Amcon Distributing Co 10-Q for FY2025 Q2

Amcon Distributing Co (DIT)

10-Q 2025-04-18 For: 2025-03-31

Added on April 06, 2026

About this 10-Q

Amcon Distributing Co filed this 10-Q on April 18, 2025, covering the quarter ended March 31, 2025 (FY2025 Q2).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $619.5M; up 2.9% from $601.88M a year earlier
Net loss: $1.59M; compared with net income of $539.54K a year earlier
Diluted EPS: -$2.58; compared with $0.89 a year earlier

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Delaware		47-0702918
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

7405 Irvington Road, Omaha NE		68122
(Address of principal executive offices)		(Zip code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	DIT	NYSE American

Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ⌧

Smaller reporting company ⌧	Emerging growth company ◻


March 31, 2025	PAGE

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements:

Condensed consolidated balance sheets at March 31, 2025 (unaudited) and September 30, 2024	3

Condensed consolidated unaudited statements of operations for the three and six months ended March 31, 2025 and 2024	4

Condensed consolidated unaudited statements of shareholders’ equity for the three and six months ended March 31, 2025 and 2024	5

Condensed consolidated unaudited statements of cash flows for the six months ended March 31, 2025 and 2024	6

Notes to condensed consolidated unaudited financial statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3. Quantitative and Qualitative Disclosures About Market Risk	24

Item 4. Controls and Procedures	25

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	26

Item 1A. Risk Factors	26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3. Defaults Upon Senior Securities	26

Item 4. Mine Safety Disclosures	26

Item 5. Other Information	26

Item 6. Exhibits	27


	March		September
	2025		2024
	(Unaudited)
ASSETS
Current assets:
Cash	$	685,854	$	672,788
Accounts receivable, less allowance for credit losses of $2.2 million at March 2025 and $2.3 million at September 2024		65,081,021		70,653,907
Inventories, net		160,544,902		144,254,843
Income taxes receivable		338,291		718,645
Prepaid expenses and other current assets		13,011,905		12,765,088
Total current assets		239,661,973		229,065,271

Property and equipment, net		110,596,212		106,049,061
Operating lease right-of-use assets, net		28,485,790		25,514,731
Goodwill		5,778,325		5,778,325
Other intangible assets, net		4,478,383		4,747,234
Other assets		3,003,354		2,952,688
Total assets	$	392,004,037	$	374,107,310

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	57,221,231	$	54,498,225
Accrued expenses		14,807,437		15,802,727
Accrued wages, salaries and bonuses		4,821,368		8,989,355
Current operating lease liabilities		7,679,960		7,036,751
Current maturities of long-term debt		5,314,657		5,202,443
Current mandatorily redeemable non-controlling interest		1,812,558		1,703,604
Total current liabilities		91,657,211		93,233,105

Credit facilities		142,291,571		121,272,004
Deferred income tax liability, net		3,802,644		4,374,316
Long-term operating lease liabilities		21,060,350		18,770,001
Long-term debt, less current maturities		13,823,014		16,562,908
Mandatorily redeemable non-controlling interest, less current portion		6,866,610		6,507,896
Other long-term liabilities		1,151,765		1,657,295

Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized		—		—
Common stock, $.01 par value, 3,000,000 shares authorized, 645,462 shares outstanding at March 2025 and 630,362 shares outstanding at September 2024		9,799		9,648
Additional paid-in capital		35,715,308		34,439,735
Retained earnings		106,897,928		108,552,565
Treasury stock at cost		(31,272,163)		(31,272,163)
Total shareholders’ equity		111,350,872		111,729,785
Total liabilities and shareholders’ equity	$	392,004,037	$	374,107,310


⌧	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2025


◻	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ___________to _________


	For the three months ended March				For the six months ended March
	2025		2024		2025		2024
Sales (including excise taxes of $126.1 and $127.4 million, and $269.5 and $265.5 million, respectively)	$	619,503,087	$	601,877,306	$	1,330,776,344	$	1,246,836,380
Cost of sales		576,475,202		559,566,439		1,240,854,907		1,161,224,591
Gross profit		43,027,885		42,310,867		89,921,437		85,611,789
Selling, general and administrative expenses		40,107,953		36,677,814		80,695,584		73,936,491
Depreciation and amortization		2,458,027		2,289,390		5,093,628		4,508,558
		42,565,980		38,967,204		85,789,212		78,445,049
Operating income		461,905		3,343,663		4,132,225		7,166,740

Other expense (income):
Interest expense		2,266,407		2,247,737		5,113,028		4,559,250
Change in fair value of mandatorily redeemable non-controlling interest		272,856		134,389		467,668		334,133
Other (income), net		(56,398)		(191,006)		(167,930)		(754,147)
		2,482,865		2,191,120		5,412,766		4,139,236
Income (loss) from operations before income taxes		(2,020,960)		1,152,543		(1,280,541)		3,027,504
Income tax expense (benefit)		(431,000)		613,000		(39,000)		1,417,000
Net income (loss) available to common shareholders	$	(1,589,960)	$	539,543	$	(1,241,541)	$	1,610,504

Basic earnings (loss) per share available to common shareholders	$	(2.58)	$	0.90	$	(2.02)	$	2.69
Diluted earnings (loss) per share available to common shareholders	$	(2.58)	$	0.89	$	(2.02)	$	2.66

Basic weighted average shares outstanding		615,261		600,161		613,270		597,879
Diluted weighted average shares outstanding		615,261		608,029		613,270		605,917

Dividends paid per common share	$	0.46	$	0.46	$	0.64	$	0.64


							Additional
	Common Stock			Treasury Stock			Paid-in		Retained
	Shares	Amount		Shares	Amount		Capital		Earnings		Total
THREE MONTHS ENDED MARCH 2024
Balance, January 1, 2024	964,945	$	9,648	(334,583)	$	(31,272,163)	$	32,521,091	$	105,627,432	$	106,886,008
Dividends on common stock, $0.18 per share	—		—	—		—		—		(113,465)		(113,465)
Compensation expense related to equity-based awards	—		—	—		—		639,548		—		639,548
Net income available to common shareholders	—		—	—		—		—		539,543		539,543
Balance, March 31, 2024	964,945	$	9,648	(334,583)	$	(31,272,163)	$	33,160,639	$	106,053,510	$	107,951,634

THREE MONTHS ENDED MARCH 2025
Balance, January 1, 2025	980,045	$	9,799	(334,583)	$	(31,272,163)	$	35,077,446	$	108,604,071	$	112,419,153
Dividends on common stock, $0.18 per share	—		—	—		—		—		(116,183)		(116,183)
Compensation expense related to equity-based awards	—		—	—		—		637,862		—		637,862
Net loss available to common shareholders	—		—	—		—		—		(1,589,960)		(1,589,960)
Balance, March 31, 2025	980,045	$	9,799	(334,583)	$	(31,272,163)	$	35,715,308	$	106,897,928	$	111,350,872


Accounts receivable	$	12,375
Inventories		2,998,299
Prepaid and other assets		1,789
Property and equipment - Land		597,700
Property and equipment - Building		2,466,364
Property and equipment - Vehicles		55,000
Total identifiable net assets	$	6,131,527

Total identifiable net assets	$	6,131,527
Goodwill		—
Total consideration	$	6,131,527


Revenue	$	5,598,721
Net loss available to common shareholders	$	(63,963)


	For the three months ended March 2025		For the three months ended March 2024		For the six months ended March 2025		For the six months ended March 2024
Revenue	$	620,521,036	$	664,670,461	$	1,339,474,585	$	1,376,384,687
Net income (loss) available to common shareholders	$	(1,602,771)	$	301,966	$	(1,336,819)	$	1,503,104


	March
	2025
Fiscal 2025 (1)	$	238,019
Fiscal 2026		463,703
Fiscal 2027		463,703
Fiscal 2028		451,043
Fiscal 2029		444,703
Fiscal 2030 and thereafter		1,917,212
	$	3,978,383


	For the Three Months Ended March 31,
	2025		2024
Fair value, beginning of period	$	8,406,312	$	9,690,575
Change in fair value		272,856		134,389
Fair value, end of period	$	8,679,168	$	9,824,964



	For the Six Months Ended March 31,
	2025		2024
Fair value, beginning of period	$	8,211,500	$	9,490,831
Change in fair value		467,668		334,133
Fair value, end of period	$	8,679,168	$	9,824,964


	March		March
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) available to common shareholders	$	(1,241,541)	$	1,610,504
Adjustments to reconcile net income (loss) available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		4,824,777		4,239,707
Amortization		268,851		268,851
(Gain) loss on sales of property and equipment		(44,229)		(105,505)
Equity-based compensation		1,275,724		1,210,685
Deferred income taxes		(571,672)		153,444
Provision for credit losses		(164,616)		(133,707)
Inventory allowance		32,688		22,413
Change in fair value of contingent consideration		(1,453,452)		—
Change in fair value of mandatorily redeemable non-controlling interest		467,668		334,133
Changes in assets and liabilities, net of effects of business combinations:
Accounts receivable		5,749,877		4,130,987
Inventories		(13,324,448)		37,236,124
Prepaid and other current assets		(245,028)		(1,680,438)
Other assets		(50,666)		104,191
Accounts payable		2,898,936		9,475,057
Accrued expenses and accrued wages, salaries and bonuses		(4,490,508)		(4,402,600)
Other long-term liabilities		237,652		283,553
Income taxes payable and receivable		380,354		1,009,754
Net cash flows from (used in) operating activities		(5,449,633)		53,757,153

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(6,451,773)		(11,084,390)
Proceeds from sales of property and equipment		67,208		234,278
Acquisition of Arrowrock Supply (See Note 2)		(6,131,527)		—
Net cash flows from (used in) investing activities		(12,516,092)		(10,850,112)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		1,262,647,310		1,128,853,805
Repayments under revolving credit facilities		(1,241,627,743)		(1,170,097,086)
Principal payments on long-term debt		(2,627,680)		(1,099,738)
Dividends on common stock		(413,096)		(403,432)
Net cash flows from (used in) financing activities		17,978,791		(42,746,451)
Net change in cash		13,066		160,590
Cash, beginning of period		672,788		790,931


	March		September
	2025		2024
Customer lists (Wholesale Segment) (less accumulated amortization of $0.6 million at March 2025 and $0.5 million at September 2024)	$	2,881,282	$	2,996,348
Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.3 million at March 2025 and $0.2 million at September 2024)		60,006		106,505
Tradename (Wholesale Segment) (less accumulated amortization of $0.5 million at March 2025 and $0.4 million at September 2024)		1,037,095		1,144,381
Trademarks and tradenames (Retail Segment)		500,000		500,000
	$	4,478,383	$	4,747,234


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED MARCH 2025
External revenue:
Cigarettes	$	374,341,125	$	—	$	—	$	374,341,125
Tobacco		121,839,251		—		—		121,839,251
Confectionery		39,765,350		—		—		39,765,350
Health food		—		11,902,524		—		11,902,524
Foodservice & other		71,654,837		—		—		71,654,837
Total external revenue		607,600,563		11,902,524		—		619,503,087
Depreciation		2,056,696		266,906		—		2,323,602
Amortization		134,425		—		—		134,425
Operating income (loss)		2,821,616		430,846		(2,790,557)		461,905
Interest expense		—		—		2,266,407		2,266,407
Income (loss) from operations before taxes		2,582,199		453,806		(5,056,965)		(2,020,960)
Total assets		373,458,943		17,342,095		1,202,999		392,004,037
Capital expenditures		2,859,192		207,068		—		3,066,260


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED MARCH 2024
External revenue:
Cigarettes	$	367,878,538	$	—	$	—	$	367,878,538
Tobacco		114,832,151		—		—		114,832,151
Confectionery		37,862,439		—		—		37,862,439
Health food		—		11,224,329		—		11,224,329
Foodservice & other		70,079,849		—		—		70,079,849
Total external revenue		590,652,977		11,224,329		—		601,877,306
Depreciation		1,940,843		214,121		—		2,154,964
Amortization		134,426		—		—		134,426
Operating income (loss)		5,813,354		456,722		(2,926,413)		3,343,663
Interest expense		—		—		2,247,737		2,247,737
Income (loss) from operations before taxes		5,843,163		483,530		(5,174,150)		1,152,543
Total assets		318,821,274		16,312,547		1,023,048		336,156,869
Capital expenditures (1)		14,230,776		726,494		—		14,957,270


Current portion of contingent consideration at fair value as of September 2024	$	710,270
Long-term portion of contingent consideration at fair value as of September 2024		743,182
Fair value of contingent consideration as of September 2024	$	1,453,452
Change in fair value		(1,453,452)
Fair value of contingent consideration as of March 2025	$	—


	2025			2024			Incr (Decr)		% Change
CONSOLIDATED:
Sales (1)	$	619,503,087		$	601,877,306		$	17,625,781	2.9
Cost of sales		576,475,202			559,566,439			16,908,763	3.0
Gross profit		43,027,885			42,310,867			717,018	1.7
Gross profit percentage		6.9	%		7.0	%

Operating expense	$	42,565,980		$	38,967,204		$	3,598,776	9.2
Operating income		461,905			3,343,663			(2,881,758)	(86.2)
Interest expense		2,266,407			2,247,737			18,670	0.8
Change in fair value of mandatorily redeemable non-controlling interest		272,856			134,389			138,467	103.0
Income tax expense (benefit)		(431,000)			613,000			(1,044,000)	(170.3)
Net income (loss) available to common shareholders		(1,589,960)			539,543			(2,129,503)	(394.7)

BUSINESS SEGMENTS:
Wholesale
Sales	$	607,600,563		$	590,652,977		$	16,947,586	2.9
Gross profit		38,556,563			38,155,508			401,055	1.1
Gross profit percentage		6.3	%		6.5	%
Retail
Sales	$	11,902,524		$	11,224,329		$	678,195	6.0
Gross profit		4,471,322			4,155,359			315,963	7.6
Gross profit percentage		37.6	%		37.0	%



	10.1	Consent, Joinder and Eleventh Amendment to Second Amended and Restated Loan and Security Agreement, dated January 17, 2025 between AMCON Distributing Company and Bank of America

	31.1	Certification by Christopher H. Atayan, Chief Executive Officer and Chairman, pursuant to section 302 of the Sarbanes-Oxley Act

	31.2	Certification by Charles J. Schmaderer, Vice President, Chief Financial Officer and Secretary, pursuant to section 302 of the Sarbanes-Oxley Act

	32.1	Certification by Christopher H. Atayan, Chief Executive Officer and Chairman, furnished pursuant to section 906 of the Sarbanes-Oxley Act

	32.2	Certification by Charles J. Schmaderer, Vice President, Chief Financial Officer and Secretary, furnished pursuant to section 906 of the Sarbanes-Oxley Act

	101	Interactive Data File (filed herewith electronically)

	104	Cover Page Interactive Data File – formatted in Inline XBRL and included as Exhibit 101

	AMCON DISTRIBUTING COMPANY
	(registrant)

Date: April 18, 2025	/s/ Christopher H. Atayan
	Christopher H. Atayan,
	Chief Executive Officer and Chairman

Date: April 18, 2025	/s/ Charles J. Schmaderer
	Charles J. Schmaderer,
	Vice President, Chief Financial Officer and Secretary
	(Principal Financial and Accounting Officer)

	Charles J. Schmaderer Vice President, Chief Financial Officer and Secretary
EXISTING BORROWERS:	AMCON DISTRIBUTING COMPANY, a Delaware corporation By: /s/ Charles J. Schmaderer Charles J. Schmaderer Vice President, Chief Financial Officer and Secretary
	CHAMBERLIN NATURAL FOODS, INC., a Florida corporation By: /s/ Andrew C. Plummer Andrew C. Plummer Secretary
	HEALTH FOOD ASSOCIATES, INC., an Oklahoma corporation By: /s/ Charles J. Schmaderer Charles J. Schmaderer Secretary
	AMCON ACQUISITION CORP., a Delaware corporation By: /s/ Andrew C. Plummer Andrew C. Plummer President
	EOM ACQUISITION CORP., a Delaware corporation By: /s/ Andrew C. Plummer Andrew C. Plummer Secretary
	CHARLES WAY LLC, a Missouri limited liability company By: /s/ Charles J. Schmaderer Charles J. Schmaderer Secretary

BORROWERS:	AMCON BISMARCK LAND CO., a Delaware corporation By: /s/ Andrew C. Plummer Andrew C. Plummer Secretary
	COLORADO CITY LAND COMPANY, LLC, a Colorado limited liability company By: /s/ Charles J. Schmaderer Charles J. Schmaderer Secretary
	PEORIA LAND COMPANY LLC, an Illinois limited liability company By: /s/ Charles J. Schmaderer Charles J. Schmaderer Manager
NEW BORROWER:	BOISE LAND COMPANY, LLC, an Idaho limited liability company By: /s/ Charles J. Schmaderer Charles J. Schmaderer Manager

July
Date: April 18, 2025	/s/ Christopher H. Atayan
	Christopher H. Atayan,
	Chief Executive Officer and Chairman

Ju
Date: April 18, 2025	/s/ Christopher H. Atayan
	Christopher H. Atayan
	Title: Chief Executive Officer and Chairman

Date: April 18, 2025	/s/ Charles J. Schmaderer
	Charles J. Schmaderer
	Title: Vice President, Chief Financial Officer and Secretary