AMCON Distributing pany(DIT) - 2025 Q4 - Annual Report

Financial Performance - Sales for fiscal 2025 reached $2,816.7 million, an increase of $105.7 million compared to $2,711.0 million in fiscal 2024[101] - Gross profit for fiscal 2025 was $188.2 million, up from $182.4 million in fiscal 2024, maintaining a gross profit percentage of 6.7%[101] - Operating income decreased to $12.6 million in fiscal 2025 from $18.0 million in fiscal 2024, reflecting a decline of $5.4 million[101] - The Company acquired Arrowrock, contributing an additional $23.2 million in sales during fiscal 2025[103] - The Wholesale Segment's sales increased by $103.7 million, driven by acquisitions and price increases, despite a $176.3 million decrease in cigarette carton sales[103] - Operating expenses rose by $11.3 million in fiscal 2025, influenced by acquisitions and increased health and insurance costs[109] Debt and Interest - Interest expense remained stable at $10.4 million for both fiscal years 2025 and 2024, despite higher debt balances[110] - The total combined borrowing capacity of the Company's credit facilities was $305.0 million as of September 2025, with $126.8 million outstanding[114] - The average interest rate on the Facilities was 5.73% at September 2025, with peak borrowings reaching $197.1 million during fiscal 2025[117] Credit and Accounting Standards - The allowance for expected credit losses is based on historical uncollectible accounts as a percentage of total accounts receivable, with specific credit exposure assessed for higher-risk customers[127][131] - The Company adopted ASU 2023-07 on September 30, 2025, which improves reportable segment disclosure requirements but did not materially affect the consolidated financial statements[128] - ASU 2023-09, effective for fiscal 2026, enhances income tax disclosures for better transparency and comparability[129] - The Company is reviewing ASU 2024-03, effective for fiscal 2028, which improves expense disaggregation disclosures[130] Risks and Uncertainties - Forward-looking statements reflect management's beliefs and estimates of future performance, subject to risks and uncertainties[133] - Risks include potential impacts from trade tariffs, macroeconomic conditions, and retail demand fluctuations, particularly in the convenience store industry[134] - The Company faces risks related to workforce availability, wage pressures, and insurance renewals, which may affect operational costs[134] - Increased competition and market conditions in wholesale and retail health food businesses may impact asset valuations and impairments[134] - The Company is exposed to risks from supply chain disruptions, higher operational costs, and changing consumer demand for tobacco products[134] - Future results may differ from management's expectations due to various factors, including regulatory changes and economic conditions[138]