,955,233  
Gross profit   17,473,902     17,540,238     35,789,888     36,502,142  
Selling, general and administrative expenses 15,820,504 14,770,358 31,518,823 30,615,492
Depreciation and amortization   529,969     575,681     1,056,402     1,142,630  
  16,350,473     15,346,039     32,575,225     31,758,122  
Operating income   1,123,429     2,194,199     3,214,663     4,744,020  
 
Other expense (income):
Interest expense 147,910 161,402 365,453 373,856
Other (income), net   (14,964 )   (35,827 )   (20,737 )   (63,082 )
  132,946     125,575     344,716     310,774  
Income from operations before income tax expense 990,483 2,068,624 2,869,947 4,433,246
Income tax expense   502,000     922,000     1,335,000     1,931,000  
Net income 488,483 1,146,624 1,534,947 2,502,246
Preferred stock dividend requirements   —     (48,643 )   —     (97,820 )
Net income available to common shareholders $ 488,483   $ 1,097,981   $ 1,534,947   $ 2,404,426  
 
Basic earnings per share available to common shareholders $ 0.72 $ 1.81 $ 2.26 $ 3.90
Diluted earnings per share available to common shareholders $ 0.71 $ 1.61 $ 2.22 $ 3.46
 
Basic weighted average shares outstanding 678,938 606,080 680,318 615,768
Diluted weighted average shares outstanding 688,016 712,547 690,190 723,317
 
Dividends declared and paid per common share $ 0.46 $ 0.46 $ 0.64 $ 0.64
 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the six months ended March 31, 2017 and 2016

   
March March
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,534,947 $ 2,502,246
Adjustments to reconcile net income from operations to net cash flows from operating activities:
Depreciation 923,903 960,130
Amortization 132,499 182,500
Gain on sale of property and equipment (21,624 ) (34,482 )
Equity-based compensation 765,554 660,203
Deferred income taxes 318,682 352,242
Provision (recovery) for losses on doubtful accounts 29,000 (67,000 )
Provision for losses on inventory obsolescence 72,197 70,818
Other 1,308 (4,022 )
Changes in assets and liabilities:
Accounts receivable 2,266,241 2,677,840
Inventories 2,625,416 4,128,553
Prepaid and other current assets 778,364 (1,954,372 )
Other assets (52,854 ) 20,467
Accounts payable (771,163 ) (1,005,681 )
Accrued expenses and accrued wages, salaries and bonuses (822,955 ) (1,479,465 )
Income taxes receivable   (117,476 )   343,304  
Net cash flows from operating activities   7,662,039     7,353,281  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (837,895 ) (692,402 )
Proceeds from sales of property and equipment   31,978     48,164  
Net cash flows from investing activities   (805,917 )   (644,238 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on bank credit agreements (5,434,648 ) (3,292,820 )
Principal payments on long-term debt (180,267 ) (174,650 )
Repurchase of common stock (1,038,060 ) (2,547,683 )
Dividends paid on convertible preferred stock — (97,820 )
Dividends on common stock (452,685 ) (412,210 )
Withholdings on the exercise of equity-based awards   (107,082 )   (81,406 )
Net cash flows from financing activities   (7,212,742 )   (6,606,589 )
Net change in cash (356,620 ) 102,454
Cash, beginning of period   605,380     219,536  
Cash, end of period $ 248,760   $ 321,990  
 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 365,620 $ 391,130
Cash paid during the period for income taxes 1,133,794 1,235,454
 
Supplemental disclosure of non-cash information:
Equipment acquisitions classified as accounts payable 29,219 17,500
Issuance of common stock in connection with the vesting and exercise of equity-based awards 1,262,763 1,174,981

AMCON Distributing Company

Christopher H. Atayan, 402-331-3727

Source: AMCON Distributing Company

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