On this page of StockholderLetter.com we present the latest annual shareholder letter from AMCON DISTRIBUTING CO — ticker symbol DIT. Reading current and past DIT letters to shareholders can bring important insights into the investment thesis.

 •  11/15/2024 Letter Continued (Full PDF)
 •  12/12/2023 DIT Stockholder Letter
 •  More "Department Stores" Category Stockholder Letters
 •  DIT Benford's Law Stock Score = 78

DIT Shareholder/Stockholder Letter Transcript:

ANNUAL
REPORT
2024

AMCON Distribution Center
C O LO R A D O C I T Y, C O
AMCON Distribution Center
E A ST P EO R I A , I L
AMCON Distribution Center
FA I RV I E W H E I G H TS , I L
AMCON Distribution Center
S O U T H B E N D, I N

O U R FO OT P R I N T
AMCON Distribution Centers
Akin   s
Chamberlin   s
Earth Origins Market
A M CO N FA M I LY O F B R A N D S
    Bismarck, North Dakota
    Colorado City, Colorado
    Crossville, Tennessee
    East Peoria, Illinois
    Fairview Heights, Illinois
    Omaha, Nebraska
    Quincy, Illinois
    Rapid City, South Dakota
    South Bend, Indiana
    Springfield, Missouri (2)
    Wheeling, West Virginia
    Alexandria, Minnesota

L E T T E R TO O U R S H A R E H O L D E R S
LADIES AND GENTLEMEN,
We are pleased to report earnings of $4.3 million, or $7.15 per diluted common share for the fiscal year ended September 30, 2024.
Our shareholders    equity per share increased to $177.25. AMCON Distributing Company   s (   AMCON    or    the Company   ) Leadership
Team and Associates have achieved these financial results by implementing a focused strategic plan centered on short, medium,
and long-term objectives. The objective of our strategic plan is to increase shareholder value, as defined by shareholders    equity per
share, in a conservative, low risk fashion over the long term.
SHORT TERM
In the short term, which we define as up to six months, we focus on the implementation of the various facets of our strategic plan.
The integration of the businesses we acquire, along with opening and developing new facilities requires concentrated management
attention. We also have highly evolved tactics designed to deal with the extreme weather conditions we consistently face due to the
nature of the locations we serve. Our core operating philosophy has a relentless focus on managing the Company   s balance sheet and
maximizing our liquidity position. This philosophy guides our daily decision-making process.
AMCON   s span of operation encompasses a large economic footprint covering thirty-three states, and various customer classes
such as convenience stores, truck stops, superettes, rural grocery stores, and restaurants. We are now the third largest Convenience
Distributor measured by geography served. As a result of a focused team effort, we deliver high quality branded consumer products
and foodservice over a wide territory, in a timely, reliable, and safe manner amid a highly turbulent operating environment. Our
consistency and reliability make us a partner of choice for many of the leading Convenience Store chains in the regions we serve.
Working capital management is one of our Company   s fundamental competencies. We believe balance sheet expertise is a critical
success factor in the distribution industry, as this discipline is the foundation of our ability to generate profits and free cash flow.
The highly liquid balance sheet posture AMCON maintains supports our commitment to excellence in operations, logistics, financial
reporting, and cash management. Our business is capital intensive and requires a significant investment in inventory. We stock
approximately 20,000 SKUs of inventory, which we manage in a dynamic and real-time fashion. During fiscal 2024, we turned our
inventory 18 times while still maintaining high levels of availability on our credit lines.
The strength of AMCON   s balance sheet enables our team to act decisively when strategic and tactical opportunities present
themselves. We maintain deep in-stock inventory positions across many critical product categories. This is a crucial competitive
advantage in the current period of supply chain challenges. In addition, we continued to make targeted investments during the year
in human capital, our facilities, and the Company   s trucking fleet to support the growth of the enterprise.
The partnership AMCON has with our banking group affords us significant availability under our credit facilities. Our banking
relationships are strong and long-term in nature. We understand that we are stewards of the banks    capital and treat it as if it were
our own. In fiscal 2024, we entered into new long-term credit facilities with our existing bank group. These facilities are tailor made
to enhance our balance sheet liquidity and expand the size of our lines as we grow.

L E T T E R TO O U R S H A R E H O L D E R S CO N T     D
MEDIUM TERM
In the medium term, which we define as six to eighteen months, our primary strategic objective is to drive the growth of our foodservice
business through our recent acquisition of
Henry   s Foods, Inc. (   Henry   s   ) in early 2023. Henry   s offers a breadth and depth of
proprietary foodservice programs and associated store level merchandising that is unparalleled in the convenience distribution
industry. Through Henry   s, we now have the capability to offer turn-key solutions that will enable our customers to compete head-on
with the Quick Service Restaurant industry. With the additional depth and capabilities provided by Henry   s distribution platform, our
customers    needs can be custom calibrated to their staffing and facilities. We have also established a full-service advertising design
and printing capability to provide point of sale advertising, electronic advertising and related marketing programs to enhance our
customers    bottom line.
Burklund Distributors, Inc. in East Peoria and Fairview Heights, Illinois,
Richmond Master Distributors, Inc. of South Bend, Indiana, during fiscal 2024. The employees of these two highly regarded
AMCON also was pleased to announce the acquisition of
and
operations have been integrated into AMCON and are playing important roles in our leadership team.
We continue to be pleased with the performance of our subsidiary
Team Sledd, LLC (   Team Sledd   ) which operates in the
Appalachian and Mid-Atlantic regions of the United States.
Collectively AMCON Distributing Company,
Team Sledd and Henry   s comprise our AMCON Family of Brands in the marketplace.
Our Senior Operational Management Team and Leadership Team all have played roles as leaders in our industry associations and are
strong advocates of our shared customer-centric culture. Together we offer our customer-based customized solutions to fit their own
specialized regional marketing needs supported by the strength of our organization in Advertising, Marketing, Purchasing Power, IT and
Logistics. We believe this high value-add model provides our Convenience Customers a competitive advantage in the market.
We also seek to generate free cash flow in the medium term, which we can deploy for a variety of corporate purposes. We established this
objective as a medium-term goal because we frequently have access to attractive short-term product procurement opportunities from
our vendor community. On a tactical basis, we deploy our credit facilities as these merchandising opportunities present themselves. As
a result, we were able to take advantage of numerous procurement opportunities in fiscal 2024. AMCON employs a highly rigorous and
disciplined process whereby we promptly liquify our balance sheet after realizing the product merchandising opportunities. In addition, we
fund various strategic initiatives such as infrastructure, acquisitions, share repurchases, and special dividends.
During the fiscal year, we deployed approximately $0.2 million towards a return-of-capital to shareholders via a special dividend, in
addition to regularly scheduled quarterly dividends. AMCON is a balance sheet driven company and our primary focus from a financial
perspective is on risk-adjusted returns on assets and deployed capital, as we build shareholders    equity per share. Over time, through
profits, we increase the availability on our credit lines.
During the year AMCON deployed approximately $28.4 million towards capital expenditures. To maintain and extend our leadership
position in the convenience distribution industry, our operational infrastructure requires continual upgrades and new investment,
not only in bricks and mortar but also with the latest technology. We continue to actively evaluate potential locations for new
distribution centers in addition to existing facility and infrastructure modernization projects as our customer base expands its
geographic footprint. Competition for new industrial real estate is fierce, however, AMCON maintains a disciplined approach towards
such investments and expansion opportunities.
We are pleased to announce that our new state-of-the-art 200,000 square foot total capacity distribution facility in Springfield, Missouri,
has become operational. This facility has been designed to support a broad range of enhanced foodservice options. In addition, during
the year AMCON acquired a new 250,000 square foot distribution facility in Colorado City, CO. We are in the process of acquiring and
installing the electronics, conveyers, racking, refrigeration, and freezer equipment necessary in equipping this facility. When completed
this state-of-the-art facility will enhance our service capabilities throughout the Mountain West Region.



 11/15/2024 Letter Continued (Full PDF)