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EQUITY METHOD INVESTMENT | 3 Months Ended
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Dec. 31, 2021
EQUITY METHOD INVESTMENT. |
EQUITY METHOD INVESTMENT | 4. EQUITY METHOD INVESTMENT ​ The Company and Chas. M. Sledd Company (“Sledd”), a West Virginia wholesale distributor serving the convenience store industry, jointly own and operate Team Sledd, LLC (“Team Sledd”), a limited liability company which owns and operates 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 December 2021, AMCON owned approximately 49% of Team Sledd’s outstanding equity, with a carrying value of $10.4 million. For the three months ended December 2021 and December 2020, the Company recognized $0.8 million and $0.3 million, respectively, 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 $3.3 million and $3.5 million as of December 2021 and September 2021, respectively. As of September 2021, approximately $0.2 million of the secured loan balance was recorded as a component of prepaid expenses and other current assets on the consolidated balance sheet. During Q1 2022, Team Sledd repaid the approximately $0.2 million current balance of the secured loan. 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 months ended December 2021 and December 2020 was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended December 2021 |  | For the three months ended December 2020
Sales | ​ | $ | 181,417,094 | ​ | $ | 164,568,084
Gross profit | ​ | ​ | 9,817,979 | ​ | ​ | 7,847,390
Net income before income taxes | ​ | ​ | 2,074,836 | ​ | ​ | 1,003,793
Net income attributable to AMCON, net of tax | ​ | ​ | 770,365 | ​ | ​ | 335,339
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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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