AMCON Distributing Company ("AMCON") DIT, an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $5.38 on net income available to common shareholders of $3.6 million for the fiscal year ended September 30, 2018. AMCON earned $1.60 per fully diluted share on net income available to common shareholders of $1.0 million for the fourth fiscal quarter ended September 30, 2018.
"We are pleased with our results for fiscal 2018. First class service and reliability continue to be the hallmark of our position as a leader in the convenience distribution industry," said Christopher H. Atayan AMCON's Chairman and Chief Executive Officer. He further noted, "Business conditions continue to be challenging for the convenience distribution industry. As a means of addressing this circumstance, we are placing increased emphasis on the development of foodservice programs that are competitive with quick service restaurants. Our management philosophy is to offer our customers a wide array of foodservice programs that offer menu options that work best with their staffing and facility requirements. Our long term commitment to foodservice excellence means that we will continue to invest in the appropriate facilities and equipment necessary to be a top level supplier in these markets. We continue to expect an enhanced level of capital expenditures in the coming years to support our efforts in foodservice, information technology, expansion of our territory, and continued redevelopment of our retail health food stores. Finally, we are continually evaluating strategic acquisition opportunities."
The wholesale distribution segment reported revenues of $1.3 billion and operating income of $15.0 million for fiscal 2018, and revenues and operating income of $352.3 million and $5.0 million, respectively, for the fourth fiscal quarter of fiscal 2018. The retail health food segment reported revenues of $29.6 million and an operating loss of $3.1 million for fiscal 2018, and revenue of $10.2 million and an operating loss of $1.4 million for the fourth quarter of fiscal 2018.
"We are actively supporting our customers as they expand organically and from acquisitions," said Andrew C. Plummer, AMCON's President and Chief Operating Officer. He furthered noted, "Late in the fiscal year we acquired an additional warehouse immediately adjacent to our existing facility in Bismarck, North Dakota. This expansion will enable us to serve the growing needs of our customers in our northern region. Our fall trade show season was well received by our customer base and supported enthusiastically by our vendor community. Also, during the fourth quarter we were able to acquire eight (8) Earth Origins Market health food retail stores in the Florida market and we are now operating as the Healthy Edge Retail Group with three brands Akins, Chamberlin's and Earth Origins Market. In addition, we were able to successfully complete the relocation of our existing store in South Lakeland."
Mr. Plummer further added, "At September 30, 2018, our shareholders' equity was $64.6 million, resulting in adjusted book value per share of $102.85. We turned our inventory 19 times and consolidated debt was $40.2 million. At its lowest point during fiscal 2018 our consolidated debt was $6.4 million. We will continue our commitment to investing in technology that supports our customers' growth and our internal needs, as well as actively evaluating wholesale facility expansions and continued investment in our retail store remodels."
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-two (22) health and natural product retail stores in the Midwest and Florida through our subsidiary The Healthy Edge, Inc. The retail stores operate under the names Chamberlin's Natural Foods www.chamberlins.com, Akin's Natural Foods www.akins.com, and Earth Origins Market www.earthoriginsmarket.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 | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| September | September | |||||||||
| 2018 | 2017 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash | $ | 520,644 | $ | 523,065 | ||||||
| Accounts receivable, less allowance for doubtful accounts of $0.9 million at September 2018 and $0.8 million at September 2017 | 31,428,845 | 30,690,403 | ||||||||
| Inventories, net | 78,869,615 | 72,909,996 | ||||||||
| Income taxes receivable | 272,112 | — | ||||||||
| Prepaid and other current assets | 4,940,775 | 4,218,811 | ||||||||
| Total current assets | 116,031,991 | 108,342,275 | ||||||||
| Property and equipment, net | 15,768,484 | 13,307,986 | ||||||||
| Goodwill | 4,436,950 | 6,349,827 | ||||||||
| Other intangible assets, net | 3,414,936 | 3,494,311 | ||||||||
| Other assets | 301,793 | 310,488 | ||||||||
| Total assets | $ | 139,954,154 | $ | 131,804,887 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 20,826,834 | $ | 17,631,552 | ||||||
| Accrued expenses | 8,556,620 | 7,553,089 | ||||||||
| Accrued wages, salaries and bonuses | 3,965,733 | 3,477,966 | ||||||||
| Income taxes payable | — | 544,069 | ||||||||
| Current maturities of long-term debt | 1,096,306 | 373,645 | ||||||||
| Total current liabilities | 34,445,493 | 29,580,321 | ||||||||
| Credit facility | 35,428,597 | 29,037,182 | ||||||||
| Deferred income tax liability, net | 1,782,801 | 2,336,263 | ||||||||
| Long-term debt, less current maturities | 3,658,391 | 2,648,179 | ||||||||
| Other long-term liabilities | 38,055 | 34,100 | ||||||||
| Shareholders' equity: | ||||||||||
| Preferred stock, $.01 par value, 1,000,000 shares authorized | — | — | ||||||||
| Common stock, $.01 par value, 3,000,000 shares authorized, 615,777 shares outstanding at September 2018 and 678,006 shares outstanding at September 2017 | 8,441 | 8,314 | ||||||||
| Additional paid-in capital | 22,069,098 | 20,825,919 | ||||||||
| Retained earnings | 63,848,030 | 60,935,911 | ||||||||
| Treasury stock at cost | (21,324,752 | ) | (13,601,302 | ) | ||||||
| Total shareholders' equity | 64,600,817 | 68,168,842 | ||||||||
| Total liabilities and shareholders' equity | $ | 139,954,154 | $ | 131,804,887 | ||||||
| AMCON Distributing Company and Subsidiaries | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| Fiscal Years Ended September | ||||||||||
| 2018 | 2017 | |||||||||
| Sales (including excise taxes of $368.4 million and $368.8 million, respectively) | $ | 1,322,306,658 | $ | 1,274,984,408 | ||||||
| Cost of sales | 1,245,375,460 | 1,202,536,285 | ||||||||
| Gross profit | 76,931,198 | 72,448,123 | ||||||||
| Selling, general and administrative expenses | 66,781,234 | 64,173,895 | ||||||||
| Depreciation and amortization | 2,318,146 | 2,049,475 | ||||||||
| Impairment charges | 1,912,877 | — | ||||||||
| 71,012,257 | 66,223,370 | |||||||||
| Operating income | 5,918,941 | 6,224,753 | ||||||||
| Other expense (income): | ||||||||||
| Interest expense | 1,194,373 | 825,690 | ||||||||
| Other (income), net | (54,042 | ) | (39,513 | ) | ||||||
| 1,140,331 | 786,177 | |||||||||
| Income from operations before income tax expense | 4,778,610 | 5,438,576 | ||||||||
| Income tax expense | 1,164,000 | 2,489,000 | ||||||||
| Net income available to common shareholders | $ | 3,614,610 | $ | 2,949,576 | ||||||
| Basic earnings per share available to common shareholders | $ | 5.47 | $ | 4.34 | ||||||
| Diluted earnings per share available to common shareholders | $ | 5.38 | $ | 4.26 | ||||||
| Basic weighted average shares outstanding | 660,925 | 679,478 | ||||||||
| Diluted weighted average shares outstanding | 672,449 | 692,183 | ||||||||
| Dividends declared and paid per common share | $ | 1.00 | $ | 1.00 | ||||||
| AMCON Distributing Company and Subsidiaries | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| Fiscal Years Ended September | ||||||||||
| 2018 | 2017 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Net income | $ | 3,614,610 | $ | 2,949,576 | ||||||
|
Adjustments to reconcile net income from operations to net cash
flows from
operating activities: |
||||||||||
| Depreciation | 2,238,771 | 1,784,475 | ||||||||
| Amortization | 79,375 | 265,000 | ||||||||
| Impairment charges | 1,912,877 | — | ||||||||
| Gain on sale of property and equipment | (4,070 | ) | (31,622 | ) | ||||||
| Equity-based compensation | 1,271,840 | 1,394,879 | ||||||||
| Deferred income taxes | (553,462 | ) | (243,387 | ) | ||||||
| Provision for losses on doubtful accounts | 90,000 | 98,000 | ||||||||
| Inventory allowance | (291,917 | ) | (101,716 | ) | ||||||
| Other | 3,955 | 3,285 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts receivable | (828,442 | ) | (755,299 | ) | ||||||
| Inventories | (5,056,917 | ) | (24,403,398 | ) | ||||||
| Prepaid and other current assets | (633,032 | ) | 4,389,238 | |||||||
| Other assets | 8,695 | (22,406 | ) | |||||||
| Accounts payable | 3,295,390 | (467,348 | ) | |||||||
| Accrued expenses and accrued wages, salaries and bonuses | 1,563,964 | 669,873 | ||||||||
| Income taxes payable and receivable | (816,181 | ) | 709,028 | |||||||
| Net cash flows from (used in) operating activities | 5,895,456 | (13,761,822 | ) | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Purchase of property and equipment | (3,226,107 | ) | (2,565,699 | ) | ||||||
| Proceeds from sales of property and equipment | 5,800 | 46,654 | ||||||||
| Net cash flows from (used in) investing activities | (3,220,307 | ) | (2,519,045 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Borrowings under revolving credit facility | 1,424,929,646 | 1,311,967,154 | ||||||||
| Repayments under revolving credit facility | (1,418,538,231 | ) | (1,293,467,198 | ) | ||||||
| Principal payments on long-term debt | (541,844 | ) | (362,495 | ) | ||||||
| Repurchase of common stock | (7,723,450 | ) | (1,124,921 | ) | ||||||
| Dividends on common stock | (702,491 | ) | (706,906 | ) | ||||||
| Withholdings on the exercise of equity-based awards | (101,200 | ) | (107,082 | ) | ||||||
| Net cash flows from (used in) financing activities | (2,677,570 | ) | 16,198,552 | |||||||
| Net change in cash | (2,421 | ) | (82,315 | ) | ||||||
| Cash, beginning of period | 523,065 | 605,380 | ||||||||
| Cash, end of period | $ | 520,644 | $ | 523,065 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Cash paid during the period for interest | $ | 1,137,691 | $ | 819,969 | ||||||
| Cash paid during the period for income taxes | 2,533,643 | 2,023,359 | ||||||||
| Supplemental disclosure of non-cash information: | ||||||||||
| Equipment acquisitions classified in accounts payable | $ | 1,253 | $ | 101,361 | ||||||
| Purchase of property financed with debt | 1,575,000 | — | ||||||||
| Acquisition of assets financed with debt | 699,717 | — | ||||||||
|
Issuance of common stock in connection with the vesting and exercise of equity-based awards |
1,183,091 | 1,262,763 | ||||||||
|
AMCON Distributing Company and Subsidiaries |
||||||||||||||||
|
FISCAL YEAR 2018 |
||||||||||||||||
| (dollars in thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
| Sales | $ | 315,513 | $ | 295,207 | $ | 349,043 | $ | 362,543 | ||||||||
|
Gross profit |
18,192 | 17,066 | 19,113 | 22,560 | ||||||||||||
|
Income from operations before income tax expense |
1,110 | 623 | 1,247 | 1,799 | ||||||||||||
|
Net income available to common shareholders |
$ | 1,480 | $ | 339 | $ | 785 | $ | 1,011 | ||||||||
|
Basic earnings per share available to common shareholders |
$ | 2.15 | $ | 0.49 | $ | 1.21 | $ | 1.64 | ||||||||
|
Diluted earnings per share available to common shareholders |
$ | 2.13 | $ | 0.49 | $ | 1.18 | $ | 1.60 | ||||||||
|
FISCAL YEAR 2017 |
||||||||||||||||
| (dollars in thousands, except per share data) | First | Second | Third | Fourth | ||||||||||||
| Sales | $ | 310,104 | $ | 294,048 | $ | 332,842 | $ | 337,990 | ||||||||
|
Gross profit |
18,316 | 17,474 | 18,024 | 18,634 | ||||||||||||
|
Income from operations before income tax expense |
1,879 | 990 | 798 | 1,771 | ||||||||||||
|
Net income available to common shareholders |
$ | 1,046 | $ | 488 | $ | 385 | $ | 1,030 | ||||||||
|
Basic earnings per share available to common shareholders |
$ | 1.54 | $ | 0.72 | $ | 0.57 | $ | 1.52 | ||||||||
|
Diluted earnings per share available to common shareholders |
$ | 1.52 | $ | 0.71 | $ | 0.56 | $ | 1.48 | ||||||||
The Company's quarterly earnings per share are based on weighted average shares outstanding for the quarter; therefore the sum of the quarters may not equal the full year earnings per share amount.
AMCON Distributing Company and Subsidiaries
GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
The financial measure of adjusted book value per share included in this press release ("adjusted book value per share") has been determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Management believes that this non-GAAP financial measurement reflects an additional way of viewing aspects of the Company's business that, when viewed together with its financial results computed in accordance with GAAP, provides a more complete understanding of factors affecting historical financial performance of the Company. This measure is important to investors interested in determining the amount of book value per share if all potentially dilutive shares were exercised or vested and outstanding. This non-GAAP financial measurement is not intended to be a substitute for the comparable GAAP measurements and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
The Company has defined the non-GAAP financial measure of adjusted book value per share as follows:
- "Adjusted book value per share" is defined as total shareholders' equity increased by the impact of proceeds from the exercise of all stock options and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options and vesting of restricted stock units."
|
September 2018 |
|||||
| Number of common shares outstanding at September 30, 2018 | 615,777 | ||||
| Total shareholders' equity at September 30, 2018 | $ | 64,600,817 | |||
| Book value per share at September 30, 2018 | $ | 104.91 | |||
|
September 2018 |
|||||
| Number of common shares outstanding at September 30, 2018 | 615,777 | ||||
| Add: common shares potentially issuable for stock options and unvested restricted stock units /1/ | 60,611 | ||||
| 676,388 | |||||
| Total shareholders' equity at September 30, 2018 | $ | 64,600,817 | |||
| Equity impact if all potential common shares were exercised or vested /1/ | 4,962,639 | ||||
| $ | 69,563,456 | ||||
| Adjusted book value per share at September 30, 2018 | $ | 102.85 | |||
|
/1/ Assumes the exercise of all vested and unvested stock options and vesting of all outstanding restricted stock units at September 30, 2018. |
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