Core Insights - AMCON Distributing Company's shares increased by 4.9% following the earnings report for the quarter ended June 30, 2025, outperforming the S&P 500's 1.2% growth during the same period [1] - The company reported earnings per share of $2.13, down from $2.46 in the prior-year quarter [1] Financial Performance - Quarterly sales rose by 3% year over year to $739.6 million, up from $717.9 million, driven by modest revenue gains across two operating segments [2] - Operating income fell by 13.5% to $4.9 million compared to $5.6 million in the prior-year period [2] - Net income available to common shareholders decreased to $1.3 million from $1.5 million a year earlier [2] Segment Performance - The wholesale distribution segment generated revenues of $728.3 million and operating income of $7.3 million [3] - The retail health food segment contributed $11.3 million in revenues and $0.1 million in operating income [3] - Gross profit increased to $49.6 million from $48 million, while selling, general, and administrative expenses rose by 6.5% to $42.5 million due to inflation-related costs [3] Cost and Expenses - Interest expenses were $2.7 million, slightly down from $2.9 million last year [4] - Income before taxes decreased to $2.1 million from $2.4 million in the prior-year quarter [4] Management Insights - The CEO emphasized the focus on integrating recent acquisitions and optimizing new facilities to strengthen AMCON's position as the third-largest convenience distributor in the U.S. [5] - The COO acknowledged challenges in the convenience retailing sector, including sluggish consumer spending and persistent inflation, while reaffirming foodservice as a strategic growth area [6] Macroeconomic Factors - AMCON's results reflect broader macroeconomic pressures, particularly inflation affecting product costs and operating expenses, which have compressed margins despite revenue growth [7] Dividend and Shareholder Returns - The company maintained its dividend payout at $0.18 per share for the quarter, consistent with the prior year, totaling $0.82 per share year-to-date [8] Financial Position - As of June 30, 2025, shareholders' equity was $113.2 million, up from $111.7 million as of September 30, 2024 [9] - Cash and equivalents were reported at $0.8 million, with total assets reaching $393.9 million [9] Cash Flow and Capital Expenditures - Cash flows from operations were negative $12.5 million for the nine-month period ended June 30, 2025, compared to positive $26.9 million in the prior-year period [10] - Capital expenditures totaled $8.2 million, with acquisitions consuming an additional $6.1 million in cash [10] Recent Developments - AMCON completed the acquisition of Arrowrock Supply for approximately $6.1 million in cash, aligning with its strategy to expand in the convenience distribution space [11]

Core Insights - Amcon Distributing reported diluted EPS of $2.13 and revenue of $739.6 million for Q3 fiscal 2025, with no analyst estimates available for comparison [1][2] - Operating profit margins tightened due to inflation in operating costs, leading to weaker profitability despite steady sales compared to Q3 fiscal 2024 [1][6] Financial Performance - EPS decreased by 13.4% from $2.46 in Q3 2024 to $2.13 in Q3 2025 [2] - Revenue increased by 3.0% from $717.9 million in Q3 2024 to $739.6 million in Q3 2025 [2] - Operating income fell by 13.5% from $5.6 million in Q3 2024 to $4.9 million in Q3 2025 [2] - Net income decreased by 11.5% from $1.5 million in Q3 2024 to $1.3 million in Q3 2025 [2] - Gross profit rose by 3.4% from $48.0 million in Q3 2024 to $49.6 million in Q3 2025 [2] Business Overview - Amcon Distributing specializes in wholesale distribution for the convenience retail sector, serving approximately 7,900 retail outlets [3] - The company operates two segments: wholesale distribution, which is the primary revenue driver, and retail health food stores [3][4] Segment Performance - The wholesale segment generated $728.3 million in revenue, accounting for over 98% of total sales, with an operating income of $7.3 million [5] - The retail health food segment reported $11.3 million in sales and a minimal operating income of $0.1 million [5] Cost and Expenses - SG&A expenses increased by 6.5% to $42.5 million compared to Q3 fiscal 2024, outpacing revenue growth [6] - Interest expense was $2.7 million, slightly lower than $2.9 million in Q3 fiscal 2024 [6] - Operating margin was approximately 0.7% [6] Strategic Focus - The company is focusing on expanding foodservice programs, integrating new acquisitions, and investing in technology to enhance marketing and customer retention [4][7] - Management highlighted the importance of proprietary marketing programs, although these have not yet translated into improved margins [7] Cash Flow and Financial Position - Year-to-date cash flow from operations was -$12.5 million, driven by increased accounts receivable and inventory buildup [8] - Shareholders' equity increased to $113.2 million, while cash on hand was $0.83 million and total debt rose to $154.6 million [8] Future Outlook - The company did not provide specific financial guidance but intends to pursue further acquisitions and maximize liquidity [9][10] - Key risks include reliance on cigarette sales and thin operating margins, with a focus on cash management due to inventory and accounts receivable buildup [10]

PART I — FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, showing total assets grew to **$393.9 million** and nine-month net income significantly decreased to **$77,006** from **$3.1 million**, primarily due to a shift in cash from operations Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total current assets | $243,725,265 | $229,065,271 | | Total assets | $393,915,525 | $374,107,310 | | Total current liabilities | $88,938,979 | $93,233,105 | | Credit facilities | $154,590,771 | $121,272,004 | | Total liabilities | $280,724,428 | $262,377,525 | | Total shareholders' equity | $113,191,097 | $111,729,785 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Q3 2025 | Q3 2024 | Nine Months 2025 | Nine Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | $739,615,416 | $717,852,293 | $2,070,391,760 | $1,964,688,673 | | Gross Profit | $49,614,899 | $47,958,754 | $139,536,336 | $133,570,544 | | Operating Income | $4,863,538 | $5,622,620 | $8,995,763 | $12,789,361 | | Net Income | $1,318,547 | $1,489,399 | $77,006 | $3,099,904 | | Diluted EPS | $2.13 | $2.46 | $0.12 | $5.11 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited, Nine Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from (used in) operating activities | $(12,471,560) | $26,870,683 | | Net cash from (used in) investing activities | $(14,264,324) | $(38,582,174) | | Net cash from (used in) financing activities | $26,889,418 | $11,639,902 | | Net change in cash | $153,534 | $(71,589) | - On January 17, 2025, the Company acquired substantially all operating assets of Arrowrock Supply for approximately **$6.1 million** in cash, funded by borrowings, as part of the Wholesale Segment to expand market access[27](index=27&type=chunk)[28](index=28&type=chunk) - The company operates through two segments: the Wholesale Segment, serving approximately **7,900** retail outlets, and the Retail Segment, which operates **15** health food stores[17](index=17&type=chunk)[20](index=20&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a challenging operating environment, detailing a **3.0%** Q3 sales increase to **$739.6 million** but a **13.5%** drop in operating income, alongside a **97.5%** nine-month net income decline due to increased expenses, with liquidity supported by **$86.4 million** in available credit - The company faces a challenging environment with weaker consumer spending and inflation, responding with strategic investments including expanding foodservice programs, geographic coverage with a new Colorado City facility, and technology investments[60](index=60&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) Q3 2025 vs. Q3 2024 Performance | Metric | Q3 2025 | Q3 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Sales | $739.6M | $717.9M | 3.0% | | Wholesale Sales | $728.3M | $707.7M | 2.9% | | Retail Sales | $11.3M | $10.2M | 11.1% | | Operating Income | $4.9M | $5.6M | (13.5%) | | Net Income | $1.3M | $1.5M | (11.5%) | - Q3 Wholesale sales growth was driven by the Arrowrock and Richmond Master acquisitions and cigarette price increases, partially offset by a **$51.7 million** decrease in cigarette carton volume[79](index=79&type=chunk) Nine Months 2025 vs. Nine Months 2024 Performance | Metric | Nine Months 2025 | Nine Months 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Sales | $2,070.4M | $1,964.7M | 5.4% | | Operating Income | $9.0M | $12.8M | (29.7%) | | Net Income | $77,006 | $3.1M | (97.5%) | - The significant drop in nine-month net income was due to a **$9.8 million** increase in operating expenses, driven by acquisitions, higher insurance costs, and a **$1.5 million** fair value adjustment of a contingent consideration liability[92](index=92&type=chunk) - The company's liquidity is primarily supported by three credit facilities with a combined borrowing capacity of **$305.0 million**, with **$154.6 million** outstanding and **$86.4 million** available as of June 2025[98](index=98&type=chunk)[101](index=101&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this section is not applicable for the current reporting period - The company states that this item is 'Not applicable'[109](index=109&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Senior management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[111](index=111&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter ended June 2025 that materially affected, or are reasonably likely to materially affect, internal controls[114](index=114&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings for the period - The company reported no legal proceedings[115](index=115&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported from the prior fiscal year's Form 10-K - No material changes to the Company's risk factors as previously disclosed in the Form 10-K for the fiscal year ended September 30, 2024[116](index=116&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds for the period - The company reported no unregistered sales of equity securities[117](index=117&type=chunk) [Defaults Upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities for the period - The company reported no defaults upon senior securities[118](index=118&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - This item is 'Not applicable'[119](index=119&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information) No company directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter ended June 30, 2025 - No directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[120](index=120&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including an amendment to a loan agreement, CEO/CFO certifications, and the Inline XBRL interactive data file - The report includes several exhibits, such as the Twelfth Amendment to a Loan and Security Agreement, CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and the Inline XBRL file[122](index=122&type=chunk)

[Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) AMCON's Q3 2025 performance shows a net income of $1.3 million, with management prioritizing strategic acquisitions and liquidity amidst challenging market conditions [Quarterly Performance Summary](index=1&type=section&id=Quarterly%20Performance%20Summary) AMCON announced a diluted earnings per share of $2.13 on a net income of $1.3 million for its third fiscal quarter ending June 30, 2025, with wholesale distribution as the primary revenue driver Q3 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Diluted Earnings Per Share | $2.13 | | Net Income Available to Common Shareholders | $1.3 million | Segment Performance for Quarter Ended June 2025 | Segment | Revenue (in millions) | Operating Income (in millions) | | :--- | :--- | :--- | | Wholesale Distribution | $728.3 million | $7.3 million | | Retail Health Food | $11.3 million | $0.1 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management is focused on integrating recent acquisitions to enhance customer service and solidify its market position while navigating inflation and expanding foodservice capabilities [CEO Commentary on Strategy and Growth](index=1&type=section&id=CEO%20Commentary%20on%20Strategy%20and%20Growth) The CEO emphasized ongoing integration of acquisitions and new facilities to enhance customer service across an expanded territory, while actively seeking further strategic opportunities - The company is integrating recent acquisitions and new facilities to enhance its suite of programs and services[3](index=3&type=chunk) - **AMCON** has become the **third largest Convenience Distributor** in the United States as measured by territory covered[3](index=3&type=chunk) - The company continues to actively seek strategic acquisition opportunities for Convenience and Foodservice Distributors[3](index=3&type=chunk) [COO Commentary on Operations and Market Conditions](index=1&type=section&id=COO%20Commentary%20on%20Operations%20and%20Market%20Conditions) The COO highlighted a challenging operating environment due to lagging consumer spending and inflationary pressures, with a strategic focus on developing foodservice solutions - The convenience retailing sector is experiencing a challenging operating environment with **lagging consumer behavior** and discretionary spending[3](index=3&type=chunk) - **Inflationary pressures** have resulted in higher operating expenses in areas such as product costs, labor, employee benefits, equipment, and insurance[3](index=3&type=chunk) - **Foodservice** remains a strategic focus, with the company developing turn-key solutions to enable retail partners to compete with the Quick Service Restaurant (QSR) industry[3](index=3&type=chunk) [CFO Commentary on Financial Position](index=1&type=section&id=CFO%20Commentary%20on%20Financial%20Position) The CFO emphasized continuous balance sheet management and liquidity maximization, reporting shareholders' equity of $113.2 million while evaluating acquisition synergies - Shareholders' equity was **$113.2 million** at June 30, 2025[4](index=4&type=chunk) - The company maintains a relentless daily focus on managing its balance sheet and maximizing its liquidity position[4](index=4&type=chunk) - AMCON is actively evaluating operational synergies that may be realizable from recent acquisition activity[4](index=4&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) AMCON, a leading Convenience and Foodservice Distributor, serves 34 states from 14 distribution centers and operates 15 health and natural product retail stores - **AMCON** is a leading Convenience and Foodservice Distributor of consumer products, including beverages, candy, tobacco, groceries, and foodservice items[5](index=5&type=chunk) - The company serves **thirty-four (34) states** from **fourteen (14) distribution centers** across the U.S[5](index=5&type=chunk) - Through its Healthy Edge Retail Group, AMCON operates **fifteen (15) health and natural product retail stores** in the Midwest and Florida[5](index=5&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present AMCON's financial position, operational results, equity changes, and cash flows for the reported periods, reflecting key financial trends [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $393.9 million, driven by higher receivables and inventories, while total liabilities rose to $280.7 million due to increased borrowings Balance Sheet Comparison | Account | June 30, 2025 (in millions) | Sept 30, 2024 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $243.7 | $229.1 | | **Total Assets** | **$393.9** | **$374.1** | | Total Current Liabilities | $88.9 | $93.2 | | Credit Facilities | $154.6 | $121.3 | | **Total Liabilities** | **$280.7** | **$262.4** | | **Total Shareholders' Equity** | **$113.2** | **$111.7** | [Condensed Consolidated Unaudited Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Operations) For Q3 2025, sales increased to $739.6 million, but operating income and net income declined, resulting in a diluted EPS of $2.13, with a significant year-to-date net income drop Q3 Performance (Three months ended June 30) | Metric | 2025 (in millions, except EPS) | 2024 (in millions, except EPS) | Change | | :--- | :--- | :--- | :--- | | Sales | $739.6 | $717.9 | +3.0% | | Gross Profit | $49.6 | $48.0 | +3.3% | | Operating Income | $4.9 | $5.6 | -12.5% | | Net Income | $1.3 | $1.5 | -13.3% | | Diluted EPS | $2.13 | $2.46 | -13.4% | Year-to-Date Performance (Nine months ended June 30) | Metric | 2025 (in millions, except EPS) | 2024 (in millions, except EPS) | Change | | :--- | :--- | :--- | :--- | | Sales | $2,070.4 | $1,964.7 | +5.4% | | Operating Income | $9.0 | $12.8 | -29.7% | | Net Income | $0.08 | $3.1 | -97.5% | | Diluted EPS | $0.12 | $5.11 | -97.7% | [Condensed Consolidated Unaudited Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased to $113.2 million by June 30, 2025, primarily due to equity-based compensation and net income, partially offset by dividends Change in Shareholders' Equity (Nine Months Ended June 30, 2025) | Item | Amount (in millions) | | :--- | :--- | | Balance, October 1, 2024 | $111.73 | | Dividends on common stock | ($0.53) | | Compensation and stock issuance | $1.91 | | Net income available to common shareholders | $0.08 | | **Balance, June 30, 2025** | **$113.19** | [Condensed Consolidated Unaudited Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, operating activities used $12.5 million in cash, contrasting with prior year's generation, while financing activities provided $26.9 million, leading to a net cash increase Cash Flow Summary (Nine months ended June 30) | Cash Flow Category | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash from (used in) operating activities | ($12.5) | $26.9 | | Net cash from (used in) investing activities | ($14.3) | ($38.6) | | Net cash from (used in) financing activities | $26.9 | $11.6 | | **Net change in cash** | **$0.2** | **($0.1)** | - The negative operating cash flow was driven by an **$8.5 million increase in accounts receivable**, a **$1.9 million increase in inventories**, and a **$7.7 million decrease in accounts payable**[17](index=17&type=chunk) - Investing activities included **$8.2 million for property and equipment purchases** and **$6.1 million for the acquisition of Arrowrock Supply**[17](index=17&type=chunk)

Core Viewpoint - AMCON Distributing Company reported a significant decline in earnings for the fiscal second quarter, with a loss per share of $2.58 compared to a profit of 89 cents in the same quarter last year, despite a modest increase in total sales to $619.5 million, reflecting ongoing challenges in profitability due to rising costs and margin pressures [2][3]. Financial Performance - The company's total sales increased by 2.9% year-over-year, from $601.9 million to $619.5 million [2]. - The net loss available to common shareholders was $1.6 million, a sharp decline from a net income of $0.5 million in the prior-year period [3]. - Operating income decreased significantly, with income from operations before income taxes swinging to a loss of $2 million compared to a profit of $1.2 million in the previous year [5]. Segment Performance - The wholesale distribution segment generated $607.6 million in revenues and $2.8 million in operating income, while the retail health food segment contributed $11.9 million in revenues and $0.4 million in operating income [4]. - Gross profit for the consolidated business was $43 million, slightly up from $42.3 million last year, but SG&A expenses rose by 9.4% to $40.1 million, outpacing revenue growth [4]. Cost and Expense Analysis - Interest expense remained high at $2.3 million, nearly unchanged from the prior year, and the company recognized a $0.3 million increase in the fair value of mandatorily redeemable non-controlling interests [5]. - Cash used in operating activities was $5.4 million, a significant decrease from cash generated from operations of $53.8 million a year ago, indicating greater working capital usage, particularly in inventories [9]. Management Insights - The CEO highlighted ongoing challenges in the convenience retailing sector, including lagging discretionary spending and cumulative inflationary effects on costs [6]. - The company is focusing on integrating acquisitions and enhancing customer service, positioning itself as the third-largest convenience distributor in the U.S. by territory [6]. Strategic Developments - AMCON acquired Arrowrock Supply during the quarter, further consolidating its position in the convenience distribution sector [11]. - The company is investing in a new 250,000 square foot distribution facility in Colorado City, CO, to support growth in the Intermountain Region [7].

Acquisition and Expansion - The Company closed the acquisition of Arrowrock Supply in January 2025, expanding its reach into the Inter-Mountain region of the United States [60]. - The Wholesale Segment serves approximately 7,900 retail outlets and distributes over 20,000 different consumer products, ranking as the third largest convenience store distributor by geographic territory served [72]. Financial Performance - Consolidated sales for Q2 2025 were $619.5 million, a 2.9% increase from $601.9 million in Q2 2024 [76]. - Consolidated sales for Q2 2025 were $1,330.8 million, an increase of $83.9 million or 6.7% compared to Q2 2024 [87]. - Gross profit for Q2 2025 was $43.0 million, with a gross profit percentage of 6.9%, down from 7.0% in Q2 2024 [76]. - Gross profit for Q2 2025 was $89.9 million, reflecting a $4.3 million increase or 5.0% from Q2 2024 [87]. - Operating income for Q2 2025 was $461,905, a significant decrease of 86.2% compared to $3.3 million in Q2 2024 [76]. - Net income available to common shareholders for Q2 2025 was a loss of $1.2 million, a decrease of $2.9 million or 177.1% from Q2 2024 [87]. - Wholesale segment sales increased by $83.4 million to $1,308.3 million in the six months ended March 2025, a 6.8% increase year-over-year [90]. - Gross profit in the Wholesale Segment for the six months ended March 2025 rose by $4.2 million, totaling $81.7 million [91]. Operating Costs and Expenses - The Wholesale Segment sales increased by $16.9 million in Q2 2025, driven by a $5.6 million contribution from the Arrowrock acquisition and a $25.3 million increase from price hikes by cigarette manufacturers [79]. - The Retail Segment sales rose by approximately $0.7 million in Q2 2025, attributed to a new store opening and higher sales volumes [79]. - Operating expenses increased by $3.6 million to $85.8 million in Q2 2025, a rise of 9.4% compared to Q2 2024 [84]. - Operating expenses for the six months ended March 2025 increased by $7.3 million to $85.8 million, driven by acquisitions and operational costs [94]. Economic and Regulatory Environment - The Company is facing inflationary pressures leading to higher operating costs, impacting product costs, labor, and employee benefits [61]. - The Company is closely monitoring proposed tariffs and regulatory actions that could negatively impact revenues and gross margins [62]. - A precipitous change in the operating environment could materially impact the Company's future revenue streams [110]. - The Company may face challenges in collecting on customer accounts receivable or securing bank credit [110]. - There are no applicable quantitative and qualitative disclosures about market risk [111]. Liquidity and Debt - Interest expense for Q2 2025 increased by less than $0.1 million, primarily due to higher debt balances from acquisitions [85]. - The company had a total combined borrowing capacity of $305.0 million as of March 2025, with $142.3 million outstanding [100]. - The average interest rate on the company's facilities was 5.76% at March 2025 [104]. - The Company believes its liquidity position will be adequate to sustain operations in both the short- and long-term [110].

Financial Performance - AMCON reported a fully diluted loss per share of $2.58, with a net loss available to common shareholders of $1.6 million for the second fiscal quarter ended March 31, 2025[2]. - For the three months ended March 31, 2025, the net loss available to common shareholders was $1,589,960, compared to a net income of $539,543 for the same period in 2024[14]. - The company reported a net cash flow from operating activities of $(5,449,633) for the three months ended March 31, 2025, significantly down from $53,757,153 in the prior year[17]. - Total sales for the three months ended March 2025 were $619.5 million, compared to $601.9 million for the same period in 2024, reflecting an increase of approximately 2.1%[12]. - The cost of sales for the quarter was $576.5 million, leading to a gross profit of $43.0 million, which is an increase from $42.3 million in the prior year[12]. - Shareholders' equity as of March 31, 2025, was reported at $111.4 million, a slight decrease from $111.7 million in September 2024[4]. Operational Highlights - The wholesale distribution segment generated revenues of $607.6 million and operating income of $2.8 million, while the retail health food segment reported revenues of $11.9 million and operating income of $0.4 million for the same quarter[3]. - The company has become the third largest Convenience Distributor in the U.S. by territory covered, enhancing its operational capabilities[3]. - AMCON's foodservice programs are positioned to provide retail partners with competitive advantages against the Quick Service Restaurant industry[3]. - AMCON is investing in a new 250,000 square foot distribution facility in Colorado City, Colorado, to support growth initiatives in the Intermountain Region[4]. Strategic Initiatives - The company continues to seek strategic acquisition opportunities to enhance its customer-focused approach and integrate recent acquisitions[3]. - The company acquired Arrowrock Supply for $6,131,527 during the three months ended March 31, 2025[17]. - AMCON's customer-centric approach is designed to ensure consistent and timely delivery of goods and services, particularly during challenging weather conditions[3]. Financial Changes - Depreciation expenses increased to $4,824,777 in March 2025 from $4,239,707 in March 2024[17]. - Total cash at the end of the period was $685,854, down from $951,521 at the end of March 2024[17]. - The company paid dividends on common stock amounting to $413,096 in March 2025, compared to $403,432 in March 2024[17]. - Equity-based compensation increased to $1,275,724 in March 2025 from $1,210,685 in March 2024[17]. - The balance of retained earnings as of March 31, 2025, was $106,897,928, compared to $106,053,510 as of March 31, 2024[14]. - The company reported a significant change in inventories, with a decrease of $13,324,448 in March 2025 compared to an increase of $37,236,124 in March 2024[17]. - Borrowings under revolving credit facilities increased to $1,262,647,310 in March 2025 from $1,128,853,805 in March 2024[17].

Core Insights - AMCON Distributing Company's shares have declined 4.6% since the earnings report for the quarter ended December 31, 2024, contrasting with a 0.9% growth in the S&P 500 index during the same period [1] - The company reported earnings per share (EPS) of 57 cents, down from $1.78 a year earlier, while net sales increased by 10.3% to $711.3 million [2] - Net income available to common shareholders fell by 67.5% to $0.4 million, primarily due to higher interest expenses and increased operating costs [3] Financial Performance - Revenue growth was driven by increased sales volume across product categories, including beverages, tobacco, and foodservice offerings, with excise taxes included in sales rising to $143.4 million from $138.1 million year-over-year [4] - Gross profit improved by 8.3% to $46.9 million, but gross margin slightly contracted to 6.6% from 6.7% in the prior-year period [5] - Operating expenses surged by 9.5% year-over-year to $43.2 million, while interest expenses rose by 23.1% to $2.9 million [5] Balance Sheet Analysis - As of December 31, 2024, shareholders' equity increased to $112.4 million from $111.7 million at the end of September 2024, while cash decreased to $0.5 million from $0.7 million [6] - Inventory levels rose significantly to $174.5 million from $144.3 million, indicating higher working capital requirements [6] Strategic Initiatives - Management emphasized a commitment to supporting retail partners with advanced logistics and innovative foodservice solutions, particularly during challenging weather conditions [7] - The strategic importance of Henry's Foods, a subsidiary specializing in proprietary foodservice programs, was highlighted, with enhancements in advertising and electronic display offerings [8] Acquisition and Growth Plans - AMCON completed the acquisition of Arrowrock Supply, a distributor based in Boise, Idaho, which is expected to strengthen its footprint in the Intermountain Region [9] - The company is investing in a new 250,000-square-foot distribution facility in Colorado City, CO, to support growth initiatives [9] Liquidity and Credit Management - AMCON continues to prioritize liquidity and balance sheet management, with borrowing under revolving credit facilities increasing to $165.9 million from $121.3 million at the end of September 2024 [10]

Financial Performance - The Company reported consolidated sales of $711.3 million for Q1 2025, an increase of 10.3% compared to $645.0 million in Q1 2024[77] - Gross profit for the Company was $46.9 million, reflecting an 8.3% increase from $43.3 million in the previous year[77] - Operating income decreased by 4.0% to $3.7 million, down from $3.8 million in Q1 2024[77] - Net income available to common shareholders fell significantly by 67.5% to $348,419 compared to $1.1 million in the prior year[77] Segment Performance - The Wholesale Segment's sales increased by $66.5 million, driven by $56.7 million from acquisitions and $29.2 million from price increases in cigarette products[80] - The Retail Segment experienced a slight decrease in sales of $0.2 million, attributed to the closure of three stores, partially offset by new store openings[80] - Gross profit in the Wholesale Segment increased by $3.8 million in Q1 2025 compared to Q1 2024, driven by acquisitions and product mix[84] - Gross profit in the Retail Segment decreased by $0.2 million in Q1 2025, primarily due to the closure of three stores[84] Operating Costs and Expenses - The Company continues to face inflationary pressures impacting operating costs, particularly in labor and product costs[62] - Operating expenses increased by $3.7 million in Q1 2025 compared to Q1 2024, with significant increases related to acquisitions and health insurance costs[85] - Interest expense rose by $0.5 million in Q1 2025, primarily due to higher outstanding debt from acquisitions and increased capital expenditures[86] Liquidity and Borrowing - The total combined borrowing capacity of the Facilities was $305.0 million as of December 2024, with $165.9 million outstanding[91] - The average interest rate of the Facilities was 5.96% at December 2024, with peak borrowings reaching $197.1 million[93] - The liquidity position is influenced by working capital levels and access to bank credit, with no current hedging against interest rate or fuel cost risks[99] - The Company believes its liquidity position will be adequate for operations, but significant changes in the operating environment could impact future revenue streams[100] Strategic Initiatives - Integration efforts for the acquisitions of Burklund Distributors and Richmond Master are ongoing, aimed at geographic expansion and enhancing product offerings[64] - The Company operates 14 distribution centers across 34 states, serving approximately 7,900 retail outlets[73] Regulatory Risks - Regulatory risks related to potential limitations on tobacco product sales by the FDA could negatively impact revenues and consumer demand[63] Dividends and Financial Management - The Company declared a special dividend of $0.28 per share totaling approximately $0.2 million during Q1 2025, to be paid in Q2 2025[95] - The Company issued letters of credit totaling $2.0 million as part of its self-insured loss control program[97]

Financial Performance - Fully diluted earnings per share of $0.57 on net income available to common shareholders of $0.3 million for the first fiscal quarter ended December 31, 2024[2] - Sales for the three months ended December 2024 were $711.3 million, compared to $645.0 million in the same period in 2023[10] - Gross profit for the three months ended December 2024 was $46.9 million, compared to $43.3 million in the same period in 2023[10] - Net income available to common shareholders for the three months ended December 2024 was $348,419, compared to $1,070,961 in the same period in 2023[10] - Net income available to common shareholders decreased to $348,419 in December 2024 from $1,070,961 in December 2023, a significant decline[14] Balance Sheet and Assets - Shareholders' equity at December 31, 2024 was $112.4 million[3] - Total assets at December 31, 2024 were $404.7 million, compared to $374.1 million at September 30, 2024[8] - Total current assets at December 31, 2024 were $258.1 million, compared to $229.1 million at September 30, 2024[8] - Inventories, net at December 31, 2024 were $174.5 million, compared to $144.3 million at September 30, 2024[8] Cash Flow and Financing - Net cash flows from operating activities were negative at $(39,867,877) in December 2024 compared to $4,996,124 in December 2023[14] - Net cash flows from financing activities improved to $43,172,220 in December 2024 from $(968,020) in December 2023[14] - Borrowings under revolving credit facilities rose to $713,853,301 in December 2024 from $603,650,771 in December 2023[14] - Cash paid for interest increased to $2,815,683 in December 2024 from $2,235,562 in December 2023[14] - Dividends declared but not paid increased to $180,729 in December 2024 from $176,501 in December 2023[14] - Cash at the end of the period decreased to $535,862 in December 2024 from $996,695 in December 2023[14] Depreciation and Equipment - Depreciation increased to $2,501,175 in December 2024 from $2,084,743 in December 2023[14] - Equipment acquisitions classified in accounts payable rose to $772,820 in December 2024 from $347,891 in December 2023[14] Inventory and Working Capital - Inventory changes showed a significant outflow of $(30,293,089) in December 2024 compared to an inflow of $384,466 in December 2023[14] Strategic Investments and Acquisitions - The company completed the acquisition of Arrowrock Supply of Boise, Idaho[3] - The company is investing capital to develop a 250,000 square foot distribution facility in Colorado City, Colorado[3]