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What changed in AMCON DISTRIBUTING CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMCON DISTRIBUTING CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+152 added−183 removedSource: 10-K (2025-11-07) vs 10-K (2024-11-08)

Top changes in AMCON DISTRIBUTING CO's 2025 10-K

152 paragraphs added · 183 removed · 124 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe currently distribute over 20,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery products, beverages, groceries, paper products, health and beauty care products, frozen and refrigerated products and institutional foodservice products.
Biggest changeWe currently distribute over 20,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery products, beverages, groceries, paper products, health and beauty care products, frozen and refrigerated products and institutional foodservice products. We have licenses, and operate, in 34 states, and are the third (3 rd ) largest convenience store distributor by geographic territory served.
ITEM 1. BUSINES S COMPANY OVERVIEW AMCON Distributing Company was incorporated in Delaware in 1986 and our common stock is listed on NYSE American under the symbol “DIT.” The Company serves customers in 33 states through two business segments: ● Our wholesale distribution segment (the “Wholesale Segment”), which includes our Team Sledd, LLC (“Team Sledd”) and Henry’s Foods, Inc.
ITEM 1. BUSINES S COMPANY OVERVIEW AMCON Distributing Company was incorporated in Delaware in 1986 and our common stock is listed on NYSE American under the symbol “DIT.” The Company serves customers in 34 states through two business segments: ● Our wholesale distribution segment (the “Wholesale Segment”), which includes our Team Sledd, LLC (“Team Sledd”) and Henry’s Foods, Inc.
The Company operates in 33 states and is subject to state regulations related to the distribution and sale of cigarettes and tobacco products, generally in the form of licensing and bonding requirements. Additionally, both state and federal regulatory agencies have the ability to impose excise taxes on cigarette and tobacco products.
The Company operates in 34 states and is subject to state regulations related to the distribution and sale of cigarettes and tobacco products, generally in the form of licensing and bonding requirements. Additionally, both state and federal regulatory agencies have the ability to impose excise taxes on cigarette and tobacco products.
The warm weather months generally fall 5 Table of Contents within the Company’s third and fourth fiscal quarters. Our retail health food business does not generally experience significant seasonal fluctuations in its business. GOVERNMENT REGULATION AMCON is subject to regulation by federal, state and local governmental agencies, including but not limited to the U.S. Department of Agriculture (“USDA”), the U.S.
The warm weather months generally fall within the Company’s third and fourth fiscal quarters. Our retail health food business does not generally experience significant seasonal fluctuations in its business. GOVERNMENT REGULATION AMCON is subject to regulation by federal, state and local governmental agencies, including but not limited to the U.S. Department of Agriculture (“USDA”), the U.S.
Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, inventory optimization and merchandising expertise, information systems, and accessing trade credit. Our Wholesale Segment operates 13 distribution centers located in Colorado, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia.
Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, inventory optimization and merchandising expertise, information systems, and accessing trade credit. Our Wholesale Segment operates 14 distribution centers located in Colorado, Idaho, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia.
We serve customers primarily in the Central, Rocky Mountain, Great Lakes, Mid-South and Mid-Atlantic regions of the United States. ​ ● Our retail health food segment (the “Retail Segment”) operates 15 health food retail stores located throughout the Midwest and Florida. ​ WHOLESALE SEGMENT Our Wholesale Segment is one of the largest wholesale distributors in the United States serving approximately 7,900 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops.
We serve customers primarily in the Central, Rocky Mountain, Great Lakes, Mid-South and Mid-Atlantic regions of the United States. ​ ● Our retail health food segment (the “Retail Segment”) operates 15 health food retail stores located throughout the Midwest and Florida. ​ WHOLESALE SEGMENT Our Wholesale Segment is one of the largest wholesale distributors in the United States serving approximately 8,500 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops.
The costs and effect on the Company to comply with state and federal environmental regulations were not significant during either fiscal 2024 or fiscal 2023.
The costs and effect on the Company to comply with state and federal environmental regulations were not significant during either fiscal 2025 or fiscal 2024.
The current labor agreement with the union is effective through November 2026. CORPORATE AND AVAILABLE INFORMATION The Company’s principal executive offices are located at 7405 Irvington Road, Omaha, Nebraska 68122. The telephone number at that address is 402-331-3727 and our website address is www.amcon.com.
The current labor agreement with the union is effective through November 2026. 6 Table of Contents CORPORATE AND AVAILABLE INFORMATION The Company’s principal executive offices are located at 7405 Irvington Road, Omaha, Nebraska 68122. The telephone number at that address is 402-331-3727 and our website address is www.amcon.com.
Sales of candy, beverages, foodservice, groceries, health food products, paper products, health and beauty care products, and tobacco products represented approximately 38% of our consolidated revenue in both fiscal 2024 and fiscal 2023. INFORMATION ON SEGMENTS Information about our segments is presented in Note 13 to the Consolidated Financial Statements included in this Annual Report.
Sales of candy, beverages, foodservice, groceries, health food products, paper products, health and beauty care products, and tobacco products represented approximately 39% and 38% of our consolidated revenue in fiscal 2025 and fiscal 2024, respectively. INFORMATION ON SEGMENTS Information about our segments is presented in Note 13 to the Consolidated Financial Statements included in this Annual Report.
The success of our strategy, however, is ultimately dependent on our ability to provide superior service, develop leading edge technologies, and maintain an exceptional array of product offerings. PRINCIPAL PRODUCTS The sales of cigarettes represented approximately 62% of our consolidated revenue in both fiscal 2024 and fiscal 2023.
The success of our strategy, however, is ultimately dependent on our ability to provide superior service, develop leading edge technologies, and maintain an exceptional array of product offerings. PRINCIPAL PRODUCTS The sales of cigarettes represented approximately 61% and 62% of our consolidated revenue in fiscal 2025 and fiscal 2024, respectively.
We also face competition from Amazon™ which pursues a vertical, multi-channel sales strategy targeting both retail consumers and business level customers. ​ Competition within the wholesale distribution industry is primarily based on the range and quality of the services provided, pricing, variety of products offered, and the reliability of deliveries.
We also face competition from online platforms such as Amazon™ which have pursued a multi-channel sales strategy targeting both retail consumers and business level customers. ​ Competition within the wholesale distribution industry is primarily based on the range and quality of the services provided, pricing, variety of products offered, and the reliability of deliveries.
As the third (3 rd ) largest convenience store distributor in the United States based on geographic territory served and the sixth (6 th ) largest in annual sales (according to Convenience Store News), our wholesale distribution business has sufficient economies of scale to offer competitive pricing as compared to national wholesalers.
As the third (3 rd ) largest convenience store distributor in the United States based on geographic territory served, our wholesale distribution business has sufficient economies of scale to offer competitive pricing as compared to national wholesalers.
Please note that any internet addresses provided in this report are for information purposes only and are not intended to be hyperlinks. Accordingly, no information found and/or provided at such internet addresses is intended or deemed to be incorporated by reference herein.
Please note that any internet addresses provided in this report are for information purposes only and are not intended to be hyperlinks. Accordingly, no information found and/or provided at such internet addresses is intended or deemed to be incorporated by reference herein. The SEC also maintains a website at www.sec.gov which contains reports, proxies and other company information. ​
Our ability to service multiple territories of larger customers, combined with our flexible distribution and support model, enables us to provide the highest level of service and customized merchandising solutions within our industry. COMPETITION—Retail Segment Natural food and supplement retailing is an intensely competitive business.
Our ability to service multiple territories of larger customers, combined with our flexible distribution and support model, enables us to provide the highest level of service and customized merchandising solutions within our industry.
EMPLOYEES At September 2024, the Company had 1,362 full-time and 201 part-time employees, which together serve in the following areas: ​ ​ ​ Managerial 65 Administrative 178 Delivery 308 Sales & Marketing 441 Warehouse 571 Total Employees 1,563 Approximately thirty of our wholesale delivery employees in our Quincy, Illinois distribution center are represented by the International Association of Machinists and Aerospace Workers (“IAMAW”).
EMPLOYEES At September 2025, the Company had 1,341 full-time and 180 part-time employees, which together serve in the following areas: ​ ​ ​ Managerial 66 Administrative 185 Delivery 310 Sales & Marketing 425 Warehouse 535 Total Employees 1,521 Approximately 30 of our wholesale delivery employees in our Quincy, Illinois distribution center are represented by the International Association of Machinists and Aerospace Workers (“IAMAW”).
These distribution centers, combined with cross-dock facilities, include approximately 1.7 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellanova, Kraft Heinz, and Mars Wrigley. We also market private label lines of water, candy products, batteries, and other products.
These distribution centers, combined with cross-dock facilities, include approximately 1.7 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellanova, Kraft Heinz, and Mars Wrigley, General Mills, Procter and Gamble, Ferrero and other major Consumer Packaged Goods and Foodservice suppliers.
We do not maintain any long-term purchase contracts with our suppliers. 3 Table of Contents RETAIL SEGMENT Our Retail Segment, through our Healthy Edge Retail Group subsidiary, is a specialty retailer of natural/organic groceries and operates 15 retail health food stores under the Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market banners.
However, given our size, we do participate in a number of programs designed by our major vendors to support in-stock positions of our key products. 3 Table of Contents RETAIL SEGMENT Our Retail Segment, through our Healthy Edge Retail Group subsidiary, is a specialty retailer of natural/organic groceries and operates 15 retail health food stores under the Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market banners.
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We have licenses, and operate, in 33 states, are the third (3 rd ) largest convenience store distributor by geographic territory served, and in December 2023, Convenience Store News ranked us as the sixth (6th) largest convenience store distributor in the United States based on annual sales.
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We also work closely with our customer base to source private label products on their behalf in a wide variety of categories. In addition, we market our own private label lines of water, candy products, batteries, and other products. We do not maintain any long-term purchase contracts with our suppliers.
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We face competition from a variety of sales channels including local, regional, and national retailers, specialty supermarkets, membership clubs, farmers markets, other natural foods stores, and internet and/or digital direct-to-consumer retailers, each of which competes with us on the basis of product selection, quality, customer service, and price.
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COMPETITION—Retail Segment The Company’s retail stores operate within the highly competitive and fragmented grocery store industry, which includes a wide range of competitors, including local, regional and national conventional supermarkets, warehouse clubs, convenience stores, independent grocers, and many other natural and organic, specialty, discount, co-op, online and other retail formats. ​ Our competitors primarily include other specialty food retailers such as Whole Foods, Sprouts Farmers Market, Trader Joe’s, regional and local Health and Natural Foods operators and co-ops, as well as conventional supermarkets such as Kroger, Albertsons, Safeway, H-E-B and Publix, discount retailers such as Target and Wal-Mart, warehouse membership clubs such as Costco, online retailers such as Amazon TM , specialty stores, restaurants, home delivery and meal solution companies, and any other outlets offering food and similar products as those found in our stores. ​ 5 Table of Contents We believe consumers are increasingly focused on active health management and are seeking out healthy foods, vitamins and supplements to support their wellness goals.
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These competitors include companies such as Whole Foods Market, Sprouts Farmers Market, Natural Grocers, General Nutrition Centers and Vitamin Shoppe. We also face competition from Amazon TM and other online competitors which continue to pursue vertical, multi-channel sales strategies targeting both retail consumers and business level customers.
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The demand for healthy products is driven by many factors, including increased awareness about the benefits of clean eating, a focus on preventative health measures, and a sharp rise in chronic conditions and health care costs. ​ As such, we believe our retail business is uniquely positioned to service this customer base given the breadth of our health and wellness products offerings, combined with the Company’s long and trusted reputation serving the wellness market with highly trained and engaged store associates. ​ SEASONALITY Sales in the wholesale distribution industry are somewhat seasonal and tend to be higher in warm weather months during which our convenience store customers experience increased customer traffic.
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We also compete with specialty supermarkets, other independent natural foods store chains, small specialty stores, and restaurants.
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In recent years, conventional supermarkets and mass market outlets such as Kroger, Albertsons, Walmart, Publix, Aldi, Trader Joe’s and Costco have significantly increased their offerings of organic and natural products adding another layer of competition. ​ SEASONALITY Sales in the wholesale distribution industry are somewhat seasonal and tend to be higher in warm weather months during which our convenience store customers experience increased customer traffic.
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The SEC also maintains a website at www.sec.gov which contains reports, proxies and other company information. ​ 6 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRISK FACTORS RELATED TO THE WHOLESALE BUSINESS ● Regulation of Cigarette, Tobacco and Tobacco-Related Products by the FDA May Negatively Impact Our Operations. In 2009, the Family Smoking Prevention and Tobacco Control Act was signed into law, which granted the FDA the authority to regulate the production, distribution, and marketing of tobacco products in the United States.
Biggest changeIn 2009, the Family Smoking Prevention and Tobacco Control Act was signed into law, which granted the FDA the authority to regulate the production, distribution, and marketing of tobacco products in the United States. Specifically, the legislation established an FDA office to regulate changes to nicotine yields, chemicals, flavors, ingredients, and the labeling used to produce and market tobacco products.
This competition may reduce our margins and/or cause a loss in market share, adversely impacting our results of operations, cash flow, and financial condition. ​ ● We Occasionally Purchase Cigarettes From Manufacturers Not Covered by The Tobacco Industry’s Master Settlement Agreement (“MSA”), Which May Expose Us to Certain Potential Liabilities and Financial Risks for Which We Are Not Indemnified.
This competition may reduce our margins and/or cause a loss in market share, adversely impacting our results of operations, cash flow, and financial condition. ​ ● We Occasionally Purchase Cigarettes From Manufacturers Not Covered by the Tobacco Industry’s Master Settlement Agreement, Which May Expose Us to Certain Potential Liabilities and Financial Risks for Which We Are Not Indemnified.
ITEM 1A. RIS K FACTORS IN GENERAL You should carefully consider the risks described below before making an investment decision concerning our securities. If any of the following risks actually materialize, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline substantially.
ITEM 1A. RIS K FACTORS IN GENERAL You should carefully consider the risks described below before making an investment decision concerning our securities. If any of the following risks materialize, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline substantially.
The purchase of assets, of all or a portion of a business, or an equity investment in another business can bring significant risks to the Company in a number of areas including purchase price, amount of equity investment, business valuation and recording risks, customer retention risks, risks associated with the assumption of liabilities or obligations, integration risks, technology risks, risks associated with the addition of new employees such as health care costs, and a wide range of other risks and considerations.
The purchase of assets, of all or a portion of a business, or an equity investment in another business can bring significant risks to the Company in a number of areas including purchase price, amount of equity investment, business valuation and recording risks, customer retention risks, risks associated with the assumption of liabilities or obligations, integration risks, information technology and cybersecurity risks, risks associated with the addition of new employees such as health care costs, and a wide range of other risks and considerations.
In our retail health food business, we compete with a wide range of well-financed regional and national competitors such as Whole Foods Markets, Trader Joe’s, Sprouts Farmers Market, Natural Grocers, General Nutrition Centers, Vitamin Shoppe, and other online competitors such as Amazon™ who all have embarked on aggressive expansion strategies.
In our retail health food business, we compete with a wide range of well-financed regional and national competitors such as Whole Foods Markets, Sprouts Farmers Market, Natural Grocers, General Nutrition Centers, Vitamin Shoppe, and other online competitors such as Amazon™ who all have embarked on aggressive expansion strategies.
If we are unable to anticipate and satisfy consumer merchandise preferences in the regions where we operate, our sales may decrease, and we may be forced to increase markdowns of slow-moving merchandise, either of which could negatively impact our business, results of operations, cash flow, and financial condition. 10 Table of Contents ● If We or Our Third-Party Suppliers Fail to Comply With Regulatory Requirements, or are Unable to Provide Products that Meet Our Specifications, Our Business and Our Reputation Could be Negatively Impacted.
If we are unable to anticipate and satisfy consumer merchandise preferences in the regions where we operate, our sales may decrease, and we may be forced to increase markdowns of slow-moving merchandise, either of which could negatively impact our business, results of operations, cash flow, and financial condition. ● If We or Our Third-Party Suppliers Fail to Comply With Regulatory Requirements, or are Unable to Provide Products that Meet Our Specifications, Our Business and Our Reputation Could be Negatively Impacted.
We cannot predict how any changes to any of these governmental or regulatory frameworks, or changes in laws, regulations, administrative orders or the interpretation or application of such items, may impact our business. Any changes in the current regulatory environment may change, restrict, or discontinue which products the Company is allowed to sell.
We cannot predict how any changes to any of these governmental or regulatory frameworks, or changes in laws, regulations, administrative orders or the interpretation or application of such items, may impact our business. Any changes in the current regulatory environment may change, restrict, or discontinue which products the Company may sell.
The terms and conditions of existing, renegotiated or new collective bargaining agreements could also increase our costs or otherwise affect our ability to fully implement future operational changes to enhance our efficiency or to adapt to changing business needs or strategy. ● We Are Subject to Significant Governmental Regulation and If We Are Unable to Comply with Regulations That Affect Our Business or If There Are Substantial Changes in These Regulations, Our Business Could Be Adversely Affected.
The terms and conditions of existing, renegotiated or new collective bargaining agreements could also increase our costs or otherwise affect our ability to fully implement future operational changes to enhance our efficiency or to adapt to changing business needs or strategy. 16 Table of Contents ● We Are Subject to Significant Governmental Regulation and If We Are Unable to Comply with Regulations That Affect Our Business or If There Are Substantial Changes in These Regulations, Our Business Could Be Adversely Affected.
If we do not have adequate insurance or if contractual indemnification is not available or if the counterparty cannot fulfill its indemnification obligation, product liability relating to allegedly defective products could have a material adverse impact on our results of operations, cash flow, business, and overall financial condition. ● We May Be Subject to Risks Associated with Insurance Plans Claims.
If we do not have adequate insurance or if contractual indemnification is not available or if the counterparty cannot fulfill its indemnification obligation, product liability relating to allegedly defective products could have a material adverse impact on our results of operations, cash flow, business, and overall financial condition. 13 Table of Contents ● We May Be Subject to Risks Associated with Insurance Plans Claims.
In addition, even if we continue to be indemnified by cigarette manufacturers that are parties to the MSA, future litigation awards against such cigarette manufacturers could be so large as to eliminate the ability of the manufacturers to satisfy their indemnification obligations.
In addition, even if we continue to be indemnified by cigarette manufacturers that are parties to the MSA, future litigation awards against such cigarette manufacturers could be so large as to lessen or eliminate the ability of the manufacturers to satisfy their indemnification obligations.
RISK FACTORS RELATED TO OUR COMMON STOCK ● The Company Has Few Shareholders of Record And, If this Number Remains below 300, as was true as of September 30, 2024, the Company Will No Longer Be Obligated to Report under the Securities Exchange Act of 1934 and in Such Case We May Be Delisted from NYSE American, Reducing the Ability of Investors to Trade in Our Common Stock.
RISK FACTORS RELATED TO OUR COMMON STOCK ● The Company Has Few Shareholders of Record And, If this Number Remains below 300, as was the case as of September 30, 2025, the Company Will No Longer Be Obligated to Report under the Securities Exchange Act of 1934 and in Such Case We May Be Delisted from NYSE American, Reducing the Ability of Investors to Trade in Our Common Stock.
Our results of operations, business, cash flow, and overall financial condition could be negatively impacted due to increased litigation costs and potential adverse rulings against us. ● We Face Competition From Sales of Deep-Discount Brands and Other Low Priced Sales of Cigarettes.
Our results of operations, business, cash flow, and overall financial condition could be negatively impacted due to increased litigation costs and potential adverse rulings against us. 9 Table of Contents ● We Face Competition From Sales of Deep-Discount Brands and Other Low-Priced Sales of Cigarettes.
Most of these competitors may have greater financial and marketing resources than the Company and may be able to devote greater resources to sourcing, promoting, and selling their products. In response to heightened competition, the Company is continuing to implement a repositioning strategy 9 Table of Contents for its retail business.
Most of these competitors may have greater financial and marketing resources than the Company and may be able to devote greater resources to sourcing, promoting, and selling their products. In response to heightened competition, the Company is continuing to implement a repositioning strategy for its retail business.
Customer traffic may be adversely affected by local and regional economic downturns in the areas where our stores are located, long-term nearby road construction projects, the closing of nearby anchor stores or other nearby stores or the decline of the shopping environment in a particular shopping area.
Customer traffic may be adversely affected by local and regional economic downturns in the areas where our stores are located, long-term nearby road construction projects, the closing of nearby anchor stores or other nearby stores or the 10 Table of Contents decline of the shopping environment in a particular shopping area.
In addition, such adverse publicity may result in product liability claims, a loss of reputation, and product recalls which could have a material adverse effect on our sales and operations. ● Impairment Charges for Goodwill or Other Intangible Assets May Have an Adverse Effect on Our Financial Condition and Results of Operations.
In addition, such adverse publicity may result in product liability claims, a loss of reputation, and product recalls which could have a material adverse effect on our sales and operations. 14 Table of Contents ● Impairment Charges for Goodwill or Other Intangible Assets May Have an Adverse Effect on Our Financial Condition and Results of Operations.
In such an event, there can be no assurances that we would be able to obtain waivers for any such breach or default, refinance such indebtedness or obtain alternative financing on satisfactory terms or at all. ● We May Not Be Able to Obtain Capital or Borrow Funds to Provide Us with Sufficient Liquidity and Capital Resources Necessary to Meet Our Future Financial Obligations.
In such an event, there can be no assurances that we would be able to obtain waivers for any such breach or default, refinance such indebtedness or obtain alternative financing on satisfactory terms or at all. 15 Table of Contents ● We May Not Be Able to Obtain Capital or Borrow Funds to Provide Us with Sufficient Liquidity and Capital Resources Necessary to Meet Our Future Financial Obligations.
A period of economic downturn or economic deterioration could result in lower sales and profitability as well as customer credit defaults. ● Periods of Significant or Prolonged Inflation or Deflation Affect Our Product Costs and Profitability. Volatile product costs have a direct impact on our business.
A period of economic downturn or economic deterioration could result in lower sales and profitability as well as an increased probability of customer credit defaults. ● Periods of Significant or Prolonged Inflation or Deflation Affect Our Product Costs and Profitability. Volatile product costs have a direct impact on our business.
Further, the evolving regulatory 7 Table of Contents responsibilities of the FDA are being funded by fees imposed on tobacco companies. These fees have been passed on to wholesale distributors and end consumers in the form of higher prices for cigarette and tobacco products.
Further, the evolving regulatory responsibilities of the FDA are being funded by fees imposed on tobacco companies. These fees have been passed on to wholesale distributors and end consumers in the form of higher prices for cigarette and tobacco products.
If the pricing strategies of the manufacturers change or the manufacturers or states change or discontinue these promotional programs or we are unable to maintain the volume of our sales, our results of operations, business, cash flow, and financial condition could be negatively affected.
If the pricing strategies of the manufacturers change or the manufacturers or states change or discontinue these promotional programs or we are unable to maintain the volume of our sales, our results of 8 Table of Contents operations, business, cash flow, and financial condition could be negatively affected.
Additionally, certain products we sell may require reformulation to meet new standards or comply with new regulations or administrative orders. As such, any related product recalls or product reformulations could result in additional record keeping costs, expanded documentation and tracking costs, and expanded 15 Table of Contents or changed product labeling and/or scientific substantiation.
Additionally, certain products we sell may require reformulation to meet new standards or comply with new regulations or administrative orders. As such, any related product recalls or product reformulations could result in additional record keeping costs, expanded documentation and tracking costs, and expanded or changed product labeling and/or scientific substantiation.
These disruptions could negatively affect our ability to service our customers, could contribute to adverse economic conditions including decreases in demand for the products we distribute, resulting in lower sales and profitability, or could present increased credit risk to the Company from customer credit defaults resulting from an economic downturn.
These disruptions could negatively affect our 12 Table of Contents ability to service our customers, could contribute to adverse economic conditions including decreases in demand for the products we distribute, resulting in lower sales and profitability, or could present increased credit risk to the Company from customer credit defaults resulting from an economic downturn.
These provisions include: ● supermajority voting requirements to amend certain provisions in our certificate of incorporation; ● non-cumulative voting for directors; ● control by our Board of Directors of the size of our Board of Directors; ● limitations on the ability of stockholders to call special meetings of stockholders; and ● advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings. ​
These provisions include: ● supermajority voting requirements to amend certain provisions in our certificate of incorporation; ● non-cumulative voting for directors; ● control by our Board of Directors of the size of our Board of Directors; ● limitations on the ability of stockholders to call special meetings of stockholders; and ● advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings. 17 Table of Contents ITEM 1B.
If the number of owners of record (including direct participants in the Depository Trust Company) of our common stock remains below 300, as was true as of September 30, 2024, our obligation to file reports under the Securities Exchange Act of 1934 could be suspended.
If the number of owners of record (including direct participants in the Depository Trust Company) of our common stock remains below 300, as was the case as of September 30, 2025, our obligation to file reports under the Securities Exchange Act of 1934 could be suspended.
Because we do not control the actual 14 Table of Contents production of the products we sell, we are also subject to delays caused by interruption in production based on conditions beyond our control.
Because we do not control the actual production of the products we sell, we are also subject to delays caused by interruption in production based on conditions beyond our control.
These estimates can be affected by numerous factors, including potential changes in economic, industry or market conditions, changes in business operations, changes 13 Table of Contents in competition or changes in our stock price and market capitalization.
These estimates can be affected by numerous factors, including potential changes in economic, industry or market conditions, changes in business operations, changes in competition or changes in our stock price and market capitalization.
In addition, at September 2024, approximately thirty of our delivery drivers in our Wholesale Segment are covered by a collective bargaining agreement with a labor organization, which expires in November 2026.
In addition, at September 2025, approximately 30 of our delivery drivers in our Wholesale Segment are covered by a collective bargaining agreement with a labor organization, which expires in November 2026.
If we take advantage of this right we will likely reduce administrative costs of complying with public company rules, but periodic and current information updates about the Company would not be available to investors. In addition, the common stock of the Company would be removed from listing on NYSE American.
While the Company currently has no intention to cease reporting, if we take advantage of this right we will likely reduce administrative costs of complying with public company rules, but periodic and current information updates about the Company would not be available to investors. In addition, the common stock of the Company would be removed from listing on NYSE American.
For example, during a transition period while integrating distribution operations from an acquisition we may need to purchase and distribute cigarettes manufactured by non-MSA manufacturers to satisfy the demands of customers of the acquired business.
From time-to-time, however, we find it necessary to purchase a limited amount of cigarettes from non-MSA manufacturers. For example, during a transition period while integrating distribution operations from an acquisition we may need to purchase and distribute cigarettes manufactured by non-MSA manufacturers to satisfy the demands of customers of the acquired business.
The distribution of cigarettes represents a significant portion of our business. During fiscal 2024, approximately 62% of our consolidated revenues came from the distribution of cigarettes, which generated approximately 18% of our consolidated gross profit.
The distribution of cigarettes represents a significant portion of our business. During fiscal 2025, approximately 61% of our consolidated revenues came from the distribution of cigarettes, which generated approximately 17% of our consolidated gross profit.
To date, most of the regulatory and compliance burden related to this legislation has fallen upon product manufacturers. However, if the FDA were to impose new regulations impacting wholesale distributors that we are not able to comply with, we could face remedial actions such as fines, suspension of product distribution rights, and/or termination of operations.
However, if the FDA were to impose new regulations impacting wholesale distributors that we are not able to comply with, we could face remedial actions such as fines, suspension of product distribution rights, and/or termination of operations.
In the event that our product purchase costs from our vendors increase and we cannot pass on those price increases to our customers, or if the retail level demand for the products we sell decreases, the Company’s results of operations, balance sheet, and cash flows could be negatively impacted. ● Employee Healthcare Benefits Represent a Significant Expense for Our Company and May Negatively Affect Our Profitability.
In the event that our product purchase costs from our vendors increase and we cannot pass on those price increases to our customers, or if the retail level demand for the products we sell decreases, the Company’s results of operations, balance sheet, and cash flows could be negatively impacted. ● We May Be Impacted by Acts of Civil Unrest or Violence.
Our results of operations and financial condition are particularly sensitive to changes in the overall economy, including the level of consumer discretionary spending. Consumer discretionary spending may be negatively impacted by inflation, 12 Table of Contents rising interest rates, recessions or other general economic uncertainties or downturns.
Our results of operations and financial condition are particularly sensitive to changes in the overall economy, including the level of consumer discretionary spending. Consumer discretionary spending may be negatively impacted by inflation, rising interest rates, tariffs and trade restrictions, job losses as a result of increasing automation (AI), recessions or other general economic uncertainties or downturns.
The Company purchases products from a wide range of vendors in both of its businesses. Some of our vendors may import certain products as part of their manufacturing processes and could be impacted by higher costs resulting from trade tariffs. Further, the impact of higher costs at the retail level may negatively impact consumer discretionary spending and demand.
Some of our vendors may import certain products as part of their manufacturing processes and could be impacted by higher costs resulting from increases or fluctuations in trade tariffs and/or changes to trade policies. Further, the impact of higher costs at the retail level may negatively impact consumer discretionary spending and demand.
Additionally, many of our Wholesale Segment customers are thinly capitalized and their access to credit may be impacted by changes in economic conditions, systemic pressures in the banking system, including disruptions in the credit markets, rising interest rates or other factors, which may affect their ability to operate as a going concern, presenting additional credit risk for the Company.
Changes in discretionary spending patterns may decrease demand from our convenience store customers and/or impact the demand for natural food products in our retail health food stores as customers purchase less expensive product alternatives. 11 Table of Contents Additionally, many of our Wholesale Segment customers are thinly capitalized and their access to credit may be impacted by changes in economic conditions, systemic pressures in the banking system, including disruptions in the credit markets, rising interest rates or other factors, which may affect their ability to operate as a going concern, presenting additional credit risk for the Company.
Interest rates have a direct impact on our business based on the amount of variable debt the Company utilizes in its operations. Prolonged periods of high interest rates may have a negative impact on the Company’s results of operations, balance sheet, and cash flows. ● We May Be Impacted by Acts of Civil Unrest or Violence.
Interest rates have a direct impact on our business based on the amount of variable debt the Company utilizes in its operations. Prolonged periods of high interest rates may have a negative impact on the Company’s results of operations, balance sheet, and cash flows. ● A Deterioration in Economic Conditions May Negatively Impact Sales in Both Our Business Segments.
We have had and may have disruptions to our information technology systems due to a number of factors including but not limited to electricity outages, equipment failure, telecommunications failures, security breaches, cyber-attacks, computer viruses, malware or other methods and causes.
We rely extensively on our information technology systems and those of third parties to operate our business. Our information technology systems may be subject to damage or interruption from a number of factors, including but not limited to, electricity outages, equipment failure, telecommunications failures, security breaches, cyber-attacks, computer viruses, malware or other methods and causes.
While the Company strives to minimize the risks associated with 11 Table of Contents its acquisition or equity investment activities, issues may arise which could have a material negative impact on the Company’s results of operations, balance sheet, and cash flows. ● We May Be Subject to Risks Associated with Trade Tariffs.
While the Company strives to minimize the risks associated with its acquisition or equity investment activities, issues may arise which could have a material negative impact on the Company’s results of operations, balance sheet, and cash flows. ● Employee Healthcare Benefits Represent a Significant Expense for Our Company and May Negatively Affect Our Profitability.
Our business operations could be negatively impacted by acts of civil unrest or violence, which are beyond our control.
Our business operations could be negatively impacted by acts of civil unrest or violence, or any restrictions, regulations, or security measures implemented by governmental bodies in response to such acts, which are beyond our control.
Such acts could threaten our supply chain, may result in property damage and/or insurance claims to the facilities of the Company or our customers, impact the safety of our workforce or the workforces of our customers, and may also have indirect impacts on customer demand for the products we sell, or our ability to collect on accounts receivable or finance our operations. ● A Major Epidemic or Pandemic or other Widespread Public Health Issue Could Adversely Affect Our Results of Operations and Financial Condition.
Such acts or any responsive governmental action could threaten or disrupt our supply chain, may result in property damage and/or insurance claims to the facilities of the Company or our customers, impact the safety of our workforce or the workforces of our customers, and may also have indirect impacts on customer demand for the products we sell, or our ability to collect on accounts receivable or finance our operations. ● A Significant Disruption to Our Distribution Network, to the Capacity of our Distribution Centers, or to the Timely Receipt of Inventory Could Have an Adverse Effect on Our Business.
The Company may not be able to renew various forms of insurance with adequate levels of coverage, at favorable rates, or obtain insurance at all based upon market conditions within the insurance industry and/or because of the industry in which the Company operates. ● A Deterioration in Economic Conditions May Negatively Impact Sales in Both Our Business Segments.
The Company may not be able to renew various forms of insurance with adequate levels of coverage, at favorable rates, or obtain insurance at all based upon market conditions within the insurance industry and/or because of the industry in which the Company operates. ● We Rely Heavily on Information Technology Systems to Operate Our Business and Any Disruptions to or Data Breach of These Technology Systems or if These Systems were Made Unavailable for Use, May Have a Material Adverse Effect on Our Business.
If any of our information technology systems or those of third parties on which we rely are damaged or made unavailable to us, it could have a material negative impact on our operations and profits. ● Adverse Publicity About the Company or Lack of Confidence in The Products We Carry May Have an Adverse Effect on Our Reputation and Reduce Earnings.
If any of our information technology systems or those of third parties on which we rely are damaged or made unavailable to us, it could have a material negative impact on our operations and profits. ● More Stringent Laws and Regulation Related to Privacy, Data Use, Data Protection and Artificial Intelligence as well as Consumers’ Expectations to Safeguard Their Personal Information May Have an Adverse Effect on our Business.
Finally, if online shopping, direct-to-consumer, and home delivery models continue to grow in popularity thereby further disrupting traditional sales channels, it may present a significant direct risk to brick and mortar retailers like the Company.
Conventional supermarkets and mass market outlets such as Kroger, Albertsons, Walmart, Trader Joe’s and Costco have also significantly increased their offerings of organic and natural products providing another layer of competition. ​ In addition, if online shopping, direct-to-consumer, and home delivery models continue to grow in popularity thereby further disrupting traditional sales channels, it may present a significant direct risk to brick and mortar retailers like the Company.
Further, if the FDA were to issue product bans or product restrictions on cigarettes, tobacco or other nicotine delivery devices, our future revenue stream could materially decrease.
Further, if the FDA were to issue product bans or product restrictions on cigarettes, tobacco or other nicotine delivery devices, our future revenue stream could materially decrease. The current trend is toward increasing regulation of the tobacco industry and vapor products alike, which differ across the various U.S. states in which we conduct business.
If any of these events were to occur, our results of operations, business, cash flow, and financial condition would be adversely affected. The Company operates and plans based on the current structure of government and other regulatory agencies and their related framework of oversight and standards setting.
If any of these events were to occur, our results of operations, business, cash flow, and financial condition would be adversely affected. The Company operates in a highly regulated environment and conducts its business in accordance with the regulatory framework currently in place.
If any of these items were to occur, our results from operations, cash flow, business, and overall financial condition could be negatively impacted. ● The Regulation of Vaping Products May Negatively Impact Our Results of Operations.
A failure by us or our manufacturers to comply with these laws and regulations could negatively impact our results from operations, cash flow, business, and overall financial condition. 7 Table of Contents ● Any Further Regulation of Vaping Products May Negatively Impact Our Results of Operations.
Specifically, the legislation established an FDA office to regulate changes to nicotine yields, chemicals, flavors, ingredients, and the labeling used to produce and market tobacco products. The FDA office is financed through user fees paid by tobacco companies, which is passed on to wholesale distributors and end consumers in the form of higher costs.
The FDA office is financed through user fees paid by tobacco companies, which is passed on to wholesale distributors and end consumers in the form of higher costs. To date, most of the regulatory and compliance burden related to this legislation has fallen upon product manufacturers.
The benefits of liability limitations and indemnities we are entitled to under the MSA do not apply to sales of cigarettes manufactured by non-MSA manufacturers. From time-to-time, however, we find it necessary to purchase a limited amount of cigarettes from non-MSA manufacturers.
In order to limit our potential tobacco-related liabilities, we try to limit our purchases of cigarettes from non-MSA manufacturers for sale in states covered by the MSA. The benefits of liability limitations and indemnities we are entitled to under the MSA do not apply to sales of cigarettes manufactured by non-MSA manufacturers.
In addition to the potential operational risks described above, disruptions caused by a widespread public health issue could present increased reputational risk to the Company or result in legal claims or costly response measures. ● We May Be Subject to Risks Associated with Equity Investments or the Acquisition of Assets or New Businesses.
In addition to the potential operational risks described above, disruptions caused by a widespread public health issue could present increased reputational risk to the Company or result in legal claims or costly response measures. ● Food-safety Issues and Foodborne Illnesses, Whether Actual or Reported, or the Failure to Comply with Applicable Regulations Relating to the Transportation, Storage or Service of Food, Could Adversely Affect Our Business and Reputation.
As a result, our profit levels may be negatively impacted during periods of product cost deflation, even though our gross profit percentage may remain relatively constant. ● We Rely Heavily on Information Technology Systems to Operate Our Business.
As a result, our profit levels may be negatively impacted during periods of product cost deflation, even though our gross profit percentage may remain relatively constant. ● We May Be Subject to Risks Associated with Trade Tariffs or Trade Policies. The Company purchases products from a wide range of vendors in both of its business segments.
Additionally, we compete with specialty supermarkets, other independent natural foods store chains, small specialty stores, and restaurants. Conventional supermarkets and mass market outlets such as Kroger, Albertsons, Walmart, and Costco have also significantly increased their offerings of organic and natural products providing another layer of competition.
Additionally, we compete with specialty supermarkets, other independent natural foods store chains, small specialty stores, and restaurants.
The payments required under the MSA resulted in the products sold by the participating manufacturers being priced at higher levels than the products sold by non-MSA manufacturers. In order to limit our potential tobacco-related liabilities, we try to limit our purchases of cigarettes from non-MSA manufacturers for sale in MSA states.
Certain of the major U.S. tobacco product manufacturers had previously entered into agreements to settle similar claims brought by Mississippi, Florida, Texas and Minnesota. The payments required under the MSA resulted in the products sold by the participating manufacturers being priced at higher levels than the products sold by non-MSA manufacturers.
Removed
In 1994, the Mississippi attorney general brought an action against various tobacco industry members on behalf of the state to recover state funds paid for health-care costs related to tobacco use. Subsequently, most other states sued the major U.S. cigarette manufacturers based on similar theories.
Added
RISK FACTORS RELATED TO THE WHOLESALE BUSINESS ● Regulation of Cigarette, Tobacco and Tobacco-Related Products by the FDA May Negatively Impact Our Operations. Our cigarette, tobacco and tobacco-related products are subject to extensive regulation at the federal, state and local levels.
Removed
The cigarette manufacturer defendants settled the first four of these cases with Mississippi, Florida, Texas and Minnesota by separate agreements. These states are referred to as non-MSA states. In November 1998, the major U.S. tobacco product manufacturers entered into the MSA with the remaining 46 states, the 8 Table of Contents District of Columbia and certain U.S. territories.
Added
Extensive and inconsistent regulation by multiple states and at different governmental levels could prove to be particularly disruptive to our business. There can be no assurance that we or the manufacturers we rely on as suppliers will be in compliance with all of these regulations.
Removed
The MSA and the other state settlement agreements settled health-care cost recovery actions and monetary claims relating to future conduct arising out of the use of, or exposure to, tobacco products, imposed a stream of future payment obligations on major U.S. cigarette manufacturers and placed significant restrictions on the ability to market and sell cigarettes.
Added
In November 1998, the major U.S. tobacco product manufacturers entered into the Master Settlement Agreement (“MSA”) with 46 U.S. states and certain U.S. territories concerning the advertising, marketing and promotion of tobacco products and to settle asserted and unasserted health care cost recovery and other claims related to use of, or exposure to, tobacco use.
Removed
Changes in discretionary spending patterns may decrease demand from our convenience store customers and/or impact the demand for natural food products in our retail health food stores as customers purchase less expensive product alternatives.
Added
Both of our operating segments rely on distribution and transportation networks, which includes our drivers, our distribution center employees, and the networks of our suppliers and retail store delivery partners, to deliver products to us and our customers in a timely and cost-effective manner.
Removed
Any Disruptions to These Technology Systems or if These Systems were Made Unavailable for Use, May Have a Material Adverse Effect on Our Business. We rely extensively on our information technology systems and those of third parties to operate our business.
Added
Any unanticipated or significant disruption or operational failure related to this process could negatively affect our operations or the operations of our retail partners, including but not limited to, our inability, or that of our delivery partners, to hire and/or retain qualified drivers and distribution center employees to meet demand, product shortages, financial or other difficulties of suppliers, cyber-related events, social unrest, inclement weather or other economic conditions. ● A Major Epidemic or Pandemic or other Widespread Public Health Issue Could Adversely Affect Our Results of Operations and Financial Condition.
Added
Any instances of, or reports linking products we sell, related to foodborne illnesses, food tampering, contamination, mislabeling or other food-safety issues could damage the value of our brand and may lead to product liability and personal injury claims, litigation, government investigations and damages.
Added
In addition, customer preferences and store traffic could be adversely impacted by food-safety issues, health concerns or negative publicity about the consumption of products we sell, which could damage our reputation and cause a decline in demand for those products and adversely impact our sales.
Added
In addition, a failure by any of our suppliers to use quality ingredients and products and/or to comply with applicable food and food-safety laws and industry standards could disrupt our supply chain, damage our reputation and adversely impact our business, financial condition and results of operation. ● We May Be Subject to Risks Associated with Equity Investments or the Acquisition of Assets or New Businesses.
Added
The rapid evolution and increased adoption of emerging technologies, such as artificial intelligence, may also increase the frequency and magnitude of cyber-attacks.
Added
We are subject to laws, rules and regulations that restrict the collection, use and security of personal information of consumers, employees or others.
Added
Regulatory actions seeking to impose significant financial penalties for noncompliance and/or legal actions (including those pursuant to laws providing for private rights of action by consumers) could be brought against the Company in the event that data or consumer information is compromised and/or misused, or from perceived or actual non-compliance with data protection, privacy or artificial intelligence requirements.
Added
The rapid evolution and increased adoption of artificial intelligence technologies may intensify these risks.
Added
Further, any unauthorized release of personal information could harm our reputation, disrupt our business, cause us to expend significant resources and lead to a loss of consumer confidence resulting in an adverse impact on our business. ● Adverse Publicity About the Company or Lack of Confidence in The Products We Carry May Have an Adverse Effect on Our Reputation and Reduce Earnings.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information on risks related to the Company's information technology systems, including cybersecurity threats that may materially affect the Company's business, see the risk factors included under Item 1A of this Annual Report on Form 10-K (“We Rely Heavily on Information Technology Systems to Operate Our Business.
Biggest changeFor more information on risks related to the Company's information technology systems, including cybersecurity threats that may materially affect the Company's business, see the risk factors included under Item 1A of this Annual Report on Form 10-K (“We Rely Heavily on Information Technology Systems to Operate Our Business and Any Disruptions to or Data Breach of These Technology Systems or if These Systems were Made Unavailable for Use, May Have a Material Adverse Effect on Our Business”). ​
These processes also cover risks from cybersecurity threats associated with our use of information technology systems of third-parties upon which we rely. ​ The day-to-day management of the Company’s cybersecurity framework is managed by the Company’s information technology team while operational oversight of its design and function are managed by the Company’s management team including, but not limited to, its Chief Operating Officer (COO), Chief Financial Officer (CFO), Director of Industrial Engineering, and Director of Information Technology, all of whom have substantial experience managing enterprise risk, including cybersecurity risks.
These processes also cover risks from cybersecurity threats associated with our use of information technology systems of third-parties upon which we rely. ​ The day-to-day management of the Company’s cybersecurity framework is managed by the Company’s information technology team while operational oversight of its design and function are managed by the Company’s management team including, but not limited to, its Chief Operating Officer (COO), Chief Financial Officer (CFO), Vice President Implementation and Launch, and Director of Information Technology, all of whom have substantial experience managing enterprise risk, including cybersecurity risks.
Removed
Any Disruptions to These Technology Systems or if These Systems were Made Unavailable for Use, May Have a Material Adverse Effect on Our Business”). ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs further described in Note 7 to the Consolidated Financial Statements, certain of our distribution facilities in Quincy, Illinois, Springfield, Missouri, Bismarck, North Dakota, Rapid City, South Dakota, Colorado City, Colorado, East Peoria, Illinois and Fairview Heights, Illinois are owned by the Company and are included as collateral under AMCON’s credit facility (“the AMCON Facility”).
Biggest changeAs further described in Note 7 to the Consolidated Financial Statements, certain of our distribution facilities in Quincy, Illinois, 18 Table of Contents Strafford, Missouri, Bismarck, North Dakota, Rapid City, South Dakota, Colorado City, Colorado, East Peoria, Illinois, Fairview Heights, Illinois and Boise, Idaho are owned by the Company and are included as collateral under AMCON’s credit facility (“the AMCON Facility”).
Management believes that its existing facilities are adequate for the Company’s current level of operations, however, larger facilities and additional cross-dock facilities and retail stores may be required if the Company experiences growth in certain market areas. ITEM 3. LEGAL PROCEEDINGS None. ​
Management believes that its existing facilities are adequate for the Company’s current level of operations, however, larger facilities and/or additional cross-dock facilities and retail stores may be required if the Company experiences growth in certain market areas. ITEM 3. LEGAL PROCEEDINGS None. ​
Henry’s distribution center in Alexandria, Minnesota is owned by the Company and is included as collateral under Henry’s credit facility (“the Henry’s Facility”). Team Sledd’s principal office and warehouse in 17 Table of Contents Wheeling, West Virginia are collateral against two separate notes payable and Team Sledd’s credit facility (the “Team Sledd Facility”).
Henry’s distribution center in Alexandria, Minnesota is owned by the Company and is included as collateral under Henry’s credit facility (“the Henry’s Facility”). Team Sledd’s principal office and warehouse in Wheeling, West Virginia are collateral against two separate notes payable and Team Sledd’s credit facility (the “Team Sledd Facility”).
PROPERTIE S The location and approximate square footage of the Company’s 13 distribution centers and 15 retail stores at September 2024 are set forth below: ​ ​ ​ Location Square Feet Distribution—CO, IL, IN, MN, MO, ND, NE, SD, TN & WV 1,705,000 Retail—AR, FL, & OK 163,000 Total Square Footage 1,868,000 The Company leases certain distribution facilities, retail stores, offices, and certain equipment under operating leases.
PROPERTIE S The location and approximate square footage of the Company’s 14 distribution centers and 15 retail stores at September 2025 are set forth below: ​ ​ ​ Location Square Feet Distribution—CO, ID, IL, IN, MN, MO, ND, NE, SD, TN & WV 1,732,000 Retail—AR, FL, & OK 163,000 Total Square Footage 1,895,000 The Company leases certain distribution facilities, retail stores, offices, and certain equipment under operating leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings 18 Item 4. Mine Safety Disclosures 18 PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19 Item 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A.
Biggest changeItem 3. Legal Proceedings 19 Item 4. Mine Safety Disclosures 19 PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 31 Item 8. Financial Statements and Supplementary Data 32
Quantitative and Qualitative Disclosures About Market Risk 30 Item 8. Financial Statements and Supplementary Data 31

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAtayan 64 Chairman of the Board, Chief Executive Officer, Director Andrew C. Plummer 50 President, Chief Operating Officer, Director Charles J. Schmaderer ​ 55 ​ Vice President, Chief Financial Officer, Secretary ​ CHRISTOPHER H.
Biggest changeAtayan 65 Chairman of the Board, Chief Executive Officer, Director Andrew C. Plummer 51 President, Chief Operating Officer, Director Charles J. Schmaderer ​ 56 ​ Vice President, Chief Financial Officer, Secretary ​ CHRISTOPHER H.
Schmaderer held financial management roles with Hewlett Packard (HP) and before that practiced public accounting, primarily with the accounting firm Grant Thornton, LLP. Mr. Schmaderer also holds a Master of Business Administration (MBA) from the University of Nebraska-Omaha. ​ ​ 18 Table of Contents PART I I
Schmaderer held financial management roles with Hewlett Packard (HP) and before that practiced public accounting, primarily with the accounting firm Grant Thornton, LLP. Mr. Schmaderer also holds a Master of Business Administration (MBA) from the University of Nebraska-Omaha. ​ 19 Table of Contents PART I I

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAt September 2024, 75,000 shares of the Company’s common shares remained authorized for repurchase in either the open market or privately negotiated transactions, as previously approved by the Company’s Board of Directors in October 2023. Management has discretion to determine the timing of any repurchases, as well as the number and pricing of any shares to be repurchased.
Biggest changeThe Company did not repurchase any shares of its common stock during fiscal 2024. At September 2025, 65,147 shares of the Company’s common shares remained authorized for repurchase in either the open market or privately negotiated transactions, as previously approved by the Company’s Board of Directors.
As of that date, the Company had approximately 795 persons holding common shares beneficially of which approximately 140 are shareholders of record (including direct participants in the Depository Trust Company). DIVIDEND POLICY On a quarterly basis, the Company’s Board of Directors evaluates the potential declaration of dividend payments on the Company’s common stock.
As of that date, the Company had approximately 756 persons holding common shares beneficially of which approximately 130 are shareholders of record (including direct participants in the Depository Trust Company). DIVIDEND POLICY On a quarterly basis, the Company’s Board of Directors evaluates the potential declaration of dividend payments on the Company’s common stock.
The Company paid cash dividends of approximately $0.6 million, or $1.00 per common share, and $3.5 million, or $5.72 per common share, during fiscal 2024 and fiscal 2023, respectively. During the fiscal years ended September 30, 2024 and September 30, 2023, the Company did not sell any unregistered securities.
The Company paid cash dividends of approximately $0.6 million, or $1.00 per common share, in each of fiscal 2025 and fiscal 2024, respectively. During the fiscal years ended September 30, 2025 and September 30, 2024, the Company did not sell any unregistered securities.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET FOR COMMON STOCK The Company’s common stock trades on NYSE American under the trading symbol “DIT”. As of November 6, 2024, the closing price of our common stock on NYSE American was $132.00 and there were 645,462 common shares outstanding.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET FOR COMMON STOCK The Company’s common stock trades on NYSE American under the trading symbol “DIT”. As of November 5, 2025, the closing price of our common stock on NYSE American was $116.54 and there were 650,709 common shares outstanding.
Our dividend policy is intended to return capital to shareholders when it is most appropriate. The AMCON Facility described in Note 7 of Part II, Item 8 provides that the Company may not pay dividends on its common shares in excess of $5.0 million on an annual basis.
The AMCON Facility described in Note 7 of Part II, Item 8 provides that the Company may not pay dividends on its common shares in excess of $7.0 million on an annual basis in fiscal years 2025 and 2026, and $5.0 million on an annual basis thereafter.
The Company issued unregistered securities to certain members of the Company’s management team in relation to the vesting of restricted stock units as described in Note 12 of Part II, Item 8. These issuances were exempt from registration under Section 4(a)(2) of the Securities Act of 1933.
The Company issued unregistered securities to certain members of the Company’s management team in relation to the granting of restricted stock awards as described in Note 12 of Part II, Item 8.
EQUITY COMPENSATION PLAN INFORMATION We refer you to Item 12 of this report for the information required by Item 201(d) of SEC Regulation S-K. ​
Management was given discretion to determine the number and pricing of the shares to be purchased, as well as the timing of any such purchases. EQUITY COMPENSATION PLAN INFORMATION We refer you to Item 12 of this report for the information required by Item 201(d) of SEC Regulation S-K. ​
REPURCHASE OF COMPANY SHARES The Company did not repurchase any shares of its common stock during fiscal 2024. During fiscal 2023, the Company repurchased a total of 2,363 shares of its common stock for cash totaling approximately $0.4 million. All repurchased shares were recorded in treasury stock at cost.
These issuances were exempt from registration under Section 4(a)(2) of the Securities Act of 1933. ​ 20 Table of Contents REPURCHASE OF COMPANY SHARES During fiscal 2025, the Company repurchased a total of 9,853 shares of its common stock for cash totaling approximately $1.1 million. All repurchased shares were recorded in treasury stock at cost.
Added
Our dividend policy is intended to return capital to shareholders when it is most appropriate.
Added
In October 2025, the Board of Directors renewed the repurchase authorization for up to 75,000 shares of the Company’s common stock. During the fourth quarter of fiscal 2025, the Company repurchased shares of its common stock for cash totaling approximately $1.1 million.
Added
The following table summarizes these repurchases made by or on behalf of the Company or certain affiliated purchasers of shares of our common stock for the quarterly period ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ (a) Total Number of Shares (or Units) Purchased ​ (b) Average Price Paid per Share (or Unit) ​ (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs ​ (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs* July 1 - 31, 2025 — $ - — 75,000 August 1 - 31, 2025 9,853 ​ 115.00 9,853 65,147 September 1 - 30, 2025 — ​ ​ - — 65,147 Total 9,853 ​ $ 115.00 9,853 65,147 * In October 2025 and subsequent to the end of fiscal 2025, the Board of Directors authorized purchases of up to 75,000 shares of our Company’s common stock in open market or negotiated transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIt should be understood that the following important factors, in addition to those discussed elsewhere in this document, could affect the future results of the Company and could cause those results to differ materially from those expressed in our forward-looking statements: ● risks associated with all forms of insurance renewals and the risk that the Company may not be able to renew various insurance with adequate levels of coverage, at favorable rates, or obtain insurance at all based upon market conditions within the insurance industry and/or because of the industry in which the Company operates, ​ ● risks associated with unrest in certain global regions which could further disrupt world supply chains, manufacturing centers, and shipping routes, impacting commodity/product availability and/or cost, as well as consumer demand trends, ​ 29 Table of Contents ● risks associated with higher interest rates or prolonged periods of higher interest rates and the related impact on demand, customer credit risk, profitability, and cash flows for both the Company and its customer base, particularly as it relates to variable interest rate borrowings, as well as the risk that such borrowings may not be renewed in the future on favorable terms or at all, ​ ● risks associated with any systemic pressures in the banking system, particularly as they relate to customer credit risk and any resulting impact on our cash flow and our ability to collect on our receivables, ​ ● risks associated with an inflationary operating environment, particularly as it relates to wages, fuel, interest, commodity prices, and customer credit risk, which impact our operating cost structure and could impact food ingredient costs and demand for many of the products we sell, ​ ● regulations, potential bans, limitations and/or litigation related to the manufacturing, distribution, and sale of certain cigarette, e-cigarette, tobacco, and vaping products imposed by the FDA, state or local governmental agencies, or other parties, including proposed and pending regulations and/or product approvals/authorizations related to the manufacturing, distribution and sale of certain menthol, vaping, and flavored tobacco products, ​ ● risks associated with the threat or occurrence of epidemics or pandemics (such as COVID-19 or its variants) or other public health issues, including the continued health of our employees and management, the reduced demand for our goods and services or increased credit risk from customer credit defaults resulting from an economic downturn, ​ ● risks associated with the imposition of governmental orders restricting our operations and the operations of our suppliers and customers, in particular, disruptions to our supply chain or our ability to procure products or fulfill orders due to labor shortages in our warehouse operations, ​ ● risks associated with events such as the COVID-19 pandemic, during which the Company experienced both higher sales volumes and labor costs but then subsequently experienced a decline in sales volumes, with limited ability to offset or pass on higher operating costs, ​ ● risks associated with the acquisition of businesses or assets, capital asset expenditure projects by either of our business segments such the development of new facilities/locations or upgrades to distribution centers or retail stores, including, but not limited to, risks associated with consummating such transactions on expected terms or timing, purchase price and business valuation and recording risks, and risks related to the assumption of certain liabilities or obligations, ● risks associated with the integration of new businesses or equity investments by either of our business segments including, but not limited to, risks associated with vendor and customer retention, technology integration, and the potential loss of any key management personnel or employees, ● increasing competition and market conditions in our wholesale and retail health food businesses and any associated impact on the carrying value and any potential impairment of assets (including intangible assets) within those businesses, ​ ● risk that our repositioning strategy for our retail business will not be successful, ​ ● risks associated with opening new retail stores, ​ ● risks to our brick and mortar retail business and potentially to our wholesale distribution business if online shopping formats such as Amazon™ continue to grow in popularity and further disrupt traditional sales channels, ​ ● the potential impact that ongoing or proposed increases in trade tariffs and/or changes to trade policies may have on raw materials or finished goods sourced from abroad which could result in higher prices for the products we sell while also decreasing consumer disposable income and demand, 30 Table of Contents ● increasing product and operational costs resulting from ongoing supply chain disruptions, an intensely competitive labor market with a limited pool of qualified workers, and higher incremental costs associated with the handling and transportation of certain product categories such as foodservice, ​ ● increases in state and federal excise taxes on cigarette and tobacco products and the potential impact on demand, particularly as it relates to current legislation under consideration which could significantly increase such taxes, ​ ● risks associated with disruptions to our technology systems or those of third parties upon which we rely, including security breaches, cyber and ransomware attacks, malware, or other methods by which such information systems could or may have been compromised or impacted, ​ ● increases in inventory carrying costs and customer credit risks, ​ ● changes in pricing strategies and/or promotional/incentive programs offered by cigarette and tobacco manufacturers, ​ ● changing demand for the Company’s products, particularly cigarette, tobacco and vaping products, ​ ● risks that product manufacturers may begin selling directly to convenience stores and bypass wholesale distributors, ​ ● changes in laws and regulations and ongoing compliance related to health care and associated insurance, ​ ● increasing health care costs for both the Company and consumers and its potential impact on discretionary consumer spending, ​ ● decreased availability of capital resources, ​ ● domestic regulatory and legislative risks, ​ ● poor weather conditions, and the adverse effects of climate change, ​ ● consolidation trends within the convenience store, wholesale distribution, and retail health food industries, ​ ● risks associated with labor disputes (strikes), natural disasters, domestic/political unrest and incidents of violence, or any restrictions, regulations, or security measures implemented by governmental bodies in response to these items, and ​ ● other risks over which the Company has little or no control, and any other factors not identified herein. ​ Changes in these factors could result in significantly different results.
Biggest changeIt should be understood that the following important factors, in addition to those discussed elsewhere in this document, could affect the future results of the Company and could cause those results to differ materially from those expressed in our forward-looking statements: ● the potential impact that ongoing or proposed increases or fluctuations in trade tariffs and/or changes to trade policies may have on raw materials or finished goods sourced from abroad which could result in higher prices for the products we sell while also decreasing consumer disposable income and demand, ​ ● risks associated with new tariffs or other macroeconomic considerations such as changes to government programs or funds which may impact discretionary consumer spending, operating costs, and overall business risk, particularly as it relates to product and equipment costs, wages, fuel, interest, food ingredient and commodity prices, customer credit risk, and ultimately our ability to absorb the impact of these items or pass them on where possible, ​ ● risks associated with continued weakness in retail level demand within the convenience store industry including declining demand for cigarette products, ​ ● risks associated with workforce availability and/or wage pressures which may be impacted by economic conditions, changes in governmental policies, or other changes in the operating environment which may impact our labor force, ​ ● risks associated with all forms of insurance renewals and the risk that the Company may not be able to renew various insurance with adequate levels of coverage, at favorable rates, or obtain insurance at all based upon market conditions within the insurance industry and/or because of the industry in which the Company operates, ​ ● risks associated with unrest in certain global regions which could further disrupt world supply chains, manufacturing centers, and shipping routes, impacting commodity/product availability and/or cost, as well as consumer demand trends, ​ ● risks associated with higher interest rates or prolonged periods of higher interest rates and the related impact on demand, customer credit risk, profitability, and cash flows for both the Company and its customer base, particularly as it relates to variable interest rate borrowings, as well as the risk that such borrowings may not be renewed in the future on favorable terms or at all, ​ ● risks associated with any systemic pressures in the banking system, particularly as they relate to customer credit risk and any resulting impact on our cash flow and our ability to collect on our receivables, ​ ● regulations, potential bans, limitations and/or litigation related to the manufacturing, distribution, and sale of certain cigarette, e-cigarette, tobacco, and vaping products imposed by the FDA, state or local governmental agencies, or other parties, including proposed and pending regulations and/or product approvals/authorizations related to the manufacturing, distribution and sale of certain menthol, vaping, and flavored tobacco products, including proposed rules which would limit nicotine levels in certain cigarette and tobacco products, ​ 28 Table of Contents ● risks associated with the threat or occurrence of epidemics or pandemics (such as COVID-19 or its variants) or other public health issues, including the continued health of our employees and management, the reduced demand for our goods and services or increased credit risk from customer credit defaults resulting from an economic downturn, ​ ● risks associated with the imposition of governmental orders restricting our operations and the operations of our suppliers and customers, in particular, disruptions to our supply chain or our ability to procure products or fulfill orders due to labor shortages in our warehouse operations, ​ ● risks associated with macroeconomic, black swan, or other similar events (e.g., stock market crashes, global unrest, supply chain disruptions, pandemics, etc.) that may impact the Company’s sales volumes and/or cost structure and for which the Company has limited ability within its business model to offset the related financial impact, ​ ● risks associated with the acquisition of businesses or assets, capital asset expenditure projects by either of our business segments such the development of new facilities/locations or upgrades to distribution centers or retail stores, including, but not limited to, risks associated with consummating such transactions on expected terms or timing, purchase price and business valuation and recording risks, customer turnover and retention risks, and risks related to the assumption of certain liabilities or obligations, ● risks associated with the integration of new businesses or equity investments by either of our business segments including, but not limited to, risks associated with vendor and customer retention, technology integration, and the potential loss of any key management personnel or employees, ● increasing competition and market conditions in our wholesale and retail health food businesses and any associated impact on the carrying value and any potential impairment of assets (including intangible assets) within those businesses, ​ ● risk that our repositioning strategy for our retail business will not be successful, ​ ● risks associated with opening new, or closing unprofitable, retail stores, ​ ● risks to our brick and mortar retail business and potentially to our wholesale distribution business if online shopping formats such as Amazon™ continue to grow in popularity and further disrupt traditional sales channels, ​ ● increasing product and operational costs resulting from ongoing supply chain disruptions, an intensely competitive labor market with a limited pool of qualified workers, and higher incremental costs associated with the handling and transportation of certain product categories such as foodservice, ​ ● increases in state and federal excise taxes on cigarette and tobacco products and the potential impact on demand, particularly as it relates to current legislation under consideration which could significantly increase such taxes, ​ ● risks associated with disruptions to our technology systems or those of third parties upon which we rely, including security breaches, cyber and ransomware attacks, malware, or other methods by which such information systems could or may have been compromised or impacted, ​ ● increases in inventory carrying costs and customer credit risks, ​ ● changes in pricing strategies and/or promotional/incentive programs offered by cigarette and tobacco manufacturers, ​ ● changing demand for the Company’s products, particularly cigarette, tobacco and vaping products, ​ ● risks that product manufacturers may begin selling directly to convenience stores and bypass wholesale distributors, ​ ● changes in laws and regulations and ongoing compliance related to health care and associated insurance, 29 Table of Contents ● increasing health care costs for both the Company and consumers and its potential impact on discretionary consumer spending, ​ ● decreased availability of capital resources and/or our access to credit to adequately fund our operations, ​ ● domestic regulatory and legislative risks, ​ ● adverse weather including the impact of climate change and/or other sudden and unanticipated changes in weather conditions that may materially impact our operations temporarily (e.g., wildfires, floods, wind storms, tornadoes, extreme temperature changes, ice storms, blizzards, or other violent storms), ​ ● consolidation trends within the convenience store, wholesale distribution, and retail health food industries, ​ ● risks associated with labor disputes (strikes), natural disasters, domestic/political unrest and incidents of violence, or any restrictions, regulations, or security measures implemented by governmental bodies in response to these items, and ​ ● other risks over which the Company has little or no control, and any other factors not identified herein. ​ Changes in these factors could result in significantly different results.
The Henry’s Facility matures in February 2026, the AMCON Facility matures in June 2027, and the Team Sledd Facility matures in March 2028, each without a penalty for prepayment. Obligations under the Facilities are collateralized by substantially all of the Company’s respective equipment, intangibles, inventories, accounts receivable, and certain real estate.
The AMCON Facility matures in June 2027, the Henry’s Facility matures in February 2028, and the Team Sledd Facility matures in March 2028, each without a penalty for prepayment. Obligations under the Facilities are collateralized by substantially all of the Company’s respective equipment, intangibles, inventories, accounts receivable, and certain real estate.
Fiscal 2023 The change in the Company’s effective tax rate during fiscal 2024 as compared to fiscal 2023 was primarily related to non-deductible compensation expense in relation to the amount of income from operations before income tax expense and variances in the average effective state income tax rates between the comparative periods. ​ Liquidity and Capital Resources The Company’s variability in cash flows from operating activities is dependent on the timing of inventory purchases and seasonal fluctuations.
Fiscal 2024 The change in the Company’s effective tax rate during fiscal 2025 as compared to fiscal 2024 was primarily related to non-deductible compensation expense in relation to the amount of income from operations before income tax expense and variances in the average effective state income tax rates between the comparative periods. ​ Liquidity and Capital Resources The Company’s variability in cash flows from operating activities is dependent on the timing of inventory purchases and seasonal fluctuations.
Fiscal 2023 Our gross profit does not include fulfillment costs and costs related to the distribution network which are included in selling, general and administrative costs, and may not be comparable to those of other entities. Some entities may classify such costs as a component of cost of sales.
Fiscal 2024 Our gross profit does not include fulfillment costs and costs related to the distribution network which are included in selling, general and administrative costs, and may not be comparable to those of other entities. Some entities may classify such costs as a component of cost of sales.
The Company primarily finances its operations through three credit facility agreements (a) a facility that is an obligation of AMCON Distributing Company (the “AMCON Facility”), (b) a facility that is an obligation of Team Sledd (the “Team Sledd Facility”) and (c) a facility that is the obligation of Henry’s (the “Henry’s Facility”), and collectively together (the “Facilities”) and long-term debt agreements with banks.
The Company primarily finances its operations through three credit facility agreements (a) a facility that is an obligation of AMCON Distributing Company (the “AMCON Facility”), (b) a facility that is an obligation of Team Sledd (“Team Sledd” and, the “Team Sledd Facility”) and (c) a facility that is the obligation of Henry’s (the “Henry’s Facility”) (collectively, the “Facilities”) and long-term debt agreements with banks.
The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. ​ FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections, contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results.
The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. 27 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections, contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results.
(2) Calculated based on rounded numbers as presented in the table. 21 Table of Contents SALES Changes in sales are primarily driven by: (i) changes to selling prices, which are largely controlled by our product suppliers, and excise taxes imposed on cigarettes and tobacco products by various states; (ii) changes in the volume and mix of products sold to our customers, either due to a change in purchasing patterns resulting from shifting consumer preferences or the fluctuation in the comparable number of business days in our reporting period; and (iii) acquisitions SALES—Fiscal 2024 vs.
(2) Calculated based on rounded numbers as presented in the table. 23 Table of Contents SALES Changes in sales are primarily driven by: (i) changes to selling prices, which are largely controlled by our product suppliers, and excise taxes imposed on cigarettes and tobacco products by various states; (ii) changes in the volume and mix of products sold to our customers, either due to a change in purchasing patterns resulting from shifting consumer preferences or the fluctuation in the comparable number of business days in our reporting period; and (iii) acquisitions SALES—Fiscal 2025 vs.
Fiscal 2023 Operating expense includes selling, general and administrative expenses and depreciation and amortization. Selling, general, and administrative expenses primarily consist of costs related to our sales, warehouse, delivery and administrative departments, including purchasing and receiving costs, warehousing costs and costs of picking and loading customer orders.
Fiscal 2024 Operating expense includes selling, general and administrative expenses and depreciation and amortization. Selling, general, and administrative expenses primarily consist of costs related to our sales, warehouse, delivery and administrative departments, including purchasing and receiving costs, warehousing costs and costs of picking and loading customer orders.
Cost of sales, a component used in determining gross profit, for the Wholesale and Retail Segments includes the cost of products purchased from manufacturers, less incentives we receive which are netted against such costs. Gross profit in our Wholesale Segment increased $11.5 million during fiscal 2024 as compared to fiscal 2023.
Cost of sales, a component used in determining gross profit, for the Wholesale and Retail Segments includes the cost of products purchased from manufacturers, less incentives we receive which are netted against such costs. Gross profit in our Wholesale Segment increased $5.0 million during fiscal 2025 as compared to fiscal 2024.
At September 2024, the Facilities have a total combined borrowing capacity of $300.0 million, which includes provisions for up to $30.0 million in credit advances for certain inventory purchases, which are limited by accounts receivable and 23 Table of Contents inventory qualifications, and the value of certain real estate collateral.
At September 2025, the Facilities have a total combined borrowing capacity of $305.0 million, which includes provisions for up to $30.0 million in credit advances for certain inventory purchases, which are limited by accounts receivable and inventory qualifications, and the value of certain real estate collateral.
Significant items impacting gross profit during fiscal 2024 included an $11.9 million increase in comparative gross profit related to the acquisition of Henry’s in Q2 2023, a $5.1 million increase in gross profit related to the combined acquisitions of Burklund and Richmond Master during fiscal 2024, and a $0.1 million increase in gross profit due to the timing and related benefits of cigarette manufacturer price increases between the comparative periods, partially offset by a $5.3 million decrease in gross profit related to the mix of volumes and promotions in our Other Products category and a $0.3 million decrease in gross profit related to the volume and mix of cigarette cartons sold between the comparative periods.
Significant items impacting gross profit during fiscal 2025 included an $6.8 million increase in comparative gross profit related to the combined acquisitions of Burklund and Richmond Master in Q3 2024, a $1.2 million increase in gross profit related to the Arrowrock acquisition during fiscal 2025, and a $1.6 million increase in gross profit related to the mix of volumes and promotions in our Other Products category, partially offset by a $3.6 million decrease in gross profit related to the volume and mix of cigarette cartons sold between the comparative periods, and a $1.0 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases.
Our most significant expenses relate to costs associated with employees, facility and equipment leases, transportation, fuel, and insurance. Our fiscal 2024 consolidated operating expenses increased $19.5 million as compared to fiscal 2023.
Our most significant expenses relate to costs associated with employees, facility and equipment leases, transportation, fuel, and insurance. Our fiscal 2025 consolidated operating expenses increased $11.3 million as compared to fiscal 2024.
This guidance is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for the Company), and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026 for the Company), with early adoption permitted.
This guidance is effective for fiscal years beginning after December 15, 2026 (fiscal 2028 for the Company), and interim periods within fiscal years beginning after December 15, 2027 (fiscal 2029 for the Company), with early adoption permitted.
The Company believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Consolidated Financial Statements. Our critical accounting estimates are set forth below.
The Company believes that the accounting estimates employed 26 Table of Contents and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions. The Company utilizes numerous critical accounting policies, estimates and assumptions in the preparation of the Consolidated Financial Statements, the most significant of which is set forth below.
This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation.
This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The Company adopted ASU 2023-07 on September 30, 2025.
Gross profit in our Retail Segment increased $0.1 million in fiscal 2024 as compared to fiscal 2023.
Gross profit in our Retail Segment increased approximately $0.8 million in fiscal 2025 as compared to fiscal 2024.
Liquidity Risk The Company’s liquidity position is significantly influenced by its ability to maintain sufficient levels of working capital. For our Company and our industry in general, customer credit risk and ongoing access to bank credit heavily influence liquidity positions. The Company does not currently hedge its exposure to interest rate risk or fuel costs.
Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. Liquidity Risk The Company’s liquidity position is significantly influenced by its ability to maintain sufficient levels of working capital. For our Company and our industry in general, customer credit risk and ongoing access to bank credit heavily influence liquidity positions.
The amount available for use from the Facilities at any given time is subject to a number of factors, including eligible accounts receivable and inventory balances that fluctuate day-to-day, as well as the value of certain real estate collateral.
Borrowings under the Facilities bear interest at the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads. 25 Table of Contents The amount available for use from the Facilities at any given time is subject to a number of factors, including eligible accounts receivable and inventory balances that fluctuate day-to-day, as well as the value of certain real estate collateral.
Significant items impacting operating expenses during fiscal 2024 included a $10.6 million increase in operating expenses related to the acquisition of Henry’s during Q2 2023, a $4.5 million increase related to the combined acquisitions of Burklund and Richmond Master during fiscal 2024, a $3.2 million increase related to employee compensation and benefit costs, a $1.3 million increase in insurance costs and a $0.6 million increase in other Wholesale Segment operating expenses, partially offset by a $0.7 million decrease in our Retail Segment operating expenses.
Significant items impacting operating expenses during fiscal 2025 included a $6.5 million increase in operating expenses related to the combined acquisitions of Burklund and Richmond Master during Q3 2024, a $1.4 million increase related to the Arrowrock acquisition during fiscal 2025, a $2.3 million increase in health and other insurance costs, a $2.3 million increase in other Wholesale Segment operating costs, and a $0.8 million increase in operating expense costs in our Retail Segment.
The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. ​ In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.
The adoption of ASU 2023-07 did not have a material effect on the Company’s consolidated financial statements. ​ Recent Accounting Pronouncements ​ In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.
The following discussion and analysis includes the results of operations for the twelve month periods ended September 2024 and September 2023. For more information regarding our business segments, see Item 1 “Business” of this Annual Report. Business Update Our business continues to be impacted by macroeconomic factors and certain manufacturer supply chain limitations.
The following discussion and analysis includes the results of operations for the twelve month periods ended September 2025 and September 2024. For more information regarding our business segments, see Item 1 “Business” of this Annual Report.
Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at September 2024 was $212.4 million, of which $121.3 million was outstanding, leaving $91.1 million available. The average interest rate of the Facilities was 6.82% at September 2024.
Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at September 2025 was $230.3 million, of which $126.8 million was outstanding, leaving $103.5 million available. The average interest rate of the Facilities was 5.73% at September 2025.
These incentives totaled $41.1 million and $40.4 million in fiscal 2024 and fiscal 2023, respectively.
These incentives totaled $43.2 million and $41.1 million in fiscal 2025 and fiscal 2024, respectively.
These acquisitions will expand the Company’s regional footprint and provide customers with an enhanced range of products and services over time. ​ Lastly, the Company opened a new retail store under the Chamberlin’s Natural Foods banner in Lakewood Ranch, Florida. ​ 20 Table of Contents Results of Operations The following table sets forth an analysis of various components of the Company’s Statement of Operations as a percentage of sales for fiscal years 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Years ​ 2024 2023 Sales 100.0 % 100.0 % Cost of sales 93.3 ​ 93.3 ​ Gross profit 6.7 ​ 6.7 ​ Selling, general and administrative expenses 5.7 ​ 5.4 ​ Depreciation and amortization 0.3 ​ 0.3 ​ Operating income 0.7 ​ 1.0 ​ Interest expense 0.4 ​ 0.3 ​ Change in fair value of mandatorily redeemable non-controlling interest ​ — ​ 0.1 ​ Other (income), net ​ — ​ (0.1) ​ Income from operations before income taxes 0.3 ​ 0.7 ​ Income tax expense 0.1 ​ 0.2 ​ Net income available to common shareholders 0.2 % 0.5 % ​ The following table presents selected statement of operations data for fiscal years 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ($ in millions) 2024 2023 Incr (Decr) (2) CONSOLIDATED: ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales (1) ​ $ 2,711.0 ​ $ 2,540.0 ​ $ 171.0 Cost of sales ​ ​ 2,528.6 ​ ​ 2,369.2 ​ ​ 159.4 Gross profit ​ ​ 182.4 ​ ​ 170.8 ​ ​ 11.6 Gross profit percentage ​ ​ 6.7 % ​ 6.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expense ​ $ 164.4 ​ $ 144.9 ​ $ 19.5 Operating income ​ ​ 18.0 ​ ​ 26.0 ​ ​ (8.0) Interest expense ​ ​ 10.4 ​ ​ 8.5 ​ ​ 1.9 Change in fair value of mandatorily redeemable non-controlling interest ​ ​ 1.0 ​ ​ 1.3 ​ ​ (0.3) Income tax expense ​ ​ 3.1 ​ ​ 5.7 ​ ​ (2.6) Net income available to common shareholders ​ ​ 4.3 ​ ​ 11.6 ​ ​ (7.3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BUSINESS SEGMENTS: ​ ​ ​ ​ ​ ​ ​ ​ ​ Wholesale ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 2,668.5 ​ $ 2,496.9 ​ $ 171.6 Gross profit ​ ​ 166.8 ​ ​ 155.3 ​ ​ 11.5 Gross profit percentage ​ ​ 6.3 % ​ 6.2 % ​ ​ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 42.5 ​ $ 43.1 ​ $ (0.6) Gross profit ​ 15.6 ​ 15.5 ​ 0.1 Gross profit percentage ​ 36.7 % 36.0 % ​ ​ ​ (1) Sales are reported net of costs associated with incentives provided to retailers.
We believe this new, expanded geographic footprint will provide an attractive platform for growth in the coming years. ​ ​ 22 Table of Contents Results of Operations The following table sets forth an analysis of various components of the Company’s Statement of Operations as a percentage of sales for fiscal years 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Years ​ 2025 2024 Sales 100.0 % 100.0 % Cost of sales 93.3 ​ 93.3 ​ Gross profit 6.7 ​ 6.7 ​ Selling, general and administrative expenses 5.9 ​ 5.7 ​ Depreciation and amortization 0.3 ​ 0.3 ​ Operating income 0.5 ​ 0.7 ​ Interest expense 0.4 ​ 0.4 ​ Change in fair value of mandatorily redeemable non-controlling interest ​ 0.0 ​ 0.0 ​ Other (income), net ​ 0.0 ​ 0.0 ​ Income from operations before income taxes 0.1 ​ 0.3 ​ Income tax expense 0.1 ​ 0.1 ​ Net income available to common shareholders 0.0 % 0.2 % ​ The following table presents selected statement of operations data for fiscal years 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ($ in millions) 2025 2024 Incr (Decr) (2) CONSOLIDATED: ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales (1) ​ $ 2,816.7 ​ $ 2,711.0 ​ $ 105.7 Cost of sales ​ ​ 2,628.5 ​ ​ 2,528.6 ​ ​ 99.9 Gross profit ​ ​ 188.2 ​ ​ 182.4 ​ ​ 5.8 Gross profit percentage ​ ​ 6.7 % ​ 6.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expense ​ $ 175.7 ​ $ 164.4 ​ $ 11.3 Operating income ​ ​ 12.6 ​ ​ 18.0 ​ ​ (5.4) Interest expense ​ ​ 10.4 ​ ​ 10.4 ​ ​ — Change in fair value of mandatorily redeemable non-controlling interest ​ ​ 0.9 ​ ​ 1.0 ​ ​ (0.1) Income tax expense ​ ​ 1.0 ​ ​ 3.1 ​ ​ (2.1) Net income available to common shareholders ​ ​ 0.6 ​ ​ 4.3 ​ ​ (3.7) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BUSINESS SEGMENTS: ​ ​ ​ ​ ​ ​ ​ ​ ​ Wholesale ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 2,772.2 ​ $ 2,668.5 ​ $ 103.7 Gross profit ​ ​ 171.8 ​ ​ 166.8 ​ ​ 5.0 Gross profit percentage ​ ​ 6.2 % ​ 6.3 % ​ ​ Retail ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 44.5 ​ $ 42.5 ​ $ 2.0 Gross profit ​ 16.4 ​ 15.6 ​ 0.8 Gross profit percentage ​ 36.9 % 36.7 % ​ ​ ​ (1) Sales are reported net of costs associated with incentives provided to customers.
During fiscal 2024, the peak borrowings under the Facilities was $181.8 million, and the average borrowings and average availability under the Facilities was $134.5 million and $81.0 million, respectively. Cross Default and Co-Terminus Provisions Team Sledd’s two notes payable and the Team Sledd Facility contain cross default provisions. The Henry’s note payable and the Henry’s Facility contain cross default provisions.
During fiscal 2025, the peak borrowings under the Facilities was $197.1 million, and the average borrowings and average availability under the Facilities was $159.4 million and $77.4 million, respectively. Cross Default and Co-Terminus Provisions The Team Sledd Facility and Team Sledd’s two notes payable contain cross default provisions.
(“Henry’s") during Q2 2023, a $98.6 million increase in sales related to the combined acquisitions of Burklund and Richmond Master during fiscal 2024, a $116.6 million increase in sales related to price increases implemented by cigarette manufacturers, and a $2.9 million increase in sales related to higher sales volumes in our tobacco, confectionary, foodservice, and other categories (“Other Products”), partially offset by a $149.6 million decrease in sales related to the volume and mix of cigarette cartons sold. ​ Sales in our Retail Segment decreased $0.6 million in fiscal 2024 as compared to fiscal 2023.
Significant items impacting sales during fiscal 2025 included a $120.8 million increase in comparative sales related to the combined acquisitions of Burklund and Richmond Master during Q3 2024, a $23.2 million increase in sales related to the Arrowrock acquisition during fiscal 2025, a $115.2 million increase in sales related to price increases implemented by cigarette manufacturers, and a $20.8 million increase in sales related to the volume and mix of products in our tobacco, confectionary, foodservice, and other categories (“Other Products”), partially offset by a $176.3 million decrease in sales related to the volume and mix of cigarette cartons sold. ​ Sales in our Retail Segment increased approximately $2.0 million in fiscal 2025 as compared to fiscal 2024.
This change was primarily due to a $5.5 million decrease related to the closure of five stores between the comparative periods, partially offset by a $2.4 million increase related to higher sales volumes in our existing stores, a $2.0 million increase related to the re-opening of our Port Charlotte store that was damaged during Hurricane Ian, and a $0.5 million increase related to the opening of our new Lakewood Ranch store. ​ GROSS PROFIT—Fiscal 2024 vs.
This change was primarily related to a $1.2 million increase in gross profit related to the combined impact of higher sales in our existing stores and the opening of one new retail store, partially offset by a $0.4 million decrease in gross profit related to the closure of three stores between the comparative periods. ​ ​ 24 Table of Contents OPERATING EXPENSE—Fiscal 2025 vs.
We continue to closely monitor regulatory actions and proposals from federal and state governmental and regulatory bodies, including the United States Food and Drug Administration (“FDA”), which is evaluating the possible prohibition and/or limitations on the sale of certain cigarette, e-cigarette, tobacco, and vaping products, including menthol cigarettes.
Additionally, we remain focused on proposals from regulatory bodies, including the United States Food and Drug Administration (“FDA”), which is evaluating potential limitations and/or prohibitions on the sale of certain products sold by our Company such as cigarettes (including menthol cigarettes), e-cigarettes, tobacco, and vaping products.
There were no such cross defaults for either Team Sledd or Henry’s at September 2024. Additionally, the Team Sledd Facility and the Henry’s Facility are non-recourse to AMCON Distributing Company, are not guaranteed by AMCON Distributing Company and have no cross default provisions applicable to AMCON Distributing Company.
Additionally, the Team Sledd Facility and the Henry’s Facility are non-recourse to AMCON Distributing Company, are not guaranteed by AMCON Distributing Company and have no cross default provisions applicable to AMCON Distributing Company. The Company and its subsidiaries, including Team Sledd and Henry’s, were in compliance with all of the financial covenants under the Facilities at September 2025.
The adoption of ASU 2016-13 did not have a material effect on the Company’s consolidated financial statements. ​ Recently Announced Accounting Pronouncements ​ In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
ACCOUNTING PRONOUNCEMENTS ​ Accounting Pronouncements Adopted ​ In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
While the Company believes its liquidity position going forward will be adequate to sustain operations in both the short- and long-term, a precipitous change in the operating environment could materially impact the Company’s future revenue streams as well as its ability to collect on customer accounts receivable or secure bank credit. 24 Table of Contents OTHER MATTERS—Critical Accounting Estimates GENERAL The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles, which require the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent assets and liabilities.
While the Company believes its liquidity position going forward will be adequate to sustain operations in both the short- and long-term, a precipitous change in the operating environment could materially impact the Company’s future revenue streams as well as its ability to collect on customer accounts receivable or secure bank credit.
Other The Company has issued letters of credit to its workers’ compensation insurance carriers as part of its self-insured loss control program totaling $2.4 million and $0.5 million as of September 2024 and September 2023, respectively. Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements.
Dividend Payments The Company paid cash dividends of $0.6 million, or $1.00 per common share, in each of fiscal 2025 and fiscal 2024. Other The Company has issued letters of credit to its workers’ compensation insurance carriers as part of its self-insured loss control program totaling $3.1 million and $2.4 million as of September 2025 and September 2024, respectively.
Accordingly, significant price movements in these areas can and do impact the Company’s profitability.
The Company does not currently hedge its exposure to interest rate risk or fuel costs. Accordingly, significant price movements in these areas can and do impact the Company’s profitability.
INTEREST EXPENSE — Fiscal 2024 vs. Fiscal 2023 Interest expense increased $1.9 million during fiscal 2024 as compared to fiscal 2023, primarily related to higher interest rates, increased capital expenditures, and higher outstanding debt balances in the current year period related to the acquisitions of Burklund and Richmond Master in fiscal 2024 and the acquisition of Henry’s in Q2 2023.
Fiscal 2024 During fiscal 2025, interest expense was impacted by higher outstanding debt balances related to the acquisitions of Arrowrock in fiscal 2025 and Burklund and Richmond Master in fiscal 2024, substantially offset by lower interest rates in the current period. INCOME TAX EXPENSE — Fiscal 2025 vs.
This change was primarily related to a $1.0 million increase in realized margins in our existing stores, a $0.7 million increase related to the re-opening of our Port Charlotte store that was damaged during Hurricane Ian, and a $0.3 million increase related to the opening of our new Lakewood Ranch store, partially offset by a $1.9 million decrease related to the closure of five stores between the comparative periods. ​ ​ 22 Table of Contents OPERATING EXPENSE—Fiscal 2024 vs.
The change in our Retail Segment’s operating costs was primarily related to the opening of one new retail store and higher costs in our existing stores, partially offset by the closure of three stores between the comparative periods. INTEREST EXPENSE — Fiscal 2025 vs.
Fiscal 2023 Sales in our Wholesale Segment increased $171.6 million during fiscal 2024 as compared to fiscal 2023. Significant items impacting sales during fiscal 2024 included a $103.1 million increase in comparative sales related to the acquisition of Henry’s Foods, Inc.
Fiscal 2024 Sales in our Wholesale Segment increased $103.7 million during fiscal 2025 as compared to fiscal 2024.
The Facilities each feature an unused commitment fee and springing financial covenants. Borrowings under the Facilities bear interest at either the bank’s prime rate or the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads.
The Facilities each feature an unused commitment fee and springing financial covenants.
The decrease in our Retail Segment was primarily due to a $2.8 million decrease related to the closure of five stores between the comparative periods, partially offset by an increase of $1.1 million in our existing stores, a $0.5 million increase related to the re-opening of our Port Charlotte store that was damaged during Hurricane Ian and a $0.5 million increase related to the opening of our new Lakewood Ranch store.
Of this change, approximately $3.1 million related to the combined impact of higher sales volumes in our existing stores and the opening of one new retail store. These increases were partially offset by a $1.1 million decrease related to the closure of three stores between the comparative periods. ​ GROSS PROFIT—Fiscal 2025 vs.
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The cumulative effect of sustained inflation across various consumer product categories has impacted discretionary spending and the related retail level demand for the convenience store customers we serve. These same inflationary pressures have also increased our operating costs, particularly as it relates to labor, equipment, insurance, interest, and the cost of the products we sell.
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Business Update Similar to other retail formats, the convenience retailing sector we service continues to operate in a challenging operating environment, impacted in part by weaker consumer spending. At the same time, the cost structures for wholesale distributors such as our Company have been impacted by the cumulative impact of inflation over a multi-year period.
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If such further regulations or further product sale limitations were to be implemented, they may limit the range of products we are able to sell in related product categories and decrease overall consumer demand. Any such changes may negatively impact our revenues, gross margins, and financial results.
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These inflationary pressures have increased operating costs in all areas of our business such as product costs, labor and employee benefits, equipment, and insurance. We continue to monitor the impact that changes in tariff rates may have on our operations.
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During fiscal year 2024, the Company continued to make targeted investments in conjunction with its long-term growth strategy. The Company purchased and is currently building out a 250,000 square foot distribution facility in Colorado City, Colorado, which will play a central role in the Company’s long-term geographic expansion initiatives.
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In response to this operating environment, the Company has undertaken a number of strategic initiatives including efforts to optimize its organizational structure, continued investments in higher margin growth categories such as foodservice, and the ongoing development of proprietary technology solutions which help differentiate the Company from its competitors.
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In addition, the Company’s new 175,000 square foot distribution facility located in Springfield, Missouri became fully operational at the end of the fiscal period. This new facility will enhance our foodservice capabilities in that region. ​ The Company also acquired Burklund Distributors, Inc. (“Burklund”), a wholesale distributor based in East Peoria, Illinois and Richmond Master Distributors, Inc.
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Additionally, the Company has expanded to targeted geographic regions to accommodate customer growth in those areas. This expanded footprint has also created new business development opportunities for the Company as it is now viewed as a viable alternative to other national distributors.
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(“Richmond Master”), a wholesale distributor based in South Bend, Indiana.
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In this regard, during fiscal 2025, the Company acquired Davis-Jones, Inc. d/b/a Arrowrock Supply (“Arrowrock”), a wholesale distributor based in Boise, Idaho, and also opened a new distribution center in Colorado City, Colorado. AMCON now ranks as the third largest Convenience Distributor in the United States as measured by territory covered.
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OTHER INCOME — Fiscal 2024 vs. Fiscal 2023 The change in other income was primarily related to differences in the amounts of insurance recoveries between the comparative periods. INCOME TAX EXPENSE — Fiscal 2024 vs.
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These increases were partially offset by a $1.5 million reduction in the Company’s contingent consideration liability and a $0.5 million reduction in employee compensation and benefit costs.
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The Company and its subsidiaries, including Team Sledd and Henry’s, were in compliance with all of the financial covenants under the Facilities at September 2024. Dividend Payments The Company paid cash dividends of $0.6 million, or $1.00 per common share, and $3.5 million, or $5.72 per common share, during fiscal 2024 and fiscal 2023, respectively.
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The Henry’s Facility and the Henry’s note payable also contain cross default provisions. There were no such cross defaults for either Team Sledd or Henry’s at September 2025.
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INVENTORIES NATURE OF ESTIMATES REQUIRED. In our businesses, we carry large quantities and dollar amounts of inventory. Inventories primarily consist of finished products purchased in bulk quantities to be sold to our customers.
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OTHER MATTERS—Critical Accounting Estimates GENERAL The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles, which require the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent assets and liabilities.
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Given the large quantities and broad range of products we carry, there is a risk that inventory may become impaired because it has become unsaleable or unrefundable, slow moving, obsolete, or because it has been discontinued.
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The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. ​ In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”, which improves disclosure requirements and provides more detailed information about an entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses.
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The use of estimates is required in determining either the net realizable value (for our wholesale business) or the lower of cost or market (“LCM”) under the retail method (for our retail business) of this inventory. ASSUMPTIONS AND APPROACH USED.
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We estimate our inventory obsolescence reserve at each balance sheet date based on the following criteria: ● Slow moving products—Items identified as slow moving are evaluated on a case-by-case basis for impairment. ● Obsolete/discontinued inventory—Products identified that are near or beyond their expiration dates. We may also discontinue carrying certain product lines for our customers.
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As a result, we estimate either the net realizable value or the LCM of this inventory as if it were to be liquidated. 25 Table of Contents ● Estimated net realizable value—For our wholesale business, the net realizable value of the inventory is estimated using management’s evaluation of the congestion in the distribution channels and experience with brokers and inventory liquidators to determine the net realizable value of the inventory.
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DEPRECIATION, AMORTIZATION AND IMPAIRMENT OF LONG-LIVED ASSETS, INCLUDING GOODWILL AND LEASED RIGHT-OF-USE ASSETS Long-lived assets consist primarily of property and equipment, leased right-of-use (“ROU”) assets, intangible assets, and goodwill acquired in business combinations. Property and equipment, ROU assets and amortizable identified intangible assets are assigned useful lives ranging from one to 40 years.
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Indefinite-lived intangible assets and goodwill are not amortized. Impairment of the Company’s long-lived assets is assessed during the Company’s fourth fiscal quarter using both qualitative and quantitative analysis, or whenever events or circumstances change that indicate the carrying value of such long-lived assets may not be recoverable. NATURE OF ESTIMATES REQUIRED.
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Management has to estimate the useful lives of the Company’s long-lived assets. In regard to the Company’s impairment analysis, the most significant assumptions include management’s estimate of the annual growth rate used to project future sales and expenses. ASSUMPTIONS AND APPROACH USED.
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For property and equipment, depreciable lives are based on our accounting policy which is intended to mirror the expected useful life of the asset. In determining the estimated useful life of ROU assets and amortizable intangible assets such as customer lists, we rely on our historical experience in addition to estimates of how long certain assets will generate cash flows.
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If impairment indicators arise, we then evaluate the potential impairment of property and equipment, ROU assets and amortizable identifiable intangible assets using an undiscounted future cash flow approach.
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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.
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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).
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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.
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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.
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The use of different assumptions or estimates for future cash flows could produce different results. Goodwill recorded on the Company’s consolidated balance sheet represents amounts allocated to its wholesale reporting unit which totaled $5.8 million at both September 2024 and September 2023.
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The Company determined that the estimated fair value of its wholesale reporting unit exceeded its carrying value at both September 2024 and September 2023. INSURANCE The Company’s insurance for employee-related health care benefits, workers’ compensation, and general liability is provided through high-deductible or self-insured programs.
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The Company accrues for employee-related health care costs utilizing a claims reserve methodology and prepays insurance carriers for all workers’ compensation and general liability coverage as part of its insurance program. All claims activity and any related reserves are evaluated at the end of each 26 Table of Contents reporting period.
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Due to the uncertainty involved with claims activity and the realization of claims incurred but unreported, management is required to make estimates of these claims. ASSUMPTIONS AND APPROACH USED.
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In order to estimate our reserve for incurred but unreported employee health care claims we consider the following key factors: ● Historical claims experience—We review loss runs for each month to calculate the average monthly claims experience. ● Lag period for reporting claims—Based on our analysis, our experience is such that we have a minimum of a one-month lag period in which claims are reported.
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INCOME TAXES The Company accounts for its income taxes by recording taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns.
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These expected future tax consequences are measured based on provisions of tax law as currently enacted; the effects of future changes in tax laws are not anticipated. Future tax law changes, such as a change in the corporate tax rate, could have a material impact on our financial condition or results of operations.
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On a periodic basis, we assess the likelihood that our deferred tax assets will be recovered from future taxable income and establish a related valuation allowance as appropriate. In performing our evaluation, we consider all available evidence, both positive and negative, to determine whether, based on the weight of the evidence, a valuation allowance is needed.
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Evidence used includes information about our current financial position and our results of operations for the current and preceding years, as well as all currently available information about future years, including our anticipated future performance, the reversal of deferred tax liabilities and tax planning strategies.
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When appropriate, we record a valuation allowance against deferred tax assets to offset future tax benefits that may not be realized. ASSUMPTIONS AND APPROACH USED.
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In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events.
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In making that estimate we consider the following key factors: ● our current financial position; ● historical financial information; ● future reversals of existing taxable temporary differences; ● future taxable income exclusive of reversing temporary differences and carryforwards; ● taxable income in prior carryback years; and ● tax planning strategies.

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