AMCON DISTRIBUTING CO

Previous wording

Our new Colorado City distribution facility, which opened in mid-July 2025, will provide the Company with valuable access to the inter-mountain and western regions of the United States. Our Company has made a number of forward-looking, targeted investments in recent years (acquisitions, the opening of new distribution centers, etc.) and now ranks as the third largest Convenience Distributor in the United States as measured by territory covered. We believe this geographic footprint will provide an attractive platform for growth in the coming years.

Current wording

Our Company has made a number of forward-looking, targeted investments in recent years (acquisitions, the opening of new distribution centers, etc.) and now ranks as the third largest Convenience Distributor in the United States as measured by territory covered. We believe this geographic footprint will provide an attractive platform for growth in the coming years and positions the Company well with major consumer goods manufacturers who are increasingly relying on large distributors to drive market penetration and operational efficiencies.

Previous wording

Certain accounting estimates used in the preparation of the Company’s condensed consolidated unaudited financial statements (“financial statements”) require us to make judgments and estimates and the financial results we report may vary depending on how we make these judgments and estimates. Our critical accounting estimates are set forth in our annual report on Form 10-K for the fiscal year ended September 30, 2024, as filed with the Securities and Exchange Commission. There have been no significant changes with respect to these estimates and related policies during the nine months ended June 2025.

Current wording

Certain accounting estimates used in the preparation of the Company’s condensed consolidated unaudited financial statements (“financial statements”) require us to make judgments and estimates and the financial results we report may vary depending on how we make these judgments and estimates. Our critical accounting estimates are set forth in our annual report on Form 10-K for the fiscal year ended September 30, 2025, as filed with the Securities and Exchange Commission. There have been no significant changes with respect to these estimates and related policies during the three months ended December 2025.

Previous wording

The following discussion and analysis includes the Company’s results of operations for the three and nine months ended June 2025 and June 2024:

Current wording

The following discussion and analysis includes the Company’s results of operations for the three months ended December 2025 and December 2024:

Previous wording

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 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 (3rd) largest convenience store distributor by geographic territory served.

Current wording

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. We 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 (3rd) largest convenience store distributor by geographic territory served.

Previous wording

Our Wholesale Segment operates 14 distribution centers located in Colorado, Idaho, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. 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. We do not maintain any long-term purchase contracts with our suppliers.

Current wording

Our Wholesale Segment operates 14 distribution centers located in Colorado, Idaho, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. 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, Mars Wrigley, General Mills, Procter and Gamble, Ferrero and other major Consumer Packaged Goods and Foodservice suppliers. 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. However, we do participate in a number of programs with our major vendors to support in-stock positions of our key products.

Previous wording

Sales in our Wholesale Segment increased $20.6 million during Q3 2025 as compared to Q3 2024. Significant items impacting sales during Q3 2025 included an increase of $8.8 million related to the Arrowrock acquisition in Q2 2025, an increase of $26.4 million related to the acquisition of Richmond Master during Q3 2024, a $31.1 million increase in sales related to price increases implemented by cigarette manufacturers, and a $6.0 million increase in sales related to the volume and mix of products in our tobacco, confectionery, foodservice, and other categories (“Other Products”), partially offset by a $51.7 million decrease in sales related to the volume and mix of cigarette cartons sold. Sales in our Retail Segment increased approximately $1.1 million during Q3 2025 as compared to Q3 2024, primarily due to higher sales volumes in our existing stores.

Current wording

Sales in our Wholesale Segment increased $18.5 million during Q1 2026 as compared to Q1 2025. Significant items impacting sales during Q1 2026 included a $29.2 million increase in sales related to price increases implemented by cigarette manufacturers, and a $5.7 million increase in sales related to the volume and mix of products in our tobacco, confectionery, foodservice, and other categories (“Other Products”), partially offset by a $16.4 million decrease in sales related to the volume and mix of cigarette cartons sold. Sales in our Retail Segment increased approximately $0.3 million during Q1 2026 as compared to Q1 2025, primarily due to higher sales volumes in our existing stores.

Previous wording

Gross profit in our Wholesale Segment increased $1.2 million during Q3 2025 as compared to Q3 2024. Significant items impacting gross profit during Q3 2025 included an increase of $0.5 million related to the Arrowrock acquisition in Q2 2025, an increase of $1.5 million related to the acquisition of Richmond Master during Q3 2024, and a $1.0 million increase in gross profit related to the mix of volumes and promotions in our Other Products category, partially offset by a $1.4 million decrease in gross profit related to the volume and mix of cigarette cartons sold between the comparative periods and a $0.4 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases. Gross profit in our Retail Segment increased approximately $0.5 million during Q3 2025 as compared to Q3 2024, primarily due to an increase in gross profit related to same store sales.

Current wording

Gross profit in our Wholesale Segment increased $1.0 million during Q1 2026 as compared to Q1 2025. Significant items impacting gross profit during Q1 2026 included an increase of $1.2 million related to the mix of volumes and promotions in our Other Products category, partially offset by a $0.2 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases. Gross profit in our Retail Segment increased approximately $0.2 million during Q1 2026 as compared to Q1 2025, primarily due to an increase in gross profit related to same store sales.

Previous wording

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. Our most significant expenses relate to costs associated with employees, facility and equipment leases, transportation, fuel, and insurance. Our Q3 2025 operating expenses increased $2.4 million as compared to Q3 2024. Significant items impacting operating expenses during Q3 2025 included an increase of $0.5 million related to the Arrowrock acquisition in Q2 2025, an increase of $1.1 million related to the acquisition of Richmond Master during Q3 2024, a $1.2 million increase in health and other insurance costs, and a $0.3 million increase in operating expense costs in our Retail Segment, partially offset by a $0.5 million decrease related to employee compensation and benefit costs and a $0.2 million decrease in other Wholesale Segment operating costs. The increase in our Retail Segment was primarily due to an increase in costs associated with our existing stores.

Current wording

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. Our most significant expenses relate to costs associated with employees, facility and equipment leases, transportation, fuel, and insurance. Our Q1 2026 operating expenses increased $0.9 million as compared to Q1 2025. Significant items impacting operating expenses during Q1 2026 included the impact of a prior year (Q1 2025) reduction in operating expenses related to a $1.5 million contingent liability fair value adjustment, a $0.1 million increase related to employee compensation and benefit costs, a $0.1 million increase in other Wholesale Segment operating costs, and a $0.1 million increase in operating expense costs in our Retail Segment. These increases in operating expenses were partially offset by a $0.9 million decrease in health and other insurance costs. The increase in our Retail Segment was primarily due to an increase in costs associated with our existing stores.

Previous wording

Interest expense decreased $0.2 million in Q3 2025 as compared to Q3 2024, primarily due to lower interest rates in the current period, partially offset by higher outstanding debt balances in the current period related to the acquisitions of Arrowrock in Q2 2025 and Burklund and Richmond Master in Q3 2024.

Current wording

Interest expense decreased $0.2 million in Q1 2026 as compared to Q1 2025, primarily due to lower interest rates, partially offset by higher average debt balances in the current period.

Previous wording

At June 2025, the Facilities had 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. 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. The Facilities each feature an unused commitment fee

Current wording

At December 2025, the Facilities had a total combined borrowing capacity of $305.0 million, including 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. 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. The Facilities each feature an unused commitment fee and springing financial covenants. Borrowings under the Facilities bear interest at the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads.

Previous wording

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. Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at June 2025 was $241.0 million, of which $154.6 million was outstanding, leaving $86.4 million available.

Current wording

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. Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at December 2025 was $229.4 million, of which $140.7 million was outstanding, leaving $88.7 million available.

Previous wording

The average interest rate of the Facilities was 5.77% at June 2025. For the nine months ended June 2025, the peak borrowings under the Facilities was $197.1 million, and the average borrowings and average availability under the Facilities was $161.8 million and $74.7 million, respectively.

Current wording

The average interest rate of the Facilities was 5.29% at December 2025. For the three months ended December 2025, the peak borrowings under the Facilities was $193.2 million, and the average borrowings and average availability under the Facilities was $163.6 million and $79.2 million, respectively.