SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) March 23, 2001
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AMCON DISTRIBUTING COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 0-24708 47-0702918
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
10228 "L" Street, Omaha, NE 68127
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(Address of principal executive offices) (Zip Code)
(402) 331-3727
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 23, 2001, the AMCON Distributing Company ("AMCON" or the "Company")
completed the sale of the health and natural foods distribution business and
related net assets of Food For Health Company Inc. ("FFH"), its wholly-owned
subsidiary, to Tree of Life, Inc. ("TOL")for approximately $8.9 million in
cash, subject to certain adjustments as set forth in the Assets Purchase
Agreement. The health and natural foods distribution business operated out of
two distribution facilities located in Phoenix, AZ and Melbourne, FL. The
Company retains the lease obligations for the two distribution facilities, but
is reimbursed for the facilities cost for a six month period under a separate
access agreement with TOL. Subsequent to the six month period, AMCON is
responsible for the remaining lease obligations for the two distribution
facilities. The Company has reflected an adjustment of approximately $1.1
million in the accompanying pro forma condensed consolidated balance sheet to
record a long-term liability for its estimated exposure in connection with
these obligations. Consideration was determined by arms length negotiations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
The following pro forma unaudited condensed consolidated financial data of
AMCON reflects the pro forma impact on the Company's financial position and
results of operations of the sale of FFH. Pro forma condensed consolidated
statements of income are presented for the three months ended December 31,
2000 and 1999 and for the three years ended September 30, 2000, 1999 and 1998,
reflecting pro forma adjustments as if the sale was consummated at the
beginning of each of the periods presented. A pro forma condensed
consolidated balance sheet is presented as of December 31, 2000, reflecting
pro forma adjustments as if the sale was consummated on that date. Certain
Management assumptions and adjustments are described in the accompanying
notes. The following pro forma financial information is not necessarily
indicative of the actual financial position or results of operations that
would have resulted had the sale been consummated on the dates assumed, nor is
it necessarily indicative of future operating results.
AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income
Three months ended December 31, 2000
(Unaudited)
Historical Pro Forma
December 31, Pro Forma December 31,
2000 Adjustments 2000
------------ ------------ ------------
Sales $109,251,278 $( 8,228,774) (1) $101,022,504
Cost of sales 96,351,902 (5,985,925) (1) 90,365,977
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Gross profit 12,899,376 (2,242,849) 10,656,527
Selling, general and
administrative expenses 11,190,434 (2,936,439) (1)
268,925 (2) 8,522,920
Depreciation and amortization 628,192 (131,270) (1) 496,922
------------ ----------- ------------
11,818,626 (2,798,784) 9,019,842
------------ ----------- ------------
Income from operations 1,080,750 555,935 1,636,685
Other expense (income):
Interest expense 853,549 (139,490) (3)
(77,500) (4) 636,559
Other (income) expense (21,234) 11,040 (1) (10,194)
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832,315 (205,950) 626,365
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Income before taxes 248,435 761,885 1,010,320
Income tax expense 85,641 310,688 (5) 396,329
------------ ----------- ------------
Net income $ 162,794 $ 451,197 $ 613,991
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Earnings per share (diluted) $ 0.06 $ 0.16 $ 0.22
============ =========== ============
Weighted average shares
outstanding (diluted) 2,819,443 2,819,443 2,819,443
============ =========== ============
AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income
Three months ended December 31, 1999
(Unaudited)
Historical Pro Forma
December 31, Pro Forma December 31,
1999 Adjustments 1999
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Sales $112,043,760 $(11,427,664) (1) $100,616,096
Cost of sales 98,085,020 (8,498,975) (1) 89,586,045
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Gross profit 13,958,740 (2,928,689) 11,030,051
Selling, general and
administrative expenses 10,967,986 (2,762,800) (1)
150,750 (2) 8,355,936
Depreciation and amortization 629,824 ( 118,136) (1) 511,688
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11,597,810 (2,730,186) 8,867,624
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Income (loss) from operations 2,360,930 ( 198,503) 2,162,427
Other expense (income):
Interest expense 744,602 ( 139,764) (3)
( 72,625) (4) 532,213
Other (income) expense (8,112) ( 7,682) (1) ( 15,794)
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736,490 ( 220,071) 516,419
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Income before taxes 1,624,440 21,568 1,646,008
Income tax expense 612,197 21,671 (5) 633,868
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Net income $ 1,012,243 $ ( 103) $ 1,012,140
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Earnings per share (diluted) $ 0.35 $ 0.00 $ 0.35
============ ============ ===========
Weighted average shares
outstanding (diluted) 2,864,444 2,864,444 2,864,444
============ ============ ===========
AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income
Year ended September 30, 2000
(Unaudited)
Historical Pro Forma
September 30, Pro Forma September 30,
2000 Adjustments 2000
------------ ------------ ------------
Sales $466,125,245 $(41,393,914) (1) $424,731,331
Cost of sales 410,511,066 (30,542,869) (1) 379,968,197
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Gross profit 55,614,179 (10,851,045) 44,763,134
Selling, general and
administrative expenses 45,910,903 (11,479,540) (1)
603,000 (2) 35,034,363
Depreciation and amortization 2,794,996 (585,578) (1) 2,209,418
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48,705,899 (11,462,118) 37,243,781
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Income from operations 6,908,280 611,073 7,519,353
Other expense (income):
Interest expense 3,048,314 (549,508) (3)
(297,000) (4) 2,201,806
Other (income) expense (2,159,995) (87,847) (1) (2,247,842)
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888,319 ( 934,355) ( 46,036)
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Income before taxes 6,019,961 1,545,428 7,565,389
Income tax expense 2,115,522 656,926 (5) 2,772,448
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Net income $ 3,904,439 $ 888,502 $ 4,792,941
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Earnings per share (diluted) $ 1.37 $ 0.31 $ 1.68
============ ============ ============
Weighted average shares
outstanding (diluted) 2,853,320 2,853,320 2,853,320
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AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income
Year ended September 30, 1999
(Unaudited)
Historical Pro Forma
September 30, Pro Forma September 30,
1999 Adjustments 1999
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Sales $385,501,178 $(42,637,607) (1) $342,863,571
Cost of sales 343,021,443 (31,952,148) (1) 311,069,295
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Gross profit 42,479,735 (10,685,459) 31,794,276
Selling, general and
administrative expenses 32,754,406 (10,235,545) (1)
135,600 (2) 22,654,461
Depreciation and amortization 1,861,364 (578,083) (1) 1,283,281
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34,615,770 (10,678,028) 23,937,742
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Income (loss) from operations 7,863,965 ( 7,431) 7,856,534
Other expense (income):
Interest expense 1,754,837 (297,364) (3)
(262,500) (4) 1,194,973
Other (income) expense (72,325) (171,775) (1) (244,100)
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1,682,512 (731,639) 950,873
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Income before taxes 6,181,453 724,208 6,905,661
Income tax expense 2,345,924 337,041 (5) 2,682,965
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Net income $ 3,835,529 $ 387,167 $ 4,222,696
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Earnings per share (diluted) $ 1.35 $ 0.13 $ 1.48
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Weighted average shares
outstanding (diluted) 2,855,419 2,855,419 2,855,419
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AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income
Year ended September 30, 1998
(Unaudited)
Historical Pro Forma
September 30, Pro Forma September 30,
1998 Adjustments 1998
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Sales $294,281,323 $(31,197,993) (1) $263,083,330
Cost of sales 262,632,767 (23,452,792) (1) 239,179,975
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Gross profit 31,648,556 (7,745,201) 23,903,355
Selling, general and
administrative expenses 25,088,767 (6,918,383) (1) 18,170,384
Depreciation and amortization 1,120,482 (197,581) (1) 922,901
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26,209,249 (7,115,964) 19,093,285
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Income (loss) from operations 5,439,307 (629,237) 4,810,070
Other expense (income):
Interest expense 1,814,555 (248,893) (3)
(271,000) (4) 1,294,662
Other (income) expense (276,287) (259,522) (535,809)
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1,538,268 (779,415) 758,853
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Income before taxes 3,901,039 150,178 4,051,217
Income tax expense 1,542,853 88,747 (5) 1,631,600
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Net income $ 2,358,186 $ 61,431 $ 2,419,617
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Earnings per share (diluted) $ 0.85 $ 0.02 $ 0.87
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Weighted average shares
outstanding (diluted) 2,788,996 2,788,996 2,788,996
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AMCON Distributing Company
Notes to Pro Forma Condensed Consolidated Statements of Income
Three months ended December 31, 2000 and
Years ended September 30, 2000, 1999 and 1998
(1) Adjustment eliminates from consolidated results the amounts contributed by
the health and natural foods distribution business. Adjustments do not
reflect the net gain or loss on the sale of the health and natural foods
distribution business as the resulting gain or loss will not be a component of
continuing operations.
(2) Adjustment reflects pro forma amount of corporate overhead originally
allocated to the health and natural foods distribution business for segment
reporting purposes.
(3)Adjustment reflects pro forma reduction in interest expense from debt
reductions resulting from the use of proceeds from the sale of FFH including
repayment of approximately $5.4 million of long-term debt associated with the
health and natural foods distribution business. Pro forma adjustments based
on actual interest rates incurred during the related periods.
(4) Adjustment reflects pro forma reduction in interest expense during the
period on $3.5 million of cash proceeds applied to reduce the Company's debt,
excluding repayment of debt described in (3) above. Calculations are based on
actual interest rates realized during the related periods.
(5) Adjustment reflects the pro forma tax effect of the pro forma adjustments
discussed in the notes above at FFH's estimated effective tax rate. The
difference between FFH's statutory tax rate of 39% and its effective tax rate
is attributable to non-deductible goodwill amortization.
AMCON Distributing Company and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
December 31, 2000
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
------------ ------------ ------------
ASSETS
Current assets:
Cash $ 1,414,270 - $ 1,414,270
Accounts receivable 17,341,106 (1,886,429) (1) 15,454,677
Inventories 24,528,190 (6,022,201) (1) 18,505,989
Deferred income taxes 1,653,871 ( 136,000) (1) 1,517,871
Other 614,049 ( 225,360) (1) 388,689
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Total current assets 45,551,486 (8,269,990) 37,281,496
Fixed assets, net 5,771,799 ( 970,555) (1) 4,801,244
Notes receivable 750,000 - 750,000
Investments 495,062 - 495,062
Other assets 15,172,915 (2,837,522) (1) 12,335,393
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$ 67,741,262 $(12,078,067) $ 55,663,195
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,267,770 $ (3,457,339) (1) $ 7,810,431
Accrued expenses 4,092,186 (1,027,116) (1) 3,065,070
Income taxes payable 440,781 - (1) 440,781
Dividends payable 82,137 - 82,137
Current portion of
long-term debt 2,830,282 ( 216,000) 2,614,282
Current portion of
subordinated debt 906,318 - (2) 906,318
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Total current liabilities 19,619,474 (4,700,455) 14,919,019
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Other liabilities 1,204,647 1,093,133 (3) 2,297,780
Long-term debt, less
current portion 21,251,544 (8,684,000) (2) 12,567,544
Subordinated debt, less
current portion 8,735,236 - 8,735,236
Shareholders' equity (as restated):
Preferred stock, $.01 par value,
1,000,000 shares authorized,
none outstanding - - -
Common stock, $.01 par value,
15,000,000 shares authorized,
2,737,881
issued 27,379 - 27,379
Additional paid-in capital 4,122,464 - 4,122,464
Unrealized gain on investments
available-for-sale, net of
$136,069 tax 223,237 - 223,237
Retained earnings 12,557,281 213,255 (1) 12,770,536
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Total shareholders' equity 16,930,361 213,255 17,143,616
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$ 67,741,262 $(12,078,067) $ 55,663,195
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AMCON Distributing Company
Notes to Pro Forma Condensed Consolidated Balance Sheet
December 31, 2000
(1) Adjustment eliminates amounts attributable to the health and natural foods
distribution business, net of assets and liabilities to be retained.
(2) Adjustment reflects the pro forma repayment of debt with the cash proceeds
from the buyer, consistent with the intended actual application of cash
proceeds after the closing of the transaction.
(3) Adjustment reflects the pro forma accrual of approximately $1.1 million
for the Company's estimated exposure under the lease obligations that will be
retained by AMCON in connection with the two FFH distribution facilities.
(c) Exhibits:
2.1 Assets Purchase and Sale Agreement by and between Food For Health
Company,
Inc, AMCON Distributing Company and Tree of Life, Inc. dated March 8,
2001
2.2 Amendment to Assets Sale and Purchase Agreement effective March 23,
2001
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMCON DISTRIBUTING COMPANY
(Registrant)
Date: April 10, 2001 By : Michael D. James
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Name: Michael D. James
Title: Treasurer & Chief Financial
Officer