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EQUITY METHOD INVESTMENT | 9 Months Ended
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Jun. 30, 2021
EQUITY METHOD INVESTMENT |
EQUITY METHOD INVESTMENT | 4. EQUITY METHOD INVESTMENT ​ In April 2020, the Company completed a transaction with Chas. M. Sledd Company (“Sledd”), a West Virginia wholesale distributor serving the convenience store industry, to jointly own and operate a limited liability company (“Team Sledd”) formed for the purpose of owning and operating Sledd’s wholesale distribution business. Sledd contributed substantially all of its assets and stated liabilities to Team Sledd, while the Company contributed $10.0 million in cash, of which $6.5 million was structured as equity and $3.5 million was structured as a secured loan to Team Sledd which is subordinate to the liens of Team Sledd's existing secured lenders. ​ At June 2021, AMCON owned approximately 49% of Team Sledd’s outstanding equity, with a carrying value of $7.8 million. For the three and nine months ended June 2021, the Company recognized $0.8 million and $1.4 million, respectively, in equity in earnings (net of income taxes) from its investment in Team Sledd. For the three months ended June 2020, the Company recognized $0.1 million in equity in earnings (net of income taxes) from its investment in Team Sledd. The Company’s secured loan to Team Sledd had a carrying value of $3.5 million as of June 2021. Pursuant to an operating agreement between the Company and Sledd, certain membership interests in Team Sledd may be redeemed over a period of years, with such redemptions being funded from the operations of Team Sledd. Any such redemptions would result in a corresponding increase in the percentage of the outstanding equity of Team Sledd owned by AMCON. ​ Team Sledd’s summarized unaudited financial data for the three and nine months ended June 2021 and the three months ended June 2020 was as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 2021 |  | For the nine months ended June 2021 |  | For the three months ended June 2020
Sales | ​ | $ | 179,676,748 | ​ | $ | 502,704,216 | ​ | $ | 171,805,323
Gross profit | ​ | ​ | 9,711,966 | ​ | ​ | 25,279,274 | ​ | ​ | 6,874,963
Net income before income taxes | ​ | ​ | 2,034,258 | ​ | ​ | 3,979,078 | ​ | ​ | 335,093
Net income attributable to AMCON, net of tax | ​ | ​ | 754,293 | ​ | ​ | 1,403,124 | ​ | ​ | 111,666
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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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