Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2021 | Jan. 14, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-15589 | |
Entity Registrant Name | AMCON DISTRIBUTING CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-0702918 | |
Entity Address, Address Line One | 7405 Irvington Road | |
Entity Address, City or Town | Omaha | |
Entity Address, State or Province | NE | |
Entity Address, Postal Zip Code | 68122 | |
City Area Code | 402 | |
Local Phone Number | 331-3727 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | DIT | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 582,789 | |
Entity Central Index Key | 0000928465 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Current assets: | ||
Cash | $ 840,961 | $ 519,591 |
Accounts receivable, less allowance for doubtful accounts of $0.8 million at December 2021 and $0.9 million at September 2021 | 30,861,247 | 35,844,163 |
Inventories, net | 97,742,318 | 95,212,085 |
Prepaid expenses and other current assets | 4,830,698 | 4,999,125 |
Total current assets | 134,275,224 | 136,574,964 |
Property and equipment, net | 15,449,705 | 16,012,524 |
Operating lease right-of-use assets, net | 16,942,549 | 17,846,529 |
Note receivable, net of current portion | 3,325,000 | 3,325,000 |
Goodwill | 4,436,950 | 4,436,950 |
Other intangible assets, net | 500,000 | 500,000 |
Equity method investment | 10,406,708 | 9,380,343 |
Other assets | 312,635 | 334,819 |
Total assets | 185,648,771 | 188,411,129 |
Current liabilities: | ||
Accounts payable | 18,372,775 | 24,235,042 |
Accrued expenses | 9,686,140 | 11,468,955 |
Accrued wages, salaries and bonuses | 2,892,772 | 4,489,852 |
Income taxes payable | 1,194,512 | 867,160 |
Current operating lease liabilities | 5,555,582 | 5,513,390 |
Current maturities of long-term debt | 566,624 | 561,202 |
Total current liabilities | 38,268,405 | 47,135,601 |
Credit facility | 48,447,738 | 43,650,865 |
Deferred income tax liability, net | 2,704,876 | 1,531,228 |
Long-term operating lease liabilities | 11,723,408 | 12,669,157 |
Long-term debt, less current maturities | 4,910,559 | 5,054,265 |
Other long-term liabilities | 13,611 | 757,387 |
Shareholders' equity: | ||
Preferred stock, $.01 par value, 1,000,000 shares authorized | ||
Common stock, $.01 par value, 3,000,000 shares authorized, 582,789 shares outstanding at December 2021 and 551,369 shares outstanding at September 2021 | 9,148 | 8,834 |
Additional paid-in capital | 26,999,735 | 24,918,781 |
Retained earnings | 83,438,578 | 83,552,298 |
Treasury stock at cost | (30,867,287) | (30,867,287) |
Total shareholders' equity | 79,580,174 | 77,612,626 |
Total liabilities and shareholders' equity | $ 185,648,771 | $ 188,411,129 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 0.8 | $ 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) | 582,789 | 551,369 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Statements of Operations - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Unaudited Statements of Operations | ||
Sales (including excise taxes of $97.1 million and $100.5 million, respectively) | $ 422,571,278 | $ 404,744,774 |
Cost of sales | 395,638,615 | 381,282,795 |
Gross profit | 26,932,663 | 23,461,979 |
Selling, general and administrative expenses | 22,390,740 | 18,599,816 |
Depreciation | 784,245 | 774,285 |
Total operating expenses | 23,174,985 | 19,374,101 |
Operating income | 3,757,678 | 4,087,878 |
Other expense (income): | ||
Interest expense | 322,097 | 376,430 |
Other (income), net | (40,109) | (41,823) |
Total other expenses (income) | 281,988 | 334,607 |
Income from operations before income taxes | 3,475,690 | 3,753,271 |
Income tax expense | 1,245,000 | 1,011,000 |
Equity method investment earnings, net of tax | 770,365 | 335,339 |
Net income available to common shareholders | $ 3,001,055 | $ 3,077,610 |
Basic earnings per share available to common shareholders | $ 5.33 | $ 5.61 |
Diluted earnings per share available to common shareholders | $ 5.18 | $ 5.57 |
Basic weighted average shares outstanding | 563,546 | 548,125 |
Diluted weighted average shares outstanding | 578,964 | 552,059 |
Dividends paid per common share | $ 5.18 | $ 0.18 |
Condensed Consolidated Unaudi_2
Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Unaudited Statements of Operations | ||
Sales, excise taxes | $ 97.1 | $ 100.5 |
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, 2020 | $ 8,697 | $ (30,861,549) | $ 24,282,058 | $ 71,362,334 | $ 64,791,540 |
Balance (in shares) at Sep. 30, 2020 | 869,867 | (332,152) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (3,038,544) | (3,038,544) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 137 | 725,181 | 725,318 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 13,722 | ||||
Repurchase of common stock | $ (5,738) | (5,738) | |||
Repurchase of common stock (in shares) | (68) | ||||
Net income | 3,077,610 | 3,077,610 | |||
Balance at Dec. 31, 2020 | $ 8,834 | $ (30,867,287) | 25,007,239 | 71,401,400 | 65,550,186 |
Balance (in shares) at Dec. 31, 2020 | 883,589 | (332,220) | |||
Balance at Sep. 30, 2021 | $ 8,834 | $ (30,867,287) | 24,918,781 | 83,552,298 | $ 77,612,626 |
Balance (in shares) at Sep. 30, 2021 | 883,589 | (332,220) | 551,369 | ||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (3,114,775) | $ (3,114,775) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 314 | 2,080,954 | 2,081,268 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 31,420 | ||||
Net income | 3,001,055 | 3,001,055 | |||
Balance at Dec. 31, 2021 | $ 9,148 | $ (30,867,287) | $ 26,999,735 | $ 83,438,578 | $ 79,580,174 |
Balance (in shares) at Dec. 31, 2021 | 915,009 | (332,220) | 582,789 |
Condensed Consolidated Unaudi_4
Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Unaudited Statements of Shareholders' Equity | ||
Dividends on common stock | $ 5.18 | $ 5.18 |
Condensed Consolidated Unaudi_5
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,001,055 | $ 3,077,610 |
Adjustments to reconcile net income from operations to net cash flows from (used in) operating activities: | ||
Depreciation | 784,245 | 774,285 |
Equity method investment earnings, net of tax | (770,365) | (335,339) |
(Gain) loss on sales of property and equipment | (31,000) | (2,000) |
Equity-based compensation | 710,056 | 346,891 |
Deferred income taxes | 1,173,648 | 132,736 |
Provision for losses on doubtful accounts | (102,000) | (24,000) |
Inventory allowance | 99,304 | 172,137 |
Changes in assets and liabilities: | ||
Accounts receivable | 5,084,916 | 4,589,579 |
Inventories | (2,629,537) | 30,967,449 |
Prepaid and other current assets | (6,573) | (5,792,622) |
Other assets | 22,184 | 40,193 |
Accounts payable | (5,750,609) | (5,069,889) |
Accrued expenses and accrued wages, salaries and bonuses | (1,519,848) | (1,793,704) |
Other long-term liabilities | (743,776) | (169,854) |
Income taxes payable and receivable | 71,352 | (211,854) |
Net cash flows from (used in) operating activities | (606,948) | 26,701,618 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (333,084) | (432,505) |
Proceeds from sales of property and equipment | 31,000 | 2,000 |
Principal payment received on note receivable | 175,000 | |
Net cash flows from (used in) investing activities | (127,084) | (430,505) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facility | 439,039,482 | 385,943,710 |
Repayments under revolving credit facility | (434,242,609) | (414,863,443) |
Proceeds from borrowings on long-term debt | 3,000,000 | |
Principal payments on long-term debt | (138,284) | (136,119) |
Repurchase of common stock | (5,738) | |
Dividends on common stock | (3,114,775) | (105,599) |
Settlement and withholdings of equity-based awards | (488,412) | (250,021) |
Net cash flows from (used in) financing activities | 1,055,402 | (26,417,210) |
Net change in cash | 321,370 | (146,097) |
Cash, beginning of period | 519,591 | 661,195 |
Cash, end of period | 840,961 | 515,098 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 333,941 | 426,655 |
Cash paid during the period for income taxes | 1,090,119 | |
Supplemental disclosure of non-cash information: | ||
Equipment acquisitions classified in accounts payable | 16,591 | 16,007 |
Dividends declared, not paid | 2,932,945 | |
Issuance of common stock in connection with the vesting and exercise of equity-based awards | $ 2,280,783 | $ 949,812 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2021 | |
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 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 17,700 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 December 2021, Convenience Store News ranked us as the sixth (6th) 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 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 685,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kelloggs, Kraft, and Mars Wrigley. 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 retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akin’s”), and Earth Origins Market (“EOM”). These stores carry over 35,000 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. EOM has a total of seven 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, 2021, as filed with the Securities and Exchange Commission on Form 10-K. For purposes of this report, unless the context indicates otherwise, all references to “we”, “us”, “our”, the “Company”, and “AMCON” shall mean AMCON Distributing Company and its subsidiaries. Additionally, the three month fiscal periods ended December 31, 2021 and December 31, 2020 have been referred to throughout this quarterly report as Q1 2022 and Q1 2021, respectively. The fiscal balance sheet dates as of December 31, 2021 and September 30, 2021 have been referred to as December 2021 and September 2021, respectively. ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 | 3 Months Ended |
Dec. 31, 2021 | |
INVENTORIES | |
INVENTORIES | 2. INVENTORIES Inventories in our wholesale segment consisted of finished goods and are stated at the lower of cost or net realizable value, determined on a FIFO basis. Inventories in our retail segment consisted of finished goods and are stated at the lower of cost or market using the retail method. The wholesale distribution and retail health food segment inventories consist of finished products purchased in bulk quantities to be redistributed to the Company’s customers or sold at retail. Finished goods included total reserves of approximately $0.9 million at December 2021 and $0.8 million at September 2021. 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 | 3 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 3. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at December 2021 and September 2021 was as follows: December September 2021 2021 Wholesale Segment $ 4,436,950 $ 4,436,950 Other intangible assets at December 2021 and September 2021 consisted of the following: December September 2021 2021 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 December 2021 and September 2021. 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 2021. |
EQUITY METHOD INVESTMENT
EQUITY METHOD INVESTMENT | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY METHOD INVESTMENT. | |
EQUITY METHOD INVESTMENT | 4. EQUITY METHOD INVESTMENT The Company and Chas. M. Sledd Company (“Sledd”), a West Virginia wholesale distributor serving the convenience store industry, jointly own and operate Team Sledd, LLC (“Team Sledd”), a limited liability company which owns and operates Sledd’s wholesale distribution business. 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 December 2021, AMCON owned approximately 49% of Team Sledd’s outstanding equity, with a carrying value of $10.4 million. For the three months ended December 2021 and December 2020, the Company recognized $0.8 million and $0.3 million, respectively, 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 $3.3 million and $3.5 million as of December 2021 and September 2021, respectively. As of September 2021, approximately $0.2 million of the secured loan balance was recorded as a component of prepaid expenses and other current assets on the consolidated balance sheet. During Q1 2022, Team Sledd repaid the approximately $0.2 million current balance of the secured loan. Pursuant to an operating agreement between the Company and Sledd, certain membership interests in Team Sledd may be redeemed over a period of years, with such redemptions being funded from the operations of Team Sledd. Any such redemptions would result in a corresponding increase in the percentage of the outstanding equity of Team Sledd owned by AMCON. Team Sledd’s summarized unaudited financial data for the three months ended December 2021 and December 2020 was as follows: For the three months ended December 2021 For the three months ended December 2020 Sales $ 181,417,094 $ 164,568,084 Gross profit 9,817,979 7,847,390 Net income before income taxes 2,074,836 1,003,793 Net income attributable to AMCON, net of tax 770,365 335,339 |
DIVIDENDS
DIVIDENDS | 3 Months Ended |
Dec. 31, 2021 | |
DIVIDENDS | |
DIVIDENDS | 5. DIVIDENDS The Company paid a $0.18 per share cash dividend on its common stock totaling $0.1 million in each of the three month periods ended December 2021 and December 2020, respectively. During Q1 2022, the Company declared and paid a $5.00 per share special dividend totaling approximately $3.0 million. During Q1 2021, the Company declared a $5.00 per share special dividend totaling approximately $2.9 million that was paid in Q2 2021. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 6. EARNINGS PER SHARE Basic earnings per share available to common shareholders is calculated by dividing net income by the weighted average number of 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 number of common shares outstanding and the weighted average dilutive equity awards. For the three months ended December 2021 2020 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 563,546 563,546 548,125 548,125 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 15,418 — 3,934 Weighted average number of shares outstanding 563,546 578,964 548,125 552,059 Net income available to common shareholders $ 3,001,055 $ 3,001,055 $ 3,077,610 $ 3,077,610 Net earnings per share available to common shareholders $ 5.33 $ 5.18 $ 5.61 $ 5.57 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive. |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2021 | |
DEBT | |
DEBT | 7. DEBT The Company primarily finances its operations through a credit facility agreement (the “Facility”) and long-term debt agreements with banks. The Facility is provided through Bank of America acting as the senior agent and with BMO Harris Bank (“BMO”) participating in a loan syndication. CREDIT FACILITY The Facility included the following significant terms at December 2021: ● 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. For this purpose, in no event shall LIBOR be less than zero 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 $5.0 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 $5.0 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 from 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 December 2021 was $109.5 million, of which $48.4 million was outstanding, leaving $61.1 million available. At December 2021, 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 1.40% at December 2021. For the three months ended December 2021, our peak borrowings under the Facility were $64.3 million, and our average borrowings and average availability under the Facility were $43.9 million and $55.4 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 (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 would cause the loan to be considered in default if the loans where BMO is a lender, including the revolving credit facility, were in default. There were no such cross defaults at December 2021. 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 $0.6 million to its workers’ compensation insurance carrier as part of its self-insured loss control program. |
EQUITY-BASED INCENTIVE AWARDS
EQUITY-BASED INCENTIVE AWARDS | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY-BASED INCENTIVE AWARDS | |
EQUITY-BASED INCENTIVE AWARDS | 8. EQUITY-BASED INCENTIVE AWARDS Omnibus Plans The Company has two equity-based incentive plans, the 2014 Omnibus Incentive Plan and 2018 Omnibus Incentive Plan (collectively the “Omnibus Plans”), which provide for equity incentives to employees. Each Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plans together permit the issuance of up to 135,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plans is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At December 2021, awards with respect to a total of 123,970 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 11,030 shares may be awarded under the Omnibus Plans. Stock Options The following is a summary of stock option activity during Q1 2022: Weighted Number Average of Exercise Shares Price Outstanding at September 2021 22,250 $ 86.76 Granted — — Exercised (7,700) 86.57 Forfeited/Expired — — Outstanding at December 2021 14,550 $ 86.86 Restricted Stock Units At December 2021, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock unit awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans: Restricted Stock Units(1) Restricted Stock Units(2) Date of award: October 2019 October 2020 Original number of awards issued: 14,550 20,500 Service period: 36 months 36 months Estimated fair value of award at grant date: $ 1,007,000 $ 1,415,000 Non-vested awards outstanding at December 31, 2021: 4,851 13,668 Fair value of non-vested awards at December 31, 2021 of approximately: $ 968,000 $ 2,727,000 (1) 9,699 of the restricted stock units were vested as of December 2021. The remaining 4,851 restricted stock units will vest in October 2022. (2) 6,832 of the restricted stock units were vested as of December 2021. 6,834 restricted stock units will vest in October 2022 and 6,834 will vest in October 2023. There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Statement of Operations reflects the straight-line amortized fair value based on the liability method. The following summarizes restricted stock unit activity under the Omnibus Plans during Q1 2022: Number Weighted of Average Shares Fair Value Nonvested restricted stock units at September 2021 35,220 $ 148.98 Granted — — Vested (16,701) 139.32 Expired — — Nonvested restricted stock units at December 2021 18,519 $ 199.51 Restricted Stock Awards At December 2021, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans: Restricted Stock Awards(1) Date of award: October 2021 Original number of awards issued: 15,100 Service period: 36 months Estimated fair value of award at grant date: $ 2,088,934 Non-vested awards outstanding at December 31, 2021: 15,100 Fair value of non-vested awards at December 31, 2021 of approximately: $ 3,013,000 (1) The 15,100 restricted stock awards will vest in equal amounts in October 2022, October 2023 and October 2024. There is no direct cost to the recipients of the restricted stock awards, except for any applicable taxes. The restricted stock awards provide that the recipients receive common stock in the Company, subject to certain restrictions until such time as the awards vest. The recipients of the restricted stock awards are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The compensation expense recorded in the Company’s Statement of Operations reflects the straight-line amortized fair value. The following summarizes restricted stock award activity under the Omnibus Plans during Q1 2022: Number Weighted of Average Shares Fair Value Nonvested restricted stock awards at September 2021 — $ — Granted 15,100 138.34 Vested — — Expired — — Nonvested restricted stock awards at December 2021 15,100 $ 199.51 All Equity-Based Awards (stock options, restricted stock units, and restricted stock awards) Net income before income taxes included compensation expense of approximately $0.7 million and $0.3 million during Q1 2022 and Q1 2021, respectively, related to the amortization of all equity-based compensation awards. Total unamortized compensation expense related to these awards at December 2021 and September 2021 was approximately $5.0 million and $2.9 million, respectively. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Dec. 31, 2021 | |
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, equity method investment earnings, net of tax 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 DECEMBER 2021 External revenues: Cigarettes $ 279,366,392 $ — $ — $ 279,366,392 Tobacco 69,068,234 — — 69,068,234 Confectionery 24,479,036 — — 24,479,036 Health food — 11,925,205 — 11,925,205 Foodservice & other 37,732,411 — — 37,732,411 Total external revenue 410,646,073 11,925,205 — 422,571,278 Depreciation 486,765 297,480 — 784,245 Operating income (loss) 7,438,666 461,585 (4,142,573) 3,757,678 Interest expense 55,495 — 266,602 322,097 Income (loss) from operations before taxes 7,391,732 464,742 (4,380,784) 3,475,690 Equity method investment earnings, net of tax — — 770,365 770,365 Total assets 153,998,433 17,710,816 13,939,522 185,648,771 Capital expenditures 176,981 44,445 — 221,426 Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED DECEMBER 2020 External revenue: Cigarettes $ 276,589,707 $ — $ — $ 276,589,707 Tobacco 64,845,544 — — 64,845,544 Confectionery 20,164,577 — — 20,164,577 Health food — 11,147,098 — 11,147,098 Foodservice & other 31,997,848 — — 31,997,848 Total external revenue 393,597,676 11,147,098 — 404,744,774 Depreciation 472,693 301,592 — 774,285 Operating income (loss) 5,788,239 (114,987) (1,585,374) 4,087,878 Interest expense 29,536 — 346,894 376,430 Income (loss) from operations before taxes 5,769,260 (112,159) (1,903,830) 3,753,271 Equity method investment earnings, net of tax — — 335,339 335,339 Total assets 128,232,076 18,583,221 10,930,821 157,746,118 Capital expenditures 406,440 42,072 — 448,512 |
COMMON STOCK REPURCHASES
COMMON STOCK REPURCHASES | 3 Months Ended |
Dec. 31, 2021 | |
COMMON STOCK REPURCHASES | |
COMMON STOCK REPURCHASES | 10. COMMON STOCK REPURCHASES The Company did not repurchase any shares of its common stock during the three months ended December 2021. The Company repurchased 68 shares of its common stock during the three months ended December 2020 for cash totaling less than $0.1 million. All repurchased shares were recorded in treasury stock at cost. |
IMPACT OF COVID-19
IMPACT OF COVID-19 | 3 Months Ended |
Dec. 31, 2021 | |
IMPACT OF COVID-19 | |
IMPACT OF COVID-19 | 11. IMPACT OF COVID-19 The Company continues to monitor a wide range of health, safety, and regulatory matters related to the continuing COVID-19 pandemic including its impact on our business operations. In particular, ongoing supply chain disruptions at consumer packaged goods (CPG) companies and the transportation companies that deliver their products have impacted product availability and costs across all markets including the convenience distribution industry in which our company operates. Additionally, the United States is experiencing an acute workforce shortage and increasing inflation which has created a hyper-competitive wage environment and has increased the Company’s operating costs and impacted its operations. Further, workplace mask, testing, and/or vaccine mandates similar to the recently proposed Emergency Temporary Standard from the Occupational Safety and Health Administration (OSHA) increase workforce complexities in addition to placing additional stress on the supply chain. We believe such measures, whether federal, state, or local, would have a material adverse impact on the Company’s ability to retain employees and staff both of its business segments and increase cost structures. Accordingly, ongoing or future disruptions to consumer demand, our supply chain, product pricing inflation, our ability to attract and retain employees, or our ability to procure products and fulfill orders, could negatively impact the Company’s operations and financial results in a substantially material manner. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
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 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 17,700 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 December 2021, Convenience Store News ranked us as the sixth (6th) 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 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 685,000 square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kelloggs, Kraft, and Mars Wrigley. 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 retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akin’s”), and Earth Origins Market (“EOM”). These stores carry over 35,000 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. EOM has a total of seven 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, 2021, as filed with the Securities and Exchange Commission on Form 10-K. For purposes of this report, unless the context indicates otherwise, all references to “we”, “us”, “our”, the “Company”, and “AMCON” shall mean AMCON Distributing Company and its subsidiaries. Additionally, the three month fiscal periods ended December 31, 2021 and December 31, 2020 have been referred to throughout this quarterly report as Q1 2022 and Q1 2021, respectively. The fiscal balance sheet dates as of December 31, 2021 and September 30, 2021 have been referred to as December 2021 and September 2021, respectively. |
ACCOUNTING PRONOUNCEMENTS | ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | December September 2021 2021 Wholesale Segment $ 4,436,950 $ 4,436,950 |
Schedule of other intangible assets | December September 2021 2021 Trademarks and tradenames (Retail Segment) $ 500,000 $ 500,000 |
EQUITY METHOD INVESTMENT (Table
EQUITY METHOD INVESTMENT (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY METHOD INVESTMENT. | |
Summarized financial data of equity investee | For the three months ended December 2021 For the three months ended December 2020 Sales $ 181,417,094 $ 164,568,084 Gross profit 9,817,979 7,847,390 Net income before income taxes 2,074,836 1,003,793 Net income attributable to AMCON, net of tax 770,365 335,339 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
EARNINGS PER SHARE | |
Schedule of net earnings per share available to common shareholders | For the three months ended December 2021 2020 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 563,546 563,546 548,125 548,125 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 15,418 — 3,934 Weighted average number of shares outstanding 563,546 578,964 548,125 552,059 Net income available to common shareholders $ 3,001,055 $ 3,001,055 $ 3,077,610 $ 3,077,610 Net earnings per share available to common shareholders $ 5.33 $ 5.18 $ 5.61 $ 5.57 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive. |
EQUITY-BASED INCENTIVE AWARDS (
EQUITY-BASED INCENTIVE AWARDS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY-BASED INCENTIVE AWARDS | |
Summary of stock options activity | Weighted Number Average of Exercise Shares Price Outstanding at September 2021 22,250 $ 86.76 Granted — — Exercised (7,700) 86.57 Forfeited/Expired — — Outstanding at December 2021 14,550 $ 86.86 |
Schedule of restricted stock unit awards | Restricted Stock Units(1) Restricted Stock Units(2) Date of award: October 2019 October 2020 Original number of awards issued: 14,550 20,500 Service period: 36 months 36 months Estimated fair value of award at grant date: $ 1,007,000 $ 1,415,000 Non-vested awards outstanding at December 31, 2021: 4,851 13,668 Fair value of non-vested awards at December 31, 2021 of approximately: $ 968,000 $ 2,727,000 (1) 9,699 of the restricted stock units were vested as of December 2021. The remaining 4,851 restricted stock units will vest in October 2022. (2) 6,832 of the restricted stock units were vested as of December 2021. 6,834 restricted stock units will vest in October 2022 and 6,834 will vest in October 2023. |
Summary of restricted stock unit awards activity | Number Weighted of Average Shares Fair Value Nonvested restricted stock units at September 2021 35,220 $ 148.98 Granted — — Vested (16,701) 139.32 Expired — — Nonvested restricted stock units at December 2021 18,519 $ 199.51 |
Schedule of restricted stock awards | Restricted Stock Awards(1) Date of award: October 2021 Original number of awards issued: 15,100 Service period: 36 months Estimated fair value of award at grant date: $ 2,088,934 Non-vested awards outstanding at December 31, 2021: 15,100 Fair value of non-vested awards at December 31, 2021 of approximately: $ 3,013,000 (1) The 15,100 restricted stock awards will vest in equal amounts in October 2022, October 2023 and October 2024. |
Summary of restricted stock awards activity | Number Weighted of Average Shares Fair Value Nonvested restricted stock awards at September 2021 — $ — Granted 15,100 138.34 Vested — — Expired — — Nonvested restricted stock awards at December 2021 15,100 $ 199.51 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
BUSINESS SEGMENTS | |
Schedule of segment information | Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED DECEMBER 2021 External revenues: Cigarettes $ 279,366,392 $ — $ — $ 279,366,392 Tobacco 69,068,234 — — 69,068,234 Confectionery 24,479,036 — — 24,479,036 Health food — 11,925,205 — 11,925,205 Foodservice & other 37,732,411 — — 37,732,411 Total external revenue 410,646,073 11,925,205 — 422,571,278 Depreciation 486,765 297,480 — 784,245 Operating income (loss) 7,438,666 461,585 (4,142,573) 3,757,678 Interest expense 55,495 — 266,602 322,097 Income (loss) from operations before taxes 7,391,732 464,742 (4,380,784) 3,475,690 Equity method investment earnings, net of tax — — 770,365 770,365 Total assets 153,998,433 17,710,816 13,939,522 185,648,771 Capital expenditures 176,981 44,445 — 221,426 Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED DECEMBER 2020 External revenue: Cigarettes $ 276,589,707 $ — $ — $ 276,589,707 Tobacco 64,845,544 — — 64,845,544 Confectionery 20,164,577 — — 20,164,577 Health food — 11,147,098 — 11,147,098 Foodservice & other 31,997,848 — — 31,997,848 Total external revenue 393,597,676 11,147,098 — 404,744,774 Depreciation 472,693 301,592 — 774,285 Operating income (loss) 5,788,239 (114,987) (1,585,374) 4,087,878 Interest expense 29,536 — 346,894 376,430 Income (loss) from operations before taxes 5,769,260 (112,159) (1,903,830) 3,753,271 Equity method investment earnings, net of tax — — 335,339 335,339 Total assets 128,232,076 18,583,221 10,930,821 157,746,118 Capital expenditures 406,440 42,072 — 448,512 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) | 1 Months Ended | 3 Months Ended |
Dec. 31, 2021ft²item | Dec. 31, 2021ft²itemstatesegment | |
Number of business segments | segment | 2 | |
Wholesale Segment | ||
Number of states served | state | 26 | |
Number of retail outlets served | 4,100 | |
Number of products sold or distributed | 17,700 | |
Rank assigned by Convenience Store News | 6 | |
Number of distribution centers | 6 | |
Floor space occupied by distribution centers (in square feet) | ft² | 685,000 | 685,000 |
Retail Segment | ||
Number of operating health food retail stores | 20 | 20 |
Number of products sold or distributed | 35,000 | |
Retail Segment | Florida | Chamberlin's | ||
Number of operating health food retail stores | 7 | 7 |
Retail Segment | Florida | Earth Origins Markets | ||
Number of operating health food retail stores | 7 | 7 |
Retail Segment | Midwest | Akin's | ||
Number of operating health food retail stores | 6 | 6 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Sep. 30, 2021 |
INVENTORIES | ||
Total reserves on finished goods | $ 0.9 | $ 0.8 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
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 ($) | Dec. 31, 2021 | Sep. 30, 2021 |
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 | ||
Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
EQUITY METHOD INVESTMENT | ||||
Carrying value of investment | $ 10,406,708 | $ 9,380,343 | ||
Equity method investment earnings, net of tax | $ 770,365 | $ 335,339 | ||
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) | 49.00% | |||
Carrying value of investment | $ 10,400,000 | |||
Equity method investment earnings, net of tax | 800,000 | $ 300,000 | ||
Carrying value of secured loan | 3,300,000 | 3,500,000 | ||
Current balance of secured loan repaid | $ 200,000 | |||
Prepaid expenses and other current assets | Team Sledd | ||||
EQUITY METHOD INVESTMENT | ||||
Secured loan balance, current | $ 200,000 |
EQUITY METHOD INVESTMENT - Equi
EQUITY METHOD INVESTMENT - Equity investee's summarized financial data (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
EQUITY METHOD INVESTMENT | ||
Total external revenue | $ 422,571,278 | $ 404,744,774 |
Gross profit | 26,932,663 | 23,461,979 |
Net income before income taxes | 3,475,690 | 3,753,271 |
Net income attributable to AMCON, net of tax | 770,365 | 335,339 |
Team Sledd | Equity method investment | ||
EQUITY METHOD INVESTMENT | ||
Total external revenue | 181,417,094 | 164,568,084 |
Gross profit | 9,817,979 | 7,847,390 |
Net income before income taxes | 2,074,836 | 1,003,793 |
Net income attributable to AMCON, net of tax | $ 770,365 | $ 335,339 |
DIVIDENDS (Details)
DIVIDENDS (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends declared and paid per common share (in USD per share) | $ 5.18 | $ 0.18 |
Dividend paid on common stock | $ 3,114,775 | $ 105,599 |
Cash dividend | ||
Dividends declared and paid per common share (in USD per share) | $ 0.18 | $ 0.18 |
Dividend paid on common stock | $ 100,000 | $ 100,000 |
Special dividend | ||
Dividends declared and paid per common share (in USD per share) | $ 5 | |
Dividend paid on common stock | $ 3,000,000 | |
Dividend declared (in USD per share) | $ 5 | |
Dividend declared | $ 2,900,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | ||
Weighted average number of common shares outstanding, Basic | 563,546 | 548,125 |
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) | 15,418 | 3,934 |
Weighted average number of shares outstanding, Diluted | 578,964 | 552,059 |
Net income available to common shareholders | $ 3,001,055 | $ 3,077,610 |
Net income available to common shareholders, diluted | $ 3,001,055 | $ 3,077,610 |
Net earnings per share available to common shareholders, Basic (in dollars per share) | $ 5.33 | $ 5.61 |
Net earnings per share available to common shareholders, Diluted (in dollars per share) | $ 5.18 | $ 5.57 |
DEBT - Credit Facility (Details
DEBT - Credit Facility (Details) - Credit Facility $ in Millions | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Revolving credit facility | |
Revolving credit limit | $ 110 |
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 | $ 5 |
Current credit limit of the Facility | 109.5 |
Outstanding borrowings under the Facility | 48.4 |
Credit available under the Facility | $ 61.1 |
Average interest rate | 1.40% |
Peak borrowings under the Facility | $ 64.3 |
Average borrowings under the Facility | 43.9 |
Average availability under the Facility | $ 55.4 |
LIBOR | |
Revolving credit facility | |
Variable rate basis | LIBOR |
Minimum basis points added to reference rate (as a percent) | 0.00% |
Prime rate | |
Revolving credit facility | |
Variable rate basis | prime rate |
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 |
Minimum | LIBOR | |
Revolving credit facility | |
Basis points added to reference rate (as a percent) | 1.25% |
Maximum | LIBOR | |
Revolving credit facility | |
Basis points added to reference rate (as a percent) | 1.50% |
DEBT - Cross Default and Co-Ter
DEBT - Cross Default and Co-Terminus Provisions and Other (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2021USD ($)item | |
DEBT | |
Number of cross defaults | item | 0 |
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | $ | $ 0.6 |
EQUITY-BASED INCENTIVE AWARDS -
EQUITY-BASED INCENTIVE AWARDS - Omnibus Plans and Stock Options (Details) | 3 Months Ended |
Dec. 31, 2021item$ / sharesshares | |
Omnibus Plans | |
EQUITY-BASED INCENTIVE AWARD | |
Number of incentive plans | item | 2 |
Number of shares of the company's common stock permitted for issuance under the plan | 135,000 |
Number of shares awarded pursuant to the plan | 123,970 |
Number of additional shares that may be awarded under the plan | 11,030 |
Stock Options | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | 22,250 |
Exercised (in shares) | (7,700) |
Outstanding at the end of the period (in shares) | 14,550 |
Weighted Average Exercise Price | |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 86.76 |
Exercised (in dollars per share) | $ / shares | 86.57 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 86.86 |
EQUITY-BASED INCENTIVE AWARDS_2
EQUITY-BASED INCENTIVE AWARDS - Authorized and Approved Restricted Stock Units/Restricted Stock Awards (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
Restricted Stock Units | ||
EQUITY-BASED INCENTIVE AWARD | ||
Non-vested awards outstanding at the end of the period (in shares) | 18,519 | 35,220 |
Direct cost to the recipients of the restricted stock units | $ 0 | |
Restricted Stock Units Awarded October 2019 | ||
EQUITY-BASED INCENTIVE AWARD | ||
Original number of awards issued | 14,550 | |
Service period | 36 months | |
Estimated fair value of award at grant date | $ 1,007,000 | |
Non-vested awards outstanding at the end of the period (in shares) | 4,851 | |
Fair value of non-vested awards at the end of the period | $ 968,000 | |
Vested as of the end of the period (in shares) | 9,699 | |
Restricted Stock Units Awarded October 2019 | Vest in October 2022 | ||
EQUITY-BASED INCENTIVE AWARD | ||
Units scheduled to vest | 4,851 | |
Restricted Stock Units Awarded October 2020 | ||
EQUITY-BASED INCENTIVE AWARD | ||
Original number of awards issued | 20,500 | |
Service period | 36 months | |
Estimated fair value of award at grant date | $ 1,415,000 | |
Non-vested awards outstanding at the end of the period (in shares) | 13,668 | |
Fair value of non-vested awards at the end of the period | $ 2,727,000 | |
Vested as of the end of the period (in shares) | 6,832 | |
Restricted Stock Units Awarded October 2020 | Vest in October 2022 | ||
EQUITY-BASED INCENTIVE AWARD | ||
Units scheduled to vest | 6,834 | |
Restricted Stock Units Awarded October 2020 | Vest in October 2023 | ||
EQUITY-BASED INCENTIVE AWARD | ||
Units scheduled to vest | 6,834 | |
Restricted Stock Awards | ||
EQUITY-BASED INCENTIVE AWARD | ||
Original number of awards issued | 15,100 | |
Service period | 36 months | |
Estimated fair value of award at grant date | $ 2,088,934 | |
Non-vested awards outstanding at the end of the period (in shares) | 15,100 | |
Fair value of non-vested awards at the end of the period | $ 3,013,000 | |
Units scheduled to vest | 15,100 | |
Direct cost to the recipients of the restricted stock units | $ 0 |
EQUITY-BASED INCENTIVE AWARDS_3
EQUITY-BASED INCENTIVE AWARDS - Restricted Stock Units/Restricted Stock Awards Activity (Details) | 3 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Restricted Stock Units | |
Number of Shares | |
Nonvested restricted stock units/awards at the beginning of the period (in shares) | shares | 35,220 |
Vested (in shares) | shares | (16,701) |
Nonvested restricted stock units/awards at the end of the period (in shares) | shares | 18,519 |
Weighted Average Fair Value | |
Nonvested restricted stock units/awards at the beginning of the period (in dollars per share) | $ / shares | $ 148.98 |
Vested (in dollars per share) | $ / shares | 139.32 |
Nonvested restricted stock units/awards at the end of the period (in dollars per share) | $ / shares | $ 199.51 |
Restricted Stock Awards | |
Number of Shares | |
Granted (in shares) | shares | 15,100 |
Nonvested restricted stock units/awards at the end of the period (in shares) | shares | 15,100 |
Weighted Average Fair Value | |
Granted (in dollars per share) | $ / shares | $ 138.34 |
Nonvested restricted stock units/awards at the end of the period (in dollars per share) | $ / shares | $ 199.51 |
EQUITY-BASED INCENTIVE AWARDS_4
EQUITY-BASED INCENTIVE AWARDS - All Equity-Based Awards (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
EQUITY-BASED INCENTIVE AWARDS | |||
Compensation expense | $ 0.7 | $ 0.3 | |
Total unamortized compensation expense | $ 5 | $ 2.9 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 3 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | |
Information by business segments | |||
Number of reportable business segments | segment | 2 | ||
Total external revenue | $ 422,571,278 | $ 404,744,774 | |
Depreciation | 784,245 | 774,285 | |
Operating income (loss) | 3,757,678 | 4,087,878 | |
Interest expense | 322,097 | 376,430 | |
Income (loss) from operations before taxes | 3,475,690 | 3,753,271 | |
Equity method investment earnings, net of tax | 770,365 | 335,339 | |
Total assets | 185,648,771 | 157,746,118 | $ 188,411,129 |
Capital expenditures | 221,426 | 448,512 | |
Cigarettes | |||
Information by business segments | |||
Total external revenue | 279,366,392 | 276,589,707 | |
Tobacco | |||
Information by business segments | |||
Total external revenue | 69,068,234 | 64,845,544 | |
Confectionery | |||
Information by business segments | |||
Total external revenue | 24,479,036 | 20,164,577 | |
Health food | |||
Information by business segments | |||
Total external revenue | 11,925,205 | 11,147,098 | |
Foodservice & other | |||
Information by business segments | |||
Total external revenue | 37,732,411 | 31,997,848 | |
Other | |||
Information by business segments | |||
Operating income (loss) | (4,142,573) | (1,585,374) | |
Interest expense | 266,602 | 346,894 | |
Income (loss) from operations before taxes | (4,380,784) | (1,903,830) | |
Equity method investment earnings, net of tax | 770,365 | 335,339 | |
Total assets | 13,939,522 | 10,930,821 | |
Wholesale Segment | |||
Information by business segments | |||
Total external revenue | 410,646,073 | 393,597,676 | |
Depreciation | 486,765 | 472,693 | |
Operating income (loss) | 7,438,666 | 5,788,239 | |
Interest expense | 55,495 | 29,536 | |
Income (loss) from operations before taxes | 7,391,732 | 5,769,260 | |
Total assets | 153,998,433 | 128,232,076 | |
Capital expenditures | 176,981 | 406,440 | |
Wholesale Segment | Cigarettes | |||
Information by business segments | |||
Total external revenue | 279,366,392 | 276,589,707 | |
Wholesale Segment | Tobacco | |||
Information by business segments | |||
Total external revenue | 69,068,234 | 64,845,544 | |
Wholesale Segment | Confectionery | |||
Information by business segments | |||
Total external revenue | 24,479,036 | 20,164,577 | |
Wholesale Segment | Foodservice & other | |||
Information by business segments | |||
Total external revenue | 37,732,411 | 31,997,848 | |
Retail Segment | |||
Information by business segments | |||
Total external revenue | 11,925,205 | 11,147,098 | |
Depreciation | 297,480 | 301,592 | |
Operating income (loss) | 461,585 | (114,987) | |
Income (loss) from operations before taxes | 464,742 | (112,159) | |
Total assets | 17,710,816 | 18,583,221 | |
Capital expenditures | 44,445 | 42,072 | |
Retail Segment | Health food | |||
Information by business segments | |||
Total external revenue | $ 11,925,205 | $ 11,147,098 |
COMMON STOCK REPURCHASES (Detai
COMMON STOCK REPURCHASES (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2020USD ($)shares | |
Number of shares of common stock repurchased | shares | 68 |
Maximum | |
Value of shares of common stock repurchased | $ | $ 0.1 |