AMCON Distributing (DIT) 10-Q 20 Jul 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2020	Jul. 17, 2020
Document and Entity Information
Entity Registrant Name	AMCON DISTRIBUTING CO
Entity Central Index Key	0000928465
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		564,878
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2020	Sep. 30, 2019
Current assets:
Cash	$ 596,564	$ 337,704
Accounts receivable, less allowance for doubtful accounts of $1.2 million at June 2020 and $0.9 million at September 2019	33,626,042	24,665,620
Inventories, net	82,009,219	102,343,517
Income taxes receivable		350,378
Prepaid and other current assets	7,259,528	7,148,459
Total current assets	123,491,353	134,845,678
Property and equipment, net	18,236,033	17,655,415
Operating lease right-of-use assets, net	19,705,044
Note receivable	3,500,000
Goodwill	4,436,950	4,436,950
Other intangible assets, net	500,000	500,000
Equity method investment	6,648,666
Other assets	399,943	273,579
Total assets	176,917,989	157,711,622
Current liabilities:
Accounts payable	20,719,129	18,647,572
Accrued expenses	7,067,083	8,577,972
Accrued wages, salaries and bonuses	2,968,148	3,828,847
Income taxes payable	480,649
Current operating lease liabilities	5,486,963
Current maturities of long-term debt	546,657	532,747
Total current liabilities	37,268,629	31,587,138
Credit facility	56,384,002	60,376,714
Deferred income tax liability, net	1,820,511	1,823,373
Long-term operating lease liabilities	14,578,728
Long-term debt, less current maturities	2,713,798	3,125,644
Other long-term liabilities	167,755	42,011
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized
Common stock, $.01 par value, 3,000,000 shares authorized, 564,878 shares outstanding at June 2020 and 552,614 shares outstanding at September 2019	8,697	8,561
Additional paid-in capital	24,250,873	23,165,639
Retained earnings	68,657,375	66,414,397
Treasury stock at cost	(28,932,379)	(28,831,855)
Total shareholders' equity	63,984,566	60,756,742
Total liabilities and shareholders' equity	$ 176,917,989	$ 157,711,622

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Sep. 30, 2019
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 1.2	$ 0.9
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,000,000	3,000,000
Common stock, shares outstanding (in shares)	564,878	552,614

Condensed Consolidated Unaudite

Condensed Consolidated Unaudited Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Unaudited Statements of Operations
Sales (including excise taxes of $103.6 million and $98.0 million, and $285.1 million and $274.0 million, respectively)	$ 396,854,324	$ 369,981,516	$ 1,094,841,943	$ 1,025,431,309
Cost of sales	375,202,044	349,455,624	1,031,651,499	963,683,859
Gross profit	21,652,280	20,525,892	63,190,444	61,747,450
Selling, general and administrative expenses	18,377,641	18,513,048	55,843,266	53,861,943
Depreciation and amortization	801,683	620,142	2,318,045	1,869,378
Total operating expenses	19,179,324	19,133,190	58,161,311	55,731,321
Operating income	2,472,956	1,392,702	5,029,133	6,016,129
Other expense (income):
Interest expense	461,581	381,469	1,321,267	1,100,995
Other (income), net	(42,525)	(15,446)	(79,222)	(55,081)
Total other expenses (income)	419,056	366,023	1,242,045	1,045,914
Income from operations before income taxes	2,053,900	1,026,679	3,787,088	4,970,215
Income tax expense	586,000	361,000	1,168,000	1,536,000
Equity method investment earnings, net of tax	111,666		111,666
Net income available to common shareholders	$ 1,579,566	$ 665,679	$ 2,730,754	$ 3,434,215
Basic earnings per share available to common shareholders (in dollars per share)	$ 2.79	$ 1.12	$ 4.84	$ 5.65
Diluted earnings per share available to common shareholders (in dollars per share)	$ 2.77	$ 1.10	$ 4.79	$ 5.56
Basic weighted average shares outstanding (in shares)	565,483	592,768	564,578	607,505
Diluted weighted average shares outstanding (in shares)	569,902	606,278	569,873	617,887
Dividends declared and paid per common share (in dollars per share)	$ 0.18	$ 0.18	$ 0.82	$ 0.82

Condensed Consolidated Unaudi_2

Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Unaudited Statements of Operations
Sales, excise taxes	$ 103.6	$ 98	$ 285.1	$ 274

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, 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)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(524,866)	(524,866)
Compensation expense and issuance of stock in connection with equity-based awards	$ 120		1,116,075		1,116,195
Compensation expense and issuance of stock in connection with equity-based awards (in shares)	11,950
Repurchase of common stock		$ (3,186,987)			(3,186,987)
Repurchase of common stock (in shares)		(34,960)
Net income				3,434,215	3,434,215
Balance at Jun. 30, 2019	$ 8,561	$ (24,511,739)	23,185,173	66,757,379	65,439,374
Balance (in shares) at Jun. 30, 2019	856,039	(263,272)
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)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(111,766)	(111,766)
Compensation expense and issuance of stock in connection with equity-based awards			36,801		36,801
Repurchase of common stock		$ (141)			(141)
Repurchase of common stock (in shares)		(1)
Net income				665,679	665,679
Balance at Jun. 30, 2019	$ 8,561	$ (24,511,739)	23,185,173	66,757,379	65,439,374
Balance (in shares) at Jun. 30, 2019	856,039	(263,272)
Balance at Sep. 30, 2019	$ 8,561	$ (28,831,855)	23,165,639	66,414,397	$ 60,756,742
Balance (in shares) at Sep. 30, 2019	856,039	(303,425)			552,614
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(487,776)	$ (487,776)
Compensation expense and issuance of stock in connection with equity-based awards	$ 136		1,085,234		1,085,370
Compensation expense and issuance of stock in connection with equity-based awards (in shares)	13,828
Repurchase of common stock		$ (100,524)			(100,524)
Repurchase of common stock (in shares)		(1,564)
Net income				2,730,754	2,730,754
Balance at Jun. 30, 2020	$ 8,697	$ (28,932,379)	24,250,873	68,657,375	$ 63,984,566
Balance (in shares) at Jun. 30, 2020	869,867	(304,989)			564,878
Balance at Mar. 31, 2020	$ 8,692	$ (28,863,654)	24,224,145	67,184,900	$ 62,554,083
Balance (in shares) at Mar. 31, 2020	869,367	(303,841)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(107,091)	(107,091)
Compensation expense and issuance of stock in connection with equity-based awards	$ 5		26,728		26,733
Compensation expense and issuance of stock in connection with equity-based awards (in shares)	500
Repurchase of common stock		$ (68,725)			(68,725)
Repurchase of common stock (in shares)		(1,148)
Net income				1,579,566	1,579,566
Balance at Jun. 30, 2020	$ 8,697	$ (28,932,379)	$ 24,250,873	$ 68,657,375	$ 63,984,566
Balance (in shares) at Jun. 30, 2020	869,867	(304,989)			564,878

Condensed Consolidated Unaudi_4

Condensed Consolidated Unaudited Statements Of Shareholders Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Unaudited Statements Of Shareholders’ Equity
Dividends on common stock	$ 0.18	$ 0.18	$ 0.82	$ 0.82

Condensed Consolidated Unaudi_5

Condensed Consolidated Unaudited Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 2,730,754	$ 3,434,215
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities:
Depreciation	2,318,045	1,827,711
Amortization		41,667
Equity method investment earnings, net of income tax	(111,666)
Loss (gain) on sales of property and equipment	17,042	(15,376)
Equity-based compensation	765,704	1,035,128
Deferred income taxes	(2,862)	112,439
Provision for losses on doubtful accounts	349,000	179,000
Inventory allowance	182,218	454,357
Changes in assets and liabilities:
Accounts receivable	(9,309,422)	(3,209,941)
Inventories	20,152,080	11,468,718
Prepaid and other current assets	(373,414)	(5,698,021)
Other assets	(126,364)	19,712
Accounts payable	2,040,386	2,485,721
Accrued expenses and accrued wages, salaries and bonuses	(1,424,472)	(1,460,935)
Other long-term liabilities	125,744	2,967
Income taxes payable and receivable	794,027	157,836
Net cash flows from (used in) operating activities	18,126,800	10,835,198
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(2,901,134)	(3,385,977)
Proceeds from sales of property and equipment	16,600	56,200
Investment in equity method investee	(6,500,000)
Issuance of note receivable	(3,500,000)
Net cash flows from (used in) investing activities	(12,884,534)	(3,329,777)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility	1,083,878,207	1,022,309,940
Repayments under revolving credit facility	(1,087,870,919)	(1,025,624,006)
Principal payments on long-term debt	(397,936)	(686,139)
Proceeds from exercise of stock options	25,750
Repurchase of common stock	(100,524)	(3,186,987)
Dividends on common stock	(487,776)	(524,866)
Settlement and withholdings of equity-based awards	(30,208)
Net cash flows from (used in) financing activities	(4,983,406)	(7,712,058)
Net change in cash	258,860	(206,637)
Cash, beginning of period	337,704	520,644
Cash, end of period	596,564	314,007
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	1,387,381	1,140,562
Cash paid during the period for income taxes	376,835	1,265,725
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	100,424	91,838
Issuance of common stock in connection with the vesting and exercise of equity-based awards	$ 990,653	$ 1,005,792

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION	9 Months Ended
	Jun. 30, 2020
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 serve customers in 26 states and primarily operate in the Central, Rocky Mountain, and Mid-South regions of the United States. · Our retail health food segment (“Retail Segment”) operates twenty-one 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 4,100 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 refrigerated products and institutional foodservice products. Convenience stores represent our largest customer category. In November 2019, Convenience Store News ranked us as the eighth (8th) largest convenience store distributor in the United States based on annual sales. Our Wholesale Segment 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, inventory optimization and merchandising expertise, information systems, and access to 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 685,000 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-one 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 33,000 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, has a total of seven locations in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of six 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. 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, 2019, 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 June 30, 2020 and June 30, 2019 have been referred to throughout this quarterly report as Q3 2020 and Q3 2019, respectively. The fiscal balance sheet dates as of June 30, 2020 and September 30, 2019 have been referred to as June 2020 and September 2019, respectively. SIGNIFICANT ACCOUNTING POLICIES Equity Method Investment The Company uses the equity method to account for its investment in an investee if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss (net of income taxes) of the investee is included in consolidated net earnings. Judgment regarding the level of influence over its equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing its equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and future prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. See Note 5 (Equity Method Investment) for further information relating to the Company’s equity method investment. ACCOUNTING PRONOUNCEMENTS Accounting Pronouncement Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 “Leases (Topic 842)”. Accounting Standards Codification Topic (“ASC”) 842 superseded the lease accounting requirements in “ASC 840 - Leases”. The most significant among the changes in ASU 2016-02 is the recognition of right-of-use (“ROU”) assets and corresponding lease liabilities for leases classified as operating leases. The accounting for finance leases, which were classified as capital leases under historical GAAP, remains substantially unchanged. The lease liabilities are equal to the present value of the remaining lease payments while the ROU asset is determined based on the amount of the lease liability, plus initial direct costs incurred less lease incentives. The Company elected the optional transition method to apply ASU 2016-02 prospectively at adoption during the Company’s first quarter of fiscal year 2020 (“Q1 2020”), which resulted in recognition of ROU assets of approximately $21.9 million, lease liabilities of $22.2 million, and a decrease of deferred rent recorded under ASC 840 of $0.3 million. The adoption of ASC 842 did not have a material effect on the Company’s consolidated statements of operations or cash flows. Comparative periods presented in the financial statements prior to Q1 2020 continue to be presented under ASC 840. The adoption of ASC 842 did not have a material impact on the Company’s debt-covenant compliance under its revolving credit facility. In accordance with an accounting policy election under ASC 842, the Company does not recognize assets or liabilities for leases with an initial term of twelve months or less as these short-term lease payments are recognized in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected the package of practical expedients within ASC 842 that allows an entity to not reassess, prior to the effective date, (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases. The Company also elected the practical expedient to account for non-lease components as part of the lease for all asset classes. New Accounting Pronouncements 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, 2022 (fiscal 2024 for the Company) with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments in this update were effective upon issuance for all entities through December 31, 2022. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements.

INVENTORIES

INVENTORIES	9 Months Ended
	Jun. 30, 2020
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 $1.2 million at June 2020 and $1.0 million at September 2019. 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.

LEASES

LEASES	9 Months Ended
	Jun. 30, 2020
Leases
LEASES	3. LEASES The Company’s wholesale segment leases certain warehouse facilities, office space, vehicles and office equipment. The Company’s retail segment leases store space in various shopping center complexes. Certain of the warehouse and retail store leases include one or more options to renew or terminate the applicable lease agreement, with the exercise of such options at the Company’s discretion. The Company’s leases do not contain any significant residual value guarantees nor do they impose any significant restrictions or covenants other than those customarily found in similar types of leases. The operating right-of-use (ROU) lease assets and liabilities recorded on the Company’s consolidated balance sheet consist of fixed lease payments. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term. Additionally, certain leases contain variable payments such as vehicle leases with per-mile charges or retail leases with an additional rent payment based on store performance. These variable payments are expensed as incurred. The Company combines lease components and non-lease components for all asset classes for purposes of recognizing lease assets and liabilities. The Company determines its incremental borrowing rates based on information available at the lease commencement date in calculating the present value of lease payments. Leases consist of the following: Assets Classification June 2020 Operating Operating lease right-of-use assets $ 19,705,044 Liabilities Current: Operating Operating lease liabilities $ 5,486,963 Non-current: Operating Long-term operating lease liabilities 14,578,728 Total lease liabilities $ 20,065,691 The components of lease costs were as follows: Total THREE MONTHS ENDED JUNE 2020 Operating lease cost $ 1,674,003 Short-term lease cost 79,334 Variable lease cost 82,092 Net lease cost $ 1,835,429 Total NINE MONTHS ENDED JUNE 2020 Operating lease cost $ 5,005,627 Short-term lease cost 246,776 Variable lease cost 251,319 Net lease cost $ 5,503,722 Maturities of lease liabilities as of June 2020 were as follows: Operating Leases 2020 $ 6,177,926 2021 5,223,564 2022 4,031,833 2023 3,200,980 2024 1,878,839 2025 and thereafter 1,345,755 Total lease payments 21,858,897 Less: interest (1,793,206) Present value of lease liabilities $ 20,065,691 Weighted-average remaining lease term and weighted-average discount rate information regarding the Company’s leases were as follows: Lease Term June 2020 Weighted-average remaining lease term (years): Operating Discount Rate Weighted-average discount rate: Operating % Other information regarding the Company’s leases were as follows: For the nine months ended June 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used by operating leases $ 4,949,672 Lease liabilities arising from obtaining new ROU assets: Operating leases $ 2,188,685 Future minimum operating lease payments as of September 2019, as reported in the 2019 Form 10-K under ASC 840, were as follows: Operating Fiscal Year Ending Leases 2020 $ 6,468,837 2021 5,418,617 2022 4,299,261 2023 3,216,671 2024 2,456,810 Thereafter 2,387,618 Total minimum lease payments $ 24,247,814

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	9 Months Ended
	Jun. 30, 2020
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: June September 2020 2019 Wholesale Segment $ 4,436,950 $ 4,436,950 Other intangible assets of the Company consisted of the following: June September 2020 2019 Trademarks and tradenames (Retail Segment) $ 500,000 $ 500,000 Goodwill, trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. Goodwill recorded on the Company’s consolidated balance sheet represents amounts allocated to its wholesale reporting unit which totaled $4.4 million at both June 2020 and September 2019. The Company performs its annual impairment testing during the fourth fiscal quarter of each year or as circumstances change or necessitate. There have been no material changes to the Company’s impairment assessments since its fiscal year ended September 2019.

EQUITY METHOD INVESTMENT

EQUITY METHOD INVESTMENT	9 Months Ended
	Jun. 30, 2020
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT	5. EQUITY METHOD INVESTMENT In April 2020, the Company completed its previously announced transaction with Chas. M. Sledd Company (“Sledd”), a West Virginia wholesale distributor serving the convenience store industry, to jointly own and operate a limited liability company (“Team Sledd”) formed for the purpose of owning and operating Sledd’s wholesale distribution business. In conjunction with the transaction, Sledd contributed substantially all of its assets and stated liabilities to Team Sledd, while the Company contributed $10.0 million in cash, of which $6.5 million was structured as equity and $3.5 million was structured as a secured loan to Team Sledd which is subordinate to the liens of Team Sledd's existing secured lenders. At June 2020, AMCON owned approximately 44% of Team Sledd’s outstanding equity, with a carrying value of $6.6 million. For the three months ended June 2020, the Company recognized $0.1 million in equity in earnings (net of income taxes) from its investment in Team Sledd. The Company’s secured loan to Team Sledd had a carrying value of $3.5 million as of June 2020.

DIVIDENDS

DIVIDENDS	9 Months Ended
	Jun. 30, 2020
DIVIDENDS
DIVIDENDS	6. DIVIDENDS The Company paid cash dividends on its common stock totaling $0.1 million and $0.5 million for the three and nine month periods ended June 2020, respectively, and $0.1 million and $0.5 million for the three and nine month periods ended June 2019, respectively.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Jun. 30, 2020
EARNINGS PER SHARE
EARNINGS PER SHARE	7. EARNINGS PER SHARE Basic earnings per share available to common shareholders is calculated by dividing net income 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 by the sum of the weighted average common shares outstanding and the weighted average dilutive equity awards. For the three months ended June 2020 2019 Basic Diluted Basic Diluted Weighted average common shares outstanding 565,483 565,483 592,768 592,768 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 4,419 — 13,510 Weighted average number of shares outstanding 565,483 569,902 592,768 606,278 Net income available to common shareholders $ 1,579,566 $ 1,579,566 $ 665,679 $ 665,679 Net earnings per share available to common shareholders $ 2.79 $ 2.77 $ 1.12 $ 1.10 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. For the nine months ended June 2020 2019 Basic Diluted Basic Diluted Weighted average common shares outstanding 564,578 564,578 607,505 607,505 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 5,295 — 10,382 Weighted average number of shares outstanding 564,578 569,873 607,505 617,887 Net income available to common shareholders $ 2,730,754 $ 2,730,754 $ 3,434,215 $ 3,434,215 Net earnings per share available to common shareholders $ 4.84 $ 4.79 $ 5.65 $ 5.56 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive.

DEBT

DEBT	9 Months Ended
	Jun. 30, 2020
DEBT
DEBT	8. 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 June 2020: · A March 2025 maturity date without a penalty for prepayment. · $110.0 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 (or equivalent successor rate index) plus 125 - 150 basis points depending on certain credit facility utilization measures, at the election of the Company. In no event shall LIBOR be less than 100 basis points. · 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 fixed charge coverage ratio was over 1.0 for the trailing twelve months. · Provides that the Company may use up to $3.5 million annually, on a collective basis, for the payment of dividends on its common stock, or other distributions or investments, provided the Company is not in default before or after such dividends, distributions or investments. Additionally, the Company may pay dividends on its common stock, or make other distributions or investments in excess of $3.5 million annually provided the Company meets certain excess availability and proforma fixed charge coverage ratios and is not in default before or after such dividends, distributions or investments. 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 June 2020 was $95.0 million, of which $56.4 million was outstanding, leaving $38.6 million available. At June 2020, 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 2.42% at June 2020. For the nine months ended June 2020, our peak borrowings under the Facility were $72.7 million, and our average borrowings and average availability under the Facility were $50.1 million and $30.8 million, respectively. 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, are in default. There were no such cross defaults at June 2020. 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 The Company has issued a letter of credit for $0.5 million to its workers’ compensation insurance carrier as part of its self‑insured loss control program.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	9 Months Ended
	Jun. 30, 2020
BUSINESS SEGMENTS
BUSINESS SEGMENTS	9. 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 and income earned 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 JUNE 2020 External revenues: Cigarettes $ 276,348,474 $ — $ — $ Tobacco 59,487,110 — — 59,487,110 Confectionery 20,614,034 — — 20,614,034 Health food — — 11,538,319 Foodservice & other 28,866,387 — — 28,866,387 Total external revenue 385,316,005 — Depreciation 452,025 349,658 — 801,683 Amortization — — — — Operating income (loss) 4,350,347 (159,706) (1,717,685) 2,472,956 Interest expense 31,623 — 429,958 461,581 Income (loss) from operations before taxes 4,329,679 (157,273) (2,118,506) 2,053,900 Equity method investment earnings, net of tax — — 111,666 111,666 Total assets 146,782,772 Capital expenditures 575,462 174,374 — 749,836 THREE MONTHS ENDED JUNE 2019 External revenue: Cigarettes $ 255,049,572 $ — $ — $ Tobacco 52,014,713 — — 52,014,713 Confectionery 22,541,448 — — 22,541,448 Health food — — 11,037,533 Foodservice & other 29,338,250 — — 29,338,250 Total external revenue 358,943,983 — Depreciation 350,701 259,024 — 609,725 Amortization 10,417 — — 10,417 Operating income (loss) 3,592,787 (702,888) (1,497,197) 1,392,702 Interest expense 36,240 — 345,229 381,469 Income (loss) from operations before taxes 3,569,182 (700,076) (1,842,427) 1,026,679 Total assets 120,567,974 186,822 Capital expenditures 757,993 347,790 — 1,105,783 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2020 External revenue: Cigarettes $ 750,264,131 $ — $ — $ 750,264,131 Tobacco 165,443,803 — — 165,443,803 Confectionery 59,477,946 — — 59,477,946 Health food — 34,629,465 — 34,629,465 Foodservice & other 85,026,598 — — 85,026,598 Total external revenue 34,629,465 — Depreciation 1,327,431 990,614 — 2,318,045 Amortization — — — — Operating income (loss) 10,907,179 (1,216,491) (4,661,555) 5,029,133 Interest expense 98,187 — 1,223,080 1,321,267 Income (loss) from operations before taxes 10,852,250 (1,209,665) (5,855,497) 3,787,088 Equity method investment earnings, net of tax — — 111,666 111,666 Total assets 146,782,772 19,584,013 176,917,989 Capital expenditures 1,808,162 1,124,143 — 2,932,305 NINE MONTHS ENDED JUNE 2019 External revenue: Cigarettes $ 704,983,203 $ — $ — $ 704,983,203 Tobacco 144,875,098 — — 144,875,098 Confectionery 60,352,104 — — 60,352,104 Health food — 34,001,611 — 34,001,611 Foodservice & other 81,219,293 — — 81,219,293 Total external revenue 991,429,698 34,001,611 — Depreciation 1,093,005 734,706 — 1,827,711 Amortization 41,667 — — 41,667 Operating income (loss) 11,093,779 (489,288) (4,588,362) 6,016,129 Interest expense 110,837 — 990,158 1,100,995 Income (loss) from operations before taxes 11,030,865 (482,128) (5,578,522) 4,970,215 Total assets 120,567,974 17,187,420 186,822 137,942,216 Capital expenditures 2,366,666 1,109,896 — 3,476,562

COMMON STOCK REPURCHASES

COMMON STOCK REPURCHASES	9 Months Ended
	Jun. 30, 2020
COMMON STOCK REPURCHASES
COMMON STOCK REPURCHASES	10. COMMON STOCK REPURCHASES The Company repurchased a total of 1,148 and 1,564 shares of its common stock during the three and nine months ended June 2020, respectively, for cash totaling approximately $0.1 million in each respective period. For the nine months ended June 2019, the Company repurchased a total of 34,960 shares of its common stock for approximately $3.2 million. All repurchased shares were recorded in treasury stock at cost.

IMPACT OF COVID-19

IMPACT OF COVID-19	9 Months Ended
	Jun. 30, 2020
IMPACT OF COVID-19
IMPACT OF COVID-19	11. IMPACT OF COVID-19 In March 2020, the World Health Organization (WHO) declared the novel strain of coronavirus (COVID-19) a global pandemic. The Company is designated as a critical infrastructure supplier to the Convenience Store Industry. Both of the Company’s business segments have continued to operate during the pandemic as essential suppliers of goods and services and the Company has taken certain proactive and precautionary steps to ensure the safety of its employees, customers and suppliers, including frequent cleaning and disinfection of workspaces, property and equipment, instituting social distancing measures and mandating remote working environments for certain employees. The Company continues to monitor medical, regulatory and consumer developments as more communities reopen, however, we cannot predict the long-term effects on our business, including our financial position or results of operations, if governmental restrictions such as Stay-At-Home orders or other such directives continue or are reinstated for a prolonged period of time and materially disrupt our supply chain or our ability to procure products or fulfill orders due to disruptions in our warehouse operations.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)	9 Months Ended
	Jun. 30, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
WHOLESALE SEGMENT AND RETAIL SEGMENT	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 serve customers in 26 states and primarily operate in the Central, Rocky Mountain, and Mid-South regions of the United States. · Our retail health food segment (“Retail Segment”) operates twenty-one 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 4,100 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 refrigerated products and institutional foodservice products. Convenience stores represent our largest customer category. In November 2019, Convenience Store News ranked us as the eighth (8th) largest convenience store distributor in the United States based on annual sales. Our Wholesale Segment 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, inventory optimization and merchandising expertise, information systems, and access to 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 685,000 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-one 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 33,000 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, has a total of seven locations in and around Orlando, Florida. Akin’s, which was also established in 1935, has a total of six 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. 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, 2019, 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 June 30, 2020 and June 30, 2019 have been referred to throughout this quarterly report as Q3 2020 and Q3 2019, respectively. The fiscal balance sheet dates as of June 30, 2020 and September 30, 2019 have been referred to as June 2020 and September 2019, respectively.
Equity Method Investment	Equity Method Investment The Company uses the equity method to account for its investment in an investee if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income or loss (net of income taxes) of the investee is included in consolidated net earnings. Judgment regarding the level of influence over its equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing its equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and future prospects, and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified. See Note 5 (Equity Method Investment) for further information relating to the Company’s equity method investment.
ACCOUNTING PRONOUNCEMENTS	ACCOUNTING PRONOUNCEMENTS Accounting Pronouncement Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 “Leases (Topic 842)”. Accounting Standards Codification Topic (“ASC”) 842 superseded the lease accounting requirements in “ASC 840 - Leases”. The most significant among the changes in ASU 2016-02 is the recognition of right-of-use (“ROU”) assets and corresponding lease liabilities for leases classified as operating leases. The accounting for finance leases, which were classified as capital leases under historical GAAP, remains substantially unchanged. The lease liabilities are equal to the present value of the remaining lease payments while the ROU asset is determined based on the amount of the lease liability, plus initial direct costs incurred less lease incentives. The Company elected the optional transition method to apply ASU 2016-02 prospectively at adoption during the Company’s first quarter of fiscal year 2020 (“Q1 2020”), which resulted in recognition of ROU assets of approximately $21.9 million, lease liabilities of $22.2 million, and a decrease of deferred rent recorded under ASC 840 of $0.3 million. The adoption of ASC 842 did not have a material effect on the Company’s consolidated statements of operations or cash flows. Comparative periods presented in the financial statements prior to Q1 2020 continue to be presented under ASC 840. The adoption of ASC 842 did not have a material impact on the Company’s debt-covenant compliance under its revolving credit facility. In accordance with an accounting policy election under ASC 842, the Company does not recognize assets or liabilities for leases with an initial term of twelve months or less as these short-term lease payments are recognized in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected the package of practical expedients within ASC 842 that allows an entity to not reassess, prior to the effective date, (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases. The Company also elected the practical expedient to account for non-lease components as part of the lease for all asset classes. New Accounting Pronouncements 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, 2022 (fiscal 2024 for the Company) with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments in this update were effective upon issuance for all entities through December 31, 2022. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements.

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Jun. 30, 2020
Leases
Schedule of leases	Assets Classification June 2020 Operating Operating lease right-of-use assets $ 19,705,044 Liabilities Current: Operating Operating lease liabilities $ 5,486,963 Non-current: Operating Long-term operating lease liabilities 14,578,728 Total lease liabilities $ 20,065,691
Schedule of components of lease costs	Total THREE MONTHS ENDED JUNE 2020 Operating lease cost $ 1,674,003 Short-term lease cost 79,334 Variable lease cost 82,092 Net lease cost $ 1,835,429 Total NINE MONTHS ENDED JUNE 2020 Operating lease cost $ 5,005,627 Short-term lease cost 246,776 Variable lease cost 251,319 Net lease cost $ 5,503,722
Schedule of maturities of lease liabilities	Operating Leases 2020 $ 6,177,926 2021 5,223,564 2022 4,031,833 2023 3,200,980 2024 1,878,839 2025 and thereafter 1,345,755 Total lease payments 21,858,897 Less: interest (1,793,206) Present value of lease liabilities $ 20,065,691
Schedule of weighted-average remaining lease term and weighted-average discount rate	Lease Term June 2020 Weighted-average remaining lease term (years): Operating Discount Rate Weighted-average discount rate: Operating %
Schedule of other information regarding the Company’s leases	For the nine months ended June 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used by operating leases $ 4,949,672 Lease liabilities arising from obtaining new ROU assets: Operating leases $ 2,188,685
Schedule of future minimum operating lease payments	Operating Fiscal Year Ending Leases 2020 $ 6,468,837 2021 5,418,617 2022 4,299,261 2023 3,216,671 2024 2,456,810 Thereafter 2,387,618 Total minimum lease payments $ 24,247,814

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	9 Months Ended
	Jun. 30, 2020
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of goodwill by reporting segment	June September 2020 2019 Wholesale Segment $ 4,436,950 $ 4,436,950
Schedule of other intangible assets	June September 2020 2019 Trademarks and tradenames (Retail Segment) $ 500,000 $ 500,000

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Jun. 30, 2020
EARNINGS PER SHARE
Schedule of net earnings per share available to common shareholders	For the three months ended June 2020 2019 Basic Diluted Basic Diluted Weighted average common shares outstanding 565,483 565,483 592,768 592,768 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 4,419 — 13,510 Weighted average number of shares outstanding 565,483 569,902 592,768 606,278 Net income available to common shareholders $ 1,579,566 $ 1,579,566 $ 665,679 $ 665,679 Net earnings per share available to common shareholders $ 2.79 $ 2.77 $ 1.12 $ 1.10 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. For the nine months ended June 2020 2019 Basic Diluted Basic Diluted Weighted average common shares outstanding 564,578 564,578 607,505 607,505 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 5,295 — 10,382 Weighted average number of shares outstanding 564,578 569,873 607,505 617,887 Net income available to common shareholders $ 2,730,754 $ 2,730,754 $ 3,434,215 $ 3,434,215 Net earnings per share available to common shareholders $ 4.84 $ 4.79 $ 5.65 $ 5.56 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive.

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	9 Months Ended
	Jun. 30, 2020
BUSINESS SEGMENTS
Schedule of segment information	Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED JUNE 2020 External revenues: Cigarettes $ 276,348,474 $ — $ — $ Tobacco 59,487,110 — — 59,487,110 Confectionery 20,614,034 — — 20,614,034 Health food — — 11,538,319 Foodservice & other 28,866,387 — — 28,866,387 Total external revenue 385,316,005 — Depreciation 452,025 349,658 — 801,683 Amortization — — — — Operating income (loss) 4,350,347 (159,706) (1,717,685) 2,472,956 Interest expense 31,623 — 429,958 461,581 Income (loss) from operations before taxes 4,329,679 (157,273) (2,118,506) 2,053,900 Equity method investment earnings, net of tax — — 111,666 111,666 Total assets 146,782,772 Capital expenditures 575,462 174,374 — 749,836 THREE MONTHS ENDED JUNE 2019 External revenue: Cigarettes $ 255,049,572 $ — $ — $ Tobacco 52,014,713 — — 52,014,713 Confectionery 22,541,448 — — 22,541,448 Health food — — 11,037,533 Foodservice & other 29,338,250 — — 29,338,250 Total external revenue 358,943,983 — Depreciation 350,701 259,024 — 609,725 Amortization 10,417 — — 10,417 Operating income (loss) 3,592,787 (702,888) (1,497,197) 1,392,702 Interest expense 36,240 — 345,229 381,469 Income (loss) from operations before taxes 3,569,182 (700,076) (1,842,427) 1,026,679 Total assets 120,567,974 186,822 Capital expenditures 757,993 347,790 — 1,105,783 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2020 External revenue: Cigarettes $ 750,264,131 $ — $ — $ 750,264,131 Tobacco 165,443,803 — — 165,443,803 Confectionery 59,477,946 — — 59,477,946 Health food — 34,629,465 — 34,629,465 Foodservice & other 85,026,598 — — 85,026,598 Total external revenue 34,629,465 — Depreciation 1,327,431 990,614 — 2,318,045 Amortization — — — — Operating income (loss) 10,907,179 (1,216,491) (4,661,555) 5,029,133 Interest expense 98,187 — 1,223,080 1,321,267 Income (loss) from operations before taxes 10,852,250 (1,209,665) (5,855,497) 3,787,088 Equity method investment earnings, net of tax — — 111,666 111,666 Total assets 146,782,772 19,584,013 176,917,989 Capital expenditures 1,808,162 1,124,143 — 2,932,305 NINE MONTHS ENDED JUNE 2019 External revenue: Cigarettes $ 704,983,203 $ — $ — $ 704,983,203 Tobacco 144,875,098 — — 144,875,098 Confectionery 60,352,104 — — 60,352,104 Health food — 34,001,611 — 34,001,611 Foodservice & other 81,219,293 — — 81,219,293 Total external revenue 991,429,698 34,001,611 — Depreciation 1,093,005 734,706 — 1,827,711 Amortization 41,667 — — 41,667 Operating income (loss) 11,093,779 (489,288) (4,588,362) 6,016,129 Interest expense 110,837 — 990,158 1,100,995 Income (loss) from operations before taxes 11,030,865 (482,128) (5,578,522) 4,970,215 Total assets 120,567,974 17,187,420 186,822 137,942,216 Capital expenditures 2,366,666 1,109,896 — 3,476,562

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details)	1 Months Ended	9 Months Ended
	Nov. 30, 2019item	Jun. 30, 2020ft²stateitem
Number of business segments		2
Wholesale Segment
Number of states served | state		26
Number of retail outlets served		4,100
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		685,000
Retail Segment
Number of operating health food retail stores		21
Number of products sold or distributed		33,000
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		6

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION - ACCOUNTING PRONOUNCEMENTS (Details) - USD ($)	9 Months Ended
	Jun. 30, 2020	Oct. 01, 2019
ROU assets	$ 19,705,044
Lease liabilities	$ 20,065,691
Lease, Practical Expedients, Package [true false]	true
ASU 2016-12
ROU assets		$ 21,900,000
Lease liabilities		22,200,000
ASU 2016-12 | Adjustment
Decrease of deferred rent		$ 300,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Millions	Jun. 30, 2020	Sep. 30, 2019
INVENTORIES
Total reserves on finished goods	$ 1.2	$ 1

LEASES (Details)

LEASES (Details)	9 Months Ended
	Jun. 30, 2020USD ($)
Leases
Options to renew	true
Options to terminate	true
Operating lease right-of-use assets, net	$ 19,705,044
Current operating lease liabilities	5,486,963
Non-current operating lease liabilities	14,578,728
Total lease liabilities	$ 20,065,691

LEASES - Components of lease co

LEASES - Components of lease costs (Details) - USD ($)	3 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Leases
Operating lease cost	$ 1,674,003	$ 5,005,627
Short-term lease cost	79,334	246,776
Variable lease cost	82,092	251,319
Net lease cost	$ 1,835,429	$ 5,503,722

LEASES - Maturities of lease li

LEASES - Maturities of lease liabilities (Details)	Jun. 30, 2020USD ($)
Operating Leases
2020	$ 6,177,926
2021	5,223,564
2022	4,031,833
2023	3,200,980
2024	1,878,839
2025 and thereafter	1,345,755
Total lease payments	21,858,897
Less: interest	(1,793,206)
Present value of lease liabilities	$ 20,065,691

LEASES - Weighted-average remai

LEASES - Weighted-average remaining lease term and weighted-average discount rate (Details)	Jun. 30, 2020
Leases
Operating, weighted-average remaining lease term	4 years 4 months 24 days
Operating, weighted-average discount rate	4.04%

LEASES - Other information (Det

LEASES - Other information (Details)	9 Months Ended
	Jun. 30, 2020USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$ 4,949,672
Lease liabilities arising from obtaining new ROU assets:
Operating leases	$ 2,188,685

LEASES - Future minimum operati

LEASES - Future minimum operating lease payments (Details)	Sep. 30, 2019USD ($)
Future minimum operating lease payments
2020	$ 6,468,837
2021	5,418,617
2022	4,299,261
2023	3,216,671
2024	2,456,810
Thereafter	2,387,618
Total minimum lease payments	$ 24,247,814

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	Jun. 30, 2020	Sep. 30, 2019
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 ($)	Jun. 30, 2020	Sep. 30, 2019
Other intangible assets, net	$ 500,000	$ 500,000
Trademarks and tradenames | Retail Segment
Other intangible assets, net	$ 500,000	$ 500,000

EQUITY METHOD INVESTMENT (Detai

EQUITY METHOD INVESTMENT (Details) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Apr. 30, 2020	Jun. 30, 2020	Jun. 30, 2020
EQUITY METHOD INVESTMENT
Contribution structured as equity			$ 6,500,000
Contribution structured as a secured loan			3,500,000
Carrying value of investment		$ 6,648,666	6,648,666
Equity method investment earnings, net of tax		111,666	111,666
Carrying value of secured loan		$ 3,500,000	$ 3,500,000
Team Sledd
EQUITY METHOD INVESTMENT
Contribution in cash	$ 10,000,000
Contribution structured as equity	6,500,000
Contribution structured as a secured loan	$ 3,500,000
Ownership (as a percent)		44.00%	44.00%
Carrying value of investment		$ 6,600,000	$ 6,600,000
Equity method investment earnings, net of tax		100,000
Carrying value of secured loan		$ 3,500,000	$ 3,500,000

DIVIDENDS (Details)

DIVIDENDS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
DIVIDENDS
Cash dividends paid on common stock	$ 100,000	$ 100,000	$ 487,776	$ 524,866

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
EARNINGS PER SHARE
Weighted average common shares outstanding, Basic	565,483	592,768	564,578	607,505
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock	4,419	13,510	5,295	10,382
Weighted average number of shares outstanding, Diluted	569,902	606,278	569,873	617,887
Net income available to common shareholders	$ 1,579,566	$ 665,679	$ 2,730,754	$ 3,434,215
Net income available to common shareholders, diluted	$ 1,579,566	$ 665,679	$ 2,730,754	$ 3,434,215
Net earnings per share available to common shareholders, Basic (in dollars per share)	$ 2.79	$ 1.12	$ 4.84	$ 5.65
Net earnings per share available to common shareholders, Diluted (in dollars per share)	$ 2.77	$ 1.10	$ 4.79	$ 5.56

DEBT (Details)

DEBT (Details) $ in Millions	Jun. 30, 2020USD ($)	Jun. 30, 2020USD ($)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	$ 0.5
Real Estate Loan
Revolving credit facility
Number of cross defaults | item		0
Facility
Revolving credit facility
Revolving credit limit	110	$ 110
Increase in borrowing capacity available under loan accordion	25	25
Additional credit advances for certain inventory purchases	$ 10	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	$ 3.5	3.5
Current credit limit of the Facility	95	95
Outstanding borrowings under the Facility	56.4	56.4
Credit available under the Facility	$ 38.6	38.6
Average interest rate	2.42%
Peak borrowings under the Facility		72.7
Average borrowings under the Facility		50.1
Average availability under the Facility		$ 30.8
Facility | LIBOR
Revolving credit facility
Variable rate basis	LIBOR
Minimum basis points added to reference rate (as a percent)	1.00%
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%

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details)	3 Months Ended		9 Months Ended
	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2020USD ($)item	Jun. 30, 2019USD ($)	Sep. 30, 2019USD ($)
Information by business segments
Number of reportable business segments | item			2
Total external revenues	$ 396,854,324	$ 369,981,516	$ 1,094,841,943	$ 1,025,431,309
Depreciation	801,683	609,725	2,318,045	1,827,711
Amortization		10,417		41,667
Operating income (loss)	2,472,956	1,392,702	5,029,133	6,016,129
Interest expense	461,581	381,469	1,321,267	1,100,995
Income (loss) from operations before taxes	2,053,900	1,026,679	3,787,088	4,970,215
Equity method investment earnings, net of tax	111,666		111,666
Total assets	176,917,989	137,942,216	176,917,989	137,942,216	$ 157,711,622
Capital expenditures	749,836	1,105,783	2,932,305	3,476,562
Cigarettes
Information by business segments
Total external revenues	276,348,474	255,049,572	750,264,131	704,983,203
Tobacco
Information by business segments
Total external revenues	59,487,110	52,014,713	165,443,803	144,875,098
Confectionery
Information by business segments
Total external revenues	20,614,034	22,541,448	59,477,946	60,352,104
Health food
Information by business segments
Total external revenues	11,538,319	11,037,533	34,629,465	34,001,611
Foodservice & other
Information by business segments
Total external revenues	28,866,387	29,338,250	85,026,598	81,219,293
Other
Information by business segments
Operating income (loss)	(1,717,685)	(1,497,197)	(4,661,555)	(4,588,362)
Interest expense	429,958	345,229	1,223,080	990,158
Income (loss) from operations before taxes	(2,118,506)	(1,842,427)	(5,855,497)	(5,578,522)
Equity method investment earnings, net of tax	111,666		111,666
Total assets	10,551,204	186,822	10,551,204	186,822
Wholesale Segment
Information by business segments
Total external revenues	385,316,005	358,943,983	1,060,212,478	991,429,698
Depreciation	452,025	350,701	1,327,431	1,093,005
Amortization		10,417		41,667
Operating income (loss)	4,350,347	3,592,787	10,907,179	11,093,779
Interest expense	31,623	36,240	98,187	110,837
Income (loss) from operations before taxes	4,329,679	3,569,182	10,852,250	11,030,865
Total assets	146,782,772	120,567,974	146,782,772	120,567,974
Capital expenditures	575,462	757,993	1,808,162	2,366,666
Wholesale Segment | Cigarettes
Information by business segments
Total external revenues	276,348,474	255,049,572	750,264,131	704,983,203
Wholesale Segment | Tobacco
Information by business segments
Total external revenues	59,487,110	52,014,713	165,443,803	144,875,098
Wholesale Segment | Confectionery
Information by business segments
Total external revenues	20,614,034	22,541,448	59,477,946	60,352,104
Wholesale Segment | Foodservice & other
Information by business segments
Total external revenues	28,866,387	29,338,250	85,026,598	81,219,293
Retail Segment
Information by business segments
Total external revenues	11,538,319	11,037,533	34,629,465	34,001,611
Depreciation	349,658	259,024	990,614	734,706
Operating income (loss)	(159,706)	(702,888)	(1,216,491)	(489,288)
Income (loss) from operations before taxes	(157,273)	(700,076)	(1,209,665)	(482,128)
Total assets	19,584,013	17,187,420	19,584,013	17,187,420
Capital expenditures	174,374	347,790	1,124,143	1,109,896
Retail Segment | Health food
Information by business segments
Total external revenues	$ 11,538,319	$ 11,037,533	$ 34,629,465	$ 34,001,611

COMMON STOCK REPURCHASES (Detai

COMMON STOCK REPURCHASES (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019
COMMON STOCK REPURCHASES
Number of shares of common stock repurchased	1,148	1,564	34,960
Value of shares of common stock repurchased	$ 0.1	$ 0.1	$ 3.2