AMCON Distributing pany(DIT) - 2024 Q3 - Quarterly Report

Financial Performance - Consolidated sales for Q3 2024 reached $717.85 million, an increase of 3.1$696.49 million in Q3 2023[158] - Gross profit for Q3 2024 was $47.96 million, reflecting a 2.3$46.87 million in the same quarter last year[158] - Net income available to common shareholders decreased by 62.2% to $1.49 million, down from$3.94 million in Q3 2023[158] - The Wholesale Segment reported sales of $707.66 million, a 3.2$685.74 million in Q3 2023[158] - The Retail Segment experienced a sales decline of 5.1%, with Q3 2024 sales at $10.20 million compared to$10.75 million in Q3 2023[158] - Net income available to common shareholders decreased by 64.1% to $3.1 million in Q3 2024 compared to$8.6 million in Q3 2023[167] Operating Expenses - Operating expenses increased by 8.7% to $42.34 million, compared to$38.95 million in Q3 2023[158] - Operating expenses increased by $3.4 million in Q3 2024 compared to Q3 2023, primarily due to higher employee compensation and costs related to acquisitions[163] - Operating expenses increased by$16.6 million for the nine months ended June 2024 compared to the same prior year period, driven by a $10.6 million increase related to the acquisition of Henry's and a$3.2 million increase in employee compensation and benefits[199] Interest Expense - Interest expense increased by 21.7% to $2.90 million, compared to$2.39 million in Q3 2023, reflecting rising borrowing costs[158] - Interest expense rose by $0.5 million in Q3 2024 compared to Q3 2023, attributed to higher interest rates and increased debt from acquisitions[164] - Interest expense rose by$1.2 million for the nine months ended June 2024, primarily due to higher interest rates and increased capital expenditures related to acquisitions[220] Growth Initiatives - The company opened a new retail store in Lakewood Ranch, Florida, in June 2024, as part of its market expansion strategy[126] - The company is investing in a new 250,000 square foot distribution facility in Colorado City, Colorado, to support long-term growth initiatives[146] Regulatory Risks - Regulatory risks related to potential bans and limitations on tobacco products could negatively impact revenues and consumer demand[125] Wholesale Segment Performance - Sales in the Wholesale Segment increased by $21.9 million during Q3 2024 compared to Q3 2023, driven by acquisitions and price increases, despite a$45.7 million decrease in sales volume of cigarette cartons[160] - Gross profit in the Wholesale Segment rose by $1.2 million in Q3 2024 compared to Q3 2023, influenced by acquisitions and price increases, while the Retail Segment saw a slight decrease of approximately$0.1 million[162] - Sales in the Wholesale Segment increased by $117.5 million for the nine months ended June 2024 compared to the same prior year period, with significant contributions from acquisitions and price increases[195] - Gross profit in the Wholesale Segment increased by$10.3 million for the nine months ended June 2024 compared to the same prior year period, driven by acquisitions and price increases[196] Liquidity and Borrowing Capacity - The credit limit of the combined Facilities at June 2024 was $239.2 million, with$156.9 million outstanding, leaving $82.3 million available[177] - The total combined borrowing capacity of the Facilities was$300.0 million as of June 2024, including provisions for up to $30.0 million in credit advances for inventory purchases[222] - The average interest rate of the Facilities was 6.99$181.8 million during the nine months ended June 2024[224] - The Company's liquidity position is significantly influenced by its ability to maintain sufficient levels of working capital and ongoing access to bank credit[226] Cash Dividends - The Company paid cash dividends totaling $0.5 million for the nine months ended June 2024, compared to$3.4 million for the same period in 2023[205] Store Closures - The Company experienced a $1.5 million decrease in revenue due to the closure of five stores between the comparative periods[198] Tax Rate Changes - The effective tax rate change during the nine-month period ended June 2024 was primarily related to non-deductible compensation expenses[200] Risk Management - The Company does not currently hedge its exposure to interest rate risk or fuel costs, which can significantly impact profitability[206]