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) November 27, 2006
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AMCON DISTRIBUTING COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 1-15589 47-0702918
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7405 Irvington Road, Omaha, NE 68122
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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 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On November 27, 2006, AMCON Distributing Company ("AMCON or "Company") issued
a press release announcing its financial results for the third quarter ended
June 30, 2006. A copy of the press release is being furnished herewith as an
exhibit and incorporated herein by reference.
The information in this Current Report (including the exhibit) shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that Section. The information set forth in this Current Report on Form 8-K
(including the exhibit) shall not be incorporated by reference into any
registration statement or other document pursuant to the Securities Act of
1933, as amended, except as shall be expressly set forth by specific
reference in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT NO. DESCRIPTION
99.1 Press release, dated November 27, 2006, issued
by AMCON Distributing Company announcing
financial results for the third quarter ended
June 30, 2006
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: November 27, 2006 By : Andrew C. Plummer
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Name: Andrew C. Plummer
Title: Vice President & Acting
Chief Financial Officer
EXHIBIT INDEX
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Exhibit Description
99.1 Press release, dated November 27, 2006, issued by AMCON
Distributing Company announcing financial results for the
third quarter ended June 30, 2006
Exhibit 99.1
AMCON DISTRIBUTING COMPANY REPORTS FULLY DILUTED EARNINGS
OF 41 CENTS FOR THE THIRD QUARTER ENDED JUNE 30, 2006
NEWS RELEASE
Chicago, IL, November 27, 2006 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company, is pleased to
report fully diluted earnings available to common stock holders of 41 cents
per share on net income of $241,865 for the period end June 30, 2006.
"We are delighted at the continued progress the corporation has made since we
announced our internal reorganization in March 2006" said Christopher Atayan,
AMCON's Chief Executive Officer. "Our core businesses continued their trend
of strong performance during the quarter and we began to reap some of the
benefits of the aggressive efforts we have instituted to control our non-core
water businesses. Our corporate strategic objective in the short to medium
term is to reduce the levels of debt we employ at AMCON, which will enhance
our ability to grow in the long term. The two primary elements supporting
this objective are to preserve and enhance the operating earnings we generate
from our core business units and the disposition of assets no longer central
to our mission. We believe that by taking this approach and continuing our
tradition of superior customer service we are well positioned to enhance
shareholder value. We are diligently working as a Company on resolving the
issues presented by our Beverage businesses and as a result have expended
very little cash resources into those businesses. This has resulted in
increasing liquidity and financial strength for the entire company" added
Atayan.
For the first nine months of fiscal 2006, AMCON's wholesale consumer products
distribution business reported segment operating income before depreciation
and amortization of approximately $6.6 million and the retail health food
business reported segment operating income before depreciation and
amortization of approximately $2.4 million. This compares to $5.6 million
and $1.2 million for the wholesale and retail businesses, respectively, in
the comparable periods one year ago.
"AMCON's legacy of premium customer service has served us well as we remain
highly competitive in the market place" noted Kathleen Evans, President of
AMCON's wholesale distribution business, " Our solid performance year to date
is a direct reflection of the programs and systems we are developing to
enhance our customers profits."
"Our retail health food stores are continuing to perform at historically high
levels of revenues and profitability. Consumers are continuing to move in the
direction of natural products and we are well positioned to serve them"
commented Eric Hinkefent, President of AMCON's retail health food business,
"We continue to differentiate our self in the market place by our high levels
of customer service. This has a direct bottom line effect as we benefit from
repeat customer business."
Another positive factor in the quarter was the narrowing of losses from
Hawaiian Natural Water Company in our beverage segment. Price increases and
active financial management of the enterprise contributed to this result.
Senior management has invested a significant amount of time and energy toward
revitalizing this enterprise. As previously announced, AMCON is actively in
negotiations to divest the business.
AMCON received an extension of its Revolving Credit agreement through July
2007 and is in active discussions with the bank group with respect to a long
term extension. "Our bank group has been very responsive to our needs. Their
solid support has enabled us to take advantage of several short term profit
opportunities developed by our management team," commented Andy Plummer,
AMCON's Acting Chief Financial Officer. Plummer also added, "During the
recently completed fourth quarter we have incurred substantial professional
fees in connection with our prior period audit and the Trinity Springs, Inc.
litigation settlement discussions which will impact bottom line profitability
when we report those results."
Concurrently with this press release AMCON has filed its third quarter 10-Q
with the Securities and Exchange Commission. This now brings AMCON into
compliance with the financial reporting compliance requirements of the
American Stock Exchange.
AMCON is a leading wholesale distributor of consumer products, including
beverages, candy, tobacco, groceries, food service, frozen and chilled foods,
and health and beauty care products with distribution centers in Illinois,
Missouri, Nebraska, North Dakota and South Dakota. Chamberlin's Natural
Foods, Inc. and Health Food Associates, Inc., both wholly-owned subsidiaries
of The Healthy Edge, Inc., operate health and natural product retail stores
in central Florida (6), Kansas, Missouri, Nebraska and Oklahoma (4). The
retail stores operate under the names Chamberlin's Market & Cafe and Akins
Natural Foods Market. Hawaiian Natural Water Company, Inc. produces and sells
natural spring water under the Hawaiian Springs label in Hawaii and other
foreign markets and purified bottled water on the Island of Oahu in Hawaii.
The natural spring water is bottled at the source on the Big Island of
Hawaii.
This news release contains forward-looking statements that are subject to
risks and uncertainties and which reflect management's current beliefs and
estimates of future economic circumstances, industry conditions, Company
performance and financial results. A number of factors could affect the
future results of the Company and could cause those results to differ
materially from those expressed in the Company's forward-looking statements
including, without limitation, availability of sufficient cash resources to
conduct its business and meet its capital expenditures needs. Moreover, past
financial performance should not be considered a reliable indicator of future
performance. Accordingly, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 with respect to all such forward-looking
statements.
Visit AMCON Distributing Company's web site at: www.amcon.com
For Further Information Contact:
Christopher H. Atayan
AMCON Distributing Company
Ph 312-327-1770
Fax: 312-527-3964
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, 2006 and September 30, 2005
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June 2006 September 2005
(Unaudited)
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ASSETS
Current assets:
Cash $ 84,020 $ 546,273
Accounts receivable, less allowance for doubtful
accounts of $1.0 million and $0.6 million, respectively 30,134,256 28,202,857
Inventories 30,492,996 23,977,889
Deferred income taxes 1,642,212 1,642,212
Current assets of discontinued operations 37,544 1,159,228
Prepaid and other current assets 4,843,534 5,269,784
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Total current assets 67,234,562 60,798,243
Property and equipment 14,102,301 15,162,007
Deferred income taxes 6,863,737 6,300,503
Noncurrent assets from discontinued operations 2,382,801 2,475,803
Goodwill 5,848,808 5,848,808
Other intangible assets 3,449,736 3,464,534
Other assets 1,084,769 1,258,899
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$100,966,714 $ 95,308,797
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 15,550,519 $ 17,047,833
Accrued expenses 4,837,193 4,990,814
Accrued wages, salaries and bonuses 1,171,914 1,601,666
Income taxes payable - 118,798
Current liabilities of discontinued operations 4,339,022 4,098,412
Current maturities of revolving credit facility 3,932,000 1,432,000
Current maturities of long-term debt 815,005 936,198
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Total current liabilities 30,645,653 30,225,721
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Revolving credit facility, less current maturities 52,768,394 47,730,388
Long-term debt, less current maturities 7,508,260 7,636,468
Noncurrent liabilities of discontinued operations 5,651,744 5,648,648
Series A cumulative, convertible preferred stock, $.01 par value
100,000 shares authorized and issued, liquidation preference
$25.00 per share 2,438,355 2,438,355
Series B cumulative, convertible preferred stock, $.01 par value
80,000 shares authorized and issued, liquidation preference
$25.00 per share 1,857,645 1,857,645
Series C cumulative, convertible preferred stock, $.01 par value
80,000 shares authorized and issued, liquidation preference
$25.00 per share 1,982,372 -
Commitments and contingencies
Shareholders' equity (deficiency):
Preferred stock, $0.01 par, 1,000,000 shares authorized,
none outstanding - -
Common stock, $.01 par value, 3,000,000
shares authorized, 527,062 shares issued 5,271 5,271
Additional paid-in capital 6,263,476 6,218,476
Accumulated other comprehensive income,
net of tax of $0.1 million in 2005 - 101,294
Accumulated deficit (8,154,456) (6,553,469)
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Total shareholders' deficiency (1,885,709) (228,428)
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$100,966,714 $ 95,308,797
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AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and nine month periods ended June 30, 2006 and 2005
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For the three months For the nine months
ended June ended June
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2006 2005 2006 2005
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Sales (including excise taxes of
$52.5 million and $50.1 million,
and $147.7 million and $145.2
million, respectively) $ 223,954,710 $ 215,124,070 $ 620,973,352 $ 621,859,811
Cost of sales 208,168,019 199,928,910 576,622,438 577,790,948
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Gross profit 15,786,691 15,195,160 44,350,914 44,068,863
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Selling, general and administrative
expenses 13,096,950 12,720,659 38,989,674 38,533,701
Depreciation and amortization 525,170 571,940 1,510,767 1,718,209
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13,622,120 13,292,599 40,500,441 40,251,910
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Operating income 2,164,571 1,902,561 3,850,473 3,816,953
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Other (income) expense:
Interest expense 1,227,561 1,063,338 3,505,530 3,114,773
Other (income) expense, net (44,424) (32,827) (94,015) (48,679)
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1,183,137 1,030,511 3,411,515 3,066,094
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Income from continuing operations
before income taxes 981,434 872,050 438,958 750,859
Income tax expense 392,000 347,000 246,000 358,000
Minority interest - - - (97,100)
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Income from continuing operations 589,434 525,050 192,958 489,959
Loss from discontinued operations,
net of income tax benefit
of $0.1 million and $0.5 million,
$0.9 million and $1.9 million, respectively (243,183) (751,473) (1,533,453) (3,084,832)
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Net income (loss) 346,251 (226,423) (1,340,495) (2,594,873)
Preferred stock dividend requirements (104,386) (74,053) (260,492) (219,773)
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Net income (loss) available to
common shareholders $ 241,865 $ (300,476) $ (1,600,987) $ (2,814,646)
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Basic earnings (loss) per share
available to common shareholders:
Continuing operations $ 0.92 $ 0.86 $ (0.13) $ 0.51
Discontinued operations (0.46) (1.43) (2.91) (5.85)
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Net basic earnings (loss) per share
available to common shareholders $ 0.46 $ (0.57) $ (3.04) $ (5.34)
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Diluted earnings (loss) per share
available to common shareholders:
Continuing operations $ 0.69 $ 0.73 $ (0.13) $ 0.49
Discontinued operations (0.28) (1.05) (2.91) (5.63)
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Net diluted earnings (loss) per share
available to common shareholders $ 0.41 $ (0.32) $ (3.04) $ (5.14)
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Weighted average shares outstanding:
Basic 527,062 527,062 527,062 527,062
Diluted 854,187 712,881 527,062 547,774
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the nine month periods ended June 30, 2006 and 2005
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2006 2005
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (1,340,495) $ (2,594,873)
Deduct: (loss) from discontinued operations, net of tax 1,533,453 3,084,832
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Income from continuing operations 192,958 489,959
Adjustments to reconcile net (loss) income from
continuing operations to net cash flows
from operating activities:
Depreciation 1,606,824 1,735,404
Amortization 29,798 146,196
(Gain) loss on sale of property and equipment 11,570 (20,361)
Stock based compensation 45,000 -
Deferred income taxes (563,234) (1,558,608)
Provision for losses on doubtful accounts 505,295 259,080
Provision for losses on inventory obsolescence 46,204 237,167
Impairment on assets held for sale - 77,680
Minority interest - (97,100)
Changes in assets and liabilities,
net of effect of acquisitions:
Accounts receivable (2,436,694) (3,698,445)
Inventories (6,561,311) 7,338,879
Other current assets 324,956 (494,133)
Other assets 174,130 (42,286)
Accounts payable (1,134,598) (2,391,119)
Accrued expenses and accrued wages, salaries and bonuses (583,373) 935,587
Income tax payable and receivable (118,798) 190,445
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Net cash flows from operating activities - continuing operations (8,461,273) 3,108,345
Net cash flows from operating activities - discontinued operations (779,463) (1,761,749)
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Net cash flows from operating activities (9,240,736) 1,346,596
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (609,637) (2,469,156)
Proceeds from sales of property and equipment 50,949 85,265
Purchase of trademark (15,000) -
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Net cash flows from investing activities - continuing operations (573,688) (2,383,891)
Net cash flows from investing activities - discontinued operations (2,671) (92,872)
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Net cash flows from investing activities (576,359) (2,476,763)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) on revolving credit facility 7,538,006 10,977,882
Net proceeds from preferred stock issuance 1,982,372 1,857,645
Proceeds from borrowings of long-term debt 125,988 1,399,636
Dividends paid on preferred stock (260,492) (219,773)
Principal payments on long-term debt and subordinated debt (738,105) (12,907,705)
Debt issue costs - (446,641)
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Net cash flows from financing activities - continuing operations 8,647,769 661,044
Net cash flows from financing activities - discontinued operations 707,073 421,489
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Net cash flows from financing activities 9,354,842 1,082,533
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Net change in cash (462,253) (47,634)
Cash, beginning of period 546,273 416,073
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Cash, end of period $ 84,020 $ 368,439
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Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 3,488,161 $ 2,661,734
Cash refunded during the period for income taxes (1,577) (185,630)
Supplemental disclosure of non-cash information:
Issuance of note payable in exchange for accounts payable $ 362,716 $ -
Acquisition of equipment through capital leases - 91,343
-end-