AMCON Distributing Company Reports Fully Diluted Earnings Per Share of $1.04 for the Quarter Ended March 31, 2015

OMAHA, Neb.--()--AMCON Distributing Company (“AMCON”) (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $1.04 on net income available to common shareholders of $0.7 million for the fiscal quarter ended March 31, 2015.

“We expect that we will continue to invest in our wholesale business to maintain our leadership position in the industry and are seeking acquisitions that can benefit from our extensive platform of customer services.”

“We are making a number of targeted investments within our wholesale business. In particular, we continue to develop our technology infrastructure and proprietary applications to enhance our customers’ experience and profitability. Additionally, we are expanding our refrigerated and temperature controlled trucking fleet. These investments are specifically designed to capitalize on our convenience store customers increasing demand for new foodservice offerings and technological needs,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted “We expect that we will continue to invest in our wholesale business to maintain our leadership position in the industry and are seeking acquisitions that can benefit from our extensive platform of customer services.”

“In late March, we hosted our annual spring trade show in Kansas City. This is our largest customer event of the year and once again, we enjoyed outstanding attendance from both existing and prospective customers. Our sales and merchandising teams are working closely with customers as the spring sales season kicks off. As convenience store traffic increases, fully capturing and maximizing this opportunity is an important focus for our customers,” said Kathleen M. Evans, President of AMCON’s Wholesale Distribution Segment.

“The retail health food operating environment in the markets we operate remains highly competitive. Both national and regional chains are pursuing aggressive expansion efforts and continue to open new stores. Our management team has been focused on a variety of initiatives designed to enhance the operating economics of each retail store. These efforts include a targeted focus on the major business drivers such as inventory rationalization, merchandising, store staffing mix, and expense management,” said Eric Hinkefent, President of AMCON’s Retail Health Food Segment.

Each of AMCON’s business segments reported solid quarters. The wholesale distribution segment reported revenues of $279.2 million and operating income before depreciation and amortization of $3.0 million for the second fiscal quarter of 2015. The retail health food segment reported revenues of $8.2 million and operating income before depreciation and amortization of $0.6 million for the same period.

“We actively manage our working capital and seek opportunities to use our liquidity to our benefit,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. Plummer added, “We are also using the lower cost energy environment to make additional investments in our refrigerated fleet. These capital improvements enhance our ability to support our foodservice business but the refrigeration also increases overall fuel consumption company wide. We were pleased to close the March 31, 2015 quarter with shareholders’ equity of $58.6 million and consolidated debt of $35.9 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, 2015 and September 30, 2014
       
March September
2015 2014
(Unaudited)
ASSETS
Current assets:
Cash $ 189,559 $ 99,922

Accounts receivable, less allowance for doubtful accounts of $0.9 million and $0.8 million at March 2015 and September 2014, respectively

30,847,526 33,286,932
Inventories, net 65,521,673 43,635,266
Deferred income taxes 1,353,082 1,606,168
Prepaid and other current assets   3,325,626     5,034,570  
Total current assets 101,237,466 83,662,858
 
Property and equipment, net 13,388,517 13,763,140
Goodwill 6,349,827 6,349,827
Other intangible assets, net 4,273,478 4,455,978
Other assets   336,357     448,149  
$ 125,585,645   $ 108,679,952  
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 16,627,660 $ 16,412,895
Accrued expenses 5,978,844 6,891,308
Accrued wages, salaries and bonuses 1,977,298 2,647,969
Income taxes payable 26,476 1,603,614
Current maturities of long-term debt   346,057     341,190  
Total current liabilities 24,956,335 27,896,976
 
Credit facility 31,963,666 15,081,783
Deferred income taxes 3,469,673 3,484,204
Long-term debt, less current maturities 3,561,053 3,735,702
Other long-term liabilities 134,980 139,003

Series A cumulative, convertible preferred stock, $.01 par value 100,000 shares authorized, issued, and outstanding, and a total liquidation preference of $2.5 million at both March 2015 and September 2014

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 March 2015 and September 2014, and a total liquidation preference of $0.4 million at both March 2015 and September 2014

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, 615,822 shares outstanding at March 2015 and 602,411 shares outstanding at September 2014

6,811 6,677
Additional paid-in capital 14,743,839 13,571,909
Retained earnings 49,814,791 47,829,201
Treasury stock at cost   (5,965,503 )   (5,965,503 )
Total shareholders’ equity   58,599,938     55,442,284  
$ 125,585,645   $ 108,679,952  
 

 
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and six months ended March 31, 2015 and 2014
       
For the three months For the six months
ended March ended March
2015     2014 2015     2014

Sales (including excise taxes of $87.4 million and $85.7 million, and $184.4 million and $183.1 million, respectively)

$ 287,443,864 $ 272,421,788 $ 602,877,340 $ 578,047,345
Cost of sales   269,710,529     254,801,826     565,617,473     540,786,320  
Gross profit   17,733,335     17,619,962     37,259,867     37,261,025  
 

Selling, general and administrative expenses

15,485,757 15,812,174 31,666,879 32,304,437
Depreciation and amortization   590,857     628,834     1,167,162     1,252,874  
  16,076,614     16,441,008     32,834,041     33,557,311  
Operating income   1,656,721     1,178,954     4,425,826     3,703,714  
 
Other expense (income):
Interest expense 194,375 222,624 431,517 524,619
Other (income), net   (35,987 )   (38,955 )   (43,054 )   (69,186 )
  158,388     183,669     388,463     455,433  
Income from operations before income tax expense 1,498,333 995,285 4,037,363 3,248,281
Income tax expense   729,000     464,000     1,722,000     1,429,000  
Net income 769,333 531,285 2,315,363 1,819,281
Preferred stock dividend requirements   (48,108 )   (48,108 )   (97,285 )   (97,285 )
Net income available to common shareholders $ 721,225   $ 483,177   $ 2,218,078   $ 1,721,996  
 
 
Basic earnings per share available to common shareholders $ 1.17 $ 0.79 $ 3.61 $ 2.79
Diluted earnings per share available to common shareholders $ 1.04 $ 0.72 $ 3.15 $ 2.46
 
Basic weighted average shares outstanding 615,822 611,432 614,173 616,888
Diluted weighted average shares outstanding 737,180 737,461 735,599 739,223
 

 
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the six months ended March 31, 2015 and 2014
       
2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,315,363 $ 1,819,281

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

Depreciation 984,662 1,070,374
Amortization 182,500 182,500
(Gain) loss on sale of property and equipment 7,036 (24,746 )
Equity-based compensation 607,661 717,821
Deferred income taxes 238,555 462,447
Provision for losses on doubtful accounts 159,999 132,000
Provision for losses (recoveries) on inventory obsolescence (34,189 ) (1,121 )
Other (4,023 ) (4,023 )
 
Changes in assets and liabilities:
Accounts receivable 2,279,407 1,356,409
Inventories (21,852,218 ) (2,474,084 )
Prepaid and other current assets 1,708,944 5,700
Other assets 111,792 13,054
Accounts payable 200,996 (34,071 )
Accrued expenses and accrued wages, salaries and bonuses (862,235 ) (1,565,640 )
Income tax payable   (1,577,138 )   (1,618,592 )
Net cash flows from operating activities (15,532,888 ) 37,309
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (611,106 ) (1,362,832 )
Proceeds from sales of property and equipment 7,800 29,969
Acquisition       (513,938 )
Net cash flows from investing activities (603,306 ) (1,846,801 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on bank credit agreements 16,881,883 4,926,619
Principal payments on long-term debt (169,782 ) (607,923 )
Repurchase of Series B Convertible Preferred Stock and common stock (1,941,918 )
Dividends paid on convertible preferred stock (97,285 ) (97,285 )
Dividends on common stock (232,488 ) (239,362 )
Withholdings on the exercise of equity-based awards   (156,497 )   (109,115 )
Net cash flows from financing activities   16,225,831     1,931,016  
 
Net change in cash 89,637 121,524
 

Cash, beginning of period

  99,922     275,036  
Cash, end of period $ 189,559   $ 396,560  
 
 
2015 2014
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 403,758 $ 523,081
Cash paid during the period for income taxes 3,060,584 2,585,145
 
Supplemental disclosure of non-cash information:
Equipment acquisitions classified as accounts payable 48,754 152,311

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

1,240,842 1,154,869
 

Contacts

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

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