AMCON Distributing pany(DIT) - 2022 Q4 - Annual Report

Financial Performance - Sales for fiscal 2022 reached $2,010.8 million, an increase of $338.4 million compared to $1,672.4 million in fiscal 2021[155] - Gross profit for fiscal 2022 was $127.7 million, representing a gross profit margin of 6.4%, up from 6.0% in fiscal 2021[155] - Net income available to common shareholders for fiscal 2022 was $16.7 million, compared to $15.5 million in fiscal 2021, reflecting an increase of $1.2 million[155] - The Wholesale Segment's gross profit increased by $28.2 million in fiscal 2022, driven by higher sales volumes and the acquisition of Team Sledd[162] - Retail Segment sales decreased by $1.1 million in fiscal 2022, primarily due to a $1.5 million decline in sales volume related to store closures[160] - Operating income rose to $22.60 million in fiscal year 2022, compared to $17.82 million in fiscal year 2021, marking a 27.5% increase[242] - Net income available to common shareholders increased to $16,672,257 in September 2022 from $15,545,265 in September 2021, representing an increase of approximately 7.2%[249] - Basic earnings per share available to common shareholders increased to $29.37 in fiscal year 2022 from $28.24 in fiscal year 2021, a rise of 4.0%[242] - Diluted earnings per share for fiscal 2022 were $28.59, compared to $27.36 in fiscal 2021[310] Expenses and Liabilities - Operating expenses increased by $22.4 million to $105.1 million in fiscal 2022, driven by a $11.6 million increase related to the acquisition of Team Sledd and a $7.3 million rise in employee compensation[164] - Total liabilities increased to $196.30 million in September 2022, compared to $110.80 million in September 2021, reflecting a growth of 77.1%[239] - Selling, general and administrative expenses rose to $101.47 million in fiscal year 2022, up from $79.63 million in fiscal year 2021, an increase of 27.5%[242] - The Company’s self-insured liabilities reserve ending balance was $1.9 million in 2022, up from $1.5 million in 2021, reflecting an increase of approximately 26.7%[346] Cash Flow and Liquidity - Cash decreased to $431.58 million in September 2022 from $519.59 million in September 2021, a decline of 17.0%[239] - The Company believes its liquidity position will be adequate to sustain operations in both the short- and long-term[180] - The Company’s liquidity position is significantly influenced by customer credit risk and ongoing access to bank credit[179] Acquisitions and Goodwill - The Company became the majority owner of Team Sledd, LLC with a controlling interest of approximately 56% in May 2022, with no additional consideration provided for the acquisition[233] - Goodwill recorded on the Company's consolidated balance sheet was $5.3 million and $4.4 million at September 2022 and September 2021, respectively[198] - The acquisition of Team Sledd was accounted for using the discounted cash flow methodology, considering factors such as sales growth and gross profit estimates[233] - The total identifiable net assets of Team Sledd at the Control Date were valued at approximately $22.5 million, with goodwill of approximately $0.8 million arising from the acquisition[304][306] Taxation - The effective income tax rate increased in fiscal 2022 due to higher non-deductible compensation, resulting in effective tax rates exceeding statutory rates[167] - The Company reported an income tax expense of $6.5 million for fiscal 2022, up from $4.5 million in fiscal 2021, reflecting an increase in current federal and state taxes[332] Risks and Challenges - Risks associated with an inflationary operating environment could impact the Company's operating cost structure and food ingredient costs[221] - The Company faces potential regulatory risks related to the manufacturing and distribution of certain tobacco products, including proposed regulations on menthol and flavored tobacco[221] - Increased competition in the wholesale and retail health food businesses may affect the carrying value and potential impairment of assets[221] - The Company is exposed to risks from disruptions in technology systems, including security breaches and cyber-attacks[223] - Ongoing supply chain disruptions and a competitive labor market are leading to increased product and operational costs[223] - The Company may face challenges in its repositioning strategy for its retail business and the opening of new retail stores[221] Shareholder Information - The Company paid cash dividends of $3.4 million, or $5.72 per common share during fiscal 2022 and fiscal 2021[176] - The Company made matching contributions to profit-sharing plans of approximately $1.2 million in fiscal 2022, compared to $1.0 million in fiscal 2021[341] - As of September 2022, a total of 111,420 shares had been awarded under the Omnibus Plans, with an additional 83,580 shares available for future awards[348]