Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2019 | Apr. 15, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | AMCON DISTRIBUTING CO | |
Entity Central Index Key | 0000928465 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 592,768 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash | $ 642,116 | $ 520,644 |
Accounts receivable, less allowance for doubtful accounts of $0.9 million at March 2019 and September 2018 | 28,016,243 | 31,428,845 |
Inventories, net | 57,650,559 | 78,869,615 |
Income taxes receivable | 272,112 | |
Prepaid and other current assets | 7,343,497 | 4,940,775 |
Total current assets | 93,652,415 | 116,031,991 |
Property and equipment, net | 16,915,409 | 15,768,484 |
Goodwill | 4,436,950 | 4,436,950 |
Other intangible assets, net | 3,383,686 | 3,414,936 |
Other assets | 293,896 | 301,793 |
Total assets | 118,682,356 | 139,954,154 |
Current liabilities: | ||
Accounts payable | 20,570,694 | 20,826,834 |
Accrued expenses | 7,106,050 | 8,556,620 |
Accrued wages, salaries and bonuses | 2,683,504 | 3,965,733 |
Income taxes payable | 1,630 | |
Current maturities of long-term debt | 803,612 | 1,096,306 |
Total current liabilities | 31,165,490 | 34,445,493 |
Credit facility | 17,224,197 | 35,428,597 |
Deferred income tax liability, net | 2,009,719 | 1,782,801 |
Long-term debt, less current maturities | 3,394,116 | 3,658,391 |
Other long-term liabilities | 40,033 | 38,055 |
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized | ||
Common stock, $.01 par value, 3,000,000 shares authorized, 592,768 shares outstanding at March 2019 and 615,777 shares outstanding at September 2018 | 8,561 | 8,441 |
Additional paid-in capital | 23,148,372 | 22,069,098 |
Retained earnings | 66,203,466 | 63,848,030 |
Treasury stock at cost | (24,511,598) | (21,324,752) |
Total shareholders' equity | 64,848,801 | 64,600,817 |
Total liabilities and shareholders' equity | $ 118,682,356 | $ 139,954,154 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 0.9 | $ 0.9 |
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 | 592,768 | 615,777 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Unaudited Statements of Operations | ||||
Sales (including excise taxes of $82.9 million and $83.1 million, and $175.9 million and $171.7 million, respectively) | $ 310,715,873 | $ 295,207,286 | $ 655,449,793 | $ 610,720,495 |
Cost of sales | 290,126,453 | 278,141,110 | 614,228,235 | 575,462,557 |
Gross profit | 20,589,420 | 17,066,176 | 41,221,558 | 35,257,938 |
Selling, general and administrative expenses | 17,391,681 | 15,619,420 | 35,348,896 | 31,973,028 |
Depreciation and amortization | 641,228 | 537,903 | 1,249,236 | 1,068,908 |
Total operating expenses | 18,032,909 | 16,157,323 | 36,598,132 | 33,041,936 |
Operating income | 2,556,511 | 908,853 | 4,623,426 | 2,216,002 |
Other expense (income): | ||||
Interest expense | 396,576 | 313,364 | 719,526 | 515,555 |
Other (income), net | (36,280) | (27,410) | (39,636) | (32,543) |
Total other expenses (income) | 360,296 | 285,954 | 679,890 | 483,012 |
Income from operations before income taxes | 2,196,215 | 622,899 | 3,943,536 | 1,732,990 |
Income tax expense (benefit) | 673,000 | 284,000 | 1,175,000 | (86,000) |
Net income available to common shareholders | $ 1,523,215 | $ 338,899 | $ 2,768,536 | $ 1,818,990 |
Basic earnings per share available to common shareholders (in dollars per share) | $ 2.49 | $ 0.49 | $ 4.50 | $ 2.64 |
Diluted earnings per share available to common shareholders (in dollars per share) | $ 2.45 | $ 0.49 | $ 4.44 | $ 2.61 |
Basic weighted average shares outstanding (in shares) | 611,824 | 689,480 | 614,874 | 688,570 |
Diluted weighted average shares outstanding (in shares) | 620,769 | 697,406 | 623,848 | 697,563 |
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 Unaudi_2
Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Unaudited Statements of Operations | ||||
Sales, excise taxes | $ 82.9 | $ 83.1 | $ 175.9 | $ 171.7 |
Condensed Consolidated Unaudi_3
Condensed Consolidated Unaudited Statements of Shareholders' Equity - USD ($) | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Total |
Balance at Sep. 30, 2017 | $ 8,314 | $ (13,601,302) | $ 20,825,919 | $ 60,935,911 | $ 68,168,842 |
Balance (in shares) at Sep. 30, 2017 | 831,438 | (153,432) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (458,859) | (458,859) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 127 | 1,210,643 | 1,210,770 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 12,651 | ||||
Repurchase of common stock | $ (644,528) | (644,528) | |||
Repurchase of common stock (in shares) | (6,653) | ||||
Net income | 1,818,990 | 1,818,990 | |||
Balance at Mar. 31, 2018 | $ 8,441 | $ (14,245,830) | 22,036,562 | 62,296,042 | 70,095,215 |
Balance (in shares) at Mar. 31, 2018 | 844,089 | (160,085) | |||
Balance at Dec. 31, 2017 | $ 8,441 | $ (13,616,477) | 22,009,620 | 62,086,133 | 70,487,717 |
Balance (in shares) at Dec. 31, 2017 | 844,089 | (153,603) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (128,990) | (128,990) | |||
Compensation expense and issuance of stock in connection with equity-based awards | 26,942 | 26,942 | |||
Repurchase of common stock | $ (629,353) | (629,353) | |||
Repurchase of common stock (in shares) | (6,482) | ||||
Net income | 338,899 | 338,899 | |||
Balance at Mar. 31, 2018 | $ 8,441 | $ (14,245,830) | 22,036,562 | 62,296,042 | 70,095,215 |
Balance (in shares) at Mar. 31, 2018 | 844,089 | (160,085) | |||
Balance at Sep. 30, 2018 | $ 8,441 | $ (21,324,752) | 22,069,098 | 63,848,030 | $ 64,600,817 |
Balance (in shares) at Sep. 30, 2018 | 844,089 | (228,312) | 615,777 | ||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (413,100) | $ (413,100) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 120 | 1,079,274 | 1,079,394 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 11,950 | ||||
Repurchase of common stock | $ (3,186,846) | (3,186,846) | |||
Repurchase of common stock (in shares) | (34,959) | ||||
Net income | 2,768,536 | 2,768,536 | |||
Balance at Mar. 31, 2019 | $ 8,561 | $ (24,511,598) | 23,148,372 | 66,203,466 | $ 64,848,801 |
Balance (in shares) at Mar. 31, 2019 | 856,039 | (263,271) | 592,768 | ||
Balance at Dec. 31, 2018 | $ 8,561 | $ (22,242,837) | 23,110,713 | 64,796,415 | $ 65,672,852 |
Balance (in shares) at Dec. 31, 2018 | 856,039 | (238,744) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (116,164) | (116,164) | |||
Compensation expense and issuance of stock in connection with equity-based awards | 37,659 | 37,659 | |||
Repurchase of common stock | $ (2,268,761) | (2,268,761) | |||
Repurchase of common stock (in shares) | (24,527) | ||||
Net income | 1,523,215 | 1,523,215 | |||
Balance at Mar. 31, 2019 | $ 8,561 | $ (24,511,598) | $ 23,148,372 | $ 66,203,466 | $ 64,848,801 |
Balance (in shares) at Mar. 31, 2019 | 856,039 | (263,271) | 592,768 |
Condensed Consolidated Unaudi_4
Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Unaudited Statements of Shareholders' Equity | ||||
Dividends on common stock | $ 0.18 | $ 0.18 | $ 0.64 | $ 0.64 |
Condensed Consolidated Unaudi_5
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,768,536 | $ 1,818,990 |
Adjustments to reconcile net income from operations to net cash flows from operating activities: | ||
Depreciation | 1,217,986 | 1,020,783 |
Amortization | 31,250 | 48,125 |
Gain on sale of property and equipment | (17,832) | (300) |
Equity-based compensation | 622,390 | 642,785 |
Deferred income taxes | 226,918 | (423,322) |
Provision (recovery) for losses on doubtful accounts | 59,000 | (77,000) |
Inventory allowance | 240,699 | (231,625) |
Other | 1,978 | 1,978 |
Changes in assets and liabilities: | ||
Accounts receivable | 3,353,602 | 1,521,705 |
Inventories | 20,978,357 | (2,951,171) |
Prepaid and other current assets | (2,402,722) | 1,216,336 |
Other assets | 7,897 | (19,903) |
Accounts payable | (467,687) | 126,012 |
Accrued expenses and accrued wages, salaries and bonuses | (2,275,795) | (1,059,839) |
Income taxes payable / receivable | 273,742 | (368,469) |
Net cash flows from operating activities | 24,618,319 | 1,265,085 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2,159,232) | (1,366,767) |
Proceeds from sales of property and equipment | 23,700 | 300 |
Net cash flows used in investing activities | (2,135,532) | (1,366,467) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facility | 642,850,736 | 623,945,799 |
Repayments under revolving credit facility | (661,055,136) | (622,433,675) |
Principal payments on long-term debt | (556,969) | (185,753) |
Repurchase of common stock | (3,186,846) | (644,528) |
Dividends on common stock | (413,100) | (458,859) |
Withholdings on the exercise of equity-based awards | (79,850) | |
Net cash flows from (used in) financing activities | (22,361,315) | 143,134 |
Net change in cash | 121,472 | 41,752 |
Cash, beginning of period | 520,644 | 523,065 |
Cash, end of period | 642,116 | 564,817 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 774,784 | 489,840 |
Cash paid during the period for income taxes | 674,340 | 705,790 |
Supplemental disclosure of non-cash information: | ||
Equipment acquisitions classified in accounts payable | 212,800 | 63,962 |
Issuance of common stock in connection with the vesting and exercise of equity-based awards | $ 1,005,792 | $ 1,183,091 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2019 | |
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 that are 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 twenty-two 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 17,000 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 November 2018, Convenience Store News ranked us as the eighth (8th) 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 689,000 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, through our Healthy Edge, Inc. subsidiary, 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 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 twenty-two retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akins”), and Earth Origins Market (“EOM”). 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 seven stores in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of seven locations in Arkansas, Missouri, and Oklahoma. Earth Origins Market has a total of eight locations in Florida. 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, 2018, 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, 2019 and March 31, 2018 have been referred to throughout this quarterly report as Q2 2019 and Q2 2018, respectively. The fiscal balance sheet dates as of March 31, 2019 and September 30, 2018 have been referred to as March 2019 and September 2018, respectively. ACCOUNTING PRONOUNCEMENTS Accounting Pronouncement Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” Accounting Standards Codification Topic (“ASC”) 606 supersedes the revenue recognition requirements in “ASC 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. The Company adopted the new standard using the modified retrospective approach effective October 1, 2018. The adoption of ASC 606 did not have a material impact on the Company’s consolidated balance sheet or consolidated results of operations as of the adoption date or for the three and six months ended March 31, 2019. Significant areas of consideration in regards to the Company’s adoption of ASC 606 were as follows: Revenue Recognition The Company recognizes revenues when the performance obligation is satisfied, which is the point at which control of the promised goods or services are transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods have been delivered, as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. The timing of satisfaction of the performance obligation is not subject to significant judgment. See Footnote 8 “Business Segments” for the disaggregation of net sales for each of our business segments. Customers’ Sales Incentives The Company provides consideration to customers, such as sales allowances or discounts to its customers on a regular basis. Under ASC 606, these customers’ sales incentives will continue to be recorded as a reduction to net sales as the sales incentive is earned by the customer. Excise Taxes As part of the implementation of ASC 606, the Company determined that it is primarily responsible for excise taxes levied on cigarette and other tobacco products and continues to present excise taxes as a component of revenue. Contract Costs Based on the nature of the Company’s business, the costs to obtain and fulfill customer contracts are not material. New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 “Leases”. This ASU and its related amendments requires lessees to recognize right-of-use assets and corresponding lease liabilities for all leases greater than one year in duration that had been classified as operating leases under previous GAAP. This ASU 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 in the data aggregation and quantification phase of its review of this new standard and continues to evaluate its impact on the consolidated financial statements, including the potential capitalization of all operating leases on the Company’s balance sheet. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 (fiscal 2021 for the Company) with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 31, 2019 | |
INVENTORIES | |
INVENTORIES | 2. INVENTORIES 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 net realizable value. 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 $0.7 million at March 2019 and $0.5 million at September 2018. 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, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 3. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill by reporting segment of the Company consisted of the following: March September 2019 2018 Wholesale Segment $ 4,436,950 $ 4,436,950 Other intangible assets of the Company consisted of the following: March September 2019 2018 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $2.1 million at both March 2019 and September 2018) 10,417 41,667 $ 3,383,686 $ 3,414,936 Goodwill, trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. At March 2019 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. At March 2019, goodwill allocated to our wholesale reporting unit totaled $4.4 million. In conjunction with the Company’s annual impairment testing for the fiscal year ended September 30, 2018, the Company determined that the estimated fair value of this reporting unit exceeded its carrying value at September 30, 2018. There has been no material changes to this assessment by the Company through March 2019. |
DIVIDENDS
DIVIDENDS | 6 Months Ended |
Mar. 31, 2019 | |
DIVIDENDS | |
DIVIDENDS | 4. DIVIDENDS The Company paid cash dividends on its common stock totaling $0.3 million and $0.4 million for the three and six month periods ended March 2019, respectively, and $0.3 million and $0.5 million for the three and six month periods ended March 2018, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 5. 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. For the three months ended March 2019 2018 Basic Diluted Basic Diluted Weighted average common shares outstanding 611,824 611,824 689,480 689,480 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 8,945 — 7,926 Weighted average number of shares outstanding 611,824 620,769 689,480 697,406 Net income available to common shareholders $ 1,523,215 $ 1,523,215 $ 338,899 $ 338,899 Net earnings per share available to common shareholders $ 2.49 $ 2.45 $ 0.49 $ 0.49 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. For the six months ended March 2019 2018 Basic Diluted Basic Diluted Weighted average common shares outstanding 614,874 614,874 688,570 688,570 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 8,974 — 8,993 Weighted average number of shares outstanding 614,874 623,848 688,570 697,563 Net income available to common shareholders $ 2,768,536 $ 2,768,536 $ 1,818,990 $ 1,818,990 Net earnings per share available to common shareholders $ 4.50 $ 4.44 $ 2.64 $ 2.61 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2019 | |
DEBT | |
DEBT | 6. 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 2019: · A November 2022 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 - 150 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 coverage ratio is over 1.0 for the trailing twelve months. · Provides that the Company may pay up to $2.0 million of dividends on its common stock annually provided the Company is not in default before or after the dividend. Additionally, the Company may pay dividends on its common stock in excess of $2.0 million annually provided the Company meets certain excess availability and proforma fixed charge coverage ratios and is not in default before or after the dividend. The amount available for use on the Facility at any given time is subject to a number of factors including eligible accounts receivable and inventory balances that fluctuate day-to-day. Based on our collateral and loan limits as defined in the Facility agreement, the credit limit of the Facility at March 2019 was $68.4 million, of which $17.2 million was outstanding, leaving $51.2 million available. At March 2019, the revolving portion of the Company’s Facility balance bore interest based on the bank’s prime rate and various short-term LIBOR rate elections made by the Company. The average interest rate was 3.87% at March 2019. For the six months ended March 2019, our peak borrowings under the Facility were $46.8 million, and our average borrowings and average availability under the Facility were $28.9 million and $40.2 million, respectively. Cross Default and Co-Terminus Provisions The Company owns certain 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, are in default. There were no such cross defaults at March 2019. 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 $0.5 million letter of credit to its workers’ compensation insurance carrier as part of its self‑insured loss control program. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 7. INCOME TAXES The Company’s results of operations for the six months ended March 2019 and March 2018 were impacted by the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) which was signed into law on December 22, 2017. Among the numerous provisions included in the new law was a reduction in the corporate federal income tax rate from 35% to 21% which resulted in a $0.8 million income tax benefit to the Company as reflected in our Statement of Operations for the six months ended March 2018 and a lower federal income tax rate for the six months ended March 2019. The $0.8 million tax benefit recognized in the prior fiscal year period (six months ended March 2018) primarily resulted from applying the new lower federal income tax rates to the Company’s net long term deferred tax liabilities recorded on its Consolidated Balance Sheet. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Mar. 31, 2019 | |
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 (loss), and income (loss) before taxes. Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED MARCH 2019 External revenues: Cigarettes $ 211,572,049 $ — $ — $ 211,572,049 Tobacco 44,665,339 — — 44,665,339 Confectionery 18,092,990 — — 18,092,990 Health food — — 11,973,455 Foodservice & other 24,412,040 — — 24,412,040 Total external revenue 298,742,418 — 310,715,873 Depreciation 378,172 247,431 — 625,603 Amortization 15,625 — — 15,625 Operating income (loss) 3,797,109 259,043 (1,499,641) 2,556,511 Interest expense 36,823 — 359,753 396,576 Income (loss) from operations before taxes 3,793,759 261,849 (1,859,393) 2,196,215 Total assets 100,479,809 241,143 118,682,356 Capital expenditures 824,557 389,717 — 1,214,274 THREE MONTHS ENDED MARCH 2018 External revenue: Cigarettes $ 208,188,686 $ — $ — $ 208,188,686 Tobacco 39,536,595 — — 39,536,595 Confectionery 17,257,066 — — 17,257,066 Health food — 6,813,088 — 6,813,088 Foodservice & other 23,411,851 — — 23,411,851 Total external revenue 288,394,198 6,813,088 — 295,207,286 Depreciation 324,142 198,136 — 522,278 Amortization 15,625 — — 15,625 Operating income (loss) 2,531,394 (193,545) (1,428,996) 908,853 Interest expense 22,814 — 290,550 313,364 Income (loss) from operations before taxes 2,530,624 (190,879) (1,716,846) 622,899 Total assets 118,169,883 120,862 132,648,757 Capital expenditures 654,964 468,982 — 1,123,946 Wholesale Retail Segment Segment Other Consolidated SIX MONTHS ENDED MARCH 2019 External revenue: Cigarettes $ 449,933,631 $ — $ — $ 449,933,631 Tobacco 92,860,385 — — 92,860,385 Confectionery 37,810,656 — — 37,810,656 Health food — — 22,964,078 Foodservice & other 51,881,043 — — 51,881,043 Total external revenue 632,485,715 — 655,449,793 Depreciation 742,304 475,682 — 1,217,986 Amortization 31,250 — — 31,250 Operating income (loss) 7,500,992 213,600 (3,091,166) 4,623,426 Interest expense 74,597 — 644,929 719,526 Income (loss) from operations before taxes 7,461,683 217,948 (3,736,095) 3,943,536 Total assets 100,479,809 241,143 118,682,356 Capital expenditures 1,608,673 762,106 — 2,370,779 SIX MONTHS ENDED MARCH 2018 External revenue: Cigarettes $ 431,454,264 $ — $ — $ 431,454,264 Tobacco 81,178,273 — — 81,178,273 Confectionery 35,773,384 — — 35,773,384 Health food — — 13,102,985 Foodservice & other 49,211,589 — — 49,211,589 Total external revenue 597,617,510 — 610,720,495 Depreciation 634,627 386,156 — 1,020,783 Amortization 48,125 — — 48,125 Operating income (loss) 5,720,377 (666,526) (2,837,849) 2,216,002 Interest expense 46,522 — 469,033 515,555 Income (loss) from operations before taxes 5,698,556 (661,384) (3,304,182) 1,732,990 Total assets 118,169,883 120,862 132,648,757 Capital expenditures 706,493 622,875 — 1,329,368 |
COMMON STOCK REPURCHASE
COMMON STOCK REPURCHASE | 6 Months Ended |
Mar. 31, 2019 | |
COMMON STOCK REPURCHASE | |
COMMON STOCK REPURCHASE | 9. COMMON STOCK REPURCHASE The Company repurchased a total of 24,527 and 34,959 shares of its common stock during the three and six month periods ended March 2019, respectively, for cash totaling $2.3 million and $3.2 million, respectively. For the three and six month periods ending March 2018, the Company repurchased a total of 6,482 and 6,653 shares of its common stock for cash totaling $0.6 million during each respective period. All repurchased shares were recorded in treasury stock at cost. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
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 17,000 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 November 2018, Convenience Store News ranked us as the eighth (8th) 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 689,000 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, through our Healthy Edge, Inc. subsidiary, 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 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 twenty-two retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akins”), and Earth Origins Market (“EOM”). 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 seven stores in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of seven locations in Arkansas, Missouri, and Oklahoma. Earth Origins Market has a total of eight locations in Florida. |
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, 2018, 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, 2019 and March 31, 2018 have been referred to throughout this quarterly report as Q2 2019 and Q2 2018, respectively. The fiscal balance sheet dates as of March 31, 2019 and September 30, 2018 have been referred to as March 2019 and September 2018, respectively. |
ACCOUNTING PRONOUNCEMENTS | ACCOUNTING PRONOUNCEMENTS Accounting Pronouncement Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” Accounting Standards Codification Topic (“ASC”) 606 supersedes the revenue recognition requirements in “ASC 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. The Company adopted the new standard using the modified retrospective approach effective October 1, 2018. The adoption of ASC 606 did not have a material impact on the Company’s consolidated balance sheet or consolidated results of operations as of the adoption date or for the three and six months ended March 31, 2019. Significant areas of consideration in regards to the Company’s adoption of ASC 606 were as follows: Revenue Recognition The Company recognizes revenues when the performance obligation is satisfied, which is the point at which control of the promised goods or services are transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods have been delivered, as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. The timing of satisfaction of the performance obligation is not subject to significant judgment. See Footnote 8 “Business Segments” for the disaggregation of net sales for each of our business segments. Customers’ Sales Incentives The Company provides consideration to customers, such as sales allowances or discounts to its customers on a regular basis. Under ASC 606, these customers’ sales incentives will continue to be recorded as a reduction to net sales as the sales incentive is earned by the customer. Excise Taxes As part of the implementation of ASC 606, the Company determined that it is primarily responsible for excise taxes levied on cigarette and other tobacco products and continues to present excise taxes as a component of revenue. Contract Costs Based on the nature of the Company’s business, the costs to obtain and fulfill customer contracts are not material. New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 “Leases”. This ASU and its related amendments requires lessees to recognize right-of-use assets and corresponding lease liabilities for all leases greater than one year in duration that had been classified as operating leases under previous GAAP. This ASU 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 in the data aggregation and quantification phase of its review of this new standard and continues to evaluate its impact on the consolidated financial statements, including the potential capitalization of all operating leases on the Company’s balance sheet. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 (fiscal 2021 for the Company) with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill by reporting segment | March September 2019 2018 Wholesale Segment $ 4,436,950 $ 4,436,950 |
Schedule of other intangible assets | March September 2019 2018 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $2.1 million at both March 2019 and September 2018) 10,417 41,667 $ 3,383,686 $ 3,414,936 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE | |
Schedule of net earnings per share available to common shareholders | 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. For the three months ended March 2019 2018 Basic Diluted Basic Diluted Weighted average common shares outstanding 611,824 611,824 689,480 689,480 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 8,945 — 7,926 Weighted average number of shares outstanding 611,824 620,769 689,480 697,406 Net income available to common shareholders $ 1,523,215 $ 1,523,215 $ 338,899 $ 338,899 Net earnings per share available to common shareholders $ 2.49 $ 2.45 $ 0.49 $ 0.49 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. For the six months ended March 2019 2018 Basic Diluted Basic Diluted Weighted average common shares outstanding 614,874 614,874 688,570 688,570 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock (1) — 8,974 — 8,993 Weighted average number of shares outstanding 614,874 623,848 688,570 697,563 Net income available to common shareholders $ 2,768,536 $ 2,768,536 $ 1,818,990 $ 1,818,990 Net earnings per share available to common shareholders $ 4.50 $ 4.44 $ 2.64 $ 2.61 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
BUSINESS SEGMENTS | |
Schedule of segment information | Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED MARCH 2019 External revenues: Cigarettes $ 211,572,049 $ — $ — $ 211,572,049 Tobacco 44,665,339 — — 44,665,339 Confectionery 18,092,990 — — 18,092,990 Health food — — 11,973,455 Foodservice & other 24,412,040 — — 24,412,040 Total external revenue 298,742,418 — 310,715,873 Depreciation 378,172 247,431 — 625,603 Amortization 15,625 — — 15,625 Operating income (loss) 3,797,109 259,043 (1,499,641) 2,556,511 Interest expense 36,823 — 359,753 396,576 Income (loss) from operations before taxes 3,793,759 261,849 (1,859,393) 2,196,215 Total assets 100,479,809 241,143 118,682,356 Capital expenditures 824,557 389,717 — 1,214,274 THREE MONTHS ENDED MARCH 2018 External revenue: Cigarettes $ 208,188,686 $ — $ — $ 208,188,686 Tobacco 39,536,595 — — 39,536,595 Confectionery 17,257,066 — — 17,257,066 Health food — 6,813,088 — 6,813,088 Foodservice & other 23,411,851 — — 23,411,851 Total external revenue 288,394,198 6,813,088 — 295,207,286 Depreciation 324,142 198,136 — 522,278 Amortization 15,625 — — 15,625 Operating income (loss) 2,531,394 (193,545) (1,428,996) 908,853 Interest expense 22,814 — 290,550 313,364 Income (loss) from operations before taxes 2,530,624 (190,879) (1,716,846) 622,899 Total assets 118,169,883 120,862 132,648,757 Capital expenditures 654,964 468,982 — 1,123,946 Wholesale Retail Segment Segment Other Consolidated SIX MONTHS ENDED MARCH 2019 External revenue: Cigarettes $ 449,933,631 $ — $ — $ 449,933,631 Tobacco 92,860,385 — — 92,860,385 Confectionery 37,810,656 — — 37,810,656 Health food — — 22,964,078 Foodservice & other 51,881,043 — — 51,881,043 Total external revenue 632,485,715 — 655,449,793 Depreciation 742,304 475,682 — 1,217,986 Amortization 31,250 — — 31,250 Operating income (loss) 7,500,992 213,600 (3,091,166) 4,623,426 Interest expense 74,597 — 644,929 719,526 Income (loss) from operations before taxes 7,461,683 217,948 (3,736,095) 3,943,536 Total assets 100,479,809 241,143 118,682,356 Capital expenditures 1,608,673 762,106 — 2,370,779 SIX MONTHS ENDED MARCH 2018 External revenue: Cigarettes $ 431,454,264 $ — $ — $ 431,454,264 Tobacco 81,178,273 — — 81,178,273 Confectionery 35,773,384 — — 35,773,384 Health food — — 13,102,985 Foodservice & other 49,211,589 — — 49,211,589 Total external revenue 597,617,510 — 610,720,495 Depreciation 634,627 386,156 — 1,020,783 Amortization 48,125 — — 48,125 Operating income (loss) 5,720,377 (666,526) (2,837,849) 2,216,002 Interest expense 46,522 — 469,033 515,555 Income (loss) from operations before taxes 5,698,556 (661,384) (3,304,182) 1,732,990 Total assets 118,169,883 120,862 132,648,757 Capital expenditures 706,493 622,875 — 1,329,368 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) | 1 Months Ended | 6 Months Ended |
Nov. 30, 2018item | Mar. 31, 2019ft²item | |
Number of business segments | 2 | |
Wholesale Segment | ||
Number of retail outlets served | 4,000 | |
Number of products sold or distributed | 17,000 | |
Rank assigned by Convenience Store News | 8 | |
Number of distribution centers | 6 | |
Floor space occupied by distribution centers (in square feet) | ft² | 689,000 | |
Retail Segment | ||
Number of operating health food retail stores | 22 | |
Number of products sold or distributed | 32,000 | |
Retail Segment | Florida | Chamberlin's | ||
Number of operating health food retail stores | 7 | |
Retail Segment | Florida | Earth Origins Markets | ||
Number of operating health food retail stores | 8 | |
Retail Segment | Midwest | Akin's | ||
Number of operating health food retail stores | 7 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Sep. 30, 2018 |
INVENTORIES | ||
Total reserves on finished goods | $ 0.7 | $ 0.5 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Goodwill by reporting segment | ||
Goodwill | $ 4,436,950 | $ 4,436,950 |
Wholesale Segment | ||
Goodwill by reporting segment | ||
Goodwill | $ 4,436,950 | $ 4,436,950 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | |
Other intangible assets, net | $ 3,383,686 | $ 3,414,936 |
Customer relationships | ||
Other intangible assets, net | 10,417 | 41,667 |
Accumulated amortization | $ 2,100,000 | 2,100,000 |
Amortization period | 8 years | |
Trademarks and tradenames | ||
Other intangible assets, net | $ 3,373,269 | $ 3,373,269 |
DIVIDENDS (Details)
DIVIDENDS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
DIVIDENDS | ||||
Cash dividends paid on common stock | $ 300,000 | $ 300,000 | $ 413,100 | $ 458,859 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
EARNINGS PER SHARE | ||||
Weighted average common shares outstanding, Basic | 611,824 | 689,480 | 614,874 | 688,570 |
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock | 8,945 | 7,926 | 8,974 | 8,993 |
Weighted average number of shares outstanding, Diluted | 620,769 | 697,406 | 623,848 | 697,563 |
Net income available to common shareholders | $ 1,523,215 | $ 338,899 | $ 2,768,536 | $ 1,818,990 |
Net income available to common shareholders, diluted | $ 1,523,215 | $ 338,899 | $ 2,768,536 | $ 1,818,990 |
Net earnings per share available to common shareholders, Basic (in dollars per share) | $ 2.49 | $ 0.49 | $ 4.50 | $ 2.64 |
Net earnings per share available to common shareholders, Diluted (in dollars per share) | $ 2.45 | $ 0.49 | $ 4.44 | $ 2.61 |
DEBT (Details)
DEBT (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2019USD ($)item | |
Other | |
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | $ 0.5 |
Real Estate Loan | |
Revolving credit facility | |
Number of cross defaults | 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% |
Restricted amount of dividends on common stock | $ 2 |
Current credit limit of the Facility | 68.4 |
Outstanding borrowings under the Facility | 17.2 |
Credit available under the Facility | $ 51.2 |
Average interest rate | 3.87% |
Peak borrowings under the Facility | $ 46.8 |
Average borrowings under the Facility | 28.9 |
Average availability under the Facility | $ 40.2 |
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 |
Facility | Minimum | LIBOR | |
Revolving credit facility | |
Basis points added to reference rate (as a percent) | 1.25% |
Facility | Maximum | LIBOR | |
Revolving credit facility | |
Basis points added to reference rate (as a percent) | 1.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2017 | |
INCOME TAXES | |||
Statutory income tax rate (as a percent) | 21.00% | 21.00% | 35.00% |
Income tax benefit resulting from Tax Reform | $ 0.8 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | |
Information by business segments | |||||
Number of reportable business segments | item | 2 | ||||
Total external revenues | $ 310,715,873 | $ 295,207,286 | $ 655,449,793 | $ 610,720,495 | |
Depreciation | 625,603 | 522,278 | 1,217,986 | 1,020,783 | |
Amortization | 15,625 | 15,625 | 31,250 | 48,125 | |
Operating income (loss) | 2,556,511 | 908,853 | 4,623,426 | 2,216,002 | |
Interest expense | 396,576 | 313,364 | 719,526 | 515,555 | |
Income (loss) from operations before taxes | 2,196,215 | 622,899 | 3,943,536 | 1,732,990 | |
Total assets | 118,682,356 | 132,648,757 | 118,682,356 | 132,648,757 | $ 139,954,154 |
Capital expenditures | 1,214,274 | 1,123,946 | 2,370,779 | 1,329,368 | |
Cigarettes | |||||
Information by business segments | |||||
Total external revenues | 211,572,049 | 208,188,686 | 449,933,631 | 431,454,264 | |
Tobacco | |||||
Information by business segments | |||||
Total external revenues | 44,665,339 | 39,536,595 | 92,860,385 | 81,178,273 | |
Confectionery | |||||
Information by business segments | |||||
Total external revenues | 18,092,990 | 17,257,066 | 37,810,656 | 35,773,384 | |
Health food | |||||
Information by business segments | |||||
Total external revenues | 11,973,455 | 6,813,088 | 22,964,078 | 13,102,985 | |
Foodservice & other | |||||
Information by business segments | |||||
Total external revenues | 24,412,040 | 23,411,851 | 51,881,043 | 49,211,589 | |
Other | |||||
Information by business segments | |||||
Operating income (loss) | (1,499,641) | (1,428,996) | (3,091,166) | (2,837,849) | |
Interest expense | 359,753 | 290,550 | 644,929 | 469,033 | |
Income (loss) from operations before taxes | (1,859,393) | (1,716,846) | (3,736,095) | (3,304,182) | |
Total assets | 241,143 | 120,862 | 241,143 | 120,862 | |
Wholesale Segment | |||||
Information by business segments | |||||
Total external revenues | 298,742,418 | 288,394,198 | 632,485,715 | 597,617,510 | |
Depreciation | 378,172 | 324,142 | 742,304 | 634,627 | |
Amortization | 15,625 | 15,625 | 31,250 | 48,125 | |
Operating income (loss) | 3,797,109 | 2,531,394 | 7,500,992 | 5,720,377 | |
Interest expense | 36,823 | 22,814 | 74,597 | 46,522 | |
Income (loss) from operations before taxes | 3,793,759 | 2,530,624 | 7,461,683 | 5,698,556 | |
Total assets | 100,479,809 | 118,169,883 | 100,479,809 | 118,169,883 | |
Capital expenditures | 824,557 | 654,964 | 1,608,673 | 706,493 | |
Wholesale Segment | Cigarettes | |||||
Information by business segments | |||||
Total external revenues | 211,572,049 | 208,188,686 | 449,933,631 | 431,454,264 | |
Wholesale Segment | Tobacco | |||||
Information by business segments | |||||
Total external revenues | 44,665,339 | 39,536,595 | 92,860,385 | 81,178,273 | |
Wholesale Segment | Confectionery | |||||
Information by business segments | |||||
Total external revenues | 18,092,990 | 17,257,066 | 37,810,656 | 35,773,384 | |
Wholesale Segment | Foodservice & other | |||||
Information by business segments | |||||
Total external revenues | 24,412,040 | 23,411,851 | 51,881,043 | 49,211,589 | |
Retail Segment | |||||
Information by business segments | |||||
Total external revenues | 11,973,455 | 6,813,088 | 22,964,078 | 13,102,985 | |
Depreciation | 247,431 | 198,136 | 475,682 | 386,156 | |
Operating income (loss) | 259,043 | (193,545) | 213,600 | (666,526) | |
Income (loss) from operations before taxes | 261,849 | (190,879) | 217,948 | (661,384) | |
Total assets | 17,961,404 | 14,358,012 | 17,961,404 | 14,358,012 | |
Capital expenditures | 389,717 | 468,982 | 762,106 | 622,875 | |
Retail Segment | Health food | |||||
Information by business segments | |||||
Total external revenues | $ 11,973,455 | $ 6,813,088 | $ 22,964,078 | $ 13,102,985 |
COMMON STOCK REPURCHASE (Detail
COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
COMMON STOCK REPURCHASE | ||||
Number of shares of common stock repurchased | 24,527 | 6,482 | 34,959 | 6,653 |
Value of shares of common stock repurchased | $ 2.3 | $ 0.6 | $ 3.2 | $ 0.6 |