Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Jan. 20, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'AMCON DISTRIBUTING CO | ' |
Entity Central Index Key | '0000928465 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 611,432 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Current assets: | ' | ' |
Cash | $326,390 | $275,036 |
Accounts receivable, less allowance for doubtful accounts of $1.2 million and $1.1 million at December 2013 and September 2013, respectively | 32,092,060 | 28,383,205 |
Inventories, net | 50,987,078 | 46,125,187 |
Deferred income taxes | 1,437,481 | 1,831,933 |
Prepaid and other current assets | 7,032,830 | 5,001,992 |
Total current assets | 91,875,839 | 81,617,353 |
Property and equipment, net | 13,527,259 | 13,088,859 |
Goodwill | 6,349,827 | 6,349,827 |
Other intangible assets, net | 4,729,728 | 4,820,978 |
Other assets | 433,084 | 497,882 |
TOTAL ASSETS | 116,915,737 | 106,374,899 |
Current liabilities: | ' | ' |
Accounts payable | 15,847,759 | 15,859,636 |
Accrued expenses | 5,438,389 | 6,714,444 |
Accrued wages, salaries and bonuses | 2,272,813 | 2,754,136 |
Income taxes payable | 253,329 | 1,922,351 |
Current maturities of long-term debt | 781,123 | 998,788 |
Total current liabilities | 24,593,413 | 28,249,355 |
Credit facility | 28,749,737 | 14,841,712 |
Deferred income taxes | 3,417,396 | 3,327,010 |
Long-term debt, less current maturities | 3,992,481 | 4,076,892 |
Other long-term liabilities | 237,385 | 239,396 |
Shareholders' equity: | ' | ' |
Preferred stock, $0.01 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, 611,432 shares outstanding at December 2013 and 623,115 shares outstanding at September 2013 | 6,677 | 6,543 |
Additional paid-in capital | 13,610,519 | 12,502,135 |
Retained earnings | 44,651,003 | 43,532,812 |
Treasury stock at cost | -5,242,874 | -3,300,956 |
Total shareholders' equity | 53,025,325 | 52,740,534 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 116,915,737 | 106,374,899 |
Series A Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock | 2,500,000 | 2,500,000 |
Series B Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock | $400,000 | $400,000 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $1.20 | $1.10 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 116,000 | 116,000 |
Preferred stock, shares issued | 116,000 | 116,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, shares outstanding | 611,432 | 623,115 |
Series A Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock, par value (in dollars per share) | $0.01 | $0.01 |
Cumulative, Convertible Preferred Stock, shares authorized | 100,000 | 100,000 |
Cumulative, Convertible Preferred Stock, shares issued | 100,000 | 100,000 |
Cumulative, Convertible Preferred Stock, liquidation preference (in dollars) | 2.5 | 2.5 |
Series B Preferred Stock | ' | ' |
Cumulative, Convertible Preferred Stock, par value (in dollars per share) | $0.01 | $0.01 |
Cumulative, Convertible Preferred Stock, shares authorized | 80,000 | 80,000 |
Cumulative, Convertible Preferred Stock, shares issued | 16,000 | 16,000 |
Cumulative, Convertible Preferred Stock, shares outstanding | 16,000 | 16,000 |
Cumulative, Convertible Preferred Stock, liquidation preference (in dollars) | $0.40 | $0.40 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Consolidated Statements of Operations | ' | ' |
Sales (including excise taxes of $97.3 million and $98.0 million at December 2013 and December 2012, respectively) | $305,625,557 | $302,218,321 |
Cost of sales | 285,984,494 | 282,988,532 |
Gross profit | 19,641,063 | 19,229,789 |
Selling, general and administrative expenses | 16,492,263 | 15,848,472 |
Depreciation and amortization | 624,040 | 593,862 |
Total operating expenses | 17,116,303 | 16,442,334 |
Operating income | 2,524,760 | 2,787,455 |
Other expense (income): | ' | ' |
Interest expense | 301,995 | 316,052 |
Other (income), net | -30,231 | -61,349 |
Total other expenses (income) | 271,764 | 254,703 |
Income from operations before income tax expense | 2,252,996 | 2,532,752 |
Income tax expense | 965,000 | 1,070,000 |
Net income | 1,287,996 | 1,462,752 |
Preferred stock dividend requirements | -49,177 | -59,291 |
Net income available to common shareholders | $1,238,819 | $1,403,461 |
Basic earnings per share available to common shareholders (in dollars per share) | $1.99 | $2.26 |
Diluted earnings per share available to common shareholders (in dollars per share) | $1.73 | $1.90 |
Basic weighted average shares outstanding (in shares) | 622,226 | 622,277 |
Diluted weighted average shares outstanding (in shares) | 744,568 | 767,957 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Operations (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Consolidated Statements of Operations | ' | ' |
Sales, excise taxes | $97.30 | $98 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $1,287,996 | $1,462,752 |
Adjustments to reconcile net income from operations to net cash flows from operating activities: | ' | ' |
Depreciation | 532,790 | 502,612 |
Amortization | 91,250 | 91,250 |
Gain on sale of property and equipment | -7,704 | -70,631 |
Equity-based compensation | 342,160 | 327,476 |
Deferred income taxes | 484,838 | 419,627 |
Provision for losses on doubtful accounts | 130,000 | 105,000 |
Provision for losses on inventory obsolescence | 38,803 | 71,603 |
Other | -2,011 | -2,011 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -3,838,855 | 241,773 |
Inventories | -4,900,694 | -11,412,393 |
Prepaid and other current assets | -2,030,838 | -878,343 |
Other assets | 64,798 | 56,705 |
Accounts payable | 995 | -2,021,716 |
Accrued expenses and accrued wages, salaries and bonuses | -928,307 | -500,789 |
Income tax payable | -1,669,022 | -1,569,182 |
Net cash flows from operating activities | -10,403,801 | -13,176,267 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -985,678 | -330,228 |
Proceeds from sales of property and equipment | 9,320 | 139,040 |
Net cash flows from investing activities | -976,358 | -191,188 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Net borrowings on bank credit agreements | 13,908,025 | 16,025,449 |
Principal payments on long-term debt | -302,076 | -292,345 |
Repurchase of common stock and Series B Convertible Preferred Stock | -1,941,918 | -2,572,085 |
Dividends paid on convertible preferred stock | -49,177 | -59,291 |
Dividends on common stock | -120,628 | -117,428 |
Proceeds from exercise of stock options | ' | 1,180 |
Withholdings on the exercise of equity-based awards | -62,713 | -74,610 |
Net cash flows from financing activities | 11,431,513 | 12,910,870 |
Net change in cash | 51,354 | -456,585 |
Cash, beginning of period | 275,036 | 491,387 |
Cash, end of period | 326,390 | 34,802 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid during the period for interest | 274,796 | 279,667 |
Cash paid during the period for income taxes | 2,149,184 | 2,219,555 |
Supplemental disclosure of non-cash information: | ' | ' |
Equipment acquisitions classified as accounts payable | 60,332 | 64,042 |
Issuance of common stock in connection with the vesting and exercise of equity-based awards | 1,154,869 | 1,389,258 |
Conversion by holder of Series B Convertible Preferred Stock to common stock | ' | 100,000 |
Common stock acquired with other consideration | ' | $760,871 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | ' |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | |
AMCON Distributing Company and Subsidiaries (“AMCON” or the “Company”) operate two business segments: | |
· Our wholesale distribution segment (“Wholesale Segment”) distributes consumer products in the Central, Rocky Mountain, and Southern regions of the United States. Additionally, our Wholesale Segment provides a full range of programs and services to assist our customers in managing their business and profitability. | |
· Our retail health food segment (“Retail Segment”) operates sixteen health food retail stores located throughout the Midwest and Florida. | |
WHOLESALE SEGMENT | |
Our Wholesale Segment is one of the largest wholesale distributors in the United States serving approximately 4,500 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops. We currently distribute over 16,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery, beverages, groceries, paper products, health and beauty care products, frozen and chilled products and institutional foodservice products. We also provide a full range of consultative services to our customers in the areas of marketing, merchandising, inventory optimization, and information systems that allow our customers to compete and maximize their profitability. Convenience stores represent our largest customer category. In October 2013, Convenience Store News ranked us as the seventh (7th) largest convenience store distributor in the United States based on annual sales. | |
Our Wholesale Segment operates six distribution centers located in Illinois, Missouri, Nebraska, North Dakota, South Dakota, and Tennessee. These distribution centers, combined with cross dock facilities, include approximately 602,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, Commonwealth Brands, Lorillard, Hershey, Kellogg’s, Kraft, and Mars. We also market private label lines of water, candy products, batteries, film, and other products. The Company does not maintain long term purchase contracts with its suppliers. | |
RETAIL SEGMENT | |
Our Retail Segment is a specialty retailer of natural/organic groceries and dietary supplements which focuses on providing high quality products at affordable prices, with an exceptional level of customer service and nutritional consultation. All of the products carried in our stores must meet strict quality and ingredient guidelines, and include offerings such as gluten-free and antibiotic-free groceries and meat products, as well as products containing no artificial colors, flavors, preservatives, or partially hydrogenated oils. We design our retail sites in an efficient and flexible small-store format, which emphasizes a high energy and shopper-friendly environment. | |
We operate within the natural products retail industry, which is a subset of the large and stable U.S. grocery industry. This industry includes conventional, natural, gourmet and specialty food markets, mass and discount retailers, warehouse clubs, health food stores, dietary supplement retailers, drug stores, farmers markets, mail order and online retailers, and multi-level marketers. According to The Natural Foods Merchandiser, a leading industry trade publication, retail sales in the natural foods industry exceeded $80 billion during the 2012 calendar year. | |
Our Retail Segment operates sixteen retail health food stores as Chamberlin’s Market & Café and Akin’s Natural Foods Market. These stores carry over 32,000 different national and regionally branded and private label products including high-quality natural, organic, and specialty foods consisting of produce, baked goods, frozen foods, nutritional supplements, personal care items, and general merchandise. Chamberlin’s, which was established in 1935, operates six stores in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of ten locations in Arkansas, Kansas, Missouri, Nebraska, and Oklahoma. | |
FINANCIAL STATEMENTS | |
The Company’s fiscal year ends on September 30. The results for the interim period included with this Quarterly Report may not be indicative of the results which could be expected for the entire fiscal year. All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted. In the opinion of management, the accompanying condensed consolidated unaudited financial statements (“financial statements”) contain all adjustments necessary to fairly present the financial information included herein, such as adjustments consisting of normal recurring items. The Company believes that although the disclosures contained herein are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the fiscal year ended September 30, 2013, as filed with the Securities and Exchange Commission on Form 10-K. For purposes of this report, unless the context indicates otherwise, all references to “we”, “us”, “our”, the “Company”, and “AMCON” shall mean AMCON Distributing Company and its subsidiaries. Additionally, the three month fiscal periods ended December 31, 2013 and December 31, 2012 have been referred to throughout this quarterly report as Q1 2014 and Q1 2013, respectively. The fiscal balance sheet dates as of December 31, 2013, December 31, 2012, and September 30, 2013 have been referred to as December 2013, December 2012, and September 2013, respectively. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
The Company is currently evaluating the impact of implementing the following new accounting standard: | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”, which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss (“NOL”) or similar tax loss or tax credit carryforward rather than as a liability when the uncertain tax position would reduce the NOL or other carryforward under the tax law. The Company will be required to adopt this new standard on a prospective basis in the first interim reporting period of fiscal 2015, however, early adoption is permitted as is a retrospective application. | |
CONVERTIBLE_PREFERRED_STOCK
CONVERTIBLE PREFERRED STOCK | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CONVERTIBLE PREFERRED STOCK | ' | |||||||
CONVERTIBLE PREFERRED STOCK | ' | |||||||
2. CONVERTIBLE PREFERRED STOCK | ||||||||
The Company has two series of convertible preferred stock outstanding at December 2013 as identified in the following table: | ||||||||
Series A | Series B | |||||||
Date of issuance: | 17-Jun-04 | 8-Oct-04 | ||||||
Optionally redeemable beginning | 18-Jun-06 | 9-Oct-06 | ||||||
Par value (gross proceeds): | $ | 2,500,000 | $ | 400,000 | ||||
Number of shares outstanding at December 2013: | 100,000 | 16,000 | ||||||
Liquidation preference per share: | $ | 25 | $ | 25 | ||||
Conversion price per share: | $ | 30.31 | $ | 24.65 | ||||
Number of common shares in which to be converted: | 82,481 | 16,227 | ||||||
Dividend rate: | 6.785 | % | 6.37 | % | ||||
The Series A Convertible Preferred Stock (“Series A”) and Series B Convertible Preferred Stock (“Series B”), (collectively, the “Preferred Stock”), are convertible at any time by the holders into a number of shares of AMCON common stock equal to the number of preferred shares being converted multiplied by a fraction equal to $25.00 divided by the conversion price. The conversion prices for the Preferred Stock are subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Common Stock. Cumulative dividends for the Preferred Stock are payable in arrears, when, and if declared by the Board of Directors, on March 31, June 30, September 30 and December 31 of each year. | ||||||||
In the event of a liquidation of the Company, the holders of the Preferred Stock are entitled to receive the liquidation preference plus any accrued and unpaid dividends prior to the distribution of any amount to the holders of the Common Stock. The shares of Preferred Stock are optionally redeemable by the Company beginning on various dates, as listed in the above table, at redemption prices equal to 112% of the liquidation preference. The redemption prices decrease 1% annually thereafter until the redemption price equals the liquidation preference, after which date it remains the liquidation preference. The Preferred Stock is redeemable at the liquidation value and at the option of the holder. The Series A Preferred Stock and 8,000 shares of the Series B Preferred Stock are owned by Mr. Christopher Atayan, AMCON’s Chief Executive Officer and Chairman of the Board. The Series B Preferred Stock holders have the right to elect one member of our Board of Directors, pursuant to the voting rights in the Certificate of Designation creating the Series B. Christopher H. Atayan was first nominated and elected to this seat in 2004. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Dec. 31, 2013 | |
INVENTORIES | ' |
INVENTORIES | ' |
3. INVENTORIES | |
At December 2013 and September 2013, inventories consisted of finished goods and are stated at the lower of cost determined on a First-in First-out (“FIFO”) basis or market. The wholesale distribution and retail health food segment inventories consist of finished products purchased in bulk quantities to be redistributed to the Company’s customers or sold at retail. Finished goods included total reserves of approximately $0.9 million and $0.8 million at December 2013 and September 2013, respectively. These reserves include the Company’s obsolescence allowance, which reflects estimated unsaleable or non-refundable inventory based upon an evaluation of slow moving and discontinued products. | |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
4. GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||
Goodwill by reporting segment of the Company consisted of the following: | ||||||||
December | September | |||||||
2013 | 2013 | |||||||
Wholesale Segment | $ | 4,436,950 | $ | 4,436,950 | ||||
Retail Segment | 1,912,877 | 1,912,877 | ||||||
$ | 6,349,827 | $ | 6,349,827 | |||||
Other intangible assets of the Company consisted of the following: | ||||||||
December | September | |||||||
2013 | 2013 | |||||||
Trademarks and tradenames | $ | 3,373,269 | $ | 3,373,269 | ||||
Non-competition agreement (less accumulated amortization of approximately $0.3 million at December 2013 and $0.2 million at September 2013) | 241,667 | 266,667 | ||||||
Customer relationships (less accumulated amortization of $1.0 million and $0.9 million at December 2013 and September 2013, respectively) | 1,114,792 | 1,181,042 | ||||||
$ | 4,729,728 | $ | 4,820,978 | |||||
Goodwill, trademarks, and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. At December 2013, identifiable intangible assets considered to have finite lives were represented by customer relationships and the value of a non-competition agreement acquired as part of acquisitions. The customer relationships are being amortized over eight years and the value of the non-competition agreement is being amortized over five years. These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to identifiable intangible assets was $0.1 million during both Q1 2014 and Q1 2013. | ||||||||
Estimated future amortization expense related to identifiable intangible assets with finite lives is as follows at December 2013: | ||||||||
December | ||||||||
2013 | ||||||||
Fiscal 2014 (1) | $ | 273,750 | ||||||
Fiscal 2015 | 365,000 | |||||||
Fiscal 2016 | 331,667 | |||||||
Fiscal 2017 | 265,000 | |||||||
Fiscal 2018 | 79,375 | |||||||
Thereafter | 41,667 | |||||||
$ | 1,356,459 | |||||||
(1) Represents amortization for the remaining nine months of Fiscal 2014. |
DIVIDENDS
DIVIDENDS | 3 Months Ended |
Dec. 31, 2013 | |
DIVIDENDS | ' |
DIVIDENDS | ' |
5. DIVIDENDS | |
The Company paid cash dividends on its common stock and convertible preferred stock totaling $0.2 million during both Q1 2014 and Q1 2013. | |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
6. EARNINGS PER SHARE | ||||||||||||||
Basic earnings per share available to common shareholders is calculated by dividing net income less preferred stock dividend requirements by the weighted average common shares outstanding for each period. Diluted earnings per share available to common shareholders is calculated by dividing income from operations less preferred stock dividend requirements (when anti-dilutive) by the sum of the weighted average common shares outstanding and the weighted average dilutive options, using the treasury stock method. | ||||||||||||||
For the three months ended December | ||||||||||||||
2013 | 2012 | |||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||
Weighted average common shares outstanding | 622,226 | 622,226 | 622,277 | 622,277 | ||||||||||
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) | — | 122,342 | — | 145,680 | ||||||||||
Weighted average number of shares outstanding | 622,226 | 744,568 | 622,277 | 767,957 | ||||||||||
Net income | $ | 1,287,996 | $ | 1,287,996 | $ | 1,462,752 | $ | 1,462,752 | ||||||
Deduct: convertible preferred stock dividends (2) | (49,177 | ) | — | (59,291 | ) | — | ||||||||
Net income available to common shareholders | $ | 1,238,819 | $ | 1,287,996 | $ | 1,403,461 | $ | 1,462,752 | ||||||
Net earnings per share available to common shareholders | $ | 1.99 | $ | 1.73 | $ | 2.26 | $ | 1.9 | ||||||
(1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock deemed to be dilutive. | ||||||||||||||
(2) Diluted earnings per share calculation excludes dividends for convertible preferred stock deemed to be dilutive, as those amounts are assumed to have been converted to common stock of the Company. |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2013 | |
DEBT | ' |
DEBT | ' |
7. DEBT | |
The Company primarily finances its operations through a credit facility provided under an agreement with Bank of America (the “Facility”). The Facility included the following significant terms at December 2013: | |
· A July 2018 maturity date without a penalty for prepayment. | |
· $70.0 million revolving credit limit. | |
· Loan accordion allowing the Company to increase the size of the credit facility agreement by $25.0 million. | |
· A provision providing an additional $10.0 million of credit advances for certain inventory purchases. | |
· Evergreen renewal clause automatically renewing the agreement for one year unless either the borrower or lender provides written notice terminating the agreement at least 90 days prior to the end of any original or renewal term of the agreement. | |
· The Facility bears interest at either the bank’s prime rate, or at LIBOR plus 125 - 175 basis points depending on certain credit facility utilization measures, at the election of the Company. | |
· Lending limits subject to accounts receivable and inventory limitations. | |
· An unused commitment fee equal to one-quarter of one percent (1/4%) per annum on the difference between the maximum loan limit and average monthly borrowings. | |
· Secured by collateral including all of the Company’s equipment, intangibles, inventories, and accounts receivable. | |
· A financial covenant requiring a fixed charge coverage ratio of at least 1.0 as measured by the previous twelve month period then ended only if excess availability falls below 10% of the maximum loan limit as defined in the credit agreement. | |
· Provides that the Company may not pay dividends on its common stock in excess of $1.00 per share on an annual basis. There is, however, no limit on common stock dividends if certain excess availability measurements have been maintained for the thirty day period immediately prior to the payment of any such dividends or distributions and if immediately after giving effect to any such dividend or distribution payments the Company has a Fixed Charge Coverage Ratio of at least 1.10 to 1.0 as defined in the credit facility agreement. | |
Cross Default and Co-Terminus Provisions | |
The Company’s owned real estate in Bismarck, ND, Quincy, IL, and Rapid City, SD, is financed through a term loan with BMO Harris, NA (“BMO”) which is also a participant lender on the Company’s revolving line of credit. The BMO loan contains cross default provisions which cause the loan with BMO to be considered in default if the loans where BMO is a lender, including the revolving credit facility, is in default. There were no such cross defaults at December 2013. In addition, the BMO loan contain co-terminus provisions which require all loans with BMO to be paid in full if any of the loans are paid in full prior to the end of their specified terms. | |
Other | |
AMCON has issued a letter of credit in the amount of approximately $0.4 million to its workers’ compensation insurance carrier as part of its self-insured loss control program. | |
Off-Balance Sheet Arrangements | |
The Company does not have any off-balance sheet arrangements. | |
EQUITYBASED_INCENTIVE_AWARDS
EQUITY-BASED INCENTIVE AWARDS | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
EQUITY-BASED INCENTIVE AWARDS | ' | |||||||||||||||
EQUITY-BASED INCENTIVE AWARDS | ' | |||||||||||||||
8. EQUITY-BASED INCENTIVE AWARDS | ||||||||||||||||
Omnibus Plan | ||||||||||||||||
The Company has an Omnibus Incentive Plan (“the Omnibus Plan”) which provides for equity incentives to employees. The Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plan permits the issuance of up to 150,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plan is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At December 2013, awards with respect to a total of 147,700 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plan and awards with respect to another 2,300 shares may be awarded under the plan. | ||||||||||||||||
Stock Options | ||||||||||||||||
The stock options issued by the Company expire ten years from the grant date and include graded vesting schedules ranging between three and five years. Stock options issued and outstanding at December 2013 are summarized as follows: | ||||||||||||||||
Remaining | Exercisable | |||||||||||||||
Exercise | Number | Weighted-Average | Weighted-Average | Number | Weighted-Average | |||||||||||
Price | Outstanding | Contractual Life | Exercise Price | Exercisable | Exercise Price | |||||||||||
Fiscal 2007 | $18.00 | 25,000 | 2.95 years | $ | 18 | 25,000 | $ | 18 | ||||||||
Fiscal 2010 | $51.50 | 5,500 | 6.33 years | $ | 51.5 | 3,300 | $ | 51.5 | ||||||||
Fiscal 2012 | $53.80 - $65.97 | 6,500 | 7.84 years | $ | 54.74 | 2,500 | $ | 54.29 | ||||||||
Fiscal 2013 | $62.33 | 8,000 | 8.82 years | $ | 62.33 | 1,600 | $ | 62.33 | ||||||||
45,000 | $ | 35.28 | 32,400 | $ | 26.4 | |||||||||||
Restricted Stock Units | ||||||||||||||||
During Q1 2014, the Company issued 17,900 restricted stock unit awards to members of its management team pursuant to the provisions of the Company’s Omnibus Plan. Nonvested restricted stock units at December 2013 are as follows: | ||||||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | ||||||||||||||
Units(1) | Units(2) | Units(3) | ||||||||||||||
Date of award: | 26-Oct-11 | 23-Oct-12 | 22-Oct-13 | |||||||||||||
Original number of awards issued: | 15,900 | 15,000 | 17,900 | |||||||||||||
Service period: | 36 months | 36 months | 36-60 months | |||||||||||||
Estimated fair value of award at grant date | $ | 855,000 | $ | 935,000 | $ | 1,486,000 | ||||||||||
Awards outstanding at December 2013 | 5,300 | 10,000 | 17,900 | |||||||||||||
Fair value of non-vested awards at December 2013: | $ | 424,000 | $ | 799,000 | $ | 1,431,000 | ||||||||||
(1) 10,600 of the restricted stock units were vested as of December 2013. The remaining 5,300 restricted stock units will vest on October 25, 2014. | ||||||||||||||||
(2) 5,000 of the restricted stock units were vested as of December 2013. The remaining 10,000 restricted stock units will vest in equal amounts on October 23, 2014 and October 23, 2015. | ||||||||||||||||
(3) 14,000 restricted stock units will vest in equal amounts on October 22, 2014, October 22, 2015, and October 22, 2016. The remaining 3,900 restricted stock units will vest in equal amounts on October 22, 2014, October 22, 2015, October 22, 2016, October 22, 2017, and October 22, 2018. | ||||||||||||||||
There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. | ||||||||||||||||
The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Condensed Statement of Operations reflects the straight-line amortized fair value based on the period end closing price. | ||||||||||||||||
Number | Weighted | |||||||||||||||
of | Average | |||||||||||||||
Shares | Fair Value | |||||||||||||||
Nonvested restricted stock units at September 2013 | 29,600 | $ | 81.89 | |||||||||||||
Granted | 17,900 | 83.03 | ||||||||||||||
Vested | (14,300 | ) | 80.68 | |||||||||||||
Expired | — | — | ||||||||||||||
Nonvested restricted stock units at December 2013 | 33,200 | $ | 79.93 | |||||||||||||
All Equity-Based Awards (stock options and restricted stock units) | ||||||||||||||||
Net income before income taxes included compensation expense of approximately $0.3 million during both Q1 2014 and Q1 2013 related to the amortization of all equity-based compensation awards. Total unamortized compensation expense related to these awards at December 2013 and December 2012 was approximately $2.5 million and $1.9 million, respectively. |
BUSINESS_SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
BUSINESS SEGMENTS | ' | |||||||||||||
BUSINESS SEGMENTS | ' | |||||||||||||
9. BUSINESS SEGMENTS | ||||||||||||||
AMCON has two reportable business segments: the wholesale distribution of consumer products and the retail sale of health and natural food products. The retail health food stores’ operations are aggregated to comprise the Retail Segment because such operations have similar economic characteristics, as well as similar characteristics with respect to the nature of products sold, the type and class of customers for the health food products and the methods used to sell the products. Included in the “Other” column are intercompany eliminations, and assets held and charges incurred by our holding company. The segments are evaluated on revenues, gross margins, operating income (loss), and income before taxes. | ||||||||||||||
Wholesale | Retail | Other | Consolidated | |||||||||||
Segment | Segment | |||||||||||||
THREE MONTHS ENDED DECEMBER 2013: | ||||||||||||||
External revenue: | ||||||||||||||
Cigarettes | $ | 221,151,811 | $ | — | $ | — | $ | 221,151,811 | ||||||
Confectionery | 18,203,191 | — | — | 18,203,191 | ||||||||||
Health food | — | 8,523,278 | — | 8,523,278 | ||||||||||
Tobacco, food service & other | 57,747,277 | — | — | 57,747,277 | ||||||||||
Total external revenue | 297,102,279 | 8,523,278 | — | 305,625,557 | ||||||||||
Depreciation | 403,342 | 128,510 | 938 | 532,790 | ||||||||||
Amortization | 91,250 | — | — | 91,250 | ||||||||||
Operating income (loss) | 3,795,962 | 52,190 | (1,323,392 | ) | 2,524,760 | |||||||||
Interest expense | 43,797 | 60,776 | 197,422 | 301,995 | ||||||||||
Income (loss) from operations before taxes | 3,759,523 | (3,628 | ) | (1,502,899 | ) | 2,252,996 | ||||||||
Total assets | 103,144,703 | 13,564,621 | 206,413 | 116,915,737 | ||||||||||
Capital expenditures | 918,542 | 67,136 | — | 985,678 | ||||||||||
THREE MONTHS ENDED DECEMBER 2012: | ||||||||||||||
External revenue: | ||||||||||||||
Cigarettes | $ | 221,730,182 | $ | — | $ | — | $ | 221,730,182 | ||||||
Confectionery | 17,956,072 | — | — | 17,956,072 | ||||||||||
Health food | — | 8,704,643 | — | 8,704,643 | ||||||||||
Tobacco, food service & other | 53,827,424 | — | — | 53,827,424 | ||||||||||
Total external revenue | 293,513,678 | 8,704,643 | — | 302,218,321 | ||||||||||
Depreciation | 408,743 | 92,932 | 937 | 502,612 | ||||||||||
Amortization | 91,250 | — | — | 91,250 | ||||||||||
Operating income (loss) | 3,802,737 | 371,798 | (1,387,080 | ) | 2,787,455 | |||||||||
Interest expense | 55,132 | 58,968 | 201,952 | 316,052 | ||||||||||
Income (loss) from operations before taxes | 3,753,457 | 317,770 | (1,538,475 | ) | 2,532,752 | |||||||||
Total assets | 103,284,807 | 12,358,555 | 187,260 | 115,830,622 | ||||||||||
Capital expenditures | 293,650 | 36,578 | — | 330,228 |
COMMON_STOCK_REPURCHASE
COMMON STOCK REPURCHASE | 3 Months Ended |
Dec. 31, 2013 | |
COMMON STOCK REPURCHASE | ' |
COMMON STOCK REPURCHASE | ' |
10. COMMON STOCK REPURCHASE | |
During Q1 2014, the Company repurchased 25,057 shares of its common stock from an independent third party for cash totaling approximately $1.9 million. All repurchased shares are recorded in treasury stock at cost. Subsequent to the share repurchase, the Company’s Board of Directors reauthorized additional repurchases of up to 50,000 shares of its common stock. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Dec. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | ' |
WHOLESALE SEGMENT and RETAIL SEGMENT | ' |
WHOLESALE SEGMENT | |
Our Wholesale Segment is one of the largest wholesale distributors in the United States serving approximately 4,500 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops. We currently distribute over 16,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery, beverages, groceries, paper products, health and beauty care products, frozen and chilled products and institutional foodservice products. We also provide a full range of consultative services to our customers in the areas of marketing, merchandising, inventory optimization, and information systems that allow our customers to compete and maximize their profitability. Convenience stores represent our largest customer category. In October 2013, Convenience Store News ranked us as the seventh (7th) largest convenience store distributor in the United States based on annual sales. | |
Our Wholesale Segment operates six distribution centers located in Illinois, Missouri, Nebraska, North Dakota, South Dakota, and Tennessee. These distribution centers, combined with cross dock facilities, include approximately 602,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, Commonwealth Brands, Lorillard, Hershey, Kellogg’s, Kraft, and Mars. We also market private label lines of water, candy products, batteries, film, and other products. The Company does not maintain long term purchase contracts with its suppliers. | |
RETAIL SEGMENT | |
Our Retail Segment is a specialty retailer of natural/organic groceries and dietary supplements which focuses on providing high quality products at affordable prices, with an exceptional level of customer service and nutritional consultation. All of the products carried in our stores must meet strict quality and ingredient guidelines, and include offerings such as gluten-free and antibiotic-free groceries and meat products, as well as products containing no artificial colors, flavors, preservatives, or partially hydrogenated oils. We design our retail sites in an efficient and flexible small-store format, which emphasizes a high energy and shopper-friendly environment. | |
We operate within the natural products retail industry, which is a subset of the large and stable U.S. grocery industry. This industry includes conventional, natural, gourmet and specialty food markets, mass and discount retailers, warehouse clubs, health food stores, dietary supplement retailers, drug stores, farmers markets, mail order and online retailers, and multi-level marketers. According to The Natural Foods Merchandiser, a leading industry trade publication, retail sales in the natural foods industry exceeded $80 billion during the 2012 calendar year. | |
Our Retail Segment operates sixteen retail health food stores as Chamberlin’s Market & Café and Akin’s Natural Foods Market. These stores carry over 32,000 different national and regionally branded and private label products including high-quality natural, organic, and specialty foods consisting of produce, baked goods, frozen foods, nutritional supplements, personal care items, and general merchandise. Chamberlin’s, which was established in 1935, operates six stores in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of ten locations in Arkansas, Kansas, Missouri, Nebraska, and Oklahoma. | |
FINANCIAL STATEMENTS | ' |
FINANCIAL STATEMENTS | |
The Company’s fiscal year ends on September 30. The results for the interim period included with this Quarterly Report may not be indicative of the results which could be expected for the entire fiscal year. All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted. In the opinion of management, the accompanying condensed consolidated unaudited financial statements (“financial statements”) contain all adjustments necessary to fairly present the financial information included herein, such as adjustments consisting of normal recurring items. The Company believes that although the disclosures contained herein are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the fiscal year ended September 30, 2013, as filed with the Securities and Exchange Commission on Form 10-K. For purposes of this report, unless the context indicates otherwise, all references to “we”, “us”, “our”, the “Company”, and “AMCON” shall mean AMCON Distributing Company and its subsidiaries. Additionally, the three month fiscal periods ended December 31, 2013 and December 31, 2012 have been referred to throughout this quarterly report as Q1 2014 and Q1 2013, respectively. The fiscal balance sheet dates as of December 31, 2013, December 31, 2012, and September 30, 2013 have been referred to as December 2013, December 2012, and September 2013, respectively. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ' |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
The Company is currently evaluating the impact of implementing the following new accounting standard: | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”, which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss (“NOL”) or similar tax loss or tax credit carryforward rather than as a liability when the uncertain tax position would reduce the NOL or other carryforward under the tax law. The Company will be required to adopt this new standard on a prospective basis in the first interim reporting period of fiscal 2015, however, early adoption is permitted as is a retrospective application. | |
CONVERTIBLE_PREFERRED_STOCK_Ta
CONVERTIBLE PREFERRED STOCK (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CONVERTIBLE PREFERRED STOCK | ' | |||||||
Schedule of two series of convertible preferred stock outstanding | ' | |||||||
Series A | Series B | |||||||
Date of issuance: | 17-Jun-04 | 8-Oct-04 | ||||||
Optionally redeemable beginning | 18-Jun-06 | 9-Oct-06 | ||||||
Par value (gross proceeds): | $ | 2,500,000 | $ | 400,000 | ||||
Number of shares outstanding at December 2013: | 100,000 | 16,000 | ||||||
Liquidation preference per share: | $ | 25 | $ | 25 | ||||
Conversion price per share: | $ | 30.31 | $ | 24.65 | ||||
Number of common shares in which to be converted: | 82,481 | 16,227 | ||||||
Dividend rate: | 6.785 | % | 6.37 | % |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
Schedule of goodwill by reporting segment | ' | |||||||
December | September | |||||||
2013 | 2013 | |||||||
Wholesale Segment | $ | 4,436,950 | $ | 4,436,950 | ||||
Retail Segment | 1,912,877 | 1,912,877 | ||||||
$ | 6,349,827 | $ | 6,349,827 | |||||
Schedule of other intangible assets | ' | |||||||
December | September | |||||||
2013 | 2013 | |||||||
Trademarks and tradenames | $ | 3,373,269 | $ | 3,373,269 | ||||
Non-competition agreement (less accumulated amortization of approximately $0.3 million at December 2013 and $0.2 million at September 2013) | 241,667 | 266,667 | ||||||
Customer relationships (less accumulated amortization of $1.0 million and $0.9 million at December 2013 and September 2013, respectively) | 1,114,792 | 1,181,042 | ||||||
$ | 4,729,728 | $ | 4,820,978 | |||||
Schedule of estimated future amortization expense related to identifiable intangible assets with finite lives | ' | |||||||
December | ||||||||
2013 | ||||||||
Fiscal 2014 (1) | $ | 273,750 | ||||||
Fiscal 2015 | 365,000 | |||||||
Fiscal 2016 | 331,667 | |||||||
Fiscal 2017 | 265,000 | |||||||
Fiscal 2018 | 79,375 | |||||||
Thereafter | 41,667 | |||||||
$ | 1,356,459 | |||||||
(1) Represents amortization for the remaining nine months of Fiscal 2014. |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
Schedule of net earnings per share available to common shareholders | ' | |||||||||||||
For the three months ended December | ||||||||||||||
2013 | 2012 | |||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||
Weighted average common shares outstanding | 622,226 | 622,226 | 622,277 | 622,277 | ||||||||||
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) | — | 122,342 | — | 145,680 | ||||||||||
Weighted average number of shares outstanding | 622,226 | 744,568 | 622,277 | 767,957 | ||||||||||
Net income | $ | 1,287,996 | $ | 1,287,996 | $ | 1,462,752 | $ | 1,462,752 | ||||||
Deduct: convertible preferred stock dividends (2) | (49,177 | ) | — | (59,291 | ) | — | ||||||||
Net income available to common shareholders | $ | 1,238,819 | $ | 1,287,996 | $ | 1,403,461 | $ | 1,462,752 | ||||||
Net earnings per share available to common shareholders | $ | 1.99 | $ | 1.73 | $ | 2.26 | $ | 1.9 | ||||||
(1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock deemed to be dilutive. | ||||||||||||||
(2) Diluted earnings per share calculation excludes dividends for convertible preferred stock deemed to be dilutive, as those amounts are assumed to have been converted to common stock of the Company. |
EQUITYBASED_INCENTIVE_AWARDS_T
EQUITY-BASED INCENTIVE AWARDS (Tables) | 3 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
EQUITY-BASED INCENTIVE AWARDS | ' | |||||||||||||||
Schedule of stock options issued and outstanding by grant year | ' | |||||||||||||||
Stock options issued and outstanding at December 2013 are summarized as follows: | ||||||||||||||||
Remaining | Exercisable | |||||||||||||||
Exercise | Number | Weighted-Average | Weighted-Average | Number | Weighted-Average | |||||||||||
Price | Outstanding | Contractual Life | Exercise Price | Exercisable | Exercise Price | |||||||||||
Fiscal 2007 | $18.00 | 25,000 | 2.95 years | $ | 18 | 25,000 | $ | 18 | ||||||||
Fiscal 2010 | $51.50 | 5,500 | 6.33 years | $ | 51.5 | 3,300 | $ | 51.5 | ||||||||
Fiscal 2012 | $53.80 - $65.97 | 6,500 | 7.84 years | $ | 54.74 | 2,500 | $ | 54.29 | ||||||||
Fiscal 2013 | $62.33 | 8,000 | 8.82 years | $ | 62.33 | 1,600 | $ | 62.33 | ||||||||
45,000 | $ | 35.28 | 32,400 | $ | 26.4 | |||||||||||
Schedule of nonvested restricted stock units | ' | |||||||||||||||
Restricted Stock | Restricted Stock | Restricted Stock | ||||||||||||||
Units(1) | Units(2) | Units(3) | ||||||||||||||
Date of award: | 26-Oct-11 | 23-Oct-12 | 22-Oct-13 | |||||||||||||
Original number of awards issued: | 15,900 | 15,000 | 17,900 | |||||||||||||
Service period: | 36 months | 36 months | 36-60 months | |||||||||||||
Estimated fair value of award at grant date | $ | 855,000 | $ | 935,000 | $ | 1,486,000 | ||||||||||
Awards outstanding at December 2013 | 5,300 | 10,000 | 17,900 | |||||||||||||
Fair value of non-vested awards at December 2013: | $ | 424,000 | $ | 799,000 | $ | 1,431,000 | ||||||||||
(1) 10,600 of the restricted stock units were vested as of December 2013. The remaining 5,300 restricted stock units will vest on October 25, 2014. | ||||||||||||||||
(2) 5,000 of the restricted stock units were vested as of December 2013. The remaining 10,000 restricted stock units will vest in equal amounts on October 23, 2014 and October 23, 2015. | ||||||||||||||||
(3) 14,000 restricted stock units will vest in equal amounts on October 22, 2014, October 22, 2015, and October 22, 2016. The remaining 3,900 restricted stock units will vest in equal amounts on October 22, 2014, October 22, 2015, October 22, 2016, October 22, 2017, and October 22, 2018. | ||||||||||||||||
Summary of restricted stock unit activity | ' | |||||||||||||||
Number | Weighted | |||||||||||||||
of | Average | |||||||||||||||
Shares | Fair Value | |||||||||||||||
Nonvested restricted stock units at September 2013 | 29,600 | $ | 81.89 | |||||||||||||
Granted | 17,900 | 83.03 | ||||||||||||||
Vested | (14,300 | ) | 80.68 | |||||||||||||
Expired | — | — | ||||||||||||||
Nonvested restricted stock units at December 2013 | 33,200 | $ | 79.93 |
BUSINESS_SEGMENTS_Tables
BUSINESS SEGMENTS (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
BUSINESS SEGMENTS | ' | |||||||||||||
Schedule of segment information | ' | |||||||||||||
Wholesale | Retail | Other | Consolidated | |||||||||||
Segment | Segment | |||||||||||||
THREE MONTHS ENDED DECEMBER 2013: | ||||||||||||||
External revenue: | ||||||||||||||
Cigarettes | $ | 221,151,811 | $ | — | $ | — | $ | 221,151,811 | ||||||
Confectionery | 18,203,191 | — | — | 18,203,191 | ||||||||||
Health food | — | 8,523,278 | — | 8,523,278 | ||||||||||
Tobacco, food service & other | 57,747,277 | — | — | 57,747,277 | ||||||||||
Total external revenue | 297,102,279 | 8,523,278 | — | 305,625,557 | ||||||||||
Depreciation | 403,342 | 128,510 | 938 | 532,790 | ||||||||||
Amortization | 91,250 | — | — | 91,250 | ||||||||||
Operating income (loss) | 3,795,962 | 52,190 | (1,323,392 | ) | 2,524,760 | |||||||||
Interest expense | 43,797 | 60,776 | 197,422 | 301,995 | ||||||||||
Income (loss) from operations before taxes | 3,759,523 | (3,628 | ) | (1,502,899 | ) | 2,252,996 | ||||||||
Total assets | 103,144,703 | 13,564,621 | 206,413 | 116,915,737 | ||||||||||
Capital expenditures | 918,542 | 67,136 | — | 985,678 | ||||||||||
THREE MONTHS ENDED DECEMBER 2012: | ||||||||||||||
External revenue: | ||||||||||||||
Cigarettes | $ | 221,730,182 | $ | — | $ | — | $ | 221,730,182 | ||||||
Confectionery | 17,956,072 | — | — | 17,956,072 | ||||||||||
Health food | — | 8,704,643 | — | 8,704,643 | ||||||||||
Tobacco, food service & other | 53,827,424 | — | — | 53,827,424 | ||||||||||
Total external revenue | 293,513,678 | 8,704,643 | — | 302,218,321 | ||||||||||
Depreciation | 408,743 | 92,932 | 937 | 502,612 | ||||||||||
Amortization | 91,250 | — | — | 91,250 | ||||||||||
Operating income (loss) | 3,802,737 | 371,798 | (1,387,080 | ) | 2,787,455 | |||||||||
Interest expense | 55,132 | 58,968 | 201,952 | 316,052 | ||||||||||
Income (loss) from operations before taxes | 3,753,457 | 317,770 | (1,538,475 | ) | 2,532,752 | |||||||||
Total assets | 103,284,807 | 12,358,555 | 187,260 | 115,830,622 | ||||||||||
Capital expenditures | 293,650 | 36,578 | — | 330,228 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
In Billions, unless otherwise specified | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
item | Wholesale distribution business | Wholesale distribution business | Retail stores | Retail stores | Retail stores | Retail stores | |
item | item | item | Florida | Midwest | |||
sqft | item | item | |||||
Business segment | ' | ' | ' | ' | ' | ' | ' |
Number of business segments | 2 | ' | ' | ' | ' | ' | ' |
Company operations | ' | ' | ' | ' | ' | ' | ' |
Number of operating health food retail stores | ' | ' | ' | 16 | ' | 6 | 10 |
Number of retail outlets served | ' | ' | 4,500 | ' | ' | ' | ' |
Number of products sold or distributed | ' | ' | 16,000 | 32,000 | ' | ' | ' |
Rank assigned by Convenience Store News | ' | 7 | ' | ' | ' | ' | ' |
Number of distribution centers | ' | ' | 6 | ' | ' | ' | ' |
Floor space occupied by distribution centers (in square feet) | ' | ' | 602,000 | ' | ' | ' | ' |
Sales increase in natural foods industry according to The Natural Foods Merchandiser | ' | ' | ' | ' | $80 | ' | ' |
CONVERTIBLE_PREFERRED_STOCK_De
CONVERTIBLE PREFERRED STOCK (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Sep. 30, 2013 | |
CONVERTIBLE PREFERRED STOCK | ' | ' |
Number of series of convertible preferred stock outstanding | 2 | ' |
Series A | ' | ' |
Convertible preferred stock | ' | ' |
Par value (gross proceeds): | $2,500,000 | ' |
Number of shares outstanding | 100,000 | 100,000 |
Liquidation preference per share: | $25 | ' |
Conversion price per share: | $30.31 | ' |
Number of common shares in which to be converted: | 82,481 | ' |
Dividend rate: (as a percent) | 6.79% | ' |
Numerator of the multiplier used to calculate number of common shares in which the preferred stock are convertible | 25 | ' |
Redemption price as a percentage of liquidation preference | 112.00% | ' |
Annual percentage decrease in redemption price until the redemption price equals the liquidation preference | 1.00% | ' |
Series B | ' | ' |
Convertible preferred stock | ' | ' |
Par value (gross proceeds): | 400,000 | ' |
Number of shares outstanding | 16,000 | 16,000 |
Liquidation preference per share: | $25 | ' |
Conversion price per share: | $24.65 | ' |
Number of common shares in which to be converted: | 16,227 | ' |
Dividend rate: (as a percent) | 6.37% | ' |
Numerator of the multiplier used to calculate number of common shares in which the preferred stock are convertible | $25 | ' |
Redemption price as a percentage of liquidation preference | 112.00% | ' |
Annual percentage decrease in redemption price until the redemption price equals the liquidation preference | 1.00% | ' |
Number of directors who can be elected by an institutional investor, pursuant to the voting rights in the certificate of designation | 1 | ' |
Series B | Chief Executive Officer | ' | ' |
Convertible preferred stock | ' | ' |
Closely held shares of Series B Preferred Stock | 8,000 | ' |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | ||
INVENTORIES | ' | ' |
Total reserves on finished goods | $0.90 | $0.80 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
Goodwill by reporting segment | ' | ' |
Goodwill | $6,349,827 | $6,349,827 |
Wholesale Segment | ' | ' |
Goodwill by reporting segment | ' | ' |
Goodwill | 4,436,950 | 4,436,950 |
Retail Segment | ' | ' |
Goodwill by reporting segment | ' | ' |
Goodwill | $1,912,877 | $1,912,877 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
Other intangible assets | ' | ' | ' |
Other intangible assets, net | $4,729,728 | ' | $4,820,978 |
Amortization expense related to identifiable intangible assets | 100,000 | 100,000 | ' |
Non-competition agreement | ' | ' | ' |
Other intangible assets | ' | ' | ' |
Other intangible assets, net | 241,667 | ' | 266,667 |
Accumulated amortization | 300,000 | ' | 200,000 |
Amortization period | '5 years | ' | ' |
Customer relationships | ' | ' | ' |
Other intangible assets | ' | ' | ' |
Other intangible assets, net | 1,114,792 | ' | 1,181,042 |
Accumulated amortization | 1,000,000 | ' | 900,000 |
Amortization period | '8 years | ' | ' |
Trademarks and tradenames | ' | ' | ' |
Other intangible assets | ' | ' | ' |
Other intangible assets, net | $3,373,269 | ' | $3,373,269 |
GOODWILL_AND_OTHER_INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) (USD $) | Dec. 31, 2013 |
Estimated future amortization expense related to identifiable intangible assets with finite lives | ' |
Fiscal 2014 | $273,750 |
Fiscal 2015 | 365,000 |
Fiscal 2016 | 331,667 |
Fiscal 2017 | 265,000 |
Fiscal 2018 | 79,375 |
Thereafter | 41,667 |
Total | $1,356,459 |
DIVIDENDS_Details
DIVIDENDS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
DIVIDENDS | ' | ' |
Cash dividends paid on common stock and convertible preferred stock issuances | $0.20 | $0.20 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
EARNINGS PER SHARE | ' | ' |
Weighted average common shares outstanding, Basic | 622,226 | 622,277 |
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock | 122,342 | 145,680 |
Weighted average number of shares outstanding, Diluted | 744,568 | 767,957 |
Net income | $1,287,996 | $1,462,752 |
Deduct: convertible preferred stock dividends | -49,177 | -59,291 |
Net income available to common shareholders | 1,238,819 | 1,403,461 |
Net income available to common shareholders, diluted | $1,287,996 | $1,462,752 |
Net earnings per share available to common shareholders, Basic (in dollars per share) | $1.99 | $2.26 |
Net earnings per share available to common shareholders, Diluted (in dollars per share) | $1.73 | $1.90 |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Other | ' |
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | $0.40 |
Facility | ' |
Revolving credit facility | ' |
Revolving credit limit | 70 |
Increase in borrowing capacity available under loan accordion | 25 |
Additional credit advances for certain inventory purchases | $10 |
Automatic renewal period of agreement unless terminated | '1 year |
Unused commitment fee (as a percent) | 0.25% |
Period considered for computing fixed charge coverage ratio | '12 months |
Threshold of excess availability of credit as a percentage of maximum loan limit, required for financial covenant compliance | 10.00% |
Facility | LIBOR | ' |
Revolving credit facility | ' |
Variable rate basis | 'LIBOR |
Facility | Prime rate | ' |
Revolving credit facility | ' |
Variable rate basis | 'Prime rate |
Facility | Minimum | ' |
Revolving credit facility | ' |
Notice period prior to the end of any original or renewal term of the agreement required for terminating the agreement either by the borrower or lender | '90 days |
Fixed charge coverage ratio | 1 |
Fixed charge coverage ratio required to be maintained immediately after giving effect to any such dividend or distribution payments | 1.1 |
Facility | Minimum | LIBOR | ' |
Revolving credit facility | ' |
Basis points added to reference rate (as a percent) | 1.25% |
Facility | Maximum | ' |
Revolving credit facility | ' |
Restricted amount of dividends on common stock (in dollars per share) | $1 |
Facility | Maximum | LIBOR | ' |
Revolving credit facility | ' |
Basis points added to reference rate (as a percent) | 1.75% |
EQUITYBASED_INCENTIVE_AWARDS_D
EQUITY-BASED INCENTIVE AWARDS (Details) (USD $) | 3 Months Ended |
Dec. 31, 2013 | |
EQUITY-BASED INCENTIVE AWARDS | ' |
Number of shares of the company's common stock permitted for issuance under the plan | 150,000 |
Number of shares awarded pursuant to the plan | 147,700 |
Number of shares that may be awarded under the plan | 2,300 |
Stock Options | ' |
Omnibus plan and stock option activity | ' |
Expiration period | '10 years |
Stock options issued and outstanding | ' |
Number Outstanding (in shares) | 45,000 |
Weighted-Average Exercise Price (in dollars per share) | $35.28 |
Number Exercisable (in shares) | 32,400 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $26.40 |
Stock Options | Minimum | ' |
Omnibus plan and stock option activity | ' |
Vesting period | '3 years |
Stock Options | Maximum | ' |
Omnibus plan and stock option activity | ' |
Vesting period | '5 years |
Stock Options | Fiscal 2007 | ' |
Stock options issued and outstanding | ' |
Number Outstanding (in shares) | 25,000 |
Remaining Weighted-Average Contractual Life | '2 years 11 months 12 days |
Weighted-Average Exercise Price (in dollars per share) | $18 |
Number Exercisable (in shares) | 25,000 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $18 |
Stock Options | Fiscal 2010 | ' |
Stock options issued and outstanding | ' |
Number Outstanding (in shares) | 5,500 |
Remaining Weighted-Average Contractual Life | '6 years 3 months 29 days |
Weighted-Average Exercise Price (in dollars per share) | $51.50 |
Number Exercisable (in shares) | 3,300 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $51.50 |
Stock Options | Fiscal 2012 | ' |
Stock options issued and outstanding | ' |
Number Outstanding (in shares) | 6,500 |
Remaining Weighted-Average Contractual Life | '7 years 10 months 2 days |
Weighted-Average Exercise Price (in dollars per share) | $54.74 |
Number Exercisable (in shares) | 2,500 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $54.29 |
Stock Options | Fiscal 2012 | Minimum | ' |
Stock options issued and outstanding | ' |
Weighted-Average Exercise Price (in dollars per share) | $53.80 |
Stock Options | Fiscal 2012 | Maximum | ' |
Stock options issued and outstanding | ' |
Weighted-Average Exercise Price (in dollars per share) | $65.97 |
Stock Options | Fiscal 2013 | ' |
Stock options issued and outstanding | ' |
Number Outstanding (in shares) | 8,000 |
Remaining Weighted-Average Contractual Life | '8 years 9 months 25 days |
Weighted-Average Exercise Price (in dollars per share) | $62.33 |
Number Exercisable (in shares) | 1,600 |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $62.33 |
EQUITYBASED_INCENTIVE_AWARDS_D1
EQUITY-BASED INCENTIVE AWARDS (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Oct. 26, 2011 | Dec. 31, 2013 | Oct. 23, 2012 | Dec. 31, 2013 | Oct. 22, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 22, 2013 | Oct. 22, 2013 | |
Restricted Stock Units | Restricted Stock Units 1 | Restricted Stock Units 1 | Restricted Stock Units 2 | Restricted Stock Units 2 | Restricted Stock Units 3 | Restricted Stock Units 3 | Restricted Stock Units 3 | Restricted Stock Units 3 | Restricted Stock Units 3 | Restricted Stock Units 3 | |||
Vesting of awards equally in three anniversaries from the date of grant | Vesting of awards equally in five anniversaries from the date of grant | Minimum | Maximum | ||||||||||
Restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service period | ' | ' | ' | '36 months | ' | '36 months | ' | ' | ' | ' | ' | '36 months | '60 months |
Estimated fair value of award at grant date | ' | ' | ' | $855,000 | ' | $935,000 | ' | $1,486,000 | ' | ' | ' | ' | ' |
Award outstanding at the end of the period (in shares) | ' | ' | 33,200 | ' | 5,300 | ' | 10,000 | ' | 17,900 | 14,000 | 3,900 | ' | ' |
Fair value of non-vested awards at the end of the period | ' | ' | ' | ' | 424,000 | ' | 799,000 | ' | 1,431,000 | ' | ' | ' | ' |
Vested as of the balance sheet date (in shares) | ' | ' | ' | ' | 10,600 | ' | 5,000 | ' | ' | ' | ' | ' | ' |
Direct cost to the recipients of the restricted stock units | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonvested restricted stock units at the beginning of the period (in shares) | ' | ' | 29,600 | ' | 5,300 | ' | 10,000 | ' | 17,900 | 14,000 | 3,900 | ' | ' |
Granted (in shares) | ' | ' | 17,900 | 15,900 | ' | 15,000 | ' | 17,900 | ' | ' | ' | ' | ' |
Vested (in shares) | ' | ' | -14,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonvested restricted stock units at the end of the period (in shares) | ' | ' | 33,200 | ' | 5,300 | ' | 10,000 | ' | 17,900 | 14,000 | 3,900 | ' | ' |
Weighted Average Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonvested restricted stock units at the beginning of the period (in dollars per share) | ' | ' | $81.89 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $83.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in dollars per share) | ' | ' | $80.68 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonvested restricted stock units at the end of the period (in dollars per share) | ' | ' | $79.93 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
All Equity-Based Awards (stock options and restricted stock units) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unamortized compensation expense | 300,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation expense related to the amortization of all equity - based compensation awards | $2,500,000 | $1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
BUSINESS_SEGMENTS_Details
BUSINESS SEGMENTS (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
item | |||
BUSINESS SEGMENTS | ' | ' | ' |
Number of reportable business segments | 2 | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | $305,625,557 | $302,218,321 | ' |
Depreciation | 532,790 | 502,612 | ' |
Amortization | 91,250 | 91,250 | ' |
Operating income (loss) | 2,524,760 | 2,787,455 | ' |
Interest expense | 301,995 | 316,052 | ' |
Income (loss) from operations before taxes | 2,252,996 | 2,532,752 | ' |
Total assets | 116,915,737 | 115,830,622 | 106,374,899 |
Capital expenditures | 985,678 | 330,228 | ' |
Cigarettes | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 221,151,811 | 221,730,182 | ' |
Confectionery | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 18,203,191 | 17,956,072 | ' |
Health food | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 8,523,278 | 8,704,643 | ' |
Tobacco, food service & other | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 57,747,277 | 53,827,424 | ' |
Wholesale Segment | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 297,102,279 | 293,513,678 | ' |
Wholesale Segment | Cigarettes | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 221,151,811 | 221,730,182 | ' |
Wholesale Segment | Confectionery | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 18,203,191 | 17,956,072 | ' |
Wholesale Segment | Tobacco, food service & other | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 57,747,277 | 53,827,424 | ' |
Retail Segment | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 8,523,278 | 8,704,643 | ' |
Retail Segment | Health food | ' | ' | ' |
Information by business segments | ' | ' | ' |
Total external revenue | 8,523,278 | 8,704,643 | ' |
Operating Segments | Wholesale Segment | ' | ' | ' |
Information by business segments | ' | ' | ' |
Depreciation | 403,342 | 408,743 | ' |
Amortization | 91,250 | 91,250 | ' |
Operating income (loss) | 3,795,962 | 3,802,737 | ' |
Interest expense | 43,797 | 55,132 | ' |
Income (loss) from operations before taxes | 3,759,523 | 3,753,457 | ' |
Total assets | 103,144,703 | 103,284,807 | ' |
Capital expenditures | 918,542 | 293,650 | ' |
Operating Segments | Retail Segment | ' | ' | ' |
Information by business segments | ' | ' | ' |
Depreciation | 128,510 | 92,932 | ' |
Operating income (loss) | 52,190 | 371,798 | ' |
Interest expense | 60,776 | 58,968 | ' |
Income (loss) from operations before taxes | -3,628 | 317,770 | ' |
Total assets | 13,564,621 | 12,358,555 | ' |
Capital expenditures | 67,136 | 36,578 | ' |
Other | ' | ' | ' |
Information by business segments | ' | ' | ' |
Depreciation | 938 | 937 | ' |
Operating income (loss) | -1,323,392 | -1,387,080 | ' |
Interest expense | 197,422 | 201,952 | ' |
Income (loss) from operations before taxes | -1,502,899 | -1,538,475 | ' |
Total assets | $206,413 | $187,260 | ' |
COMMON_STOCK_REPURCHASE_Detail
COMMON STOCK REPURCHASE (Details) (Common Stock, USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 |
REPURCHASE OF COMMON STOCK | ' |
Shares repurchased | 25,057 |
Value of shares repurchased | $1.90 |
Maximum | ' |
REPURCHASE OF COMMON STOCK | ' |
Number of shares of common stock authorized to be repurchased | 50,000 |