Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2023 | Jul. 17, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, $0.01 Par Value | |
Trading Symbol | DIT | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 608,689 | |
Entity Central Index Key | 0000928465 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash | $ 739,013 | $ 431,576 |
Accounts receivable, less allowance for doubtful accounts of $2.5 million at both June 2023 and September 2022 | 78,640,187 | 62,367,888 |
Inventories, net | 162,567,117 | 134,654,637 |
Income taxes receivable | 819,595 | |
Prepaid expenses and other current assets | 13,630,317 | 12,702,084 |
Total current assets | 255,576,634 | 210,975,780 |
Property and equipment, net | 78,872,876 | 48,085,520 |
Operating lease right-of-use assets, net | 19,739,321 | 19,941,009 |
Goodwill | 5,778,325 | 5,277,950 |
Other intangible assets, net | 5,419,361 | 2,093,113 |
Other assets | 3,320,838 | 2,751,155 |
Total assets | 368,707,355 | 289,124,527 |
Current liabilities: | ||
Accounts payable | 51,853,159 | 39,962,363 |
Accrued expenses | 15,960,945 | 14,446,210 |
Accrued wages, salaries and bonuses | 7,799,903 | 7,811,207 |
Income taxes payable | 752,658 | |
Current operating lease liabilities | 6,300,102 | 6,454,473 |
Current maturities of long-term debt | 2,738,524 | 1,595,309 |
Current mandatorily redeemable non-controlling interest | 1,641,612 | 1,712,095 |
Total current liabilities | 87,046,903 | 71,981,657 |
Credit facilities | 143,375,961 | 91,262,438 |
Deferred income tax liability, net | 3,138,204 | 2,328,588 |
Long-term operating lease liabilities | 13,737,167 | 13,787,721 |
Long-term debt, less current maturities | 12,229,486 | 7,384,260 |
Mandatorily redeemable non-controlling interest, less current portion | 7,976,499 | 9,446,460 |
Other long-term liabilities | 289,672 | 103,968 |
Shareholders' equity: | ||
Preferred stock, $.01 par value, 1,000,000 shares authorized | ||
Common stock, $.01 par value, 3,000,000 shares authorized, 608,689 shares outstanding at June 2023 and 584,789 shares outstanding at September 2022 | 9,431 | 9,168 |
Additional paid-in capital | 30,175,977 | 26,903,201 |
Retained earnings | 102,000,218 | 96,784,353 |
Treasury stock at cost | (31,272,163) | (30,867,287) |
Total shareholders' equity | 100,913,463 | 92,829,435 |
Total liabilities and shareholders' equity | $ 368,707,355 | $ 289,124,527 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Sep. 30, 2022 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $ 2.5 | $ 2.5 |
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) | 608,689 | 584,789 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Unaudited Statements of Operations | ||||
Sales (including excise taxes of $153.7 million and $129.2 million, and $414.9 million and $315.5 million, respectively) | $ 696,489,427 | $ 550,584,152 | $ 1,847,472,782 | $ 1,365,043,621 |
Cost of sales | 649,623,651 | 516,907,540 | 1,724,504,862 | 1,277,757,425 |
Gross profit | 46,865,776 | 33,676,612 | 122,967,920 | 87,286,196 |
Selling, general and administrative expenses | 36,851,520 | 25,862,325 | 99,227,695 | 70,168,415 |
Depreciation and amortization | 2,103,429 | 912,501 | 4,982,068 | 2,514,968 |
Total operating expenses | 38,954,949 | 26,774,826 | 104,209,763 | 72,683,383 |
Operating income | 7,910,827 | 6,901,786 | 18,758,157 | 14,602,813 |
Other expense (income): | ||||
Interest expense | 2,385,842 | 655,811 | 6,249,540 | 1,222,829 |
Change in fair value of mandatorily redeemable non-controlling interest | 698,571 | 705,392 | 864,684 | 705,392 |
Other (income), net | (931,765) | (2,417,252) | (1,159,021) | (2,518,320) |
Total other expenses (income) | 2,152,648 | (1,056,049) | 5,955,203 | (590,099) |
Income from operations before income taxes | 5,758,179 | 7,957,835 | 12,802,954 | 15,192,912 |
Income tax expense | 1,813,800 | 2,221,000 | 4,164,000 | 4,811,000 |
Equity method investment earnings, net of tax | 307,973 | 1,670,133 | ||
Net income available to common shareholders | $ 3,944,379 | $ 6,044,808 | $ 8,638,954 | $ 12,052,045 |
Basic earnings per share available to common shareholders | $ 6.74 | $ 10.61 | $ 14.78 | $ 21.25 |
Diluted earnings per share available to common shareholders | $ 6.59 | $ 10.38 | $ 14.56 | $ 20.72 |
Basic weighted average shares outstanding | 585,625 | 569,689 | 584,359 | 567,026 |
Diluted weighted average shares outstanding | 598,590 | 582,370 | 593,480 | 581,578 |
Dividends paid per common share | $ 0.18 | $ 0.18 | $ 5.54 | $ 5.54 |
Condensed Consolidated Unaudi_2
Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Unaudited Statements of Operations | ||||
Sales, excise taxes | $ 153.7 | $ 129.2 | $ 414.9 | $ 315.5 |
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, 2021 | $ 8,834 | $ (30,867,287) | $ 24,918,781 | $ 83,552,298 | $ 77,612,626 |
Balance (in shares) at Sep. 30, 2021 | 883,589 | ||||
Balance (in shares) at Sep. 30, 2021 | (332,220) | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (3,331,606) | (3,331,606) | |||
Compensation expense and settlement of equity-based awards | $ 334 | 1,810,343 | 1,810,677 | ||
Compensation expense and settlement of equity-based awards (in shares) | 33,420 | ||||
Net income available to common shareholders | 12,052,045 | 12,052,045 | |||
Balance at Jun. 30, 2022 | $ 9,168 | $ (30,867,287) | 26,729,124 | 92,272,737 | 88,143,742 |
Balance (in shares) at Jun. 30, 2022 | 917,009 | ||||
Balance (in shares) at Jun. 30, 2022 | (332,220) | ||||
Balance at Mar. 31, 2022 | $ 9,168 | $ (30,867,287) | 26,555,046 | 86,336,525 | 82,033,452 |
Balance (in shares) at Mar. 31, 2022 | 917,009 | ||||
Balance (in shares) at Mar. 31, 2022 | (332,220) | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (108,596) | (108,596) | |||
Compensation expense and settlement of equity-based awards | 174,078 | 174,078 | |||
Net income available to common shareholders | 6,044,808 | 6,044,808 | |||
Balance at Jun. 30, 2022 | $ 9,168 | $ (30,867,287) | 26,729,124 | 92,272,737 | 88,143,742 |
Balance (in shares) at Jun. 30, 2022 | 917,009 | ||||
Balance (in shares) at Jun. 30, 2022 | (332,220) | ||||
Balance at Sep. 30, 2022 | $ 9,168 | $ (30,867,287) | 26,903,201 | 96,784,353 | $ 92,829,435 |
Balance (in shares) at Sep. 30, 2022 | 917,009 | 584,789 | |||
Balance (in shares) at Sep. 30, 2022 | (332,220) | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (3,423,089) | $ (3,423,089) | |||
Compensation expense and settlement of equity-based awards | $ 263 | 3,272,776 | 3,273,039 | ||
Compensation expense and settlement of equity-based awards (in shares) | 26,263 | ||||
Net income available to common shareholders | 8,638,954 | 8,638,954 | |||
Committed repurchase of treasury stock | $ (404,876) | (404,876) | |||
Committed repurchase of treasury stock (in shares) | (2,363) | ||||
Balance at Jun. 30, 2023 | $ 9,431 | $ (31,272,163) | 30,175,977 | 102,000,218 | $ 100,913,463 |
Balance (in shares) at Jun. 30, 2023 | 943,272 | 608,689 | |||
Balance (in shares) at Jun. 30, 2023 | (334,583) | ||||
Balance at Mar. 31, 2023 | $ 9,431 | $ (30,867,287) | 29,766,566 | 98,167,058 | $ 97,075,768 |
Balance (in shares) at Mar. 31, 2023 | 943,272 | ||||
Balance (in shares) at Mar. 31, 2023 | (332,220) | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (111,219) | (111,219) | |||
Compensation expense and settlement of equity-based awards | 409,411 | 409,411 | |||
Net income available to common shareholders | 3,944,379 | 3,944,379 | |||
Committed repurchase of treasury stock | $ (404,876) | (404,876) | |||
Committed repurchase of treasury stock (in shares) | (2,363) | ||||
Balance at Jun. 30, 2023 | $ 9,431 | $ (31,272,163) | $ 30,175,977 | $ 102,000,218 | $ 100,913,463 |
Balance (in shares) at Jun. 30, 2023 | 943,272 | 608,689 | |||
Balance (in shares) at Jun. 30, 2023 | (334,583) |
Condensed Consolidated Unaudi_4
Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Unaudited Statements of Shareholders' Equity | ||||
Dividends on common stock | $ 0.18 | $ 0.18 | $ 5.54 | $ 5.54 |
Condensed Consolidated Unaudi_5
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income available to common shareholders | $ 8,638,954 | $ 12,052,045 |
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities: | ||
Depreciation | 4,701,316 | 2,486,613 |
Amortization | 280,752 | 28,355 |
Equity method investment earnings, net of tax | (1,670,133) | |
Gain on re-valuation of equity method investment to fair value | (2,387,411) | |
(Gain) loss on sales of property and equipment | (133,159) | (133,639) |
Equity-based compensation | 1,940,631 | 1,903,884 |
Deferred income taxes | 809,616 | 1,231,012 |
Provision for losses on doubtful accounts | (7,697) | 83,000 |
Inventory allowance | 442,603 | 688,902 |
Change in fair value of mandatorily redeemable non-controlling interest | 864,684 | 705,392 |
Changes in assets and liabilities, net of effects of business acquisition: | ||
Accounts receivable | (8,026,950) | (1,215,238) |
Inventories | (12,294,118) | (4,674,292) |
Prepaid and other current assets | (745,490) | (2,986,167) |
Equity method investment distributions | 1,095,467 | |
Other assets | (569,683) | (728,596) |
Accounts payable | 10,360,228 | 1,313,711 |
Accrued expenses and accrued wages, salaries and bonuses | 1,487,971 | 1,926,479 |
Other long-term liabilities | 185,704 | (690,693) |
Income taxes payable and receivable | 1,572,253 | (1,890,449) |
Net cash flows from (used in) operating activities | 9,507,615 | 7,138,242 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (6,759,929) | (13,940,428) |
Proceeds from sales of property and equipment | 151,307 | 145,500 |
Principal payment received on note receivable | 175,000 | |
Cash acquired in business combination | 7,958 | |
Acquisition of Henry's (See Note 2) | (54,865,303) | |
Net cash flows from (used in) investing activities | (61,473,925) | (13,611,970) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facilities | 1,863,027,754 | 1,393,048,057 |
Repayments under revolving credit facilities | (1,810,914,231) | (1,381,508,745) |
Proceeds from borrowings on long-term debt | 7,000,000 | |
Principal payments on long-term debt | (1,011,559) | (524,874) |
Proceeds from exercise of stock options | 173,590 | |
Dividends on common stock | (3,423,089) | (3,331,606) |
Settlement and withholdings of equity-based awards | (1,280,749) | |
Redemption and distributions to non-controlling interest | (2,405,128) | (20,600) |
Net cash flows from (used in) financing activities | 52,273,747 | 6,555,073 |
Net change in cash | 307,437 | 81,345 |
Cash, beginning of period | 431,576 | 519,591 |
Cash, end of period | 739,013 | 600,936 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 5,824,144 | 1,201,073 |
Cash paid during the period for income taxes, net of refunds | 1,780,000 | 5,468,488 |
Supplemental disclosure of non-cash information: | ||
Equipment acquisitions classified in accounts payable | 1,622,224 | 123,801 |
Effect of business acquisition | 23,308,624 | |
Committed repurchase of treasury stock | 404,876 | |
Issuance of common stock in connection with the vesting and exercise of equity-based awards | $ 2,044,805 | $ 2,280,783 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
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 31 states and primarily operate in the Central, Rocky Mountain, Mid-South and Mid-Atlantic regions of the United States. ● Our retail health food segment (“Retail Segment”) operates 17 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 6,800 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 products, 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 2022, 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 distribution 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 eight distribution centers located in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. These distribution centers, combined with cross-dock facilities, include approximately 1.1 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellogg’s, Kraft Heinz, 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. As further described in Note 2, on February 3, 2023, the Company closed on its acquisition of Henry’s Foods, Inc. (“Henry’s”), purchasing substantially all of Henry’s operating assets for approximately $54.9 million. RETAIL SEGMENT Our Retail Segment, through our Healthy Edge Retail Group We operate within the natural products retail industry, which is a subset of the United States 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 17 retail health food stores as Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market. 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. FINANCIAL STATEMENTS The Company’s fiscal year ends on September 30 th 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. |
ACQUISITION
ACQUISITION | 9 Months Ended |
Jun. 30, 2022 | |
ACQUISITION | |
ACQUISITION | 2. ACQUISITION On February 3, 2023, the Company, through its wholly owned subsidiary, LOL Foods, Inc., paid approximately $54.9 million in cash to acquire substantially all of the operating assets of Henry’s, a wholesale distributor to convenience stores and other retail formats operating in Minnesota, North Dakota, South Dakota, Iowa, and Wisconsin. In connection with the transaction, the Company also assumed certain operating liabilities totaling approximately $1.2 million, including approximately $0.2 million of operating leases. The transaction was funded with borrowings from the Company’s existing bank group. Costs to effectuate the acquisition were not significant and were expensed as incurred. Strategically, the acquisition expands the Company’s footprint in the North Central portion of the United States and enhances the product and service offerings available to its customer base. The Company paid cash consideration for the net acquired assets and their related values as of the acquisition date, measured in accordance with FASB Accounting Standards Codification (“ASC”) 805 – Business Combinations The following purchase price allocation reflects the Company’s provisional (preliminary) estimates and analyses and is subject to change during the measurement period, which is generally one year from the acquisition date. During Q3 2023, certain non-contingent components of the total purchase price were updated, which resulted in a reduction of the total purchase price by approximately $0.1 million. This reduction was recorded as an adjustment to goodwill. All amounts are provisional and incomplete at the reporting date and may change materially in subsequent reporting periods during the measurement period while additional information is obtained, particularly as it relates to certain accounts receivable, property and equipment, inventory, other intangible assets and certain liability balances while final appraisal and valuation work is completed. Accordingly, any changes to the Company’s provisional recording of the transaction may materially impact its financial statements, including but not limited to its consolidated balance sheets, statements of operations, shareholders’ equity and cash flows, and related disclosures. All assets acquired and operating liabilities assumed have been recorded as a component of our Wholesale Segment. Provisional (preliminary) amounts of identifiable assets and liabilities assumed: Accounts receivable $ 8,237,652 Inventories 16,060,965 Prepaid and other assets 400,964 Property and equipment 27,216,323 Other intangible assets 3,607,000 Liabilities assumed (1,157,976) Total identifiable net assets $ 54,364,928 Total identifiable net assets $ 54,364,928 Goodwill 500,375 Consideration transferred $ 54,865,303 Accounts receivable were recorded at their fair value representing the amount we expect to collect, which also approximated the gross contractual values of such receivables at the acquisition date. Goodwill totaling approximately $0.5 million arose from the acquisition and primarily represents synergies and economies of scale generated through reductions in selling, general, and administrative expenses. This goodwill has been assigned to the Company’s Wholesale Segment and is expected to be deductible for tax purposes. The provisional (preliminary) value of other intangible assets acquired consisted of the following: Acquisition-Date Useful Life Other Intangible Asset Fair Value (Years) Customer list $ 2,010,000 15 Non-competition agreement 95,000 5 Trade name 1,502,000 7 $ 3,607,000 The following table sets forth the unaudited supplemental financial data for Henry’s from the acquisition date through June 2023, which is included in the Company’s consolidated results for the nine months ended June 2023. Revenue $ 131,563,988 Net income available to common shareholders $ 1,288,462 The following table presents unaudited supplemental pro forma information assuming the Company acquired Henry’s on October 1, 2021, in addition to holding a 64% interest in Team Sledd, LLC (“Team Sledd”) on October 1, 2021. These pro forma amounts do not purport to be indicative of the actual results that would have been obtained had the acquisitions occurred at that time. For the three months ended June 2023 For the three months ended June 2022 For the nine months ended June 2023 For the nine months ended June 2022 Revenue $ 696,489,427 $ 700,311,723 $ 1,951,264,477 $ 1,988,702,611 Net income available to common shareholders $ 3,944,379 $ 6,202,533 $ 8,838,866 $ 15,484,735 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jun. 30, 2023 | |
INVENTORIES | |
INVENTORIES | 3. INVENTORIES Inventories in our Wholesale Segment consisted of finished goods and are stated at the lower of cost or net realizable value, utilizing FIFO and average cost methods. 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 $1.7 million at June 2023 and $1.1 million at September 2022. 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 | 9 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at June 2023 and September 2022 was as follows: June September 2023 2022 Wholesale Segment $ 5,778,325 $ 5,277,950 Other intangible assets at June 2023 and September 2022 consisted of the following: June September 2023 2022 Customer lists (Wholesale Segment) (less accumulated amortization of $0.2 million at June 2023 and less than $0.1 million at September 2022) $ 3,284,013 $ 1,401,945 Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023 and less than $0.1 million at September 2022) 222,753 191,168 Tradename (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023) 1,412,595 — Trademarks and tradenames (Retail Segment) 500,000 500,000 $ 5,419,361 $ 2,093,113 Goodwill and the trademarks and tradenames for our Retail Segment are considered to have indefinite useful lives and therefore no amortization has been recorded on these assets. Goodwill recorded on the Company’s consolidated balance sheets represent amounts allocated to its wholesale reporting unit which totaled approximately $5.8 million and $5.3 million at June 2023 and September 2022, respectively. 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 2022. At June 2023, identifiable intangible assets considered to have finite lives were represented by customer lists which are being amortized over 15 years , a non-competition agreement which is being amortized over three years , a non-competition agreement which is being amortized over five years , and a tradename in our Wholesale Segment that is being amortized over seven years . These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to these assets was approximately $0.1 million and $0.3 million for the three and nine month periods ended June 2023, respectively. Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at June 2023: June 2023 Fiscal 2023 (1) $ 134,425 Fiscal 2024 537,701 Fiscal 2025 506,869 Fiscal 2026 463,703 Fiscal 2027 463,703 Fiscal 2028 and thereafter 2,812,960 $ 4,919,361 (1) Represents amortization for the remaining three months of Fiscal 2023. |
DIVIDENDS
DIVIDENDS | 9 Months Ended |
Jun. 30, 2023 | |
DIVIDENDS | |
DIVIDENDS | 5. DIVIDENDS The Company paid cash dividends on its common stock totaling $0.1 million and $3.4 million for the three and nine month periods ended June 2023, respectively, and $0.1 million and $3.3 million for the three and nine month periods ended June 2022, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 6. EARNINGS PER SHARE Basic earnings per share available to common shareholders is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding for each period. Diluted earnings per share available to common shareholders is calculated by dividing net income available to common shareholders by the sum of the weighted average number of common shares outstanding and the weighted average dilutive equity awards. For the three months ended June 2023 2022 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 585,625 585,625 569,689 569,689 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 12,965 — 12,681 Weighted average number of shares outstanding 585,625 598,590 569,689 582,370 Net income available to common shareholders $ 3,944,379 $ 3,944,379 $ 6,044,808 $ 6,044,808 Net earnings per share available to common shareholders $ 6.74 $ 6.59 $ 10.61 $ 10.38 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive. For the nine months ended June 2023 2022 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 584,359 584,359 567,026 567,026 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 9,121 — 14,552 Weighted average number of shares outstanding 584,359 593,480 567,026 581,578 Net income available to common shareholders $ 8,638,954 $ 8,638,954 $ 12,052,045 $ 12,052,045 Net earnings per share available to common shareholders $ 14.78 $ 14.56 $ 21.25 $ 20.72 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive . |
DEBT
DEBT | 9 Months Ended |
Jun. 30, 2023 | |
DEBT | |
DEBT | 7. DEBT The Company primarily finances its operations through three credit facility agreements (the “AMCON Facility”, the “Team Sledd Facility” and the “Henry’s Facility”, and together, the “Facilities”) and long-term debt agreements with banks. At June 2023, the Facilities had a total combined borrowing capacity of $300.0 million, including provisions for up to $30.0 million in credit advances for certain inventory purchases, which are limited by accounts receivable and inventory qualifications, and the value of certain real estate collateral. The Henry’s Facility matures in February 2026, the AMCON Facility matures in June 2027 and the Team Sledd Facility matures in March 2028, each without a penalty for prepayment. Obligations under the Facilities are collateralized by substantially all of the Company’s respective equipment, intangibles, inventories, accounts receivable, and certain real estate. The Facilities each feature an unused commitment fee and springing financial covenants. Borrowings under the Facilities bear interest at either the bank’s prime rate or the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads. The amount available for use from the Facilities at any given time is subject to a number of factors, including eligible accounts receivable and inventory balances that fluctuate day-to-day, as well as the value of certain real estate collateral. Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at June 2023 was $249.9 million, of which $143.4 million was outstanding, leaving $106.5 million available. The average interest rate of the Facilities was 6.75% at June 2023. For the nine months ended June 2023, the peak borrowings under the Facilities was $159.7 million, and the average borrowings and average availability under the Facilities was $124.3 million and $83.8 million, respectively. LONG-TERM DEBT In addition to the Facilities, the Company also had the following long-term obligations at June 2023 and September 2022. June 2023 September 2022 Unsecured note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023 852,642 968,589 Note payable, interest payable at a fixed rate of 4.10% with monthly installments of principal and interest of $53,361 through June 2033 with remaining principal due July 2033, collateralized by Team Sledd's principal office and warehouse 5,280,076 5,572,766 Note payable, interest payable at a fixed rate of 3.25% with monthly installments of principal and interest of $17,016 through August 2034 with remaining principal due September 2034, collateralized by Team Sledd's principal office and warehouse 1,927,167 2,052,327 Note payable with monthly installments of principal and interest of $7,934 through February 2025 with remaining principal due March 2025, and an effective variable rate of 7.28% at June 2023, collateralized by certain of Team Sledd's equipment 312,040 385,887 Note payable, interest payable at a fixed rate of 6.04% with monthly installments of principal and interest of $135,469 through February 2028, collateralized by certain of Henry's equipment 6,596,085 — 14,968,010 8,979,569 Less current maturities (2,738,524) (1,595,309) $ 12,229,486 $ 7,384,260 The aggregate minimum principal maturities of the long-term debt for each of the next five fiscal years are as follows: Fiscal Year Ending 2023 (1) $ 1,295,972 2024 1,957,369 2025 2,166,686 2026 2,073,198 2027 2,187,857 2028 and thereafter 5,286,928 $ 14,968,010 (1) Cross Default and Co-Terminus Provisions Team Sledd’s three notes payable and the Team Sledd Facility contain cross default provisions. There were no such cross defaults at June 2023. The Company was in compliance with all of its financial covenants under the Facilities at June 2023. 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. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | 8. INCOME TAXES The change in the Company’s effective income tax rate for the three and nine month periods ended June 2023 as compared to the respective prior year periods, was primarily related to non-deductible compensation expense in relation to the amount of income from operations before income tax expense and higher effective state income tax rates between the comparative periods. |
MANDATORILY REDEEMABLE NON-CONT
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST | 9 Months Ended |
Jun. 30, 2023 | |
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST | |
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST | 9. MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST Mandatorily redeemable non-controlling interest (“MRNCI”) recorded on the Company’s condensed consolidated balance sheet represents the non-controlling interest in the Company’s strategic investment in Team Sledd. Financial Instruments Fair value of MRNCI as of September 2022 $ 11,158,555 Redemption of non-controlling interests (1,812,558) Distributions to non-controlling interest (592,570) Change in fair value 864,684 Fair value of MRNCI as of June 2023 $ 9,618,111 Less current portion at fair value (1,641,612) $ 7,976,499 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Jun. 30, 2023 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | 10. BUSINESS SEGMENTS The Company has two reportable business segments: the wholesale distribution of consumer products which includes Team Sledd and Henry’s (the Wholesale Segment), and the retail sale of health and natural food products (the Retail Segment). The aggregation of the Company’s business operations into these business segments was based on a range of considerations, including but not limited to the characteristics of each business, similarities in the nature and type of products sold, customer classes, methods used to sell the products and economic profiles. 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) from operations before taxes. Certain amounts in prior periods have been reclassified to conform with the current presentation. Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED JUNE 2023 External revenue: Cigarettes $ 429,431,319 $ — $ — $ 429,431,319 Tobacco 124,894,734 — — 124,894,734 Confectionery 46,624,371 — — 46,624,371 Health food — 10,745,108 — 10,745,108 Foodservice & other 84,793,895 — — 84,793,895 Total external revenue 685,744,319 10,745,108 — 696,489,427 Depreciation 1,690,452 278,552 — 1,969,004 Amortization 134,425 — — 134,425 Operating income (loss) 11,772,692 (297,795) (3,564,070) 7,910,827 Interest expense — — 2,385,842 2,385,842 Income (loss) from operations before taxes 11,148,619 559,473 (5,949,913) 5,758,179 Total assets 349,564,773 18,008,597 1,133,985 368,707,355 Capital expenditures 5,082,997 405,694 — 5,488,691 Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED JUNE 2022 External revenue: Cigarettes $ 364,771,496 $ — $ — $ 364,771,496 Tobacco 93,957,495 — — 93,957,495 Confectionery 32,541,090 — — 32,541,090 Health food — 11,350,797 — 11,350,797 Foodservice & other 47,963,274 — — 47,963,274 Total external revenue 539,233,355 11,350,797 — 550,584,152 Depreciation 602,770 281,376 — 884,146 Amortization 28,355 — — 28,355 Operating income (loss) 9,432,660 241,225 (2,772,099) 6,901,786 Interest expense — — 655,811 655,811 Income (loss) from operations before taxes 8,732,244 256,392 (1,030,801) 7,957,835 Equity method investment earnings, net of tax — — 307,973 307,973 Total assets 278,824,259 18,656,853 814,291 298,295,403 Capital expenditures 12,074,922 985,835 — 13,060,757 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2023 External revenue: Cigarettes $ 1,161,352,954 $ — $ — $ 1,161,352,954 Tobacco 339,356,268 — — 339,356,268 Confectionery 115,820,426 — — 115,820,426 Health food — 32,354,992 — 32,354,992 Foodservice & other 198,588,142 — — 198,588,142 Total external revenue 1,815,117,790 32,354,992 — 1,847,472,782 Depreciation 3,884,128 817,188 — 4,701,316 Amortization 280,752 — — 280,752 Operating income (loss) 28,934,860 (392,963) (9,783,740) 18,758,157 Interest expense — — 6,249,540 6,249,540 Income (loss) from operations before taxes 28,321,283 514,952 (16,033,281) 12,802,954 Total assets 349,564,773 18,008,597 1,133,985 368,707,355 Capital expenditures 7,499,029 791,468 — 8,290,497 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2022 External revenue: Cigarettes $ 900,677,466 $ — $ — $ 900,677,466 Tobacco 229,765,009 — — 229,765,009 Confectionery 79,691,881 — — 79,691,881 Health food — 35,695,298 — 35,695,298 Foodservice & other 119,213,967 — — 119,213,967 Total external revenue 1,329,348,323 35,695,298 — 1,365,043,621 Depreciation 1,589,102 897,511 — 2,486,613 Amortization 28,355 — — 28,355 Operating income (loss) 23,174,638 1,448,878 (10,020,703) 14,602,813 Interest expense — — 1,222,829 1,222,829 Income (loss) from operations before taxes 22,513,900 1,469,705 (8,790,693) 15,192,912 Equity method investment earnings, net of tax — — 1,670,133 1,670,133 Total assets 278,824,259 18,656,853 814,291 298,295,403 Capital expenditures 12,718,606 1,217,373 — 13,935,979 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
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 31 states and primarily operate in the Central, Rocky Mountain, Mid-South and Mid-Atlantic regions of the United States. ● Our retail health food segment (“Retail Segment”) operates 17 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 6,800 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 products, 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 2022, 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 distribution 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 eight distribution centers located in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. These distribution centers, combined with cross-dock facilities, include approximately 1.1 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellogg’s, Kraft Heinz, 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. As further described in Note 2, on February 3, 2023, the Company closed on its acquisition of Henry’s Foods, Inc. (“Henry’s”), purchasing substantially all of Henry’s operating assets for approximately $54.9 million. RETAIL SEGMENT Our Retail Segment, through our Healthy Edge Retail Group We operate within the natural products retail industry, which is a subset of the United States 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 17 retail health food stores as Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market. 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. |
FINANCIAL STATEMENTS | FINANCIAL STATEMENTS The Company’s fiscal year ends on September 30 th |
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. |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
ACQUISITION | |
Schedule of identifiable assets and liabilities assumed | Accounts receivable $ 8,237,652 Inventories 16,060,965 Prepaid and other assets 400,964 Property and equipment 27,216,323 Other intangible assets 3,607,000 Liabilities assumed (1,157,976) Total identifiable net assets $ 54,364,928 Total identifiable net assets $ 54,364,928 Goodwill 500,375 Consideration transferred $ 54,865,303 |
Schedule of other intangible assets acquired | Acquisition-Date Useful Life Other Intangible Asset Fair Value (Years) Customer list $ 2,010,000 15 Non-competition agreement 95,000 5 Trade name 1,502,000 7 $ 3,607,000 |
Schedule of unaudited supplemental financial data | The following table sets forth the unaudited supplemental financial data for Henry’s from the acquisition date through June 2023, which is included in the Company’s consolidated results for the nine months ended June 2023. Revenue $ 131,563,988 Net income available to common shareholders $ 1,288,462 |
Schedule of unaudited supplemental pro forma information | For the three months ended June 2023 For the three months ended June 2022 For the nine months ended June 2023 For the nine months ended June 2022 Revenue $ 696,489,427 $ 700,311,723 $ 1,951,264,477 $ 1,988,702,611 Net income available to common shareholders $ 3,944,379 $ 6,202,533 $ 8,838,866 $ 15,484,735 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | June September 2023 2022 Wholesale Segment $ 5,778,325 $ 5,277,950 |
Schedule of other intangible assets | June September 2023 2022 Customer lists (Wholesale Segment) (less accumulated amortization of $0.2 million at June 2023 and less than $0.1 million at September 2022) $ 3,284,013 $ 1,401,945 Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023 and less than $0.1 million at September 2022) 222,753 191,168 Tradename (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023) 1,412,595 — Trademarks and tradenames (Retail Segment) 500,000 500,000 $ 5,419,361 $ 2,093,113 |
Schedule of estimated future amortization expense related to identifiable intangible assets with finite lives | Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at June 2023: June 2023 Fiscal 2023 (1) $ 134,425 Fiscal 2024 537,701 Fiscal 2025 506,869 Fiscal 2026 463,703 Fiscal 2027 463,703 Fiscal 2028 and thereafter 2,812,960 $ 4,919,361 (1) Represents amortization for the remaining three months of Fiscal 2023. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of net earnings per share available to common shareholders | For the three months ended June 2023 2022 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 585,625 585,625 569,689 569,689 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 12,965 — 12,681 Weighted average number of shares outstanding 585,625 598,590 569,689 582,370 Net income available to common shareholders $ 3,944,379 $ 3,944,379 $ 6,044,808 $ 6,044,808 Net earnings per share available to common shareholders $ 6.74 $ 6.59 $ 10.61 $ 10.38 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive. For the nine months ended June 2023 2022 Basic Diluted Basic Diluted Weighted average number of common shares outstanding 584,359 584,359 567,026 567,026 Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1) — 9,121 — 14,552 Weighted average number of shares outstanding 584,359 593,480 567,026 581,578 Net income available to common shareholders $ 8,638,954 $ 8,638,954 $ 12,052,045 $ 12,052,045 Net earnings per share available to common shareholders $ 14.78 $ 14.56 $ 21.25 $ 20.72 (1) Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive . |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
DEBT | |
Schedule of long-term obligations | June 2023 September 2022 Unsecured note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023 852,642 968,589 Note payable, interest payable at a fixed rate of 4.10% with monthly installments of principal and interest of $53,361 through June 2033 with remaining principal due July 2033, collateralized by Team Sledd's principal office and warehouse 5,280,076 5,572,766 Note payable, interest payable at a fixed rate of 3.25% with monthly installments of principal and interest of $17,016 through August 2034 with remaining principal due September 2034, collateralized by Team Sledd's principal office and warehouse 1,927,167 2,052,327 Note payable with monthly installments of principal and interest of $7,934 through February 2025 with remaining principal due March 2025, and an effective variable rate of 7.28% at June 2023, collateralized by certain of Team Sledd's equipment 312,040 385,887 Note payable, interest payable at a fixed rate of 6.04% with monthly installments of principal and interest of $135,469 through February 2028, collateralized by certain of Henry's equipment 6,596,085 — 14,968,010 8,979,569 Less current maturities (2,738,524) (1,595,309) $ 12,229,486 $ 7,384,260 |
Schedule of minimum principal maturities of the long-term debt | Fiscal Year Ending 2023 (1) $ 1,295,972 2024 1,957,369 2025 2,166,686 2026 2,073,198 2027 2,187,857 2028 and thereafter 5,286,928 $ 14,968,010 (1) |
MANDATORILY REDEEMABLE NON-CO_2
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST | |
Schedule of mandatorily redeemable non-controlling interest | Fair value of MRNCI as of September 2022 $ 11,158,555 Redemption of non-controlling interests (1,812,558) Distributions to non-controlling interest (592,570) Change in fair value 864,684 Fair value of MRNCI as of June 2023 $ 9,618,111 Less current portion at fair value (1,641,612) $ 7,976,499 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
BUSINESS SEGMENTS | |
Schedule of segment information | Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED JUNE 2023 External revenue: Cigarettes $ 429,431,319 $ — $ — $ 429,431,319 Tobacco 124,894,734 — — 124,894,734 Confectionery 46,624,371 — — 46,624,371 Health food — 10,745,108 — 10,745,108 Foodservice & other 84,793,895 — — 84,793,895 Total external revenue 685,744,319 10,745,108 — 696,489,427 Depreciation 1,690,452 278,552 — 1,969,004 Amortization 134,425 — — 134,425 Operating income (loss) 11,772,692 (297,795) (3,564,070) 7,910,827 Interest expense — — 2,385,842 2,385,842 Income (loss) from operations before taxes 11,148,619 559,473 (5,949,913) 5,758,179 Total assets 349,564,773 18,008,597 1,133,985 368,707,355 Capital expenditures 5,082,997 405,694 — 5,488,691 Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED JUNE 2022 External revenue: Cigarettes $ 364,771,496 $ — $ — $ 364,771,496 Tobacco 93,957,495 — — 93,957,495 Confectionery 32,541,090 — — 32,541,090 Health food — 11,350,797 — 11,350,797 Foodservice & other 47,963,274 — — 47,963,274 Total external revenue 539,233,355 11,350,797 — 550,584,152 Depreciation 602,770 281,376 — 884,146 Amortization 28,355 — — 28,355 Operating income (loss) 9,432,660 241,225 (2,772,099) 6,901,786 Interest expense — — 655,811 655,811 Income (loss) from operations before taxes 8,732,244 256,392 (1,030,801) 7,957,835 Equity method investment earnings, net of tax — — 307,973 307,973 Total assets 278,824,259 18,656,853 814,291 298,295,403 Capital expenditures 12,074,922 985,835 — 13,060,757 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2023 External revenue: Cigarettes $ 1,161,352,954 $ — $ — $ 1,161,352,954 Tobacco 339,356,268 — — 339,356,268 Confectionery 115,820,426 — — 115,820,426 Health food — 32,354,992 — 32,354,992 Foodservice & other 198,588,142 — — 198,588,142 Total external revenue 1,815,117,790 32,354,992 — 1,847,472,782 Depreciation 3,884,128 817,188 — 4,701,316 Amortization 280,752 — — 280,752 Operating income (loss) 28,934,860 (392,963) (9,783,740) 18,758,157 Interest expense — — 6,249,540 6,249,540 Income (loss) from operations before taxes 28,321,283 514,952 (16,033,281) 12,802,954 Total assets 349,564,773 18,008,597 1,133,985 368,707,355 Capital expenditures 7,499,029 791,468 — 8,290,497 Wholesale Retail Segment Segment Other Consolidated NINE MONTHS ENDED JUNE 2022 External revenue: Cigarettes $ 900,677,466 $ — $ — $ 900,677,466 Tobacco 229,765,009 — — 229,765,009 Confectionery 79,691,881 — — 79,691,881 Health food — 35,695,298 — 35,695,298 Foodservice & other 119,213,967 — — 119,213,967 Total external revenue 1,329,348,323 35,695,298 — 1,365,043,621 Depreciation 1,589,102 897,511 — 2,486,613 Amortization 28,355 — — 28,355 Operating income (loss) 23,174,638 1,448,878 (10,020,703) 14,602,813 Interest expense — — 1,222,829 1,222,829 Income (loss) from operations before taxes 22,513,900 1,469,705 (8,790,693) 15,192,912 Equity method investment earnings, net of tax — — 1,670,133 1,670,133 Total assets 278,824,259 18,656,853 814,291 298,295,403 Capital expenditures 12,718,606 1,217,373 — 13,935,979 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) ft² in Millions, $ in Millions | 1 Months Ended | 9 Months Ended | |
Feb. 03, 2023 USD ($) | Dec. 31, 2022 item | Jun. 30, 2023 ft² state item segment | |
Number of business segments | segment | 2 | ||
Henry's | |||
Payments to acquire stores | $ | $ 54.9 | ||
Wholesale Segment | |||
Number of states served | state | 31 | ||
Number of retail outlets served | 6,800 | ||
Number of products sold or distributed | 17,000 | ||
Rank assigned by Convenience Store News | 6 | ||
Number of distribution centers | 8 | ||
Floor space occupied by distribution centers (in square feet) | ft² | 1.1 | ||
Retail Segment | |||
Number of operating health food retail stores | 17 | ||
Number of products sold or distributed | 35,000 |
ACQUISITION - Additional Inform
ACQUISITION - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 03, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | |
EQUITY METHOD INVESTMENT | |||||
Goodwill | $ 5,778,325 | $ 5,277,950 | |||
Remeasurement gain | $ 2,387,411 | ||||
Henry's | |||||
EQUITY METHOD INVESTMENT | |||||
Payment to acquire | $ 54,900,000 | ||||
Liabilities assumed | 1,157,976 | ||||
Operating leases | 200,000 | ||||
Reduction of the total purchase price recorded as an adjustment to goodwill | $ (100,000) | ||||
Goodwill | $ 500,375 | ||||
Team Sledd | |||||
EQUITY METHOD INVESTMENT | |||||
Controlling interest (as a percent) | 64% | 56% | 64% |
ACQUISITION - Identifiable Asse
ACQUISITION - Identifiable Assets and Liabilities and Goodwill (Details) - USD ($) | Jun. 30, 2023 | Feb. 03, 2023 | Sep. 30, 2022 |
Provisional (preliminary) amounts of identifiable assets and liabilities at fair value: | |||
Goodwill | $ 5,778,325 | $ 5,277,950 | |
Henry's | |||
Provisional (preliminary) amounts of identifiable assets and liabilities at fair value: | |||
Accounts receivable | $ 8,237,652 | ||
Inventories | 16,060,965 | ||
Prepaid and other assets | 400,964 | ||
Property and equipment | 27,216,323 | ||
Other intangible assets | 3,607,000 | ||
Liabilities assumed | (1,157,976) | ||
Total identifiable net assets | 54,364,928 | ||
Goodwill | 500,375 | ||
Consideration transferred | $ 54,865,303 |
ACQUISITION - Other Intangible
ACQUISITION - Other Intangible Asset Acquired (Details) - Henry's | Feb. 03, 2023 USD ($) |
Intangible assets | |
Acquisition-Date Fair Value | $ 3,607,000 |
Customer lists | |
Intangible assets | |
Acquisition-Date Fair Value | $ 2,010,000 |
Useful Life (Years) | 15 years |
Non-competition agreements | |
Intangible assets | |
Acquisition-Date Fair Value | $ 95,000 |
Useful Life (Years) | 5 years |
Trade Names | |
Intangible assets | |
Acquisition-Date Fair Value | $ 1,502,000 |
Useful Life (Years) | 7 years |
ACQUISITION - Unaudited Supplem
ACQUISITION - Unaudited Supplemental Financial Data (Details) - Henry's | 5 Months Ended |
Jun. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 131,563,988 |
Net income available to common shareholders | $ 1,288,462 |
ACQUISITION - Unaudited Suppl_2
ACQUISITION - Unaudited Supplemental Pro Forma Information (Details) - Henry's - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 696,489,427 | $ 700,311,723 | $ 1,951,264,477 | $ 1,988,702,611 |
Net income available to common shareholders | $ 3,944,379 | $ 6,202,533 | $ 8,838,866 | $ 15,484,735 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Sep. 30, 2022 |
INVENTORIES | ||
Total reserves on finished goods | $ 1.7 | $ 1.1 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Goodwill by reporting segment | ||
Goodwill | $ 5,778,325 | $ 5,277,950 |
Wholesale Segment | ||
Goodwill by reporting segment | ||
Goodwill | $ 5,778,325 | $ 5,277,950 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Other intangible assets, net | $ 5,419,361 | $ 2,093,113 |
Trademarks and tradenames | Retail Segment | ||
Other intangible assets, net | 500,000 | 500,000 |
Customer lists | Wholesale Segment | ||
Other intangible assets, net | 3,284,013 | 1,401,945 |
Accumulated amortization | 200,000 | |
Customer lists | Wholesale Segment | Maximum | ||
Accumulated amortization | 100,000 | |
Non-competition agreements | Wholesale Segment | ||
Other intangible assets, net | 222,753 | 191,168 |
Accumulated amortization | 100,000 | |
Non-competition agreements | Wholesale Segment | Maximum | ||
Accumulated amortization | $ 100,000 | |
Tradename | Wholesale Segment | ||
Other intangible assets, net | 1,412,595 | |
Accumulated amortization | $ 100,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | |
Goodwill | $ 5,778,325 | $ 5,778,325 | $ 5,277,950 |
Amortization expense related to finite-lived intangible assets | 100,000 | $ 300,000 | |
Customer lists | |||
Amortization period (in years) | 15 years | ||
Non-competition agreements | Minimum | |||
Amortization period (in years) | 3 years | ||
Non-competition agreements | Maximum | |||
Amortization period (in years) | 5 years | ||
Wholesale Segment | |||
Goodwill | $ 5,778,325 | $ 5,778,325 | $ 5,277,950 |
Wholesale Segment | Tradename | |||
Amortization period (in years) | 7 years |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) | Jun. 30, 2023 USD ($) |
Estimated future amortization expense related to identifiable intangible assets with finite lives | |
Fiscal 2023 | $ 134,425 |
Fiscal 2024 | 537,701 |
Fiscal 2025 | 506,869 |
Fiscal 2026 | 463,703 |
Fiscal 2027 | 463,703 |
Fiscal 2028 and thereafter | 2,812,960 |
Total | $ 4,919,361 |
DIVIDENDS (Details)
DIVIDENDS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
DIVIDENDS | ||||
Dividend paid | $ 100,000 | $ 100,000 | $ 3,423,089 | $ 3,331,606 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER SHARE | ||||
Weighted average number of common shares outstanding, Basic | 585,625 | 569,689 | 584,359 | 567,026 |
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock | 12,965 | 12,681 | 9,121 | 14,552 |
Weighted average number of shares outstanding, Diluted | 598,590 | 582,370 | 593,480 | 581,578 |
Net income available to common shareholders, Basic | $ 3,944,379 | $ 6,044,808 | $ 8,638,954 | $ 12,052,045 |
Net income available to common shareholders, Diluted | $ 3,944,379 | $ 6,044,808 | $ 8,638,954 | $ 12,052,045 |
Net earnings per share available to common shareholders, Basic (in dollars per share) | $ 6.74 | $ 10.61 | $ 14.78 | $ 21.25 |
Net earnings per share available to common shareholders, Diluted (in dollars per share) | $ 6.59 | $ 10.38 | $ 14.56 | $ 20.72 |
DEBT - Credit Facilities (Detai
DEBT - Credit Facilities (Details) $ in Millions | 9 Months Ended | |
Jun. 30, 2023 USD ($) item | Mar. 31, 2023 USD ($) | |
Revolving credit facility | ||
Number of credit facility agreements | item | 3 | |
Facilities | ||
Revolving credit facility | ||
Borrowing capacity | $ 300 | |
Maximum credit advances for certain inventory purchases under the facilities | 30 | |
Credit limit | 249.9 | |
Outstanding borrowings | 143.4 | |
Credit available | $ 106.5 | |
Average interest rate | 6.75% | |
Peak borrowings | $ 159.7 | |
Average borrowings | 124.3 | |
Average availability | 83.8 | |
Team Sledd Facility | ||
Revolving credit facility | ||
Borrowing capacity | $ 80 | $ 70 |
DEBT - Long-Term Debt (Details)
DEBT - Long-Term Debt (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Sep. 30, 2022 | |
Long-term obligations | ||
Long-term debt | $ 14,968,010 | $ 8,979,569 |
Less current maturities | (2,738,524) | (1,595,309) |
Long-term debt less current maturities | 12,229,486 | 7,384,260 |
4.50% Unsecured Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 852,642 | $ 968,589 |
Fixed interest rate (as a percent) | 4.50% | 4.50% |
Periodic installments of principal and interest | $ 49,114 | $ 49,114 |
4.10% Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 5,280,076 | $ 5,572,766 |
Fixed interest rate (as a percent) | 4.10% | 4.10% |
Periodic installments of principal and interest | $ 53,361 | $ 53,361 |
3.25% Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 1,927,167 | $ 2,052,327 |
Fixed interest rate (as a percent) | 3.25% | 3.25% |
Periodic installments of principal and interest | $ 17,016 | $ 17,016 |
7.28% Note payable | ||
Long-term obligations | ||
Long-term debt | 312,040 | 385,887 |
Periodic installments of principal and interest | $ 7,934 | $ 7,934 |
Variable rate | 7.28% | |
6.04% Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 6,596,085 | |
Fixed interest rate (as a percent) | 6.04% | |
Periodic installments of principal and interest | $ 135,469 |
DEBT - Aggregate Minimum Princi
DEBT - Aggregate Minimum Principal Maturities (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Minimum principal maturities | ||
2023 | $ 1,295,972 | |
2024 | 1,957,369 | |
2025 | 2,166,686 | |
2026 | 2,073,198 | |
2027 | 2,187,857 | |
2028 and thereafter | 5,286,928 | |
Long-term debt | $ 14,968,010 | $ 8,979,569 |
DEBT - Cross Default and Co-Ter
DEBT - Cross Default and Co-Terminus Provisions and Other (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2023 USD ($) item | |
DEBT | |
Number of notes payable containing cross default provisions | 3 |
Number of cross defaults | 0 |
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | $ | $ 0.5 |
MANDATORILY REDEEMABLE NON-CO_3
MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Difference between the contractual amount due and the fair value | $ 700,000 | $ 700,000 | ||||
Fair value of MRNCI as of September 2022 | 11,158,555 | |||||
Redemption of non-controlling interests | (1,812,558) | |||||
Distributions to non-controlling interest | (592,570) | |||||
Change in fair value | 698,571 | $ 705,392 | 864,684 | $ 705,392 | ||
Fair value of MRNCI as of June 2023 | 9,618,111 | 9,618,111 | ||||
Less current portion at fair value | (1,641,612) | (1,641,612) | $ (1,712,095) | |||
Noncurrent portion at fair value | $ 7,976,499 | $ 7,976,499 | ||||
Team Sledd | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Interest own (as a percent) | 64% | 64% | 56% | 64% |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Information by business segments | |||||
Number of reportable business segments | segment | 2 | ||||
Total external revenue | $ 696,489,427 | $ 550,584,152 | $ 1,847,472,782 | $ 1,365,043,621 | |
Depreciation | 1,969,004 | 884,146 | 4,701,316 | 2,486,613 | |
Amortization | 134,425 | 28,355 | 280,752 | 28,355 | |
Operating income (loss) | 7,910,827 | 6,901,786 | 18,758,157 | 14,602,813 | |
Interest expense | 2,385,842 | 655,811 | 6,249,540 | 1,222,829 | |
Income (loss) from operations before taxes | 5,758,179 | 7,957,835 | 12,802,954 | 15,192,912 | |
Equity method investment earnings, net of tax | 307,973 | 1,670,133 | |||
Total assets | 368,707,355 | 298,295,403 | 368,707,355 | 298,295,403 | $ 289,124,527 |
Capital expenditures | 5,488,691 | 13,060,757 | 8,290,497 | 13,935,979 | |
Cigarettes | |||||
Information by business segments | |||||
Total external revenue | 429,431,319 | 364,771,496 | 1,161,352,954 | 900,677,466 | |
Tobacco | |||||
Information by business segments | |||||
Total external revenue | 124,894,734 | 93,957,495 | 339,356,268 | 229,765,009 | |
Confectionery | |||||
Information by business segments | |||||
Total external revenue | 46,624,371 | 32,541,090 | 115,820,426 | 79,691,881 | |
Health food | |||||
Information by business segments | |||||
Total external revenue | 10,745,108 | 11,350,797 | 32,354,992 | 35,695,298 | |
Foodservice & other | |||||
Information by business segments | |||||
Total external revenue | 84,793,895 | 47,963,274 | 198,588,142 | 119,213,967 | |
Other | |||||
Information by business segments | |||||
Operating income (loss) | (3,564,070) | (2,772,099) | (9,783,740) | (10,020,703) | |
Interest expense | 2,385,842 | 655,811 | 6,249,540 | 1,222,829 | |
Income (loss) from operations before taxes | (5,949,913) | (1,030,801) | (16,033,281) | (8,790,693) | |
Equity method investment earnings, net of tax | 307,973 | 1,670,133 | |||
Total assets | 1,133,985 | 814,291 | 1,133,985 | 814,291 | |
Wholesale Segment | Segments | |||||
Information by business segments | |||||
Total external revenue | 685,744,319 | 539,233,355 | 1,815,117,790 | 1,329,348,323 | |
Depreciation | 1,690,452 | 602,770 | 3,884,128 | 1,589,102 | |
Amortization | 134,425 | 28,355 | 280,752 | 28,355 | |
Operating income (loss) | 11,772,692 | 9,432,660 | 28,934,860 | 23,174,638 | |
Income (loss) from operations before taxes | 11,148,619 | 8,732,244 | 28,321,283 | 22,513,900 | |
Total assets | 349,564,773 | 278,824,259 | 349,564,773 | 278,824,259 | |
Capital expenditures | 5,082,997 | 12,074,922 | 7,499,029 | 12,718,606 | |
Wholesale Segment | Segments | Cigarettes | |||||
Information by business segments | |||||
Total external revenue | 429,431,319 | 364,771,496 | 1,161,352,954 | 900,677,466 | |
Wholesale Segment | Segments | Tobacco | |||||
Information by business segments | |||||
Total external revenue | 124,894,734 | 93,957,495 | 339,356,268 | 229,765,009 | |
Wholesale Segment | Segments | Confectionery | |||||
Information by business segments | |||||
Total external revenue | 46,624,371 | 32,541,090 | 115,820,426 | 79,691,881 | |
Wholesale Segment | Segments | Foodservice & other | |||||
Information by business segments | |||||
Total external revenue | 84,793,895 | 47,963,274 | 198,588,142 | 119,213,967 | |
Retail Segment | Segments | |||||
Information by business segments | |||||
Total external revenue | 10,745,108 | 11,350,797 | 32,354,992 | 35,695,298 | |
Depreciation | 278,552 | 281,376 | 817,188 | 897,511 | |
Operating income (loss) | (297,795) | 241,225 | (392,963) | 1,448,878 | |
Income (loss) from operations before taxes | 559,473 | 256,392 | 514,952 | 1,469,705 | |
Total assets | 18,008,597 | 18,656,853 | 18,008,597 | 18,656,853 | |
Capital expenditures | 405,694 | 985,835 | 791,468 | 1,217,373 | |
Retail Segment | Segments | Health food | |||||
Information by business segments | |||||
Total external revenue | $ 10,745,108 | $ 11,350,797 | $ 32,354,992 | $ 35,695,298 |