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EQUITY METHOD INVESTMENT | 6 Months Ended
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Mar. 31, 2022
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, formed and jointly own and operate Team Sledd, LLC (“Team Sledd”), a limited liability company which owns and operates Sledd’s wholesale distribution business. In conjunction with the formation of Team Sledd, 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 March 2022, AMCON owned approximately 49% of Team Sledd’s outstanding equity, with a carrying value of $10.5 million. For the three and six months ended March 2022, the Company recognized $0.6 million and $1.4 million, respectively, in equity investment earnings (net of income taxes) from its investment in Team Sledd. For the three and six months ended March 2021, the Company recognized $0.3 million and $0.6 million, respectively, in equity investment 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 March 2022 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. 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 six months ended March 2022 and March 2021 was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended March 2022 |  | For the three months ended March 2021 |  | For the six months ended March 2022 |  | For the six months ended March 2021
Sales | ​ | $ | 148,066,173 | ​ | $ | 158,459,384 | ​ | $ | 329,483,268 | ​ | $ | 323,027,468
Gross profit | ​ | ​ | 8,219,808 | ​ | ​ | 7,719,918 | ​ | ​ | 18,037,786 | ​ | ​ | 15,567,308
Net income before income taxes | ​ | ​ | 1,594,579 | ​ | ​ | 941,027 | ​ | ​ | 3,669,415 | ​ | ​ | 1,944,820
Net income attributable to AMCON, net of tax | ​ | ​ | 591,795 | ​ | ​ | 313,492 | ​ | ​ | 1,362,161 | ​ | ​ | 648,831
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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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