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]
AMCON Distributing pany(DIT) - 2025 Q1 - Quarterly Report