Financial Performance - Sales for fiscal 2024 reached $2,711.0 million, an increase of $171.0 million compared to $2,540.0 million in fiscal 2023[148]. - Gross profit for fiscal 2024 was $182.4 million, maintaining a gross profit percentage of 6.7%[148]. - Operating income decreased to $18.0 million in fiscal 2024 from $26.0 million in fiscal 2023, reflecting a decline in operating income margin from 1.0% to 0.7%[147]. - Net income available to common shareholders fell to $4,336,489 in fiscal year 2024, down 62.7% from $11,596,393 in fiscal year 2023[225]. - Basic earnings per share decreased to $7.24 in fiscal year 2024 from $19.85 in fiscal year 2023, a decline of 63.5%[225]. - Total sales for fiscal year 2024 reached $2,710,981,108, an increase of 6.7% compared to $2,539,994,999 in fiscal year 2023[225]. - Operating income decreased to $17,980,514 in fiscal year 2024 from $25,966,583 in fiscal year 2023, indicating a decline of 30.7%[225]. - The company reported a loss from operations before taxes of $7,462,489 for fiscal year 2024, a decline from a profit of $17,302,393 in fiscal year 2023[328][329]. Acquisitions and Investments - The company acquired Burklund Distributors, Inc. and Richmond Master Distributors, Inc., contributing to a $98.6 million increase in sales from these acquisitions[151]. - The Company acquired Burklund Distributors, Inc. for approximately $20.9 million, consisting of $15.4 million in cash and a $3.9 million promissory note[273]. - The Company acquired Richmond Master Distributors, Inc. for approximately $6.6 million in cash, assuming operating liabilities of about $0.6 million[274]. - The acquisition of Burklund aligns with the Company's long-term growth strategy by expanding its regional footprint[273]. - The total consideration paid for the acquisition of Burklund and Richmond Master was $27,573,880, with cash payments of $22,095,436[276]. - The acquisition of Henry's Foods, Inc. involved a cash payment of approximately $54.9 million and the assumption of operating liabilities totaling approximately $1.2 million[281]. - Total identifiable net assets acquired from Henry's Foods amounted to $54,364,928, including accounts receivable of $8,237,652 and inventories of $16,060,965[283]. - The pro forma revenue for the year ended September 2024, assuming the acquisitions of Burklund, Richmond Master, and Henry's, is projected to be $2,854,752,348[286]. Financial Position and Liquidity - The total combined borrowing capacity of the company's credit facilities is $300.0 million, with $121.3 million outstanding as of September 2024[164]. - The average interest rate on the company's credit facilities was 6.82% at September 2024, with peak borrowings reaching $181.8 million during fiscal 2024[165]. - The Company believes its liquidity position will be adequate for operations, but a significant change in the operating environment could impact future revenue streams[171]. - The Company has no off-balance sheet arrangements, indicating a straightforward financial structure[169]. - The Company’s liquidity position is influenced by customer credit risk and access to bank credit, with no current hedging against interest rate or fuel cost risks[170]. - Total current assets decreased to $229,065,271 in September 2024 from $245,670,707 in September 2023, a reduction of 6.8%[222]. - Total liabilities increased to $262,377,525 in September 2024 from $259,260,106 in September 2023, reflecting a rise of 1.1%[222]. - Shareholders' equity increased to $111,729,785 in September 2024 from $104,169,094 in September 2023, an increase of 7.2%[222]. Operational Costs and Expenses - Operating expenses increased by $19.5 million in fiscal 2024, driven by higher costs associated with acquisitions and employee compensation[156]. - Interest expense rose by $1.9 million in fiscal 2024, primarily due to higher interest rates and increased debt from acquisitions[157]. - Cash paid for interest during the period was $9,985,313, compared to $8,311,375 in the previous year, reflecting an increase of approximately 20.1%[231]. - The Company made matching contributions to its profit-sharing plans of approximately $2.0 million in fiscal 2024, up from $1.6 million in fiscal 2023[317]. Revenue Recognition and Accounting Standards - The Company recognizes revenues when the performance obligation is satisfied, reflecting the consideration expected to be received[217]. - The occurrence and cutoff of revenue transactions were identified as a critical audit matter due to the significance of net sales[218]. - The Company adopted ASU 2016-13 on October 1, 2023, which introduced a forward-looking approach to estimate credit losses, with no material effect on consolidated financial statements[202]. - The Company is reviewing ASU No. 2023-07, which improves segment reporting disclosures, effective for fiscal 2025[203]. - The new FASB ASU No. 2023-09 will enhance income tax disclosures, effective for annual periods beginning after December 15, 2024[204]. - The Company is currently reviewing the potential impact of the new ASU on its consolidated financial statements[204]. Risks and Challenges - Risks associated with higher interest rates could impact demand, customer credit risk, profitability, and cash flows[207]. - The Company faces risks from supply chain disruptions and an intensely competitive labor market, leading to increased operational costs[208]. - The Company is subject to risks related to the acquisition of businesses or assets, including integration challenges and vendor retention[206]. - The Company reported that changes in trade tariffs may result in higher prices for products, affecting consumer demand[208]. Asset Management - Goodwill on the balance sheet was recorded at $5.8 million as of September 2024, with the estimated fair value of the wholesale reporting unit exceeding its carrying value[185]. - The Company performs annual goodwill and intangible asset impairment assessments during the fourth fiscal quarter[247]. - Goodwill and intangible assets with indefinite useful lives are not amortized but reviewed for impairment annually[247]. - The Company utilizes a discounted cash flow methodology for impairment testing, requiring significant judgment in estimating future cash flows[249]. - The total net deferred tax assets increased from $2,431,995 in September 2023 to $3,317,504 in September 2024, indicating a significant rise in deferred tax assets[311].
AMCON Distributing pany(DIT) - 2024 Q4 - Annual Report