AMCON Distributing (DIT) 10-Q 18 Apr 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	Apr. 17, 2017
Document and Entity Information
Entity Registrant Name	AMCON DISTRIBUTING CO
Entity Central Index Key	928,465
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
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		678,938
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Current assets:
Cash	$ 248,760	$ 605,380
Accounts receivable, less allowance for doubtful accounts of $0.7 million at March 2017 and $0.7 million at September 2016	27,737,863	30,033,104
Inventories, net	45,707,269	48,404,882
Deferred income taxes	1,182,299	1,441,919
Income taxes receivable	282,435	164,959
Prepaid and other current assets	7,829,685	8,608,049
Total current assets	82,988,311	89,258,293
Property and equipment, net	12,373,290	12,607,877
Goodwill	6,349,827	6,349,827
Other intangible assets, net	3,626,812	3,759,311
Other assets	340,936	288,082
Total assets	105,679,176	112,263,390
Current liabilities:
Accounts payable	17,255,595	18,164,983
Accrued expenses	6,299,199	6,792,884
Accrued wages, salaries and bonuses	2,653,577	3,580,996
Current maturities of long-term debt	367,982	362,495
Total current liabilities	26,576,353	28,901,358
Credit facility	5,102,578	10,537,226
Deferred income taxes	4,080,631	4,021,569
Long-term debt, less current maturities	2,836,070	3,021,824
Other long-term liabilities	32,123	30,815
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized
Common stock, $.01 par value, 3,000,000 shares authorized, 678,938 shares outstanding and issued at March 2017 and 677,057 shares outstanding and issued at September 2016	8,314	8,184
Additional paid-in capital	20,782,045	19,525,554
Retained earnings	59,775,503	58,693,241
Treasury stock at cost	(13,514,441)	(12,476,381)
Total shareholders' equity	67,051,421	65,750,598
Total liabilities and shareholders' equity	$ 105,679,176	$ 112,263,390

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2017	Sep. 30, 2016
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 0.7	$ 0.7
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
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	678,938	677,057
Common stock, shares issued	678,938	677,057

Condensed Consolidated Unaudite

Condensed Consolidated Unaudited Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidated Unaudited Statements of Operations
Sales (including excise taxes of $85.7 million and $88.7 million, and $176.7 million and $186.0 million, respectively)	$ 294,047,870	$ 296,449,126	$ 604,152,099	$ 618,457,375
Cost of sales	276,573,968	278,908,888	568,362,211	581,955,233
Gross profit	17,473,902	17,540,238	35,789,888	36,502,142
Selling, general and administrative expenses	15,820,504	14,770,358	31,518,823	30,615,492
Depreciation and amortization	529,969	575,681	1,056,402	1,142,630
Total operating expenses	16,350,473	15,346,039	32,575,225	31,758,122
Operating income	1,123,429	2,194,199	3,214,663	4,744,020
Other expense (income):
Interest expense	147,910	161,402	365,453	373,856
Other (income), net	(14,964)	(35,827)	(20,737)	(63,082)
Total other expenses (income)	132,946	125,575	344,716	310,774
Income from operations before income tax expense	990,483	2,068,624	2,869,947	4,433,246
Income tax expense	502,000	922,000	1,335,000	1,931,000
Net income	488,483	1,146,624	1,534,947	2,502,246
Preferred stock dividend requirements		(48,643)		(97,820)
Net income available to common shareholders	$ 488,483	$ 1,097,981	$ 1,534,947	$ 2,404,426
Basic earnings per share available to common shareholders (in dollars per share)	$ 0.72	$ 1.81	$ 2.26	$ 3.90
Diluted earnings per share available to common shareholders (in dollars per share)	$ 0.71	$ 1.61	$ 2.22	$ 3.46
Basic weighted average shares outstanding (in shares)	678,938	606,080	680,318	615,768
Diluted weighted average shares outstanding (in shares)	688,016	712,547	690,190	723,317
Dividends declared per common share	$ 0.46	$ 0.46	$ 0.64	$ 0.64
Dividends paid per common share	$ 0.46	$ 0.46	$ 0.64	$ 0.64

Condensed Consolidated Unaudit5

Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidated Unaudited Statements of Operations
Sales, excise taxes	$ 85.7	$ 88.7	$ 176.7	$ 186

Condensed Consolidated Unaudit6

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

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION	6 Months Ended
	Mar. 31, 2017
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 and provides a full range of programs and services to our customers and is focused on helping them manage their business and increase their profitability. We primarily operate in the Central, Rocky Mountain, and Southern regions of the United States. · 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 4,000 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. Convenience stores represent our largest customer category. In September 2016, Convenience Store News ranked us as the seventh (7th) largest convenience store distributor in the United States based on annual sales. Our wholesale business offers retailers the ability to take advantage of manufacturer and Company sponsored sales and marketing programs, merchandising and product category management services, and the use of information systems and data services that are focused on minimizing retailers’ investment in inventory, while seeking to maximize their sales and profits. In addition, our wholesale distributing capabilities provide valuable services to both manufacturers of consumer products and convenience retailers. Manufacturers benefit from our broad retail coverage, inventory management, efficiency in processing small orders, and frequency of deliveries. Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, optimizing inventory, merchandising expertise, information systems, and accessing trade credit. 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 641,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kelloggs, Kraft, and Mars. We also market private label lines of water, candy products, batteries, and other products. We do not maintain any long-term purchase contracts with our 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 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. 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, 2016, 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 March 31, 2017 and March 31, 2016 have been referred to throughout this quarterly report as Q2 2017 and Q2 2016, respectively. The fiscal balance sheet dates as of March 31, 2017 and September 30, 2016 have been referred to as March 2017 and September 2016, respectively. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"). ASU 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail inventory method. This ASU is effective for fiscal years beginning after December 15, 2016 (Fiscal 2018 for the Company). The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In November 2015, FASB issued ASU No. 2015-17 "Income Taxes: Balance Sheet Classification of Deferred Taxes” ("ASU 2015-17"). ASU 2015-17 eliminates the requirement to bifurcate deferred taxes between current and non-current on the balance sheet and requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public entities in fiscal years beginning after December 15, 2016 (Fiscal 2018 for the Company), and for interim periods within those fiscal years. The amendments for ASU 2015-17 can be applied retrospectively or prospectively and early adoption is permitted. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of how companies account for share-based compensation, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statements of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 (Fiscal 2018 for the Company) and early adoption is permitted. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This ASU and related amendments supersedes the revenue recognition requirements in "Accounting Standard Codification 605 - Revenue Recognition" and most industry-specific guidance. The standard requires that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2017 (Fiscal 2019 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 provides guidance regarding the classification of certain items within the statements of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017 (Fiscal 2019 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02 "Leases” ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (Fiscal 2020 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The new guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. ASU 2017-04 requires prospective application and is effective for annual periods beginning after December 15, 2019 (Fiscal 2021 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements.

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK	6 Months Ended
	Mar. 31, 2017
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK	2. CONVERTIBLE PREFERRED STOCK In fiscal 2016, the Company had 100,000 shares of Series A Preferred Stock (“Series A”) and 16,000 shares of Series B Preferred Stock (“Series B”) outstanding. During the fourth quarter of fiscal 2016, all outstanding shares of Series A and Series B were converted to 98,707 common shares of the Company pursuant to terms provided in the preferred stock agreements. Mr. Christopher Atayan, AMCON’s Chief Executive Officer and Chairman of the Board, owned all of the outstanding shares of the Series A and 8,000 shares of the Series B. For the six month period ending March 2016, the Company paid cash dividends of approximately $0.1 million to Mr. Atayan related to his ownership of the Series A and Series B.

INVENTORIES

INVENTORIES	6 Months Ended
	Mar. 31, 2017
INVENTORIES
INVENTORIES	3. INVENTORIES At March 2017 and September 2016, inventories consisted of finished goods and are stated at the lower of cost (determined on a FIFO basis for our wholesale segment and using the retail method for our retail segment) 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 at both March 2017 and September 2016. These reserves include the Company’s obsolescence allowance, which reflects estimated unsalable or non-refundable inventory based upon an evaluation of slow moving and discontinued products.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	6 Months Ended
	Mar. 31, 2017
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: March September 2017 2016 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: March September 2017 2016 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $1.9 million and $1.7 million at March 2017 and September 2016, respectively) 253,543 386,042 $ 3,626,812 $ 3,759,311 Goodwill, trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. At March 2017, identifiable intangible assets considered to have finite lives were represented by customer relationships which are being amortized over eight years. These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to these assets was approximately $0.1 million for both the three and six month periods ended March 2017, respectively, and $0.1 million and $0.2 million for the three and six month periods ended March 2016, respectively. Estimated future amortization expense related to identifiable intangible assets with finite lives is as follows at March 2017: March 2017 Fiscal 2017 (1) $ 132,501 Fiscal 2018 79,375 Fiscal 2019 41,667 $ 253,543 (1) Represents amortization for the remaining six months of Fiscal 2017.

DIVIDENDS

DIVIDENDS	6 Months Ended
	Mar. 31, 2017
DIVIDENDS
DIVIDENDS	5. DIVIDENDS The Company paid cash dividends on its common stock and convertible preferred stock totaling $0.3 million and $0.5 million for the three and six month periods ended March 2017, respectively, and $0.2 million and $0.5 million for the three and six month periods ended March 2016, respectively.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Mar. 31, 2017
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 March 2017 2016 Basic Diluted Basic Diluted Weighted average common shares outstanding 678,938 678,938 606,080 606,080 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 9,078 — 106,467 Weighted average number of shares outstanding 678,938 688,016 606,080 712,547 Net income $ 488,483 $ 488,483 $ 1,146,624 $ 1,146,624 Deduct: convertible preferred stock dividends (2) — — (48,643) — Net income available to common shareholders $ 488,483 $ 488,483 $ 1,097,981 $ 1,146,624 Net earnings per share available to common shareholders $ 0.72 $ 0.71 $ 1.81 $ 1.61 (1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock units 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. For the six months ended March 2017 2016 Basic Diluted Basic Diluted Weighted average common shares outstanding 680,318 680,318 615,768 615,768 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 9,872 — 107,549 Weighted average number of shares outstanding 680,318 690,190 615,768 723,317 Net income $ 1,534,947 $ 1,534,947 $ 2,502,246 $ 2,502,246 Deduct: convertible preferred stock dividends (2) — — (97,820) — Net income available to common shareholders $ 1,534,947 $ 1,534,947 $ 2,404,426 $ 2,502,246 Net earnings per share available to common shareholders $ 2.26 $ 2.22 $ 3.90 $ 3.46 (1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock units 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	6 Months Ended
	Mar. 31, 2017
DEBT
DEBT	7. DEBT The Company primarily finances its operations through a credit facility agreement (the “Facility”) and long-term debt agreements with banks. The Facility is provided through Bank of America acting as the senior agent and with BMO Harris Bank participating in a loan syndication. The Facility included the following significant terms at March 2017: · 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. The Company’s availability has not fallen below 10% of the maximum loan limit and the Company’s fixed charge ratio is over 1.0. · 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 owns real estate in Bismarck, ND, Quincy, IL, and Rapid City, SD, which is financed through a single term loan with BMO Harris Bank (the “Real Estate Loan”) which is also a participant lender on the Company’s revolving line of credit. The Real Estate Loan contains cross default provisions which cause the loan 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 March 2017. In addition, the Real Estate Loan contains 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.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	6 Months Ended
	Mar. 31, 2017
BUSINESS SEGMENTS
BUSINESS SEGMENTS	8. BUSINESS SEGMENTS The Company 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, and income before taxes. Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED MARCH 2017 External revenues: Cigarettes $ 209,646,918 $ — $ — $ 209,646,918 Tobacco 37,371,108 — — 37,371,108 Confectionery 17,980,905 — — 17,980,905 Health food — 6,718,058 — 6,718,058 Foodservice & other 22,330,881 — — 22,330,881 Total external revenue 287,329,812 6,718,058 — 294,047,870 Depreciation 346,264 117,456 — 463,720 Amortization 66,249 — — 66,249 Operating income (loss) 2,737,099 (209,189) (1,404,481) 1,123,429 Interest expense 25,428 — 122,482 147,910 Income (loss) from operations before taxes 2,722,619 (205,173) (1,526,963) 990,483 Total assets 91,608,744 13,989,794 80,638 105,679,176 Capital expenditures 153,469 283,648 — 437,117 THREE MONTHS ENDED MARCH 2016 External revenue: Cigarettes $ 211,638,962 $ — $ — $ 211,638,962 Tobacco 35,756,254 — — 35,756,254 Confectionery 19,045,686 — — 19,045,686 Health food — 7,537,713 — 7,537,713 Foodservice & other 22,470,511 — — 22,470,511 Total external revenue 288,911,413 7,537,713 — 296,449,126 Depreciation 367,530 116,901 — 484,431 Amortization 91,250 — — 91,250 Operating income (loss) 3,073,641 474,545 (1,353,987) 2,194,199 Interest expense 29,368 — 132,034 161,402 Income (loss) from operations before taxes 3,075,629 479,017 (1,486,022) 2,068,624 Total assets 101,775,492 12,554,229 221,537 114,551,258 Capital expenditures 255,324 75,513 — 330,837 Wholesale Retail Segment Segment Other Consolidated SIX MONTHS ENDED MARCH 2017 External revenue: Cigarettes $ 431,415,941 $ — $ — $ 431,415,941 Tobacco 76,056,934 — — 76,056,934 Confectionery 36,581,352 — — 36,581,352 Health food — 12,957,362 — 12,957,362 Foodservice & other 47,140,510 — — 47,140,510 Total external revenue 591,194,737 12,957,362 — 604,152,099 Depreciation 688,938 234,965 — 923,903 Amortization 132,499 — — 132,499 Operating income (loss) 6,705,891 (507,675) (2,983,553) 3,214,663 Interest expense 51,821 — 313,632 365,453 Income (loss) from operations before taxes 6,666,521 (499,388) (3,297,186) 2,869,947 Total assets 91,608,744 13,989,794 80,638 105,679,176 Capital expenditures 320,244 517,651 — 837,895 SIX MONTHS ENDED MARCH 2016 External revenue: Cigarettes $ 443,592,290 $ — $ — $ 443,592,290 Tobacco 73,384,745 73,384,745 Confectionery 38,891,522 — — 38,891,522 Health food — 14,811,831 — 14,811,831 Foodservice & other 47,776,987 — — 47,776,987 Total external revenue 603,645,544 14,811,831 — 618,457,375 Depreciation 726,097 234,033 — 960,130 Amortization 182,500 — — 182,500 Operating income (loss) 6,922,793 538,670 (2,717,443) 4,744,020 Interest expense 59,400 — 314,456 373,856 Income (loss) from operations before taxes 6,917,371 547,775 (3,031,900) 4,433,246 Total assets 101,775,492 12,554,229 221,537 114,551,258 Capital expenditures 581,877 110,525 — 692,402

COMMON STOCK REPURCHASE

COMMON STOCK REPURCHASE	6 Months Ended
	Mar. 31, 2017
COMMON STOCK REPURCHASE
COMMON STOCK REPURCHASE	9. COMMON STOCK REPURCHASE For the six months ended March 2017, the Company had repurchased 11,104 shares of its common stock for cash totaling approximately $1.0 million. All repurchased shares are recorded in treasury stock at cost. No shares of the Company’s common stock were repurchased during Q2 2017.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Mar. 31, 2017
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 4,000 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. Convenience stores represent our largest customer category. In September 2016, Convenience Store News ranked us as the seventh (7th) largest convenience store distributor in the United States based on annual sales. Our wholesale business offers retailers the ability to take advantage of manufacturer and Company sponsored sales and marketing programs, merchandising and product category management services, and the use of information systems and data services that are focused on minimizing retailers’ investment in inventory, while seeking to maximize their sales and profits. In addition, our wholesale distributing capabilities provide valuable services to both manufacturers of consumer products and convenience retailers. Manufacturers benefit from our broad retail coverage, inventory management, efficiency in processing small orders, and frequency of deliveries. Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, optimizing inventory, merchandising expertise, information systems, and accessing trade credit. 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 641,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kelloggs, Kraft, and Mars. We also market private label lines of water, candy products, batteries, and other products. We do not maintain any long-term purchase contracts with our 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 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. 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, 2016, 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 March 31, 2017 and March 31, 2016 have been referred to throughout this quarterly report as Q2 2017 and Q2 2016, respectively. The fiscal balance sheet dates as of March 31, 2017 and September 30, 2016 have been referred to as March 2017 and September 2016, respectively.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, "Simplifying the Measurement of Inventory" ("ASU 2015-11"). ASU 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail inventory method. This ASU is effective for fiscal years beginning after December 15, 2016 (Fiscal 2018 for the Company). The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In November 2015, FASB issued ASU No. 2015-17 "Income Taxes: Balance Sheet Classification of Deferred Taxes” ("ASU 2015-17"). ASU 2015-17 eliminates the requirement to bifurcate deferred taxes between current and non-current on the balance sheet and requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public entities in fiscal years beginning after December 15, 2016 (Fiscal 2018 for the Company), and for interim periods within those fiscal years. The amendments for ASU 2015-17 can be applied retrospectively or prospectively and early adoption is permitted. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of how companies account for share-based compensation, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statements of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 (Fiscal 2018 for the Company) and early adoption is permitted. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements. In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This ASU and related amendments supersedes the revenue recognition requirements in "Accounting Standard Codification 605 - Revenue Recognition" and most industry-specific guidance. The standard requires that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2017 (Fiscal 2019 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 provides guidance regarding the classification of certain items within the statements of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017 (Fiscal 2019 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02 "Leases” ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (Fiscal 2020 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The new guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. ASU 2017-04 requires prospective application and is effective for annual periods beginning after December 15, 2019 (Fiscal 2021 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements.

GOODWILL AND OTHER INTANGIBLE17

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	6 Months Ended
	Mar. 31, 2017
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of goodwill by reporting segment	March September 2017 2016 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	March September 2017 2016 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $1.9 million and $1.7 million at March 2017 and September 2016, respectively) 253,543 386,042 $ 3,626,812 $ 3,759,311
Schedule of estimated future amortization expense related to identifiable intangible assets with finite lives	March 2017 Fiscal 2017 (1) $ 132,501 Fiscal 2018 79,375 Fiscal 2019 41,667 $ 253,543 (1) Represents amortization for the remaining six months of Fiscal 2017.

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Mar. 31, 2017
EARNINGS PER SHARE
Schedule of net earnings per share available to common shareholders	For the three months ended March 2017 2016 Basic Diluted Basic Diluted Weighted average common shares outstanding 678,938 678,938 606,080 606,080 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 9,078 — 106,467 Weighted average number of shares outstanding 678,938 688,016 606,080 712,547 Net income $ 488,483 $ 488,483 $ 1,146,624 $ 1,146,624 Deduct: convertible preferred stock dividends (2) — — (48,643) — Net income available to common shareholders $ 488,483 $ 488,483 $ 1,097,981 $ 1,146,624 Net earnings per share available to common shareholders $ 0.72 $ 0.71 $ 1.81 $ 1.61 (1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock units 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. For the six months ended March 2017 2016 Basic Diluted Basic Diluted Weighted average common shares outstanding 680,318 680,318 615,768 615,768 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 9,872 — 107,549 Weighted average number of shares outstanding 680,318 690,190 615,768 723,317 Net income $ 1,534,947 $ 1,534,947 $ 2,502,246 $ 2,502,246 Deduct: convertible preferred stock dividends (2) — — (97,820) — Net income available to common shareholders $ 1,534,947 $ 1,534,947 $ 2,404,426 $ 2,502,246 Net earnings per share available to common shareholders $ 2.26 $ 2.22 $ 3.90 $ 3.46 (1) Diluted earnings per share calculation includes all stock options, convertible preferred stock, and restricted stock units 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.

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	6 Months Ended
	Mar. 31, 2017
BUSINESS SEGMENTS
Schedule of segment information	Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED MARCH 2017 External revenues: Cigarettes $ 209,646,918 $ — $ — $ 209,646,918 Tobacco 37,371,108 — — 37,371,108 Confectionery 17,980,905 — — 17,980,905 Health food — 6,718,058 — 6,718,058 Foodservice & other 22,330,881 — — 22,330,881 Total external revenue 287,329,812 6,718,058 — 294,047,870 Depreciation 346,264 117,456 — 463,720 Amortization 66,249 — — 66,249 Operating income (loss) 2,737,099 (209,189) (1,404,481) 1,123,429 Interest expense 25,428 — 122,482 147,910 Income (loss) from operations before taxes 2,722,619 (205,173) (1,526,963) 990,483 Total assets 91,608,744 13,989,794 80,638 105,679,176 Capital expenditures 153,469 283,648 — 437,117 THREE MONTHS ENDED MARCH 2016 External revenue: Cigarettes $ 211,638,962 $ — $ — $ 211,638,962 Tobacco 35,756,254 — — 35,756,254 Confectionery 19,045,686 — — 19,045,686 Health food — 7,537,713 — 7,537,713 Foodservice & other 22,470,511 — — 22,470,511 Total external revenue 288,911,413 7,537,713 — 296,449,126 Depreciation 367,530 116,901 — 484,431 Amortization 91,250 — — 91,250 Operating income (loss) 3,073,641 474,545 (1,353,987) 2,194,199 Interest expense 29,368 — 132,034 161,402 Income (loss) from operations before taxes 3,075,629 479,017 (1,486,022) 2,068,624 Total assets 101,775,492 12,554,229 221,537 114,551,258 Capital expenditures 255,324 75,513 — 330,837 Wholesale Retail Segment Segment Other Consolidated SIX MONTHS ENDED MARCH 2017 External revenue: Cigarettes $ 431,415,941 $ — $ — $ 431,415,941 Tobacco 76,056,934 — — 76,056,934 Confectionery 36,581,352 — — 36,581,352 Health food — 12,957,362 — 12,957,362 Foodservice & other 47,140,510 — — 47,140,510 Total external revenue 591,194,737 12,957,362 — 604,152,099 Depreciation 688,938 234,965 — 923,903 Amortization 132,499 — — 132,499 Operating income (loss) 6,705,891 (507,675) (2,983,553) 3,214,663 Interest expense 51,821 — 313,632 365,453 Income (loss) from operations before taxes 6,666,521 (499,388) (3,297,186) 2,869,947 Total assets 91,608,744 13,989,794 80,638 105,679,176 Capital expenditures 320,244 517,651 — 837,895 SIX MONTHS ENDED MARCH 2016 External revenue: Cigarettes $ 443,592,290 $ — $ — $ 443,592,290 Tobacco 73,384,745 73,384,745 Confectionery 38,891,522 — — 38,891,522 Health food — 14,811,831 — 14,811,831 Foodservice & other 47,776,987 — — 47,776,987 Total external revenue 603,645,544 14,811,831 — 618,457,375 Depreciation 726,097 234,033 — 960,130 Amortization 182,500 — — 182,500 Operating income (loss) 6,922,793 538,670 (2,717,443) 4,744,020 Interest expense 59,400 — 314,456 373,856 Income (loss) from operations before taxes 6,917,371 547,775 (3,031,900) 4,433,246 Total assets 101,775,492 12,554,229 221,537 114,551,258 Capital expenditures 581,877 110,525 — 692,402

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details)	1 Months Ended	6 Months Ended
	Sep. 30, 2016item	Mar. 31, 2017ft²item
Business segment
Number of business segments		2
Wholesale Segment
Business segment
Number of retail outlets served		4,000
Number of products sold or distributed		16,000
Rank assigned by Convenience Store News	7
Number of distribution centers		6
Floor space occupied by distribution centers (in square feet) | ft²		641,000
Retail Segment
Business segment
Number of operating health food retail stores		16
Number of products sold or distributed		32,000
Retail Segment | Florida
Business segment
Number of operating health food retail stores		6
Retail Segment | Midwest
Business segment
Number of operating health food retail stores		10

CONVERTIBLE PREFERRED STOCK (De

CONVERTIBLE PREFERRED STOCK (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Sep. 30, 2016	Mar. 31, 2016
Common Stock
Convertible preferred stock
Shares of common stock issued for all outstanding Series A and Series B shares	98,707
Chief Executive Officer
Convertible preferred stock
Cash dividends paid on convertible preferred stock issuances		$ 0.1
Series A preferred stock
Convertible preferred stock
Number of shares:	100,000
Series B preferred stock
Convertible preferred stock
Number of shares:	16,000
Series B preferred stock | Chief Executive Officer
Convertible preferred stock
Number of shares:	8,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Millions	Mar. 31, 2017	Sep. 30, 2016
INVENTORIES
Total reserves on finished goods	$ 0.9	$ 0.9

GOODWILL AND OTHER INTANGIBLE23

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
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 INTANGIBLE24

GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Other intangible assets, net	$ 3,626,812		$ 3,626,812		$ 3,759,311
Amortization expense related to finite-lived intangible assets	100,000	$ 100,000	100,000	$ 200,000
Customer relationships
Other intangible assets, net	253,543		253,543		386,042
Accumulated amortization	1,900,000		$ 1,900,000		1,700,000
Amortization period			8 years
Trademarks and tradenames
Other intangible assets, net	$ 3,373,269		$ 3,373,269		$ 3,373,269

GOODWILL AND OTHER INTANGIBLE25

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details)	Mar. 31, 2017USD ($)
Estimated future amortization expense related to identifiable intangible assets with finite lives
Fiscal 2,017	$ 132,501
Fiscal 2,018	79,375
Fiscal 2,019	41,667
Total	$ 253,543

DIVIDENDS (Details)

DIVIDENDS (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
DIVIDENDS
Cash dividends paid on common stock and convertible preferred stock issuances	$ 0.3	$ 0.2	$ 0.5	$ 0.5

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
EARNINGS PER SHARE
Weighted average common shares outstanding, Basic	678,938	606,080	680,318	615,768
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock	9,078	106,467	9,872	107,549
Weighted average number of shares outstanding, Diluted	688,016	712,547	690,190	723,317
Net income	$ 488,483	$ 1,146,624	$ 1,534,947	$ 2,502,246
Deduct: convertible preferred stock dividends		(48,643)		(97,820)
Net income available to common shareholders	488,483	1,097,981	1,534,947	2,404,426
Net income available to common shareholders, diluted	$ 488,483	$ 1,146,624	$ 1,534,947	$ 2,502,246
Net earnings per share available to common shareholders, Basic (in dollars per share)	$ 0.72	$ 1.81	$ 2.26	$ 3.90
Net earnings per share available to common shareholders, Diluted (in dollars per share)	$ 0.71	$ 1.61	$ 2.22	$ 3.46

DEBT (Details)

DEBT (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Mar. 31, 2017USD ($)item$ / shares
Other
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program	$ 0.4
6.75 % Real Estate Loan
Other
Debt Instrument, Cross Default Provision Number of Loans in Default in Participant, Lender to Cause All Loans with Participant Lender to be in Default | item	0
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%
Period of maintaining excess availability measurements required to remove limit on common stock dividends	30 days
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	1.10
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) | $ / shares	$ 1
Facility | Maximum | LIBOR
Revolving credit facility
Basis points added to reference rate (as a percent)	1.75%

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details)	3 Months Ended		6 Months Ended
	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)	Sep. 30, 2016USD ($)
Information by business segments
Number of reportable business segments | item			2
Total external revenues	$ 294,047,870	$ 296,449,126	$ 604,152,099	$ 618,457,375
Depreciation	463,720	484,431	923,903	960,130
Amortization	66,249	91,250	132,499	182,500
Operating income (loss)	1,123,429	2,194,199	3,214,663	4,744,020
Interest expense	147,910	161,402	365,453	373,856
Income (loss) from operations before taxes	990,483	2,068,624	2,869,947	4,433,246
Total assets	105,679,176	114,551,258	105,679,176	114,551,258	$ 112,263,390
Capital expenditures	437,117	330,837	837,895	692,402
Cigarettes
Information by business segments
Total external revenues	209,646,918	211,638,962	431,415,941	443,592,290
Tobacco
Information by business segments
Total external revenues	37,371,108	35,756,254	76,056,934	73,384,745
Confectionery
Information by business segments
Total external revenues	17,980,905	19,045,686	36,581,352	38,891,522
Health food
Information by business segments
Total external revenues	6,718,058	7,537,713	12,957,362	14,811,831
Foodservice & other
Information by business segments
Total external revenues	22,330,881	22,470,511	47,140,510	47,776,987
Wholesale Segment
Information by business segments
Total external revenues	287,329,812	288,911,413	591,194,737	603,645,544
Depreciation	346,264	367,530	688,938	726,097
Amortization	66,249	91,250	132,499	182,500
Operating income (loss)	2,737,099	3,073,641	6,705,891	6,922,793
Interest expense	25,428	29,368	51,821	59,400
Income (loss) from operations before taxes	2,722,619	3,075,629	6,666,521	6,917,371
Total assets	91,608,744	101,775,492	91,608,744	101,775,492
Capital expenditures	153,469	255,324	320,244	581,877
Wholesale Segment | Cigarettes
Information by business segments
Total external revenues	209,646,918	211,638,962	431,415,941	443,592,290
Wholesale Segment | Tobacco
Information by business segments
Total external revenues	37,371,108	35,756,254	76,056,934	73,384,745
Wholesale Segment | Confectionery
Information by business segments
Total external revenues	17,980,905	19,045,686	36,581,352	38,891,522
Wholesale Segment | Foodservice & other
Information by business segments
Total external revenues	22,330,881	22,470,511	47,140,510	47,776,987
Retail Segment
Information by business segments
Total external revenues	6,718,058	7,537,713	12,957,362	14,811,831
Depreciation	117,456	116,901	234,965	234,033
Operating income (loss)	(209,189)	474,545	(507,675)	538,670
Income (loss) from operations before taxes	(205,173)	479,017	(499,388)	547,775
Total assets	13,989,794	12,554,229	13,989,794	12,554,229
Capital expenditures	283,648	75,513	517,651	110,525
Retail Segment | Health food
Information by business segments
Total external revenues	6,718,058	7,537,713	12,957,362	14,811,831
Other
Information by business segments
Operating income (loss)	(1,404,481)	(1,353,987)	(2,983,553)	(2,717,443)
Interest expense	122,482	132,034	313,632	314,456
Income (loss) from operations before taxes	(1,526,963)	(1,486,022)	(3,297,186)	(3,031,900)
Total assets	$ 80,638	$ 221,537	$ 80,638	$ 221,537

COMMON STOCK REPURCHASE (Detail

COMMON STOCK REPURCHASE (Details) - Common Stock - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2017
REPURCHASE OF COMMON STOCK
Number of shares of common stock repurchased	0	11,104
Value of shares of common stock repurchased		$ 1