AMCON Distributing Company Reports Results for the Quarter Ended June 30, 2021

AMCON Distributing Company (“AMCON”) (NYSE American: DIT), an Omaha, Nebraska based consumer products company, is pleased to announce fully diluted earnings per share of $6.48 on net income available to common shareholders of $3.7 million for its third fiscal quarter ended June 30, 2021.

“We are pleased with our results for the third fiscal quarter. Our Management Team and Associates’ central focus is on delivering a consistent level of high quality service to our customers in this challenging economic environment,” 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 Food Service Distributors who want to align with our growing platform and customer centric management philosophy.”

The wholesale distribution segment reported revenues of $426.6 million and operating income of $6.3 million for the third quarter of fiscal 2021. The retail health food segment reported revenues of $11.7 million and operating income of $0.6 million for the third quarter of fiscal 2021.

“Ongoing supply chain disruptions at consumer packaged goods companies have impacted product availability across all markets including the convenience distribution industry in which our Company operates. Additionally, the United States is experiencing an acute workforce shortage which has created a hyper-competitive wage environment which has impacted the Company’s operations. Our customer base continues to grow geographically and AMCON is deploying the capital and human resources necessary to support our customers’ growth in a collaborative fashion,” said Andrew C. Plummer, AMCON’s President and Chief Operating Officer. Mr. Plummer further noted, “We are actively searching for facilities in, and adjacent to, the geographic markets we serve.”

Charles J. Schmaderer, AMCON’s Chief Financial Officer said, “AMCON is pleased with the progress of our strategic investment in Team Sledd, LLC. In addition, AMCON ended the quarter with $71.4 million of shareholders’ equity and we continue to diligently focus on maintaining high levels of liquidity in our business to support operations and our growth initiatives.”

AMCON’s Healthy Edge Retail Group plays an important role in the health and wellness of the communities it serves. Throughout the pandemic, our management team has worked diligently to offer a continuous and safe shopping experience for customers. Our long term relationship with the organic/natural products vendor community has enabled our stores to meet the demands of our customers for total wellness solutions. Our strategy is to offer a broad selection of the highest quality organic and natural merchandise available supported by a high degree of customer service not found at other big box retailers within our industry.

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 twenty (20) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Akin’s Natural Foods www.akins.com in its Midwest market, and Chamberlin's Natural Foods www.chamberlins.com and Earth Origins Market www.earthoriginsmarket.com in its Florida market.

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, 2021 and September 30, 2020

June

September

2021

2020

(Unaudited)

ASSETS

Current assets:

Cash

$

699,895

$

661,195

Accounts receivable, less allowance for doubtful accounts of $0.9 million at June 2021 and September 2020

36,526,770

34,278,429

Inventories, net

95,640,441

98,971,773

Prepaid and other current assets

5,769,066

2,091,645

Total current assets

138,636,172

136,003,042

Property and equipment, net

16,425,171

17,497,274

Operating lease right-of-use assets, net

17,148,745

18,936,126

Note receivable

3,500,000

3,500,000

Goodwill

4,436,950

4,436,950

Other intangible assets, net

500,000

500,000

Equity method investment

7,784,753

6,744,095

Other assets

349,139

383,786

Total assets

$

188,780,930

$

188,001,273

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

24,788,839

$

22,108,299

Accrued expenses

11,169,530

8,306,160

Accrued wages, salaries and bonuses

3,839,072

4,761,020

Income taxes payable

495,860

567,408

Current operating lease liabilities

5,503,940

5,607,098

Current maturities of long-term debt

555,832

516,850

Total current liabilities

46,353,073

41,866,835

Credit facility

51,491,984

61,971,682

Deferred income tax liability, net

1,585,882

1,806,575

Long-term operating lease liabilities

12,000,823

14,028,606

Long-term debt, less current maturities

5,196,596

2,608,794

Other long-term liabilities

757,387

927,241

Shareholders’ equity:

Preferred stock, $.01 par value, 1,000,000 shares authorized

Common stock, $.01 par value, 3,000,000 shares authorized, 551,369 shares outstanding at June 2021 and 537,715 shares outstanding at September 2020

8,834

8,697

Additional paid-in capital

24,943,292

24,282,058

Retained earnings

77,310,346

71,362,334

Treasury stock at cost

(30,867,287

)

(30,861,549

)

Total shareholders’ equity

71,395,185

64,791,540

Total liabilities and shareholders’ equity

$

188,780,930

$

188,001,273

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2021 and 2020

For the three months ended June

For the nine months ended June

2021

2020

2021

2020

Sales (including excise taxes of $104.9 million and $103.6 million, and $297.4 million and $285.1 million, respectively)

$

438,313,030

$

396,854,324

$

1,221,571,294

$

1,094,841,943

Cost of sales

412,771,324

375,202,044

1,149,594,823

1,031,651,499

Gross profit

25,541,706

21,652,280

71,976,471

63,190,444

Selling, general and administrative expenses

20,501,117

18,377,641

58,123,100

55,843,266

Depreciation

741,180

801,683

2,295,390

2,318,045

21,242,297

19,179,324

60,418,490

58,161,311

Operating income

4,299,409

2,472,956

11,557,981

5,029,133

Other expense (income):

Interest expense

329,929

461,581

1,016,902

1,321,267

Other (income), net

(43,437

)

(42,525

)

(169,525

)

(79,222

)

286,492

419,056

847,377

1,242,045

Income from operations before income taxes

4,012,917

2,053,900

10,710,604

3,787,088

Income tax expense

1,076,000

586,000

2,916,000

1,168,000

Equity method investment earnings, net of tax

754,293

111,666

1,403,124

111,666

Net income available to common shareholders

$

3,691,210

$

1,579,566

$

9,197,728

$

2,730,754

Basic earnings per share available to common shareholders

$

6.69

$

2.79

$

16.71

$

4.84

Diluted earnings per share available to common shareholders

$

6.48

$

2.77

$

16.37

$

4.79

Basic weighted average shares outstanding

551,369

565,483

550,276

564,578

Diluted weighted average shares outstanding

569,481

569,902

561,940

569,873

Dividends declared and paid per common share

$

0.18

$

0.18

$

5.54

$

0.82

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three and nine months ended June 30, 2021 and 2020

Additional

Common Stock

Treasury Stock

Paid-in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

THREE MONTHS ENDED JUNE 2020

Balance, April 1, 2020

869,367

$

8,692

(303,841

)

$

(28,863,654

)

$

24,224,145

$

67,184,900

$

62,554,083

Dividends on common stock, $0.18 per share

(107,091

)

(107,091

)

Compensation expense and issuance of stock in connection with equity-based awards

500

5

26,728

26,733

Repurchase of common stock

(1,148

)

(68,725

)

(68,725

)

Net income

1,579,566

1,579,566

Balance, June 30, 2020

869,867

$

8,697

(304,989

)

$

(28,932,379

)

$

24,250,873

$

68,657,375

$

63,984,566

THREE MONTHS ENDED JUNE 2021

Balance, April 1, 2021

883,589

$

8,834

(332,220

)

$

(30,867,287

)

$

24,917,765

$

73,724,722

$

67,784,034

Dividends on common stock, $0.18 per share

(105,586

)

(105,586

)

Compensation expense and issuance of stock in connection with equity-based awards

25,527

25,527

Repurchase of common stock

Net income

3,691,210

3,691,210

Balance, June 30, 2021

883,589

$

8,834

(332,220

)

$

(30,867,287

)

$

24,943,292

$

77,310,346

$

71,395,185

Additional

Common Stock

Treasury Stock

Paid-in

Retained

Shares

Amount

Shares

Amount

Capital

Earnings

Total

NINE MONTHS ENDED JUNE 2020

Balance, October 1, 2019

856,039

$

8,561

(303,425

)

$

(28,831,855

)

$

23,165,639

$

66,414,397

$

60,756,742

Dividends on common stock, $0.82 per share

(487,776

)

(487,776

)

Compensation expense and issuance of stock in connection with equity-based awards

13,828

136

1,085,234

1,085,370

Repurchase of common stock

(1,564

)

(100,524

)

(100,524

)

Net income

2,730,754

2,730,754

Balance, June 30, 2020

869,867

$

8,697

(304,989

)

$

(28,932,379

)

$

24,250,873

$

68,657,375

$

63,984,566

NINE MONTHS ENDED JUNE 2021

Balance, October 1, 2020

869,867

$

8,697

(332,152

)

$

(30,861,549

)

$

24,282,058

$

71,362,334

$

64,791,540

Dividends on common stock, $5.54 per share

(3,249,716

)

(3,249,716

)

Compensation expense and issuance of stock in connection with equity-based awards

13,722

137

661,234

661,371

Repurchase of common stock

(68

)

(5,738

)

(5,738

)

Net income

9,197,728

9,197,728

Balance, June 30, 2021

883,589

$

8,834

(332,220

)

$

(30,867,287

)

$

24,943,292

$

77,310,346

$

71,395,185

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2021 and 2020

June

June

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

9,197,728

$

2,730,754

Adjustments to reconcile net income from operations to net cash flows from (used in)
operating activities:

Depreciation

2,295,390

2,318,045

Equity method investment earnings, net of tax

(1,403,124

)

(111,666

)

(Gain) loss on sales of property and equipment

(8,057

)

17,042

Equity-based compensation

1,819,272

765,704

Deferred income taxes

(220,693

)

(2,862

)

Provision for losses on doubtful accounts

86,000

349,000

Inventory allowance

238,148

182,218

Changes in assets and liabilities:

Accounts receivable

(2,334,341

)

(9,309,422

)

Inventories

3,093,184

20,152,080

Prepaid and other current assets

(3,677,421

)

(373,414

)

Equity method investment distributions

828,466

Other assets

34,647

(126,364

)

Accounts payable

2,680,540

2,040,386

Accrued expenses and accrued wages, salaries and bonuses

804,983

(1,424,472

)

Other long-term liabilities

(169,854

)

125,744

Income taxes payable and receivable

(537,548

)

794,027

Net cash flows from (used in) operating activities

12,727,320

18,126,800

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(1,254,958

)

(2,901,134

)

Proceeds from sales of property and equipment

39,728

16,600

Investment in equity method investee

(6,500,000

)

Issuance of note receivable

(3,500,000

)

Net cash flows from (used in) investing activities

(1,215,230

)

(12,884,534

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under revolving credit facility

1,217,375,073

1,083,878,207

Repayments under revolving credit facility

(1,227,854,771

)

(1,087,870,919

)

Proceeds from borrowings on long-term debt

3,000,000

Principal payments on long-term debt

(373,216

)

(397,936

)

Proceeds from exercise of stock options

25,750

Repurchase of common stock

(5,738

)

(100,524

)

Dividends on common stock

(3,249,716

)

(487,776

)

Settlement and withholdings of equity-based awards

(365,022

)

(30,208

)

Net cash flows from (used in) financing activities

(11,473,390

)

(4,983,406

)

Net change in cash

38,700

258,860

Cash, beginning of period

661,195

337,704

Cash, end of period

$

699,895

$

596,564

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

1,031,457

$

1,387,381

Cash paid during the period for income taxes

3,667,036

376,835

Supplemental disclosure of non-cash information:

Equipment acquisitions classified in accounts payable

$

$

100,424

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

949,812

990,653

Contacts:

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

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