AMCON DISTRIBUTING CO Leases Disclosure
5. LEASES:
The Company’s Wholesale Segment leases certain warehouse facilities, office space, vehicles and office equipment. The Company’s Retail Segment leases store space in various shopping center complexes and certain office space. Certain of the warehouse and retail store leases include one or more options to renew or terminate the applicable lease agreement, with the exercise of such options at the Company’s discretion. The Company’s leases do not contain any significant residual value guarantees nor do they impose any significant restrictions or covenants other than those customarily found in similar types of leases.
The operating ROU lease assets and liabilities recorded on the Company’s consolidated balance sheets consist of fixed lease payments. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term. Additionally, certain leases contain variable payments such as vehicle leases with per-mile charges or retail leases with an additional rent payment based on store performance. These variable payments are expensed as incurred. The Company combines lease components and non-lease components for all asset classes for purposes of recognizing lease assets and liabilities. The Company determines its incremental borrowing rates based on information available at the lease commencement date in calculating the present value of lease payments. The Company reviews its ROU lease assets for indicators of impairment in the same manner as its other property and equipment as described in Note 1.
Leases consist of the following:
Assets |
| Classification |
| September 2025 |
| September 2024 | ||
Operating | Operating lease right-of-use assets | $ | 30,488,841 | $ | 25,514,731 | |||
Liabilities | ||||||||
Current: | ||||||||
Operating | Operating lease liabilities | $ | 7,862,117 | $ | 7,036,751 | |||
Non-current: | ||||||||
Operating | Long-term operating lease liabilities | 22,845,456 | 18,770,001 | |||||
Total lease liabilities | $ | 30,707,573 | $ | 25,806,752 | ||||
The components of lease costs were as follows:
| Fiscal Year 2025 |
| Fiscal Year 2024 | |||
Operating lease cost | $ | 9,493,725 | $ | 8,012,939 | ||
Short-term lease cost | 291,364 | 372,387 | ||||
Variable lease cost | 506,136 | 602,246 | ||||
Net lease cost | $ | 10,291,225 | $ | 8,987,572 | ||
Maturities of lease liabilities as of September 2025 were as follows:
|
|
| Operating Leases | |||
2026 | $ | 9,547,144 | ||||
2027 | 7,932,452 | |||||
2028 | 5,963,177 | |||||
2029 | 4,011,003 | |||||
2030 | 3,306,970 | |||||
2031 and thereafter | 5,233,299 | |||||
Total lease payments | 35,994,045 | |||||
Less: interest | (5,286,472) | |||||
Present value of lease liabilities | $ | 30,707,573 | ||||
Weighted-average remaining lease term and weighted-average discount rate information regarding the Company’s leases were as follows:
Lease Term |
|
| September 2025 |
| September 2024 | ||
Weighted-average remaining lease term (years): | |||||||
Operating | 5.1 | 5.0 | |||||
Discount Rate | |||||||
Weighted-average discount rate: | |||||||
Operating | 6.34 | % | 5.91 | % | |||
Other information regarding the Company’s leases were as follows:
| Fiscal Year 2025 |
| Fiscal Year 2024 | |||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows used by operating leases | $ | 9,532,953 | $ | 7,997,795 | ||
Lease liabilities arising from obtaining new ROU assets: | ||||||
Operating leases | $ | 11,020,596 | $ | 8,547,877 | ||
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.