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 8, 2007
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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 8, 2007, AMCON Distributing Company ("AMCON or "Company") issued
a press release announcing its financial results for the fiscal year ended
September 30, 2007. 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 8, 2007, issued
by AMCON Distributing Company announcing
financial results for the fiscal ended
September 30, 2007
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 8, 2007 By : Andrew C. Plummer
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Name: Andrew C. Plummer
Title: Vice President & Chief
Financial Officer
EXHIBIT INDEX
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Exhibit Description
99.1 Press release, dated November 8, 2007, issued by AMCON
Distributing Company announcing financial results for the
fiscal year ended September 30, 2007
Exhibit 99.1
NEWS RELEASE
AMCON DISTRIBUTING COMPANY REPORTS RECORD FULLY DILUTED EARNINGS PER SHARE OF
$5.16 FOR THE YEAR ENDED SEPTEMBER 30, 2007
Chicago, IL, November 8, 2007 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to
announce for the fiscal year ended September 30, 2007 fully diluted earnings
per share of $5.16 on net income available to common stockholders of $4.0
million. In addition, AMCON ended the year with consolidated stockholders
equity of $5.5 million.
"We had a fantastic year which reflects our company wide commitment to
deliver superior service and value to our customers. Further, this is a
reflection of the initial success of our strategic plan which was implemented
in connection with our corporate restructuring in 2006," said Christopher H.
Atayan AMCON's Chief Executive Officer. Mr. Atayan continued, "We enter
fiscal 2008 with considerable momentum as we continue to address our
strategic initiatives."
Each of AMCON's business segments had a banner year. The wholesale
distribution segment reported revenues of $815.7 million and operating income
before depreciation and amortization of $14.1 million. The retail health food
segment reported revenues of $37.9 million and operating income before
depreciation and amortization of $3.7 million.
"We continue to maintain an active dialogue with our wholesale customers and
vendors focusing on new products and services to increase their bottom line
profit. We believe this partnership approach works to our mutual advantage"
said Kathleen Evans, President of AMCON's wholesale distribution segment. Ms.
Evans added, "The convenience store industry continues to be a vital element
of the consumer products marketplace and we are well positioned as a service
leader in the industry."
"The trend toward a healthy lifestyle continues in a very strong fashion"
said Eric Hinkefent, President of AMCON's retail health food segment. Mr.
Hinkefent continued, "We are continually searching for unique products to
bundle with our premier level of service. This customer-centric strategy
enables us to deliver the premium shopping experience they deserve."
AMCON recently changed its accounting for inventory from last in, first out
(LIFO) to first in, first out (FIFO) cost flow assumption. This change did
not impact the overall operating results for Fiscal 2007. As a result of the
change in accounting method, all prior periods have been reported as if the
new accounting method was in place at that time. "We believe that the change
to a FIFO inventory accounting methodology will provide a more meaningful
presentation of our financial position and results of operation to our
stockholders as it values inventory in a manner which more closely
approximates current or replacement cost," said Andrew Plummer, AMCON's Chief
Financial Officer. In addition, as previously reported during the fourth
fiscal quarter the Company settled two significant lawsuits. Mr. Plummer
added, "We have spent a considerable amount of time and corporate resources
resolving these two legal matters. We will now be able to focus our resources
into growing our core businesses."
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 a total of 13 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.
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
CONSOLIDATED BALANCE SHEETS
AMCON Distributing Company and Subsidiaries
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September 30, 2007 2006
As restated/1/
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ASSETS
Current assets:
Cash $ 717,554 $ 481,138
Accounts receivable, less allowance
for doubtful accounts of $0.3 million
and $0.9 million in 2007 and 2006, respectively 27,848,938 27,815,751
Inventories, net 29,738,727 29,407,201
Deferred income taxes 1,446,389 1,511,650
Current assets of discontinued operations 18,897 1,270,198
Prepaid and other current assets 5,935,208 5,369,154
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Total current assets 65,705,713 65,855,092
Property and equipment, net 11,190,768 12,528,539
Goodwill 5,848,808 5,848,808
Other intangible assets, net 3,400,070 3,439,803
Deferred income taxes 2,768,043 5,324,043
Non-current assets of discontinued operations 2,057,033 3,774,106
Other assets 1,093,150 1,247,464
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$ 92,063,585 $ 98,017,855
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,253,562 $ 14,633,124
Accrued expenses 5,293,923 4,687,789
Accrued wages, salaries and bonuses 2,202,594 1,879,699
Income taxes payable 367,773 168,936
Current liabilities of discontinued operations 4,035,863 7,461,549
Current maturities of credit facility 3,046,000 3,896,000
Current maturities of long-term debt 568,024 524,130
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Total current liabilities 30,767,739 33,251,227
Credit facility, less current maturities 35,808,180 44,927,429
Long-term debt, less current maturities 7,123,453 7,069,357
Noncurrent liabilities of discontinued operations 6,542,310 5,087,230
Series A cumulative, convertible preferred stock, $.01 par value
100,000 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 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 authorized and issued, liquidation preference
$25.00 per share 1,982,372 1,982,372
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares
authorized, 260,000 outstanding and issued in Series A, B and C
referred to above - -
Common stock, $.01 par value, 3,000,000 shares
authorized, 529,436 outstanding for 2007 and
527,062 outstanding for 2006 5,295 5,271
Additional paid-in capital 6,396,131 6,278,476
Accumulated deficit (857,895) (4,879,507)
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Total shareholders' equity 5,543,531 1,404,240
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$ 92,063,585 $ 98,017,855
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CONSOLIDATED STATEMENTS OF OPERATIONS
AMCON Distributing Company and Subsidiaries
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Fiscal Years Ended September 2007 2006 2005
As restated/1/ As restated/1/
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Sales (including excise taxes of $208.2 million,
$200.6 million and $197.7 million, respectively) $ 853,566,512 $ 839,539,780 $ 834,551,448
Cost of sales 789,317,758 779,189,369 773,292,164
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Gross profit 64,248,754 60,350,411 61,259,284
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Selling, general and administrative expenses 50,963,645 51,721,525 51,032,197
Depreciation and amortization 1,831,640 1,936,897 2,155,983
Impairment charges - - 4,234,856
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52,795,285 53,658,422 57,423,036
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Operating income 11,453,469 6,691,989 3,836,248
Other expense (income):
Interest expense 4,816,324 4,858,012 4,211,685
Other (income), net (194,608) (137,241) (80,105)
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4,621,716 4,720,771 4,131,580
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Income (loss) from continuing operations
before income tax expense 6,831,753 1,971,218 (295,332)
Income tax expense 2,626,000 514,000 94,000
Minority interest in loss, net of tax - - (97,100)
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Income (loss) from continuing operations 4,205,753 1,457,218 (292,232)
Discontinued operations
Gain on disposal of discontinued
operations, net of income tax expense
of $0.6 million 829,090 - -
Loss from discontinued operations, net of
income tax benefit of $0.3 million,
$1.1 million and $5.4 million, respectively (594,539) (2,435,766) (11,960,904)
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Income (loss) on discontinued operations 234,551 (2,435,766) (11,960,904)
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Net income (loss) 4,440,304 (978,548) (12,253,136)
Preferred stock dividend requirements (418,692) (366,042) (294,640)
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Net income (loss) available to common shareholders $ 4,021,612 $ (1,344,590) $ (12,547,776)
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Basic earnings (loss) per share
available to common shareholders:
Continuing operations $ 7.19 $ 2.07 $ (1.11)
Discontinued operations 0.44 (4.62) (22.70)
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Net basic earnings (loss) per share
available to common shareholders $ 7.63 $ (2.55) $ (23.81)
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Diluted earnings (loss) per share
available to common shareholders:
Continuing operations $ 4.89 $ 1.82 $ (1.11)
Discontinued operations 0.27 (3.44) (22.70)
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Net diluted earnings (loss) per share
available to common shareholders $ 5.16 $ (1.62) $ (23.81)
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Weighted average shares outstanding:
Basic 527,062 527,062 527,062
Diluted 860,121 708,946 527,062
CONSOLIDATED STATEMENTS OF CASH FLOWS
AMCON Distributing Company and Subsidiaries
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Fiscal Years 2007 2006 2005
As restated/1/ As restated/1/
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,440,304 $ (978,548) $(12,253,136)
Deduct: Income (loss) from discontinued operations,
net of tax 234,551 (2,435,766) (11,960,904)
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Income (loss) from continuing operations 4,205,753 1,457,218 (292,232)
Adjustments to reconcile income (loss) from
continuing operations to net cash flows
from operating activities:
Depreciation 1,791,907 1,897,166 2,039,553
Amortization 39,733 39,731 116,430
Impairment charges - - 4,234,856
Loss (gain) on sale of property and equipment 27,235 30,082 (13,116)
Stock based compensation 70,993 60,000 -
Deferred income taxes 2,621,261 (722,727) (5,691,019)
(Benefit) provision for losses on doubtful accounts (250,196) 179,196 (189,604)
(Benefit) provision for losses on inventory obsolescence 52,242 77,940 (33,520)
Minority interest - - (97,100)
Changes in assets and liabilities,
net of effect of acquisitions:
Accounts receivable 217,009 (814,916) 1,383,923
Inventories (383,768) (1,396,154) 9,288,767
Other current assets (566,058) (205,819) (4,848,246)
Other assets 254,314 (10,891) (160,509)
Accounts payable 739,188 (805,235) (670,130)
Accrued expenses and accrued wages, salaries and bonuses 1,574,429 641,863 1,280,966
Income taxes payable and receivable 198,837 50,138 1,281,423
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Net cash flows from operating activities
- continuing operations 10,592,879 477,592 7,630,442
Net cash flows from operating activities
- discontinued operations (1,929,323) (820,913) 897,434
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Net cash flows from operating activities 8,663,556 (343,321) 8,527,876
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (514,277) (980,510) (2,464,694)
Proceeds from sales of property and equipment 101,328 39,665 116,597
Purchase of trademark - (15,000) -
----------- ----------- -----------
Net cash flows from investing activities
- continuing operations (412,949) (955,845) (2,348,097)
Net cash flows from investing activities
- discontinued operations 3,965,394 (16,818) (585,451)
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Net cash flows from investing activities 3,552,445 (972,663) (2,933,548)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net principal (payments) borrowings on bank credit
agreements (9,969,248) (338,959) 4,352,573
Net proceeds from preferred stock issuance - 1,982,372 1,857,645
Proceeds from borrowings of long-term debt - 237,266 1,399,638
Payments on long-term and subordinated debt (734,416) (670,966) (8,413,374)
Proceeds from exercise of stock options 46,686 - -
Debt issuance costs (100,000) - (446,641)
Dividends paid on preferred stock (418,692) (366,042) (294,640)
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Net cash flows from financing activities
- continuing operations (11,175,670) 843,671 (1,544,799)
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Fiscal Years 2007 2006 2005
As restated/1/ As restated/1/
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Net cash flows from financing activities
- discontinued operations (803,915) 407,178 (3,919,329)
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Net cash flow from financing activities (11,979,585) 1,250,849 (5,464,128)
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Net change in cash 236,416 (65,135) 130,200
Cash, beginning of year 481,138 546,273 416,073
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Cash, end of year $ 717,554 $ 481,138 $ 546,273
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Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 4,890,997 $ 4,858,960 $ 4,376,251
Cash paid (refunded) during the year for
income taxes 94,901 (647) (911,278)
Supplemental disclosure of non-cash information:
Forgiveness of debt and related interest in
connection with settlement of TSI litigation $(3,735,145) $ - $ -
Forgiveness of water royalty in connection
with settlement of TSI litigation (2,807,000) - -
Issuance of note payable in connection with
TSI litigation 5,000,000 - -
Issuance of note payable in settlement for accounts
payable and accrued liability in connection
with settlement of TBG litigation 763,983 - -
Buyer's assumption of HNWC lease in connection with
the sale of HNWC's assets - discontinued operations (225,502) - -
Issuance of note payable in exchange for
accounts payable - discontinued operations - 362,716 -
Acquisition of equipment through capital leases 68,422 - 91,343
/1/ In the fourth quarter of fiscal 2007, the Company changed its inventory valuation method from the
Last-In First-Out (LIFO) method to the First-In First-Out (FIFO) method. The change is preferable as it
provides a more meaningful presentation of the Company's financial position as it values inventory in a
manner which more closely approximates current cost; better represents the underlying commercial substance
of selling the oldest products first; and more accurately reflects the Company's realized periodic income.
As required by U.S. generally accepted accounting principles, this change in accounting principle has been
reflected in the consolidated statements of financial position, consolidated statements of operations, and
consolidated statements of cash flows through retroactive application of the FIFO method. Accordingly,
inventories from continuing operations as of the beginning of fiscal 2005 were increased by the LIFO
reserve ($4.0 million), net current deferred tax assets were decreased ($0.7 million), current assets of
discontinued operations were increased for the impact of related LIFO reserves ($0.1 million), net
non-current deferred tax liabilities were increased ($0.9 million), and shareholders' equity was increased
by the after-tax effect ($2.5 million). Previously reported net income (loss) available to common
shareholders' for the fiscal years 2006 and 2005 were also increased by $0.1 million and $0.5 million
after income taxes, respectively.