Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 05, 2018 | Mar. 31, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | AMCON DISTRIBUTING CO | ||
Entity Central Index Key | 928,465 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 27,055,890 | ||
Entity Common Stock, Shares Outstanding | 617,350 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash | $ 520,644 | $ 523,065 |
Accounts receivable, less allowance for doubtful accounts of $0.9 million at September 2018 and $0.8 million at September 2017 | 31,428,845 | 30,690,403 |
Inventories, net | 78,869,615 | 72,909,996 |
Income taxes receivable | 272,112 | |
Prepaid and other current assets | 4,940,775 | 4,218,811 |
Total current assets | 116,031,991 | 108,342,275 |
Property and equipment, net | 15,768,484 | 13,307,986 |
Goodwill | 4,436,950 | 6,349,827 |
Other intangible assets, net | 3,414,936 | 3,494,311 |
Other assets | 301,793 | 310,488 |
Total assets | 139,954,154 | 131,804,887 |
Current liabilities: | ||
Accounts payable | 20,826,834 | 17,631,552 |
Accrued expenses | 8,556,620 | 7,553,089 |
Accrued wages, salaries and bonuses | 3,965,733 | 3,477,966 |
Income taxes payable | 544,069 | |
Current maturities of long-term debt | 1,096,306 | 373,645 |
Total current liabilities | 34,445,493 | 29,580,321 |
Credit facility | 35,428,597 | 29,037,182 |
Deferred income tax liability, net | 1,782,801 | 2,336,263 |
Long-term debt, less current maturities | 3,658,391 | 2,648,179 |
Other long-term liabilities | 38,055 | 34,100 |
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized | ||
Common stock, $0.01 par value, 3,000,000 shares authorized, 615,777 shares outstanding at September 2018 and 678,006 shares outstanding at September 2017 | 8,441 | 8,314 |
Additional paid-in capital | 22,069,098 | 20,825,919 |
Retained earnings | 63,848,030 | 60,935,911 |
Treasury stock at cost | (21,324,752) | (13,601,302) |
Total shareholders' equity | 64,600,817 | 68,168,842 |
Total liabilities and shareholders' equity | $ 139,954,154 | $ 131,804,887 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 0.9 | $ 0.8 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, shares outstanding | 615,777 | 678,006 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Sales (including excise taxes of $368.4 million and $368.8 million, respectively) | $ 1,322,306,658 | $ 1,274,984,408 |
Cost of sales | 1,245,375,460 | 1,202,536,285 |
Gross profit | 76,931,198 | 72,448,123 |
Selling, general and administrative expenses | 66,781,234 | 64,173,895 |
Depreciation and amortization | 2,318,146 | 2,049,475 |
Impairment charges | 1,912,877 | |
Total operating expenses | 71,012,257 | 66,223,370 |
Operating income | 5,918,941 | 6,224,753 |
Other expense (income): | ||
Interest expense | 1,194,373 | 825,690 |
Other (income), net | (54,042) | (39,513) |
Total other expenses (income) | 1,140,331 | 786,177 |
Income from operations before income tax expense | 4,778,610 | 5,438,576 |
Income tax expense | 1,164,000 | 2,489,000 |
Net income available to common shareholders | $ 3,614,610 | $ 2,949,576 |
Basic earnings per share available to common shareholders (in dollars per share) | $ 5.47 | $ 4.34 |
Diluted earnings per share available to common shareholders (in dollars per share) | $ 5.38 | $ 4.26 |
Basic weighted average shares outstanding (in shares) | 660,925 | 679,478 |
Diluted weighted average shares outstanding (in shares) | 672,449 | 692,183 |
Dividends declared per common share | $ 1 | $ 1 |
Dividends paid per common share | $ 1 | $ 1 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Sales, excise taxes | $ 368.4 | $ 368.8 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Total |
Balance at Sep. 30, 2016 | $ 8,184 | $ (12,476,381) | $ 19,525,554 | $ 58,693,241 | $ 65,750,598 |
Balance (in shares) at Sep. 30, 2016 | 818,453 | (141,396) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (706,906) | (706,906) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 130 | 1,300,365 | 1,300,495 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 12,985 | ||||
Repurchase of common stock | $ (1,124,921) | (1,124,921) | |||
Repurchase of common stock (in shares) | (12,036) | ||||
Net income | 2,949,576 | 2,949,576 | |||
Balance at Sep. 30, 2017 | $ 8,314 | $ (13,601,302) | 20,825,919 | 60,935,911 | $ 68,168,842 |
Balance (in shares) at Sep. 30, 2017 | 831,438 | (153,432) | 678,006 | ||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends on common stock | (702,491) | $ (702,491) | |||
Compensation expense and issuance of stock in connection with equity-based awards | $ 127 | 1,243,179 | 1,243,306 | ||
Compensation expense and issuance of stock in connection with equity-based awards (in shares) | 12,651 | ||||
Repurchase of common stock | $ (7,723,450) | (7,723,450) | |||
Repurchase of common stock (in shares) | (74,880) | ||||
Net income | 3,614,610 | 3,614,610 | |||
Balance at Sep. 30, 2018 | $ 8,441 | $ (21,324,752) | $ 22,069,098 | $ 63,848,030 | $ 64,600,817 |
Balance (in shares) at Sep. 30, 2018 | 844,089 | (228,312) | 615,777 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||
Dividends on common stock (in dollars per share) | $ 1 | $ 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,614,610 | $ 2,949,576 |
Adjustments to reconcile net income from operations to net cash flows from operating activities: | ||
Depreciation | 2,238,771 | 1,784,475 |
Amortization | 79,375 | 265,000 |
Impairment charges | 1,912,877 | |
Gain on sale of property and equipment | (4,070) | (31,622) |
Equity-based compensation | 1,271,840 | 1,394,879 |
Deferred income taxes | (553,462) | (243,387) |
Provision for losses on doubtful accounts | 90,000 | 98,000 |
Inventory allowance | (291,917) | (101,716) |
Other | 3,955 | 3,285 |
Changes in assets and liabilities: | ||
Accounts receivable | (828,442) | (755,299) |
Inventories | (5,056,917) | (24,403,398) |
Prepaid and other current assets | (633,032) | 4,389,238 |
Other assets | 8,695 | (22,406) |
Accounts payable | 3,295,390 | (467,348) |
Accrued expenses and accrued wages, salaries and bonuses | 1,563,964 | 669,873 |
Income taxes payable and receivable | (816,181) | 709,028 |
Net cash flows from (used in) operating activities | 5,895,456 | (13,761,822) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (3,226,107) | (2,565,699) |
Proceeds from sales of property and equipment | 5,800 | 46,654 |
Net cash flows from (used in) investing activities | (3,220,307) | (2,519,045) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facility | 1,424,929,646 | 1,311,967,154 |
Repayments under revolving credit facility | (1,418,538,231) | (1,293,467,198) |
Principal payments on long-term debt | (541,844) | (362,495) |
Repurchase of common stock | (7,723,450) | (1,124,921) |
Dividends on common stock | (702,491) | (706,906) |
Withholdings on the exercise of equity-based awards | (101,200) | (107,082) |
Net cash flows from (used in) financing activities | (2,677,570) | 16,198,552 |
Net change in cash | (2,421) | (82,315) |
Cash, beginning of period | 523,065 | 605,380 |
Cash, end of period | 520,644 | 523,065 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 1,137,691 | 819,969 |
Cash paid during the period for income taxes | 2,533,643 | 2,023,359 |
Supplemental disclosure of non-cash information: | ||
Equipment acquisitions classified in accounts payable | 1,253 | 101,361 |
Purchase of property financed with debt | 1,575,000 | |
Acquisition of assets financed with debt | 699,717 | |
Issuance of common stock in connection with the vesting and exercise of equity-based awards | $ 1,183,091 | $ 1,262,763 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (a) Company Operations: AMCON Distributing Company and Subsidiaries (“AMCON” and “the Company”) is primarily engaged in the wholesale distribution of consumer products in the Central, Rocky Mountain, and Southern regions of the United States. AMCON’s wholesale distribution business includes six distribution centers that sell approximately 17,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery, beverages, groceries, paper products, health and beauty care products, frozen and chilled products and institutional foodservice products. The Company distributes products primarily to retailers such as convenience stores, discount and general merchandise stores, grocery stores, drug stores, and gas stations. In addition, the Company services institutional customers, including restaurants and bars, schools, sports complexes, as well as other wholesalers. AMCON, through its Healthy Edge Inc. subsidiary, operates twenty two retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akin’s”), and Earth Origins Markets (“EOM”). These stores carry natural supplements, organic and natural groceries, health and beauty care products, and other food items. The Company’s operations are subject to a number of factors which are beyond the control of management, such as changes in manufacturers’ cigarette pricing, state excise tax increases, or the opening of competing retail stores in close proximity to the Company’s retail stores. While the Company sells a diversified product line, it remains dependent upon the sale of cigarettes which accounted for approximately 71% of our consolidated revenue and 20% of our consolidated gross profit during both fiscal 2018 and fiscal 2017. (b) Accounting Period: The Company’s fiscal year ends on September 30 and the fiscal years ended September 30, 2018 and September 30, 2017 have been included herein. (c) Principles of Consolidation and Basis of Presentation: The Consolidated Financial Statements include the accounts of AMCON and its wholly‑owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. (d) Cash and Accounts Payable: AMCON utilizes a cash management system under which an overdraft is the normal book balance in the primary disbursing accounts. Overdrafts included in accounts payable at fiscal 2018 and fiscal 2017 totaled approximately $1.2 million and $2.2 million, respectively, and reflect checks drawn on the disbursing accounts that have been issued but have not yet cleared through the banking system. The Company’s policy has been to fund these outstanding checks as they clear with borrowings under its revolving credit facility (see Note 6). These outstanding checks (book overdrafts) are classified as cash flows from operating activities in the Consolidated Statements of Cash Flows. (e) Accounts Receivable: Accounts receivable consist primarily of amounts due to the Company from its normal business activities. An allowance for doubtful accounts is maintained to reflect the expected uncollectibility of accounts receivable based on past collection history, evaluation of economic conditions as they may impact our customers, and specific risks identified in the portfolio. The Company determines the past due status of trade receivables based on our terms with each customer. Account balances are charged off against the allowance for doubtful accounts when collection efforts have been exhausted and the account receivable is deemed worthless. Any subsequent recoveries of charged off account balances are recorded as income in the period received. (f) Inventories: At September 2018 and September 2017, inventories consisted of finished goods and are stated at the lower of cost (determined on a FIFO basis for our wholesale segment and using the retail method for our retail segment) or net realizable value. The wholesale distribution and retail health food segment inventories consist of finished products purchased in bulk quantities to be redistributed to the Company’s customers or sold at retail. Finished goods included total reserves of approximately $0.5 million and $0.8 million at September 2018 and September 2017, respectively. These reserves include the Company’s obsolescence allowance, which reflects estimated unsaleable or non‑refundable inventory based upon an evaluation of slow moving and discontinued products. (g) Prepaid Expenses and Other Current Assets: A summary of prepaid expenses and other current assets is as follows (in millions): September 2018 September 2017 Prepaid expenses $ 1.6 $ 1.4 Prepaid inventory 3.3 2.8 $ 4.9 $ 4.2 Prepaid inventory represents inventory in-transit that has been paid for but not received. (h) Property and Equipment: Property and equipment are stated at cost less accumulated depreciation or amortization. Major renewals and improvements are capitalized and charged to expense over their useful lives through depreciation or amortization charges. Repairs and maintenance are charged to expense in the period incurred. The straight-line method of depreciation is used to depreciate assets over the estimated useful lives as follows: Years Buildings and improvements - 40 Warehouse equipment - 12 Furniture, fixtures and leasehold improvements - 12 Vehicles - 5 Costs and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and the resulting gains or losses are reported as a component of operating income. The Company reviews property and equipment for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the asset group are estimated over the asset’s useful life of the primary asset and based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the asset group may not be recoverable, the potential impairment is determined based on the amount by which the carrying value of the asset group exceeds the fair value of the asset group. (i) Goodwill and Intangible Assets: Our goodwill consists of the excess purchase price paid in business combinations over the fair value of assets acquired. Our intangible assets consist of trademarks, tradenames, customer relationships, and the value of non‑competition agreements acquired as part of acquisitions. Goodwill, trademarks, and tradenames are considered to have indefinite lives. Goodwill and intangible assets having indefinite useful lives are not amortized into the results of operations, but instead are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value. The Company performs its annual goodwill and intangible asset impairment assessment during the fourth fiscal quarter of each year. When evaluating the potential impairment of non‑amortizable indefinite‑lived assets and goodwill, the Company first assesses a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, market prices, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If after completing this assessment, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative evaluation is performed using the income approach (discounted cash flow method). A discounted cash flow methodology requires the estimation of a wide range of factors including but not limited to: (i) forecasting future earnings and cash flows (ii) determining the discount rate applicable to the earnings stream being discounted, and (iii) computing a terminal value at some point in the future. These estimations require significant judgment and include making assumptions such as sales growth rates including the addition of new retail stores, future store profitability, planned capital expenditures, our ability to control costs, the successful implementation of initiatives designed to enhance sales and improve inventory management, gross profit estimates, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. For goodwill impairment testing, the Company utilizes the guidance in ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which the Company early adopted. ASU No. 2017-04 simplifies the measurement of potential goodwill impairments by permitting a methodology whereby a reporting unit’s carrying value is compared to its fair value and impairment charges are recognized for an amount by which a reporting unit’s carrying amount exceeds its fair value. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are assessed for impairment whenever events or circumstances change which may indicate that the carrying amount of the assets may not be recoverable. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used in evaluating the elements of property and equipment. If impaired, the related assets are written down to their estimated fair value. During fiscal 2018, the Company recorded goodwill impairment charges of approximately $1.9 million in its retail reporting unit. These impairment charges resulted from heightened competition in the industry, retail sector market conditions, and earning shortfalls which impacted the Company’s projections of future cash flows to be generated from this reporting unit and fully impaired all the goodwill in this reporting unit (see Note 5). There were no impairments to either indefinite‑lived assets or identifiable intangible assets with finite lives during either fiscal 2018 or fiscal 2017. (j) Revenue Recognition: AMCON recognizes revenue when title passes to our customers. In our Wholesale Segment, this occurs when products are delivered to customers (which generally is the same day products are shipped) and in our retail health food segment when products are sold to consumers. Sales are shown net of returns, discounts, and sales incentives to customers. (k) Insurance: The Company’s workers’ compensation, general liability, and employee‑related health care benefits are provided through high‑deductible or self‑insurance programs. As a result, the Company accrues for its workers’ compensation and general liability based upon a claim reserve analysis. The Company has issued a letter of credit in the amount of $0.5 million to its workers’ compensation insurance carrier as part of its loss control program. The reserve for incurred, but not reported, employee health care benefits is calculated using the Company’s historical claims experience rate, plus specific reserves for large claims. The reserves associated with the exposure to these liabilities are reviewed by management for adequacy at the end of each reporting period. (l) Income Taxes: The Company uses the asset and liability method to calculate deferred income taxes. Deferred tax assets and liabilities are recognized on temporary differences between financial statement and tax bases of assets and liabilities using enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when we do not consider it more likely than not that some portion or all of the deferred tax assets will be realized. (m) Share-Based Compensation: The Company recognizes expense for its share‑based compensation based on the fair value of the awards that are granted. The fair value of the stock options is estimated at the date of grant using the Black‑Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock units is based on the period ending closing price of the Company’s common stock. Measured compensation cost is recognized ratably over the vesting period of the related share‑based compensation award and is reflected in our Consolidated Statement of Operations under “selling, general and administrative expenses.” (n) Customer Sales Incentives: The Company provides sales rebates or discounts to our wholesale customers. These incentives are recorded as a reduction of sales revenue as earned by the customer. (o) Per-share results: Basic earnings or loss per share data are based on the weighted‑average number of common shares outstanding during each period. Diluted earnings or loss per share data are based on the weighted‑average number of common shares outstanding and the effect of all dilutive potential common shares including stock options and conversion features of the Company’s preferred stock issuances. (p) Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (q) Fair Value Measurements: The Company’s financial assets and liabilities are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amount of trade accounts receivable, other receivables, trade accounts payable, accounts payable and other accrued liabilities approximates fair value because of the short maturity of these financial instruments. The carrying amount of the Company’s variable and fixed rate debt also approximates fair value. During fiscal 2018, goodwill in our retail reporting unit was adjusted to fair value, resulting in a pretax, non-cash impairment charge of $1.9 million (see Note 5). (r) Accounting Pronouncements: Accounting Pronouncements Adopted During fiscal 2018, the Company adopted the following Accounting Standards Updates (“ASU”). The adoption of these standards did not have a material impact on the Company’s consolidated financial statements. In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, "Simplifying the Measurement of Inventory". This ASU required an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In March 2016, FASB issued ASU No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. This ASU simplified several aspects of how companies account for share-based compensation, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statements of cash flows. In January 2017, FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU provided guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. In January 2017, FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. The new guidance simplified the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This ASU required goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, "Revenue from Contracts with Customers" (ASU 606). ASU 606 and related amendments supersedes the revenue recognition requirements in "Accounting Standard Codification 605 - Revenue Recognition" and most industry-specific guidance. The standard requires that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. ASU 606 is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company), and for interim periods within that fiscal year. The Company has substantially completed its assessment of the accounting required under ASU 606 and does not expect that the implementation of the new standard will have a material effect on the Company’s financial statements. The Company will adopt the standard in the first quarter of fiscal 2019 using the modified retrospective method and will include enhanced disclosures in conjunction with the adoption of this standard. In February 2016, the FASB issued ASU No. 2016-02 "Leases”. This ASU and related amendments requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. This ASU is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its impact on our consolidated financial statements including the potential capitalization of all operating leases on the Company’s balance sheet. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 (fiscal 2021 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Sep. 30, 2018 | |
ACQUISITION | |
ACQUISITION | 2. ACQUISITION: During fiscal 2018, the Company entered into an agreement to acquire the assets (primarily inventory) of eight retail stores located in Florida for approximately $0.7 million in exchange for a note payable due in four installments through July 2019. As part of the agreement, the Company will continue to operate the eight retail stores which do business as Earth Origins Market (“EOM”) and will be included as a component of the Company’s Retail Segment. No material intangible assets or liabilities were assumed in connection with this transaction and the Company does not consider the transaction material to the Company’s consolidated financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 3. EARNINGS PER SHARE: Basic earnings per share available to common shareholders is calculated by dividing net income less preferred stock dividend requirements by the weighted average common shares outstanding for each period. Diluted earnings per share available to common shareholders is calculated by dividing income from operations less preferred stock dividend requirements (when anti‑dilutive) by the sum of the weighted average common shares outstanding and the weighted average dilutive options. For Fiscal Years 2018 2017 Basic Basic Weighted average common shares outstanding 660,925 679,478 Net income available to common shareholders $ 3,614,610 $ 2,949,576 Net earnings per share available to common shareholders $ 5.47 $ 4.34 For Fiscal Years 2018 2017 Diluted Diluted Weighted average common shares outstanding 660,925 679,478 Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock(1) 11,524 12,705 Weighted average number of shares outstanding 672,449 692,183 Net income available to common shareholders $ 3,614,610 $ 2,949,576 Net earnings per share available to common shareholders $ 5.38 $ 4.26 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Sep. 30, 2018 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 4. PROPERTY AND EQUIPMENT, NET: Property and equipment at September 2018 and September 2017 consisted of the following: 2018 2017 Land $ 773,068 $ 648,818 Buildings and improvements 12,206,908 10,661,543 Warehouse equipment 13,424,236 13,195,827 Furniture, fixtures and leasehold improvements 12,018,984 10,732,163 Vehicles 3,229,551 2,195,704 Construction in progress 743,278 1,315,714 42,396,025 38,749,769 Less accumulated depreciation and amortization: (26,627,541) (25,441,783) Owned property and equipment $ 15,768,484 $ 13,307,986 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 5. GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill by reporting segment at September 2018 and September 2017 was as follows: September September 2018 2017 Wholesale Segment $ 4,436,950 $ 4,436,950 Retail Segment — 1,912,877 $ 4,436,950 $ 6,349,827 Other intangible assets at fiscal year ends 2018 and 2017 consisted of the following: September September 2018 2017 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $2.1 million and $2.0 million at September 2018 and September 2017, respectively) 41,667 121,042 $ 3,414,936 $ 3,494,311 During fiscal 2018, the Company recorded goodwill impairment charges of approximately $1.9 million in its retail reporting unit fully impairing all the goodwill in this reporting unit when it was determined that the carrying value of this reporting unit exceeded its fair value. These impairment charges arose from a range of considerations including but not limited to heightened competition in the industry, retail sector market conditions, and earning shortfalls which impacted the Company’s projections of future cash flows to be generated from this reporting unit. These impairment charges were recorded in the Company’s consolidated statement of operations as a component of operating income. At September 2018, the only remaining goodwill on the Company’s consolidated balance sheet related to goodwill allocated to our wholesale reporting unit which totaled $4.4 million. The fair value for this reporting unit was determined to exceed it carrying value at September 2018. Goodwill, trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. At September 2018 and September 2017, identifiable intangible assets considered to have finite lives were represented by customer relationships which are being amortized over eight years. These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to these assets totaled $0.1 million and $0.3 million during fiscal 2018 and fiscal 2017, respectively. Estimated future amortization expense related to identifiable intangible assets with finite lives is as follows at September 2018: September 2018 Fiscal 2019 $ 41,667 |
DEBT
DEBT | 12 Months Ended |
Sep. 30, 2018 | |
DEBT | |
DEBT | 6. DEBT: The Company primarily finances its operations through a credit facility agreement (the “Facility”) and long-term debt agreements with banks. The Facility is provided through Bank of America acting as the senior agent and with BMO Harris Bank participating in a loan syndication. CREDIT FACILITY 2018 2017 Revolving portion of the Facility, interest payable at 3.83% at September 2018 $ 35,428,597 $ 29,037,182 The Facility included the following significant terms at September 2018: · A November 2022 maturity date without a penalty for prepayment. · $70.0 million revolving credit limit. · Loan accordion allowing the Company to increase the size of the credit facility agreement by $25.0 million. · A provision providing an additional $10.0 million of credit advances for certain inventory purchases. · Evergreen renewal clause automatically renewing the agreement for one year unless either the borrower or lender provides written notice terminating the agreement at least 90 days prior to the end of any original or renewal term of the agreement. · The Facility bears interest at either the bank’s prime rate, or at LIBOR plus 125 ‑ 150 basis points depending on certain credit facility utilization measures, at the election of the Company. · Lending limits subject to accounts receivable and inventory limitations. · An unused commitment fee equal to one‑quarter of one percent ( 1 / 4 %) per annum on the difference between the maximum loan limit and average monthly borrowings. · Secured by collateral including all of the Company’s equipment, intangibles, inventories, and accounts receivable. · A financial covenant requiring a fixed charge coverage ratio of at least 1.0 as measured by the previous twelve month period then ended only if excess availability falls below 10% of the maximum loan limit as defined in the credit agreement. The Company’s availability has not fallen below 10% of the maximum loan limit and the Company’s fixed charge coverage ratio is over 1.0 for the trailing twelve months. · Provides that the Company may pay up to $2.0 million of dividends on its common stock provided the Company meets certain excess availability and proforma fixed charge coverage ratios and is not in default before or after the dividend. During fiscal 2018, total borrowings and payments on the Facility were approximately $1.4 billion and $1.4 billion, respectively, resulting in net advances of $6.4 million. Total borrowings and repayment on the Facility during fiscal 2017 were approximately $1.3 billion and $1.3 billion, respectively, resulting in net payments of $18.5 million. The amount available for use on the Facility at any given time is subject to a number of factors including eligible accounts receivable and inventory balances that fluctuate day‑to‑day. Based on our collateral and loan limits as defined in the Facility agreement, the credit limit of the Facility at September 2018 was $69.5 million, of which $35.4 million was outstanding, leaving $34.1 million available. LONG-TERM DEBT In addition to the Facility, the Company also had the following long‑term obligations at fiscal 2018 and fiscal 2017. 2018 2017 Note payable to a bank (“Real Estate Loan”), interest payable at a fixed rate of 2.99% with monthly installments of principal and interest of $38,344 through August 2021 with remaining principal due September 2021, collateralized by three distribution facilities $ 2,648,179 $ 3,021,824 Note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023 1,476,772 — Unsecured note payable due in varying installments through fiscal 2019 629,746 — Less current maturities (1,096,306) (373,645) $ 3,658,391 $ 2,648,179 The aggregate minimum principal maturities of the long‑term debt for each of the next five fiscal years are as follows: Fiscal Year Ending 2019 $ 1,096,306 2020 532,747 2021 2,008,390 2022 148,665 2023 968,589 $ 4,754,697 Market rate risk for fixed rate debt is estimated as the potential increase in fair value of debt obligations resulting from decreases in interest rates. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Company’s long‑term debt approximated its carrying value at September 2018. Cross Default and Co‑Terminus Provisions The Company owns real estate in Bismarck, ND, Quincy, IL, and Rapid City, SD, which is financed through a single term loan with BMO Harris Bank (the “Real Estate Loan”) which is also a participant lender on the Company’s revolving line of credit. The Real Estate Loan contains cross default provisions which cause the loan to be considered in default if the loans where BMO is a lender, including the revolving credit facility, is in default. There were no such cross defaults at September 2018. In addition, the Real Estate Loan contains co‑terminus provisions which require all loans with BMO to be paid in full if any of the loans are paid in full prior to the end of their specified terms. Other The Company has issued a letter of credit for $0.5 million to its workers’ compensation insurance carrier as part of its self‑insured loss control program . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES | |
INCOME TAXES | 7. INCOME TAXES: The components of income tax expense from operations for fiscal 2018 and fiscal 2017 consisted of the following: 2018 2017 Current: Federal $ 1,294,253 $ 2,348,725 Current: State 423,209 383,662 1,717,462 2,732,387 Deferred: Federal (470,166) (223,283) Deferred: State (83,296) (20,104) (553,462) (243,387) Income tax expense $ 1,164,000 $ 2,489,000 The difference between the Company’s income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate of approximately 24% and 34% for fiscal 2018 and fiscal 2017, respectively on income before income taxes is as follows: 2018 2017 Tax at statutory rate $ 1,160,247 $ 1,903,502 Nondeductible business expenses 405,996 402,980 State income taxes, net of federal tax benefit 306,918 244,587 Change in deferred tax rate due to tax reform legislation (778,000) — Other 68,839 (62,069) $ 1,164,000 $ 2,489,000 Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to a net deferred tax assets (liabilities) at September 2018 and September 2017 relates to the following: 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 210,734 $ 282,576 Accrued expenses 779,282 1,185,624 Inventory 272,946 502,042 Other 23,237 — Property and equipment — 28,713 Net operating loss carry forwards - federal 92,421 195,675 Net operating loss carry forwards - state 697,013 592,559 Total gross deferred tax assets 2,075,633 2,787,189 Less: Valuation allowance (697,013) (592,559) Total net deferred tax assets 1,378,620 2,194,630 Deferred tax liabilities: Trade discounts 285,439 410,793 Property and equipment 1,361,508 1,395,560 Goodwill 921,799 1,381,953 Intangible assets 592,675 1,342,587 Total deferred tax liabilities 3,161,421 4,530,893 Total net deferred income tax liability $ 1,782,801 $ 2,336,263 The Company’s fiscal 2018 income tax rate and results of operations were impacted by the enactment of the Tax Cuts and Jobs Act (“Tax Reform Act”), which was signed into law on December 22, 2017. Among the numerous provisions included in the Tax Reform Act was a reduction in the corporate federal income tax rate from 35% to 21%. The Company applied the newly enacted corporate federal income tax rate during the first quarter of fiscal 2018 resulting in an income tax benefit of approximately $0.8 million, primarily related to the application of the new lower income tax rates to net long term deferred tax liabilities recorded on the Company’s Consolidated Balance Sheet. The application of the Tax Reform Act also resulted in blended federal income tax rate of approximately 24% for fiscal 2018, reflecting a portion of the fiscal year at both the old and new federal income tax rates. At September 2018, the Company had a $0.1 million noncurrent deferred tax asset related to federal net operating loss carryforwards. These federal net operating loss carryforwards totaled approximately $0.4 million and were primarily attributable to the Company’s fiscal 2002 purchase of Hawaiian Natural Water Company, Inc. (“HNWC”), a wholly owned subsidiary of the Company. The utilization of HNWC’s net operating losses is limited by Internal Revenue Code Section 382 to approximately $0.1 million per year through 2022. The Company had a valuation allowance of approximately $0.7 million and $0.6 million at September 2018 and September 2017, respectively, against certain state net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during fiscal 2018 or fiscal 2017, and the Company does not anticipate any such items during the next twelve months. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2015 and forward remain open under U.S. and state statutes. |
PROFIT SHARING PLAN
PROFIT SHARING PLAN | 12 Months Ended |
Sep. 30, 2018 | |
PROFIT SHARING PLAN | |
PROFIT SHARING PLAN | 8. PROFIT SHARING PLAN: The Company sponsors a profit sharing plan (i.e. a section 401(k) plan) covering substantially all employees. The plan allows employees to make voluntary contributions up to 100% of their compensation, subject to Internal Revenue Service limits. The Company matches 50% of the first 4% contributed and 100% of the next 2% contributed for a maximum match of 4% of employee compensation. The Company made matching contributions to the profit sharing plan of approximately $0.7 million (net of employee forfeitures) in both fiscal 2018 and fiscal 2017. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES: Lease Obligations The Company leases various office and warehouse facilities and equipment under noncancellable operating leases. Rents charged to expense under these operating leases totaled approximately $6.1 million and $5.7 million in fiscal 2018 and fiscal 2017, respectively. At September 2018 the minimum future lease commitments were as follows: Operating Fiscal Year Ending Leases 2019 $ 6,307,616 2020 4,671,779 2021 3,731,591 2022 3,026,818 2023 2,153,584 Thereafter 3,814,291 Total minimum lease payments $ 23,705,679 Liability Insurance The Company carries property, general liability, vehicle liability, directors’ and officers’ liability and workers’ compensation insurance. Additionally, the Company carries an umbrella liability policy to provide excess coverage over the underlying limits of the aforementioned primary policies. The Company’s insurance programs for workers’ compensation, general liability, and employee related health care benefits are provided through high deductible or self‑insured programs. Claims in excess of self‑insurance levels are fully insured subject to policy limits. Accruals are based on historical claims experience, actual claims filed, and estimates of claims incurred but not reported. The Company’s liabilities for unpaid and incurred, but not reported claims, for workers’ compensation, general liability, and health insurance at September 2018 and September 2017 was $1.6 million and $1.5 million, respectively. These amounts are included in accrued expenses in the accompanying Consolidated Balance Sheets. While the ultimate amount of claims incurred is dependent on future developments, in the Company’s opinion, recorded reserves are adequate to cover the future payment of claims previously incurred. However, it is possible that recorded reserves may not be adequate to cover the future payment of claims. Adjustments, if any, to claims estimates previously recorded, resulting from actual claim payments, are reflected in operations in the periods in which such adjustments are known. A summary of the activity in the Company’s self‑insured liabilities reserve is set forth below (in millions): 2018 2017 Beginning balance $ 1.5 $ 1.3 Charged to expense 5.8 6.5 Payments (5.7) (6.3) Ending balance $ 1.6 $ 1.5 |
EQUITY-BASED INCENTIVE AWARDS
EQUITY-BASED INCENTIVE AWARDS | 12 Months Ended |
Sep. 30, 2018 | |
EQUITY-BASED INCENTIVE AWARDS | |
EQUITY-BASED INCENTIVE AWARDS | 10. EQUITY-BASED INCENTIVE AWARDS: Omnibus Plan The Company has two equity-based incentive plans, the 2007 Omnibus Incentive Plan and 2014 Omnibus Incentive Plan (collectively “the Omnibus Plans”), which provide for equity incentives to employees. Each Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plans together permit the issuance of up to 225,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plans is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At September 2018, awards with respect to a total of 208,095 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 5,068 shares may be awarded under the Omnibus Plans. Stock Options The Company issued 6,000 incentive stock options during both fiscal 2018 and fiscal 2017, respectively, to various employees pursuant to the provisions of the Company’s 2014 Omnibus Plan. These awards vest in equal installments over a five year service period. The awards had an estimated fair value at the grant date of approximately $0.2 million in fiscal 2018 and $0.1 million in fiscal 2017 using the Black‑Scholes option pricing model. The following assumptions were used in connection with the Black‑Scholes option pricing calculation as it relates to the fiscal 2018 and fiscal 2017 incentive stock option awards: Stock Option Stock Option Pricing Pricing Assumptions Assumptions 2018 2017 Risk-free interest rate 2.41 % 2.12 % Dividend yield 0.8 % 0.6 % Expected volatility % % Expected life in years The stock options issued by the Company expire ten years from the grant date and include a five year graded vesting schedule. At September 2018, the Company had 33,800 stock options outstanding with a weighted average exercise price of $77.85 per share and 17,300 stock options which were exercisable with a weighted average price of $68.04 per share. The following is a summary of stock option activity during fiscal 2018: Weighted Number Average of Exercise Shares Price Outstanding at September 2017 28,300 $ 74.75 Granted 6,000 90.50 Exercised (500) 96.50 Forfeited/Expired — — Outstanding at September 2018 33,800 $ 77.85 Net income before income taxes included compensation expense related to the amortization of the Company’s stock option awards of $0.1 million during both fiscal 2018 and fiscal 2017. At September 2018, total unamortized compensation expense related to stock options was approximately $0.2 million. This unamortized compensation expense is expected to be amortized over approximately the next 29 months. The aggregate intrinsic value of stock options outstanding was approximately $0.4 million at September 2018 and $0.5 million at September 2017. The aggregate intrinsic value of stock options exercisable was approximately $0.3 million and $0.4 million at September 2018 and September 2017, respectively. The total intrinsic value of stock options exercised was $0.1 million in both fiscal 2018 and fiscal 2017. The total fair value of stock options vested was $0.4 million during both fiscal 2018 and fiscal 2017. Restricted Stock Units At September 2018, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock unit awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans: Restricted Restricted Restricted Restricted Date of award: October 2013 October 2015 October 2016 October 2017 Original number of awards issued: Service period: 36 - 60 months 36 - 60 months 36 months 36 months Estimated fair value of award at grant date: $ $ $ $ Non-vested awards outstanding at September 30, 2018: Fair value of non-vested awards at $ $ $ $ (1) (2) (3) (4) There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Statement of Operations reflects the straight‑line amortized fair value based on the period end closing price under the liability method. Net income before income taxes included compensation expense related to the amortization of the Company’s restricted stock unit awards of approximately $1.2 million and $1.3 million during fiscal 2018 and fiscal 2017, respectively. These amounts were recorded as accrued expenses in the Company’s Consolidated Balance Sheet at both September 2018 and September 2017. The tax benefit related to this compensation expense was approximately $0.3 million in fiscal 2018 and $0.5 million in fiscal 2017. The total intrinsic value of restricted stock units vested during fiscal 2018 and fiscal 2017 was approximately $1.2 million and $1.3 million, respectively. Total unamortized compensation expense for these awards based on the September 2018 closing price was approximately $1.1 million. This unamortized compensation expense, plus any changes in the fair value of the awards through the settlement date, are expected to be amortized over approximately the next 16 months (the weighted‑average period). The following summarizes restricted stock unit activity under the Omnibus Plans during fiscal 2018: Number Weighted of Average Shares Fair Value Nonvested restricted stocks units at September 2017 27,521 $ 92.25 Granted 13,000 90.50 Vested (13,710) 90.97 Expired — — Nonvested restricted stocks units at September 2018 26,811 $ 86.95 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Sep. 30, 2018 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | 11. BUSINESS SEGMENTS: The Company has two reportable business segments: the wholesale distribution of consumer products and the retail sale of health and natural food products. The retail health food stores’ operations are aggregated to comprise the Retail Segment because such operations have similar economic characteristics, as well as similar characteristics with respect to the nature of products sold, the type and class of customers for the health food products and the methods used to sell the products. Included in the “Other” column are intercompany eliminations, and assets held and charges incurred by our holding company. The segments are evaluated on revenues, gross margins, operating income (loss), and income before taxes. Wholesale Retail Segment Segment Other Consolidated FISCAL YEAR ENDED 2018: External revenues: Cigarettes $ 933,920,414 $ — $ — $ 933,920,414 Tobacco 172,904,744 — — 172,904,744 Confectionery 78,915,899 — — 78,915,899 Health food 29,572,602 — 29,572,602 Foodservice & other 106,992,999 — — 106,992,999 Total external revenue 1,292,734,056 29,572,602 — 1,322,306,658 Depreciation 1,338,476 900,295 — 2,238,771 Amortization 79,375 — — 79,375 Operating income (loss) 15,000,101 (3,144,133) (5,937,027) 5,918,941 Interest expense 91,276 — 1,103,097 1,194,373 Income (loss) from operations before taxes 14,950,647 (3,134,613) (7,037,424) 4,778,610 Total assets 125,152,820 14,639,962 161,372 139,954,154 Capital expenditures 1,590,784 1,635,323 — 3,226,107 FISCAL YEAR ENDED 2017: External revenue: Cigarettes $ 909,533,495 $ — $ — $ 909,533,495 Tobacco 158,899,064 — — 158,899,064 Confectionery 80,129,898 — — 80,129,898 Health food — 25,421,603 — 25,421,603 Foodservice & other 101,000,348 — — 101,000,348 Total external revenue 1,249,562,805 25,421,603 — 1,274,984,408 Depreciation 1,295,534 488,941 — 1,784,475 Amortization 265,000 — — 265,000 Operating income (loss) 13,665,234 (1,801,581) (5,638,900) 6,224,753 Interest expense 101,691 — 723,999 825,690 Income (loss) from operations before taxes 13,663,327 (1,786,851) (6,437,900) 5,438,576 Total assets 117,297,333 14,399,224 108,330 131,804,887 Capital expenditures 525,558 2,040,141 — 2,565,699 |
TREASURY STOCK
TREASURY STOCK | 12 Months Ended |
Sep. 30, 2018 | |
TREASURY STOCK. | |
TREASURY STOCK | 12. TREASURY STOCK: The Company repurchased a total of 74,880 and 12,036 shares of its common stock during fiscal 2018 and fiscal 2017, respectively, for cash totaling approximately $7.7 million and $1.1 million, respectively. All repurchased shares were recorded in treasury stock at cost. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2018 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS: On October 23, 2018 the Compensation Committee of the Company’s Board of Directors awarded 15,050 long-term incentive equity awards, primarily to members of the Company’s executive management team. These awards included a three year graded vesting schedule and can be settled in either cash or stock. At the same time, the Company’s Board of Directors replenished the number of shares authorized for repurchase under AMCON’s existing Common Stock repurchase program. The program provides for periodic repurchases of up to 75,000 shares of AMCON’s common stock in open market or privately negotiated transactions. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Company Operations | (a) Company Operations: AMCON Distributing Company and Subsidiaries (“AMCON” and “the Company”) is primarily engaged in the wholesale distribution of consumer products in the Central, Rocky Mountain, and Southern regions of the United States. AMCON’s wholesale distribution business includes six distribution centers that sell approximately 17,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery, beverages, groceries, paper products, health and beauty care products, frozen and chilled products and institutional foodservice products. The Company distributes products primarily to retailers such as convenience stores, discount and general merchandise stores, grocery stores, drug stores, and gas stations. In addition, the Company services institutional customers, including restaurants and bars, schools, sports complexes, as well as other wholesalers. AMCON, through its Healthy Edge Inc. subsidiary, operates twenty two retail health food stores as Chamberlin’s Natural Foods (“Chamberlin’s”), Akin’s Natural Foods (“Akin’s”), and Earth Origins Markets (“EOM”). These stores carry natural supplements, organic and natural groceries, health and beauty care products, and other food items. The Company’s operations are subject to a number of factors which are beyond the control of management, such as changes in manufacturers’ cigarette pricing, state excise tax increases, or the opening of competing retail stores in close proximity to the Company’s retail stores. While the Company sells a diversified product line, it remains dependent upon the sale of cigarettes which accounted for approximately 71% of our consolidated revenue and 20% of our consolidated gross profit during both fiscal 2018 and fiscal 2017. |
Accounting Period | (b) Accounting Period: The Company’s fiscal year ends on September 30 and the fiscal years ended September 30, 2018 and September 30, 2017 have been included herein. |
Principles of Consolidation and Basis of Presentation | (c) Principles of Consolidation and Basis of Presentation: The Consolidated Financial Statements include the accounts of AMCON and its wholly‑owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Cash and Accounts Payable | (d) Cash and Accounts Payable: AMCON utilizes a cash management system under which an overdraft is the normal book balance in the primary disbursing accounts. Overdrafts included in accounts payable at fiscal 2018 and fiscal 2017 totaled approximately $1.2 million and $2.2 million, respectively, and reflect checks drawn on the disbursing accounts that have been issued but have not yet cleared through the banking system. The Company’s policy has been to fund these outstanding checks as they clear with borrowings under its revolving credit facility (see Note 6). These outstanding checks (book overdrafts) are classified as cash flows from operating activities in the Consolidated Statements of Cash Flows. |
Accounts Receivable | (e) Accounts Receivable: Accounts receivable consist primarily of amounts due to the Company from its normal business activities. An allowance for doubtful accounts is maintained to reflect the expected uncollectibility of accounts receivable based on past collection history, evaluation of economic conditions as they may impact our customers, and specific risks identified in the portfolio. The Company determines the past due status of trade receivables based on our terms with each customer. Account balances are charged off against the allowance for doubtful accounts when collection efforts have been exhausted and the account receivable is deemed worthless. Any subsequent recoveries of charged off account balances are recorded as income in the period received. |
Inventories | (f) Inventories: At September 2018 and September 2017, inventories consisted of finished goods and are stated at the lower of cost (determined on a FIFO basis for our wholesale segment and using the retail method for our retail segment) or net realizable value. The wholesale distribution and retail health food segment inventories consist of finished products purchased in bulk quantities to be redistributed to the Company’s customers or sold at retail. Finished goods included total reserves of approximately $0.5 million and $0.8 million at September 2018 and September 2017, respectively. These reserves include the Company’s obsolescence allowance, which reflects estimated unsaleable or non‑refundable inventory based upon an evaluation of slow moving and discontinued products. |
Prepaid Expenses and Other Current Assets | (g) Prepaid Expenses and Other Current Assets: A summary of prepaid expenses and other current assets is as follows (in millions): September 2018 September 2017 Prepaid expenses $ 1.6 $ 1.4 Prepaid inventory 3.3 2.8 $ 4.9 $ 4.2 Prepaid inventory represents inventory in-transit that has been paid for but not received. |
Property and Equipment | (h) Property and Equipment: Property and equipment are stated at cost less accumulated depreciation or amortization. Major renewals and improvements are capitalized and charged to expense over their useful lives through depreciation or amortization charges. Repairs and maintenance are charged to expense in the period incurred. The straight-line method of depreciation is used to depreciate assets over the estimated useful lives as follows: Years Buildings and improvements - 40 Warehouse equipment - 12 Furniture, fixtures and leasehold improvements - 12 Vehicles - 5 Costs and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and the resulting gains or losses are reported as a component of operating income. The Company reviews property and equipment for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the asset group are estimated over the asset’s useful life of the primary asset and based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the asset group may not be recoverable, the potential impairment is determined based on the amount by which the carrying value of the asset group exceeds the fair value of the asset group. |
Goodwill and Intangible Assets | (i) Goodwill and Intangible Assets: Our goodwill consists of the excess purchase price paid in business combinations over the fair value of assets acquired. Our intangible assets consist of trademarks, tradenames, customer relationships, and the value of non‑competition agreements acquired as part of acquisitions. Goodwill, trademarks, and tradenames are considered to have indefinite lives. Goodwill and intangible assets having indefinite useful lives are not amortized into the results of operations, but instead are reviewed annually or more frequently if events or changes in circumstances indicate that the assets might be impaired, to assess whether their fair value exceeds their carrying value. The Company performs its annual goodwill and intangible asset impairment assessment during the fourth fiscal quarter of each year. When evaluating the potential impairment of non‑amortizable indefinite‑lived assets and goodwill, the Company first assesses a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, market prices, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If after completing this assessment, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative evaluation is performed using the income approach (discounted cash flow method). A discounted cash flow methodology requires the estimation of a wide range of factors including but not limited to: (i) forecasting future earnings and cash flows (ii) determining the discount rate applicable to the earnings stream being discounted, and (iii) computing a terminal value at some point in the future. These estimations require significant judgment and include making assumptions such as sales growth rates including the addition of new retail stores, future store profitability, planned capital expenditures, our ability to control costs, the successful implementation of initiatives designed to enhance sales and improve inventory management, gross profit estimates, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. For goodwill impairment testing, the Company utilizes the guidance in ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which the Company early adopted. ASU No. 2017-04 simplifies the measurement of potential goodwill impairments by permitting a methodology whereby a reporting unit’s carrying value is compared to its fair value and impairment charges are recognized for an amount by which a reporting unit’s carrying amount exceeds its fair value. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are assessed for impairment whenever events or circumstances change which may indicate that the carrying amount of the assets may not be recoverable. Identifiable intangible assets that are subject to amortization are evaluated for impairment using a process similar to that used in evaluating the elements of property and equipment. If impaired, the related assets are written down to their estimated fair value. During fiscal 2018, the Company recorded goodwill impairment charges of approximately $1.9 million in its retail reporting unit. These impairment charges resulted from heightened competition in the industry, retail sector market conditions, and earning shortfalls which impacted the Company’s projections of future cash flows to be generated from this reporting unit and fully impaired all the goodwill in this reporting unit (see Note 5). There were no impairments to either indefinite‑lived assets or identifiable intangible assets with finite lives during either fiscal 2018 or fiscal 2017. |
Revenue Recognition | (j) Revenue Recognition: AMCON recognizes revenue when title passes to our customers. In our Wholesale Segment, this occurs when products are delivered to customers (which generally is the same day products are shipped) and in our retail health food segment when products are sold to consumers. Sales are shown net of returns, discounts, and sales incentives to customers. |
Insurance | (k) Insurance: The Company’s workers’ compensation, general liability, and employee‑related health care benefits are provided through high‑deductible or self‑insurance programs. As a result, the Company accrues for its workers’ compensation and general liability based upon a claim reserve analysis. The Company has issued a letter of credit in the amount of $0.5 million to its workers’ compensation insurance carrier as part of its loss control program. The reserve for incurred, but not reported, employee health care benefits is calculated using the Company’s historical claims experience rate, plus specific reserves for large claims. The reserves associated with the exposure to these liabilities are reviewed by management for adequacy at the end of each reporting period. |
Income Taxes | (l) Income Taxes: The Company uses the asset and liability method to calculate deferred income taxes. Deferred tax assets and liabilities are recognized on temporary differences between financial statement and tax bases of assets and liabilities using enacted tax rates. The effect of tax rate changes on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when we do not consider it more likely than not that some portion or all of the deferred tax assets will be realized. |
Share-Based Compensation | (m) Share-Based Compensation: The Company recognizes expense for its share‑based compensation based on the fair value of the awards that are granted. The fair value of the stock options is estimated at the date of grant using the Black‑Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock units is based on the period ending closing price of the Company’s common stock. Measured compensation cost is recognized ratably over the vesting period of the related share‑based compensation award and is reflected in our Consolidated Statement of Operations under “selling, general and administrative expenses.” |
Customer Sales Incentives | (n) Customer Sales Incentives: The Company provides sales rebates or discounts to our wholesale customers. These incentives are recorded as a reduction of sales revenue as earned by the customer. |
Per-share results | (o) Per-share results: Basic earnings or loss per share data are based on the weighted‑average number of common shares outstanding during each period. Diluted earnings or loss per share data are based on the weighted‑average number of common shares outstanding and the effect of all dilutive potential common shares including stock options and conversion features of the Company’s preferred stock issuances. |
Use of Estimates | (p) Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value Measurements | (q) Fair Value Measurements: The Company’s financial assets and liabilities are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amount of trade accounts receivable, other receivables, trade accounts payable, accounts payable and other accrued liabilities approximates fair value because of the short maturity of these financial instruments. The carrying amount of the Company’s variable and fixed rate debt also approximates fair value. During fiscal 2018, goodwill in our retail reporting unit was adjusted to fair value, resulting in a pretax, non-cash impairment charge of $1.9 million (see Note 5). |
Accounting Pronouncements | (r) Accounting Pronouncements: Accounting Pronouncements Adopted During fiscal 2018, the Company adopted the following Accounting Standards Updates (“ASU”). The adoption of these standards did not have a material impact on the Company’s consolidated financial statements. In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, "Simplifying the Measurement of Inventory". This ASU required an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In March 2016, FASB issued ASU No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. This ASU simplified several aspects of how companies account for share-based compensation, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statements of cash flows. In January 2017, FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU provided guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. In January 2017, FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. The new guidance simplified the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This ASU required goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, "Revenue from Contracts with Customers" (ASU 606). ASU 606 and related amendments supersedes the revenue recognition requirements in "Accounting Standard Codification 605 - Revenue Recognition" and most industry-specific guidance. The standard requires that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. ASU 606 is effective for fiscal years beginning after December 15, 2017 (fiscal 2019 for the Company), and for interim periods within that fiscal year. The Company has substantially completed its assessment of the accounting required under ASU 606 and does not expect that the implementation of the new standard will have a material effect on the Company’s financial statements. The Company will adopt the standard in the first quarter of fiscal 2019 using the modified retrospective method and will include enhanced disclosures in conjunction with the adoption of this standard. In February 2016, the FASB issued ASU No. 2016-02 "Leases”. This ASU and related amendments requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. This ASU is effective for fiscal years beginning after December 15, 2018 (fiscal 2020 for the Company), and for interim periods within that fiscal year. The Company is currently evaluating this ASU and its impact on our consolidated financial statements including the potential capitalization of all operating leases on the Company’s balance sheet. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 (fiscal 2021 for the Company) with early adoption permitted. The Company is currently evaluating this ASU and its potential impact on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of prepaid expenses and other current assets | September 2018 September 2017 Prepaid expenses $ 1.6 $ 1.4 Prepaid inventory 3.3 2.8 $ 4.9 $ 4.2 |
Schedule of estimated useful lives of property and equipment | Years Buildings and improvements - 40 Warehouse equipment - 12 Furniture, fixtures and leasehold improvements - 12 Vehicles - 5 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
EARNINGS PER SHARE | |
Schedule of net earnings per share available to common shareholders | For Fiscal Years 2018 2017 Basic Basic Weighted average common shares outstanding 660,925 679,478 Net income available to common shareholders $ 3,614,610 $ 2,949,576 Net earnings per share available to common shareholders $ 5.47 $ 4.34 For Fiscal Years 2018 2017 Diluted Diluted Weighted average common shares outstanding 660,925 679,478 Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock(1) 11,524 12,705 Weighted average number of shares outstanding 672,449 692,183 Net income available to common shareholders $ 3,614,610 $ 2,949,576 Net earnings per share available to common shareholders $ 5.38 $ 4.26 (1) Diluted earnings per share calculation includes all stock options and restricted stock units deemed to be dilutive. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | 2018 2017 Land $ 773,068 $ 648,818 Buildings and improvements 12,206,908 10,661,543 Warehouse equipment 13,424,236 13,195,827 Furniture, fixtures and leasehold improvements 12,018,984 10,732,163 Vehicles 3,229,551 2,195,704 Construction in progress 743,278 1,315,714 42,396,025 38,749,769 Less accumulated depreciation and amortization: (26,627,541) (25,441,783) Owned property and equipment $ 15,768,484 $ 13,307,986 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill by reporting segment | September September 2018 2017 Wholesale Segment $ 4,436,950 $ 4,436,950 Retail Segment — 1,912,877 $ 4,436,950 $ 6,349,827 |
Schedule of other intangible assets | September September 2018 2017 Trademarks and tradenames (Retail Segment) $ 3,373,269 $ 3,373,269 Customer relationships (Wholesale Segment) (less accumulated amortization of approximately $2.1 million and $2.0 million at September 2018 and September 2017, respectively) 41,667 121,042 $ 3,414,936 $ 3,494,311 |
Schedule of estimated future amortization expense related to identifiable intangible assets with finite lives | September 2018 Fiscal 2019 $ 41,667 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
DEBT | |
Schedule of Revolving portion of the Facility | 2018 2017 Revolving portion of the Facility, interest payable at 3.83% at September 2018 $ 35,428,597 $ 29,037,182 |
Schedule of long-term obligations | 2018 2017 Note payable to a bank (“Real Estate Loan”), interest payable at a fixed rate of 2.99% with monthly installments of principal and interest of $38,344 through August 2021 with remaining principal due September 2021, collateralized by three distribution facilities $ 2,648,179 $ 3,021,824 Note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023 1,476,772 — Unsecured note payable due in varying installments through fiscal 2019 629,746 — Less current maturities (1,096,306) (373,645) $ 3,658,391 $ 2,648,179 |
Schedule of minimum principal maturities of the long-term debt | Fiscal Year Ending 2019 $ 1,096,306 2020 532,747 2021 2,008,390 2022 148,665 2023 968,589 $ 4,754,697 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
INCOME TAXES | |
Schedule of components of income tax expense from operations | 2018 2017 Current: Federal $ 1,294,253 $ 2,348,725 Current: State 423,209 383,662 1,717,462 2,732,387 Deferred: Federal (470,166) (223,283) Deferred: State (83,296) (20,104) (553,462) (243,387) Income tax expense $ 1,164,000 $ 2,489,000 |
Schedule of difference between the income tax expense and that which would be calculated using the statutory income tax rate | 2018 2017 Tax at statutory rate $ 1,160,247 $ 1,903,502 Nondeductible business expenses 405,996 402,980 State income taxes, net of federal tax benefit 306,918 244,587 Change in deferred tax rate due to tax reform legislation (778,000) — Other 68,839 (62,069) $ 1,164,000 $ 2,489,000 |
Schedule of temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to the net deferred tax asset (liabilities) | 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 210,734 $ 282,576 Accrued expenses 779,282 1,185,624 Inventory 272,946 502,042 Other 23,237 — Property and equipment — 28,713 Net operating loss carry forwards - federal 92,421 195,675 Net operating loss carry forwards - state 697,013 592,559 Total gross deferred tax assets 2,075,633 2,787,189 Less: Valuation allowance (697,013) (592,559) Total net deferred tax assets 1,378,620 2,194,630 Deferred tax liabilities: Trade discounts 285,439 410,793 Property and equipment 1,361,508 1,395,560 Goodwill 921,799 1,381,953 Intangible assets 592,675 1,342,587 Total deferred tax liabilities 3,161,421 4,530,893 Total net deferred income tax liability $ 1,782,801 $ 2,336,263 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of minimum future lease commitments | Operating Fiscal Year Ending Leases 2019 $ 6,307,616 2020 4,671,779 2021 3,731,591 2022 3,026,818 2023 2,153,584 Thereafter 3,814,291 Total minimum lease payments $ 23,705,679 |
Summary of self-insured liabilities reserve | 2018 2017 Beginning balance $ 1.5 $ 1.3 Charged to expense 5.8 6.5 Payments (5.7) (6.3) Ending balance $ 1.6 $ 1.5 |
EQUITY-BASED INCENTIVE AWARDS (
EQUITY-BASED INCENTIVE AWARDS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
EQUITY-BASED INCENTIVE AWARDS | |
Schedule of assumptions used in connection with the Black-Scholes option pricing calculation | Stock Option Stock Option Pricing Pricing Assumptions Assumptions 2018 2017 Risk-free interest rate 2.41 % 2.12 % Dividend yield 0.8 % 0.6 % Expected volatility % % Expected life in years |
Summary of stock options activity | Weighted Number Average of Exercise Shares Price Outstanding at September 2017 28,300 $ 74.75 Granted 6,000 90.50 Exercised (500) 96.50 Forfeited/Expired — — Outstanding at September 2018 33,800 $ 77.85 |
Schedule of nonvested restricted stock units awarded | Restricted Restricted Restricted Restricted Date of award: October 2013 October 2015 October 2016 October 2017 Original number of awards issued: Service period: 36 - 60 months 36 - 60 months 36 months 36 months Estimated fair value of award at grant date: $ $ $ $ Non-vested awards outstanding at September 30, 2018: Fair value of non-vested awards at $ $ $ $ (1) (2) (3) (4) |
Summary of restricted stock unit activity | Number Weighted of Average Shares Fair Value Nonvested restricted stocks units at September 2017 27,521 $ 92.25 Granted 13,000 90.50 Vested (13,710) 90.97 Expired — — Nonvested restricted stocks units at September 2018 26,811 $ 86.95 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
BUSINESS SEGMENTS | |
Schedule of segment information | Wholesale Retail Segment Segment Other Consolidated FISCAL YEAR ENDED 2018: External revenues: Cigarettes $ 933,920,414 $ — $ — $ 933,920,414 Tobacco 172,904,744 — — 172,904,744 Confectionery 78,915,899 — — 78,915,899 Health food 29,572,602 — 29,572,602 Foodservice & other 106,992,999 — — 106,992,999 Total external revenue 1,292,734,056 29,572,602 — 1,322,306,658 Depreciation 1,338,476 900,295 — 2,238,771 Amortization 79,375 — — 79,375 Operating income (loss) 15,000,101 (3,144,133) (5,937,027) 5,918,941 Interest expense 91,276 — 1,103,097 1,194,373 Income (loss) from operations before taxes 14,950,647 (3,134,613) (7,037,424) 4,778,610 Total assets 125,152,820 14,639,962 161,372 139,954,154 Capital expenditures 1,590,784 1,635,323 — 3,226,107 FISCAL YEAR ENDED 2017: External revenue: Cigarettes $ 909,533,495 $ — $ — $ 909,533,495 Tobacco 158,899,064 — — 158,899,064 Confectionery 80,129,898 — — 80,129,898 Health food — 25,421,603 — 25,421,603 Foodservice & other 101,000,348 — — 101,000,348 Total external revenue 1,249,562,805 25,421,603 — 1,274,984,408 Depreciation 1,295,534 488,941 — 1,784,475 Amortization 265,000 — — 265,000 Operating income (loss) 13,665,234 (1,801,581) (5,638,900) 6,224,753 Interest expense 101,691 — 723,999 825,690 Income (loss) from operations before taxes 13,663,327 (1,786,851) (6,437,900) 5,438,576 Total assets 117,297,333 14,399,224 108,330 131,804,887 Capital expenditures 525,558 2,040,141 — 2,565,699 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Sep. 30, 2018USD ($)storeitem | Sep. 30, 2017USD ($) | |
Number of operating health food retail stores | store | 22 | |
Cash and Accounts Payable | ||
Overdrafts | $ 1,200,000 | $ 2,200,000 |
Inventories | ||
Total reserves on finished goods | 500,000 | 800,000 |
Prepaid Expenses and Other Current Assets | ||
Prepaid expenses | 1,600,000 | 1,400,000 |
Prepaid inventory | 3,300,000 | 2,800,000 |
Prepaid and other current assets | $ 4,940,775 | $ 4,218,811 |
Cigarettes Product | Percentage of consolidated revenue | ||
Concentration of cigarette sales | 71.00% | 71.00% |
Cigarettes Product | Percentage of consolidated gross profit | ||
Concentration of cigarette sales | 20.00% | 20.00% |
Wholesale Segment | ||
Number of distribution centers | item | 6 | |
Number of products sold or distributed | item | 17,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, Intangible Assets, Insurance and Fair Value Measurements (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets: | ||
Goodwill impairment charges | $ 1,912,877 | |
Indefinite-lived assets impairment charges | 0 | $ 0 |
Insurance | ||
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | 500,000 | |
Retail Segment | ||
Goodwill and Intangible Assets: | ||
Goodwill impairment charges | $ 1,900,000 | |
Buildings and improvements | Minimum | ||
Property and Equipment | ||
Estimated useful lives | 5 years | |
Buildings and improvements | Maximum | ||
Property and Equipment | ||
Estimated useful lives | 40 years | |
Warehouse equipment | Minimum | ||
Property and Equipment | ||
Estimated useful lives | 3 years | |
Warehouse equipment | Maximum | ||
Property and Equipment | ||
Estimated useful lives | 12 years | |
Furniture, fixtures and leasehold improvements | Minimum | ||
Property and Equipment | ||
Estimated useful lives | 1 year | |
Furniture, fixtures and leasehold improvements | Maximum | ||
Property and Equipment | ||
Estimated useful lives | 12 years | |
Vehicles | Minimum | ||
Property and Equipment | ||
Estimated useful lives | 2 years | |
Vehicles | Maximum | ||
Property and Equipment | ||
Estimated useful lives | 5 years |
ACQUISITION (Details)
ACQUISITION (Details) - Acquisition of retail health food stores located in Florida $ in Millions | 12 Months Ended |
Sep. 30, 2018USD ($)installment | |
Acquisition | |
Total purchase price | $ | $ 0.7 |
Number of payment installments | installment | 4 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
EARNINGS PER SHARE | ||
Weighted average common shares outstanding, Basic | 660,925 | 679,478 |
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock and conversion of preferred stock | 11,524 | 12,705 |
Weighted average number of shares outstanding, Diluted | 672,449 | 692,183 |
Net income available to common shareholders | $ 3,614,610 | $ 2,949,576 |
Net income available to common shareholders, diluted | $ 3,614,610 | $ 2,949,576 |
Net earnings per share available to common shareholders, Basic (in dollars per share) | $ 5.47 | $ 4.34 |
Net earnings per share available to common shareholders, Diluted (in dollars per share) | $ 5.38 | $ 4.26 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | $ 42,396,025 | $ 38,749,769 |
Less accumulated depreciation and amortization: Owned property and equipment | (26,627,541) | (25,441,783) |
Property and equipment, net | 15,768,484 | 13,307,986 |
Land | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 773,068 | 648,818 |
Buildings and improvements | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 12,206,908 | 10,661,543 |
Warehouse equipment | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 13,424,236 | 13,195,827 |
Furniture, fixtures and leasehold improvements | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 12,018,984 | 10,732,163 |
Vehicles | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | 3,229,551 | 2,195,704 |
Construction in progress | ||
PROPERTY AND EQUIPMENT, NET | ||
Property and equipment, gross | $ 743,278 | $ 1,315,714 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill by reporting segment | ||
Goodwill | $ 4,436,950 | $ 6,349,827 |
Goodwill impairment charges | 1,912,877 | |
Wholesale Segment | ||
Goodwill by reporting segment | ||
Goodwill | 4,436,950 | 4,436,950 |
Retail Segment | ||
Goodwill by reporting segment | ||
Goodwill | $ 1,912,877 | |
Goodwill impairment charges | $ 1,900,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Other intangible assets, net | $ 3,414,936 | $ 3,494,311 |
Amortization expense related to finite-lived intangible assets | 100,000 | 300,000 |
Customer relationships | ||
Other intangible assets, net | 41,667 | 121,042 |
Accumulated amortization | $ 2,100,000 | 2,000,000 |
Amortization period | 8 years | |
Trademarks and tradenames | ||
Other intangible assets, net | $ 3,373,269 | $ 3,373,269 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) | Sep. 30, 2018USD ($) |
Estimated future amortization expense related to identifiable intangible assets with finite lives | |
Fiscal 2,019 | $ 41,667 |
DEBT - Credit Facility (Details
DEBT - Credit Facility (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revolving credit facility | ||
Revolving portion of the facility | $ 35,428,597 | $ 29,037,182 |
Facility | ||
Revolving credit facility | ||
Revolving portion of the facility | $ 35,428,597 | 29,037,182 |
Interest rate (as a percent) | 3.83% | |
Revolving credit limit | $ 69,500,000 | |
Increase in borrowing capacity available under loan accordion | 25,000,000 | |
Additional credit advances for certain inventory purchases | $ 10,000,000 | |
Automatic renewal period of agreement unless terminated | 1 year | |
Unused commitment fee (as a percent) | 0.25% | |
Period considered for computing fixed charge coverage ratio | 12 months | |
Threshold of excess availability of credit as a percentage of maximum loan limit, required for financial covenant compliance | 10.00% | |
Restricted amount of dividends on common stock | $ 2,000,000 | |
Borrowings on the facility | 1,400,000,000 | 1,300,000,000 |
Payments on the facility | 1,400,000,000 | 1,300,000,000 |
Net advances (payments) on the Facility | 6,400,000 | $ (18,500,000) |
Revolving credit available | $ 34,100,000 | |
Facility | LIBOR | ||
Revolving credit facility | ||
Variable rate basis | LIBOR | |
Facility | Prime rate | ||
Revolving credit facility | ||
Variable rate basis | Prime rate | |
Facility | Minimum | ||
Revolving credit facility | ||
Notice period prior to the end of any original or renewal term of the agreement required for terminating the agreement either by the borrower or lender | 90 days | |
Fixed charge coverage ratio | 1 | |
Facility | Minimum | LIBOR | ||
Revolving credit facility | ||
Basis points added to reference rate (as a percent) | 1.25% | |
Facility | Maximum | ||
Revolving credit facility | ||
Revolving credit limit | $ 70,000,000 | |
Facility | Maximum | LIBOR | ||
Revolving credit facility | ||
Basis points added to reference rate (as a percent) | 1.50% |
DEBT - Long-Term Debt (Details)
DEBT - Long-Term Debt (Details) | 12 Months Ended | |
Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($)item | |
Long-term obligations | ||
Long-term debt | $ 4,754,697 | $ 3,021,824 |
Less current maturities | (1,096,306) | (373,645) |
Long-term debt, less current maturities | 3,658,391 | 2,648,179 |
2.99% Real Estate Loan | ||
Long-term obligations | ||
Long-term debt | $ 2,648,179 | $ 3,021,824 |
Fixed interest rate (as a percent) | 2.99% | 2.99% |
Periodic installments of principal and interest | $ 38,344 | $ 38,344 |
Number of owned distribution facilities which collateralize debt instrument | item | 3 | 3 |
4.50% Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 1,476,772 | |
Fixed interest rate (as a percent) | 4.50% | |
Periodic installments of principal and interest | $ 49,114 | |
Unsecured Note Payable | ||
Long-term obligations | ||
Long-term debt | $ 629,746 |
DEBT - Aggregate Minimum Princi
DEBT - Aggregate Minimum Principal Maturities of Long-Term Debt and Other (Details) | 12 Months Ended | |
Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | |
Minimum principal maturities | ||
2,019 | $ 1,096,306 | |
2,020 | 532,747 | |
2,021 | 2,008,390 | |
2,022 | 148,665 | |
2,023 | 968,589 | |
Long-term debt | 4,754,697 | $ 3,021,824 |
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program | 500,000 | |
2.99% Real Estate Loan | ||
Minimum principal maturities | ||
Long-term debt | $ 2,648,179 | $ 3,021,824 |
Number of cross defaults | item | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Components of income tax expense from operations | ||||
Current: Federal | $ 1,294,253 | $ 2,348,725 | ||
Current: State | 423,209 | 383,662 | ||
Current income tax expense | 1,717,462 | 2,732,387 | ||
Deferred: Federal | (470,166) | (223,283) | ||
Deferred: State | (83,296) | (20,104) | ||
Deferred income tax expense | (553,462) | (243,387) | ||
Income tax expense | $ 1,164,000 | $ 2,489,000 | ||
Income tax rate (as a percent) | ||||
Blended federal rate (as a percent) | 24.00% | 34.00% | ||
Statutory income tax rate (as a percent) | 35.00% | 21.00% | ||
Income tax benefit resulting from Tax Reform | $ 800,000 | |||
Summary of difference between the Company's income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate | ||||
Tax at statutory rate | $ 1,160,247 | $ 1,903,502 | ||
Nondeductible business expenses | 405,996 | 402,980 | ||
State income taxes, net of federal tax benefit | 306,918 | 244,587 | ||
Change in deferred tax rate due to tax reform legislation | (778,000) | |||
Other | 68,839 | (62,069) | ||
Income tax expense | 1,164,000 | 2,489,000 | ||
Deferred tax assets: | ||||
Allowance for doubtful accounts | 210,734 | 282,576 | ||
Accrued expenses | 779,282 | 1,185,624 | ||
Inventory | 272,946 | 502,042 | ||
Other | 23,237 | |||
Property and equipment | 28,713 | |||
Net operating loss carry forwards-federal | 92,421 | 195,675 | ||
Net operating loss carry forwards-state | 697,013 | 592,559 | ||
Total gross deferred tax assets | 2,075,633 | 2,787,189 | ||
Less: Valuation allowance | (697,013) | (592,559) | ||
Total net deferred tax assets | 1,378,620 | 2,194,630 | ||
Deferred tax liabilities: | ||||
Trade discounts | 285,439 | 410,793 | ||
Property and equipment | 1,361,508 | 1,395,560 | ||
Goodwill | 921,799 | 1,381,953 | ||
Intangible assets | 592,675 | 1,342,587 | ||
Total deferred tax liabilities | 3,161,421 | 4,530,893 | ||
Total net deferred income tax liability | 1,782,801 | 2,336,263 | ||
Limitation on utilization of HNWC's net operating losses per year through 2022 | 100,000 | |||
Valuation allowance against net operating losses | 700,000 | $ 600,000 | ||
Federal | ||||
Deferred tax liabilities: | ||||
Noncurrent deferred tax asset related to federal net operating loss carryforwards | 100,000 | |||
Net operating loss carryforwards | $ 400,000 |
PROFIT SHARING PLAN (Details)
PROFIT SHARING PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
PROFIT SHARING PLAN | ||
Employee's maximum voluntary contribution as percentage of their compensation | 100.00% | |
Percentage of employer's contribution matching first 4 percent of employee's compensation | 50.00% | |
Percentage of first portion of employee's compensation eligible for employer's matching contribution | 4.00% | |
Percentage of employer's contribution matching next 2 percent of employee's compensation | 100.00% | |
Percentage of second portion of employee's compensation eligible for employer's matching contribution | 2.00% | |
Maximum matching percentage of employee compensation | 4.00% | |
Company's matching contributions to the profit sharing plan (net of employee forfeitures) | $ 0.7 | $ 0.7 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Lease Obligations | ||
Rents charged to expense under operating leases | $ 6,100,000 | $ 5,700,000 |
Minimum future lease commitments | ||
2,019 | 6,307,616 | |
2,020 | 4,671,779 | |
2,021 | 3,731,591 | |
2,022 | 3,026,818 | |
2,023 | 2,153,584 | |
Thereafter | 3,814,291 | |
Total minimum lease payments | 23,705,679 | |
Self-insured liabilities reserve | ||
Liabilities for workers' compensation, general liability and health insurance | 1,600,000 | 1,500,000 |
Beginning balance | 1,500,000 | 1,300,000 |
Charged to expense | 5,800,000 | 6,500,000 |
Payments | (5,700,000) | (6,300,000) |
Ending balance | $ 1,600,000 | $ 1,500,000 |
EQUITY-BASED INCENTIVE AWARDS -
EQUITY-BASED INCENTIVE AWARDS - Stock Options (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Sep. 30, 2018USD ($)item$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | |
Omnibus plan and stock option activity | ||
Number of incentive plans | item | 2 | |
Stock options issued and outstanding | ||
Number Outstanding (in shares) | 33,800 | |
Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 77.85 | |
Stock Options | ||
Omnibus plan and stock option activity | ||
Vesting period | 5 years | 5 years |
Estimated fair value of the stock option awards using the Black-Scholes option pricing model | $ | $ 0.2 | $ 0.1 |
Expiration period | 10 years | 10 years |
Stock Option Pricing Assumptions | ||
Risk-free interest rate (as a percent) | 2.41% | 2.12% |
Dividend yield (as a percent) | 0.80% | 0.60% |
Expected volatility (as a percent) | 33.00% | 22.40% |
Expected life | 6 years | 6 years |
Stock options issued and outstanding | ||
Number Outstanding (in shares) | 33,800 | 28,300 |
Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 77.85 | $ 74.75 |
Number Exercisable (in shares) | 17,300 | |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 68.04 | |
Number of Shares | ||
Granted (in shares) | 6,000 | 6,000 |
Exercised (in shares) | (500) | |
Weighted Average Exercise Price | ||
Granted (in dollars per share) | $ / shares | $ 90.50 | |
Exercised (in dollars per share) | $ / shares | $ 96.50 | |
Aggregate intrinsic value and fair value of options outstanding | ||
Compensation expense related to the amortization of all equity - based compensation awards | $ | $ 0.1 | $ 0.1 |
Total unamortized compensation expense | $ | $ 0.2 | |
Amortization period of unamortized compensation expense | 29 months | |
Aggregate intrinsic value of options outstanding | $ | $ 0.4 | 0.5 |
Aggregate intrinsic value of options exercisable | $ | 0.3 | 0.4 |
Total intrinsic value of options | $ | 0.1 | 0.1 |
Total fair value of options vested | $ | $ 0.4 | $ 0.4 |
Omnibus Plan | ||
Omnibus plan and stock option activity | ||
Number of shares of the company's common stock permitted for issuance under the plan | 225,000 | |
Number of shares awarded pursuant to the plan | 208,095 | |
Number of additional shares that may be awarded under the plan | 5,068 |
EQUITY-BASED INCENTIVE AWARDS_2
EQUITY-BASED INCENTIVE AWARDS - Authorized and Approved Restricted Stock Unit Awards (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2013 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted Stock Units | ||||||
Restricted stock units | ||||||
Original number of awards issued | 13,000 | |||||
Non-vested awards outstanding at the end of the period (in shares) | 26,811 | 27,521 | ||||
Direct cost to the recipients of the restricted stock units | $ 0 | |||||
Compensation expense related to the amortization of all equity - based compensation awards | 1,200,000 | $ 1,300,000 | ||||
Tax benefit related to compensation expense | 300,000 | 500,000 | ||||
Total intrinsic value of equity-based compensation awards vested | 1,200,000 | $ 1,300,000 | ||||
Total unamortized compensation expense | $ 1,100,000 | |||||
Period over which unamortized compensation expense is expected to be amortized | 16 months | |||||
Restricted Stock Units Awarded October 2013 | ||||||
Restricted stock units | ||||||
Original number of awards issued | 17,600 | |||||
Estimated fair value of award at grant date | $ 1,486,000 | |||||
Non-vested awards outstanding at the end of the period (in shares) | 660 | |||||
Fair value of non-vested awards at the end of the period | $ 57,000 | |||||
Vested as of the end of the period (in shares) | 16,940 | |||||
Units scheduled to vest | 660 | |||||
Restricted Stock Units Awarded October 2013 | Minimum | ||||||
Restricted stock units | ||||||
Service period | 36 months | |||||
Restricted Stock Units Awarded October 2013 | Maximum | ||||||
Restricted stock units | ||||||
Service period | 60 months | |||||
Restricted Stock Units Awarded October 2015 | ||||||
Restricted stock units | ||||||
Original number of awards issued | 13,250 | |||||
Estimated fair value of award at grant date | $ 1,112,000 | |||||
Non-vested awards outstanding at the end of the period (in shares) | 4,484 | |||||
Fair value of non-vested awards at the end of the period | $ 390,000 | |||||
Vested as of the end of the period (in shares) | 8,766 | |||||
Restricted Stock Units Awarded October 2015 | Vesting in October 2018 | ||||||
Restricted stock units | ||||||
Units scheduled to vest | 4,334 | |||||
Restricted Stock Units Awarded October 2015 | Vesting annually in October 2018 through October 2020 | ||||||
Restricted stock units | ||||||
Units scheduled to vest | 150 | |||||
Restricted Stock Units Awarded October 2015 | Minimum | ||||||
Restricted stock units | ||||||
Service period | 36 months | |||||
Restricted Stock Units Awarded October 2015 | Maximum | ||||||
Restricted stock units | ||||||
Service period | 60 months | |||||
Restricted Stock Units Awarded October 2016 | ||||||
Restricted stock units | ||||||
Original number of awards issued | 13,000 | |||||
Service period | 36 months | |||||
Estimated fair value of award at grant date | $ 1,191,000 | |||||
Non-vested awards outstanding at the end of the period (in shares) | 8,667 | |||||
Fair value of non-vested awards at the end of the period | $ 754,000 | |||||
Vested as of the end of the period (in shares) | 4,333 | |||||
Units scheduled to vest | 8,667 | |||||
Restricted Stock Units Awarded October 2017 | ||||||
Restricted stock units | ||||||
Original number of awards issued | 13,000 | |||||
Service period | 36 months | |||||
Estimated fair value of award at grant date | $ 1,177,000 | |||||
Non-vested awards outstanding at the end of the period (in shares) | 13,000 | |||||
Fair value of non-vested awards at the end of the period | $ 1,130,000 | |||||
Units scheduled to vest | 13,000 |
EQUITY-BASED INCENTIVE AWARDS_3
EQUITY-BASED INCENTIVE AWARDS - Restricted Stock Unit Activity (Details) - Restricted Stock Units | 12 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Nonvested restricted stock units at the beginning of the period (in shares) | shares | 27,521 |
Granted (in shares) | shares | 13,000 |
Vested (in shares) | shares | (13,710) |
Nonvested restricted stock units at the end of the period (in shares) | shares | 26,811 |
Weighted Average Fair Value | |
Nonvested restricted stock units at the beginning of the period (in dollars per share) | $ / shares | $ 92.25 |
Granted (in dollars per share) | $ / shares | 90.50 |
Vested (in dollars per share) | $ / shares | 90.97 |
Nonvested restricted stock units at the end of the period (in dollars per share) | $ / shares | $ 86.95 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 12 Months Ended | |
Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | |
Information by business segments | ||
Number of reportable business segments | item | 2 | |
Total external revenues | $ 1,322,306,658 | $ 1,274,984,408 |
Depreciation | 2,238,771 | 1,784,475 |
Amortization | 79,375 | 265,000 |
Operating income (loss) | 5,918,941 | 6,224,753 |
Interest expense | 1,194,373 | 825,690 |
Income (loss) from operations before taxes | 4,778,610 | 5,438,576 |
Total assets | 139,954,154 | 131,804,887 |
Capital expenditures | 3,226,107 | 2,565,699 |
Cigarettes | ||
Information by business segments | ||
Total external revenues | 933,920,414 | 909,533,495 |
Tobacco | ||
Information by business segments | ||
Total external revenues | 172,904,744 | 158,899,064 |
Confectionery | ||
Information by business segments | ||
Total external revenues | 78,915,899 | 80,129,898 |
Health food | ||
Information by business segments | ||
Total external revenues | 29,572,602 | 25,421,603 |
Foodservice & other | ||
Information by business segments | ||
Total external revenues | 106,992,999 | 101,000,348 |
Other | ||
Information by business segments | ||
Operating income (loss) | (5,937,027) | (5,638,900) |
Interest expense | 1,103,097 | 723,999 |
Income (loss) from operations before taxes | (7,037,424) | (6,437,900) |
Total assets | 161,372 | 108,330 |
Wholesale Segment | ||
Information by business segments | ||
Total external revenues | 1,292,734,056 | 1,249,562,805 |
Depreciation | 1,338,476 | 1,295,534 |
Amortization | 79,375 | 265,000 |
Operating income (loss) | 15,000,101 | 13,665,234 |
Interest expense | 91,276 | 101,691 |
Income (loss) from operations before taxes | 14,950,647 | 13,663,327 |
Total assets | 125,152,820 | 117,297,333 |
Capital expenditures | 1,590,784 | 525,558 |
Wholesale Segment | Cigarettes | ||
Information by business segments | ||
Total external revenues | 933,920,414 | 909,533,495 |
Wholesale Segment | Tobacco | ||
Information by business segments | ||
Total external revenues | 172,904,744 | 158,899,064 |
Wholesale Segment | Confectionery | ||
Information by business segments | ||
Total external revenues | 78,915,899 | 80,129,898 |
Wholesale Segment | Foodservice & other | ||
Information by business segments | ||
Total external revenues | 106,992,999 | 101,000,348 |
Retail Segment | ||
Information by business segments | ||
Total external revenues | 29,572,602 | 25,421,603 |
Depreciation | 900,295 | 488,941 |
Operating income (loss) | (3,144,133) | (1,801,581) |
Income (loss) from operations before taxes | (3,134,613) | (1,786,851) |
Total assets | 14,639,962 | 14,399,224 |
Capital expenditures | 1,635,323 | 2,040,141 |
Retail Segment | Health food | ||
Information by business segments | ||
Total external revenues | $ 29,572,602 | $ 25,421,603 |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
TREASURY STOCK. | ||
Number of shares of common stock repurchased | 74,880 | 12,036 |
Value of shares of common stock repurchased | $ 7.7 | $ 1.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent events | Oct. 23, 2018shares |
Common Stock repurchase program | |
SUBSEQUENT EVENT | |
Number of shares of the company's common stock permitted for issuance under the plan | 75,000 |
Long term incentive equity awards | |
SUBSEQUENT EVENT | |
Awards granted (in shares) | 15,050 |
Vesting period | 3 years |