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AMCON Distributing Company$89.00$1.501.71%

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 AMCON Distributing Company Reports Fully Diluted Earnings Per Share of $6.75 for the Fiscal Year Ended September 30, 2014
   Friday, November 07, 2014 4:01:15 PM ET

AMCON Distributing Company ("AMCON") (NYSE MKT:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $6.75 on net income available to common shareholders of $4.8 million for the fiscal year ended September 30, 2014. AMCON earned $2.57 per fully diluted share on net income available to common shareholders of $1.8 million for the fourth fiscal quarter ended September 30, 2014.

"We are pleased with our results for fiscal 2014. Our relentless focus on customer service and reliability has enabled us to maintain our leadership position in the convenience distribution industry," said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. He further noted, "We believe our focused strategic plan and customer centric philosophy are essential elements critical to navigating this challenging business environment. Our objective is to deliver attractive risk adjusted rates of return on the capital we employ. To support this objective we continue to invest in foodservice and information technology which drives the profitability of our customers."

The wholesale distribution segment reported revenues of $1.2 billion and operating income before depreciation and amortization of $15.6 million for fiscal 2014, and revenues and operating income before depreciation and amortization of $328.0 million and $4.6 million, respectively, for the fourth fiscal quarter of fiscal 2014. The retail health food segment reported revenues of $34.3 million and operating income before depreciation and amortization of $1.3 million for fiscal 2014, and revenue of $8.1 million and operating income before depreciation and amortization of $0.2 million for the fourth fiscal quarter of 2014.

"Our emphasis on building long term relationships continues to provide us with a significant competitive advantage," said Kathleen Evans, President of AMCON’s Wholesale Distribution Segment. Evans continued, "This is clearly evident based on our positive fall trade show response which will provide considerable momentum as we enter fiscal 2015. We are very excited about the completion of our plant expansion in Rapid City, South Dakota that will serve our foodservice growth plans in the region."

"The Retail Health Food industry continues to grow. However, with this growth there has been substantial new competition enter our markets which has pressured revenues," said Eric Hinkefent, President of AMCON’s Retail Health Food segment. "We have taken an aggressive approach to rationalize our operating expenses in light of the competitive environment and are looking at alternative ways to maintain our margins," added Hinkefent.

"We are very focused on increasing our shareholders’ equity per share and maintaining high levels of balance sheet liquidity. Debt reduction is an important priority for us because it improves our debt to equity ratio. At September 30, 2014 our shareholders’ equity was $55.4 million, resulting in adjusted book value per share of $80.62. We turned our inventory twenty-six times and consolidated debt was reduced to $19.2 million. This was after share repurchases and plant expansions totaling $5.5 million," said Andrew Plummer, AMCON’s Chief Financial Officer. "The Rapid City plant expansion brings a number of important benefits including increased efficiencies and the enhanced ability to service the thriving foodservice sector. We continue to place a high priority on the development of information technology for internal and external purposes. These are important investments in the future of our business," added Plummer.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and chilled foods, and health and beauty care products with locations in Illinois, Missouri, Nebraska, North Dakota, South Dakota and Tennessee. AMCON also operates sixteen (16) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Chamberlin’s Market & Cafe www.chamberlins.com and Akin’s Natural Foods Market www.akins.com

This news release contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. A number of factors could affect the future results of the Company and could cause those results to differ materially from those expressed in the Company’s forward-looking statements including, without limitation, availability of sufficient cash resources to conduct its business and meet its capital expenditures needs and the other factors described under Item 1.A. of the Company’s Annual Report on Form 10-K. Moreover, past financial performance should not be considered a reliable indicator of future performance. Accordingly, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements.

Visit AMCON Distributing Company’s web site at: www.amcon.com

                                                                                            AMCON Distributing Company and Subsidiaries
 
                                                                                                    CONSOLIDATED BALANCE SHEETS
                                                                       
                                                                                                                                                        September 30,
                                                                                           ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     2014                                                       2013
                                                                                           ---------------------------------------------------------                     ---------------------------------------------------------
                                ASSETS
Current assets:
  Cash                                                                                     $                            99,922                                           $                           275,036
  Accounts receivable, less allowance for doubtful accounts of $0.8                                                 33,286,932                                                                    28,383,205
  million at 2014 and $1.1 million at 2013
  Inventories, net                                                                                                  43,635,266                                                                    46,125,187
  Deferred income taxes                                                                                              1,606,168                                                                     1,831,933
  Prepaid and other current assets                                                                5,034,570                               5,001,992  
                                                                                           -------------------- -------------- --------------------                      -------------------- -------------- --------------------
   Total current assets                                                                                             83,662,858                                                                    81,617,353
Property and equipment, net                                                                                         13,763,140                                                                    13,088,859
Goodwill                                                                                                             6,349,827                                                                     6,349,827
Other intangible assets, net                                                                                         4,455,978                                                                     4,820,978
Other assets                                                                                        448,149                                 497,882  
                                                                                           -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                           $                       108,679,952                        $                       106,374,899  
                                                                                           ==================== ============== ====================                      ==================== ============== ====================
    LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                                                         $                        16,412,895                                           $                        15,859,636
  Accrued expenses                                                                                                   6,891,308                                                                     6,714,444
  Accrued wages, salaries and bonuses                                                                                2,647,969                                                                     2,754,136
  Income taxes payable                                                                                               1,603,614                                                                     1,922,351
  Current maturities of long-term debt                                                              341,190                                 998,788  
                                                                                           -------------------- -------------- --------------------                      -------------------- -------------- --------------------
   Total current liabilities                                                                                        27,896,976                                                                    28,249,355
Credit facility                                                                                                     15,081,783                                                                    14,841,712
Deferred income taxes                                                                                                3,484,204                                                                     3,327,010
Long-term debt, less current maturities                                                                              3,735,702                                                                     4,076,892
Other long-term liabilities                                                                                            139,003                                                                       239,396
Series A cumulative, convertible preferred stock, $.01 par value                                                     2,500,000                                                                     2,500,000
100,000 shares authorized and issued, and a total liquidation
preference of $2.5 million at both September 2014 and September 2013
Series B cumulative, convertible preferred stock, $.01 par value                                                       400,000                                                                       400,000
80,000 shares authorized, 16,000 shares issued and outstanding at
September 30, 2014 and September 30, 2013, and a total liquidation
preference of $0.4 million at both September 2014 and September 2013
                                                                                                                                                                          
Commitments and contingencies
                                                                                                                                                                          
Shareholders’ equity:
  Preferred stock, $0.01 par value, 1,000,000 shares authorized,                                                --                                                                --
  116,000 shares outstanding and issued in Series A and B referred to
  above
  Common stock, $0.01 par value, 3,000,000 shares authorized, 602,411                                                    6,677                                                                         6,543
  shares issued and outstanding at September 2014 and 623,115 shares
  issued and outstanding at September 2013
  Additional paid-in capital                                                                                        13,571,909                                                                    12,502,135
  Retained earnings                                                                                                 47,829,201                                                                    43,532,812
  Treasury stock at cost                                                                         (5,965,503 )                                               (3,300,956 )
                                                                                           -------------------- -------------- --------------------                      -------------------- -------------- --------------------
   Total shareholders’ equity                                         55,442,284                              52,740,534  
                                                                                           -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                           $                       108,679,952                        $                       106,374,899  
                                                                                           ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                              
                                                                                          AMCON Distributing Company and Subsidiaries
                                                                     
                                                                                             CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                          
                                                                                                                                             Fiscal Years Ended September
                                                                                         -------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2014                                                      2013
                                                                                         --------------------------------------------------------                     --------------------------------------------------------
Sales (including excise taxes of $387.8 million and $386.4 million,                      $                    1,236,755,388                                           $                    1,211,052,634
respectively)
Cost of sales                                                                              1,160,248,793                          1,133,695,309  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Gross profit                                                                                  76,506,595                             77,357,325  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Selling, general and administrative expenses                                                                     64,723,824                                                                   63,880,109
Depreciation and amortization                                                                  2,386,402                              2,412,613  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
                                                                                              67,110,226                             66,292,722  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Operating income                                                                                                  9,396,369                                                                   11,064,603
Other expense (income):
  Interest expense                                                                                                  935,360                                                                    1,108,146
  Other (income), net                                                                           (130,519 )                                                (277,215 )
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
                                                                                                 804,841                                830,931  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Income from operations before income tax expense                                                                  8,591,528                                                                   10,233,672
Income tax expense                                                                             3,632,000                              4,375,000  
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Net income                                                                                                        4,959,528                                                                    5,858,672
Preferred stock dividend requirements                                                           (195,105 )                                                (205,218 )
                                                                                         -------------------- ------------- --------------------                      -------------------- ------------- --------------------
Net income available to common shareholders                                              $                        4,764,423                        $                        5,653,454  
                                                                                         ==================== ============= ====================                      ==================== ============= ====================
                                                                                                                                                                                                          
                                                                                         $                             7.81                                           $                             9.08
  Basic earnings per share available to common shareholders:
                                                                                                                                                                                                          
                                                                                         $                             6.75                                           $                             7.79
  Diluted earnings per share available to common shareholders:
                                                                                                                                                                                                          
                                                                                                                    610,392                                                                      622,904
  Basic weighted average shares outstanding
  Diluted weighted average shares outstanding                                                                       735,227                                                                      751,812
                                                                                                                                                                                                          
                                                                                            AMCON Distributing Company and Subsidiaries
                                                                        
                                                                                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                             
                                                                                                                                                 Fiscal Years Ended September
                                                                                            ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      2014                                                       2013
                                                                                            ---------------------------------------------------------                     ---------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                                  $                         4,959,528                                           $                         5,858,672
Adjustments to reconcile income from operations to net cash flows
from operating activities:
  Depreciation                                                                                                        2,021,402                                                                     2,047,613
  Amortization                                                                                                          365,000                                                                       365,000
  Gain on sale of property and equipment                                                                                (59,449 )                                                                     (56,829 )
  Equity-based compensation                                                                                           1,406,033                                                                     1,303,310
  Deferred income taxes                                                                                                 382,959                                                                      (221,694 )
  Recoveries for losses on doubtful accounts                                                                           (317,000 )                                                                     (55,000 )
  Provision (recoveries) for losses on inventory obsolescence                                                            44,695                                                                       (91,494 )
  Other                                                                                                                  (8,045 )                                                                     (93,328 )
Changes in assets and liabilities:
  Accounts receivable                                                                                                (4,586,727 )                                                                   4,353,630
  Inventories                                                                                                         3,403,156                                                                    (7,669,072 )
  Prepaid and other current assets                                                                                      (32,578 )                                                                   1,474,710
  Other assets                                                                                                           49,733                                                                           232
  Accounts payable                                                                                                      591,478                                                                    (1,391,539 )
  Accrued expenses and accrued wages, salaries and bonuses                                                             (238,994 )                                                                     181,294
  Income taxes payable                                                                              (318,737 )                                                 (272,615 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash flows from operating activities                                                           7,662,454                               5,732,890  
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                                                                 (2,796,326 )                                                                  (2,113,426 )
  Proceeds from sales of property and equipment                                                                         192,373                                                                       179,662
  Acquisitions                                                                                      (996,803 )                                           --  
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash flows from investing activities                                                          (3,600,756 )                                               (1,933,764 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings on bank credit agreements                                                                              240,071                                                                       487,980
  Principal payments on long-term debt                                                                                 (998,788 )                                                                  (1,182,829 )
  Repurchase of common stock and Series B Convertible Preferred Stock                                                (2,664,547 )                                                                  (2,572,085 )
  Dividends paid on convertible preferred stock                                                                        (195,105 )                                                                    (205,218 )
  Dividends on common stock                                                                                            (468,034 )                                                                    (469,895 )
  Withholdings on the exercise of equity-based awards                                               (150,409 )                                                  (73,430 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash flow from financing activities                                                           (4,236,812 )                                               (4,015,477 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net change in cash                                                                                                     (175,114 )                                                                    (216,351 )
Cash, beginning of year                                                                              275,036                                 491,387  
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash, end of year                                                                           $                            99,922                        $                           275,036  
                                                                                            ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                           
Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                                    $                           946,881                                           $                         1,115,991
  Cash paid during the year for income taxes                                                                          3,567,778                                                                     4,867,986
                                                                                                                                                                           
Supplemental disclosure of non-cash information:
  Equipment acquisitions classified as accounts payable                                     $                            34,985                                           $                            73,204
  Issuance of common stock in connection with the vesting and exercise                                                1,154,869                                                                     1,389,258
  of equity-based awards
  Conversion by holders of Series B Convertible Preferred Stock to                                               --                                                                       100,000
  common stock
  Common stock acquired with other consideration                                                                 --                                                                       760,871
                                                                                                                                                                                                               
                                                                                                                                                       AMCON Distributing Company and Subsidiaries
                                                                                                                                                                                                                         
FISCAL YEAR 2014
                                                                                                                                                                                                                                                                                                       
(dollars in thousands, except per share data)                                                           First                                                                 Second                                                                  Third                                                                 Fourth
                                                                                 --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------
                                                                                                                                                                                                                                                                                                       
Sales                                                                            $                    305,626                                           $                    272,422                                           $                    322,648                                           $                    336,060
                                                                                                                                                                                                                                                                                                                                    
Gross profit                                                                        19,641                           17,620                           19,295                           19,951  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Income from operations before income tax expense                                     2,253                              995                            2,250                            3,093  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Net income                                                                                              1,288                                                                    531                                                                  1,260                                                                  1,880
                                                                                                                                                                                                                                                                                                                                    
Preferred stock dividend requirements                                                  (49 )                                               (48 )                                               (49 )                                               (49 )
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Net income available to common shareholders                                      $                      1,239                        $                        483                        $                      1,211                        $                      1,831  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                    
Basic earnings per share available to common shareholders                        $                       1.99                        $                       0.79                        $                       2.00                        $                       3.04  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                    
Diluted earnings per share available to common shareholders                      $                       1.73                        $                       0.72                        $                       1.73                        $                       2.57  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                       
FISCAL YEAR 2013
                                                                                                                                                                                                                                                                                                       
(dollars in thousands, except per share data)                                                           First                                                                 Second                                                                  Third                                                                 Fourth
                                                                                 --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------
                                                                                                                                                                                                                                                                                                       
Sales                                                                            $                    302,218                                           $                    274,568                                           $                    316,031                                           $                    318,235
                                                                                                                                                                                                                                                                                                                                    
Gross profit                                                                        19,230                           18,297                           19,811                           20,020  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Income from operations before income tax expense                                     2,533                            2,125                            2,887                            2,689  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Net income                                                                                              1,463                                                                  1,214                                                                  1,632                                                                  1,549
                                                                                                                                                                                                                                                                                                                                    
Preferred stock dividend requirements                                                  (59 )                                               (48 )                                               (49 )                                               (49 )
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Net income available to common shareholders                                      $                      1,403                        $                      1,166                        $                      1,584                        $                      1,500  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                    
Basic earnings per share available to common shareholders                        $                       2.26                        $                       1.87                        $                       2.54                        $                       2.41  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                    
Diluted earnings per share available to common shareholders                      $                       1.90                        $                       1.63                        $                       2.19                        $                       2.07  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                    

The Company’s quarterly earnings per share are based on weighted average shares outstanding for the quarter; therefore the sum of the quarters may not equal the full year earnings per share amount.

AMCON Distributing Company and Subsidiaries

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

The financial measure of adjusted book value per share included in this press release ("adjusted book value per share") has been determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Management believes that this non-GAAP financial measurement reflects an additional way of viewing aspects of the Company’s business that, when viewed together with its financial results computed in accordance with GAAP, provides a more complete understanding of factors affecting historical financial performance of the Company. This measure is important to investors interested in determining the amount of book value per share if all potentially dilutive shares were exercised or converted. This non-GAAP financial measurement is not intended to be a substitute for the comparable GAAP measurements and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

The Company has defined the non-GAAP financial measure of adjusted book value per share as follows:

-- "Adjusted book value per share" is defined as total shareholders’ equity increased by the impact of proceeds from the exercise of all stock options, conversion of convertible preferred stock and vesting of restricted stock units divided by total common shares outstanding plus common shares issuable upon the exercise of all stock options, conversion of convertible preferred stock and vesting of restricted stock units."

                                                                                       September 2014
                                                                                                 ------------------------------
Number of common shares outstanding at September 30, 2014                                                                602,411
Total shareholders’ equity at September 30, 2014                      $                    55,442,284
                                                                                                 -------------------- ----------
                                                                                                  
Book value per share at September 30, 2014                                                       $                         92.03
                                                                                                  
                                                                                                          September 2014
                                                                                                 ------------------------------
Number of common shares outstanding at September 30, 2014                                                                602,411
Add: common shares potentially issuable for stock options,                                            173,208
convertible preferred stock, and unvested restricted stock units /1/
                                                                                                 -------------------- ----------
                                                                                                      775,619
                                                                                                 ==================== ==========
                                                                                                  
Total shareholders’ equity at September 30, 2014                      $                    55,442,284
Equity impact if all potential common shares were converted /1/                                     7,089,656
                                                                                                 -------------------- ----------
                                                                                                 $                    62,531,940
                                                                                                 ==================== ==========
                                                                                                  
Adjusted book value per share at September 30, 2014                                              $                         80.62
                                                                                                  
/1/   Assumes the exercise of all vested and unvested stock options,
                         conversion of all preferred stock, and vesting of all outstanding
                         restricted stock units at September 30, 2014.
                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20141107005963r1&sid=cmtx6&distro=nx&lang=en

SOURCE: AMCON Distributing Company

AMCON Distributing Company 
Christopher H. Atayan, 402-331-3727


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