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) October 2, 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 October 2, 2006, AMCON Distributing Company ("AMCON or "Company") issued a
press release announcing its financial results for the first half of fiscal
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 October 2, 2006, issued
by AMCON Distributing Company announcing
financial results for the first half of fiscal
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: October 2, 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 October 2, 2006, issued by AMCON
Distributing Company announcing financial results for the
first half of fiscal 2006
Exhibit 99.1
AMCON DISTRIBUTING COMPANY REPORTS FIRST HALF FISCAL 2006 FINANCIAL RESULTS
NEWS RELEASE
Chicago, IL, October 2, 2006 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to
announce its financial results for the first and second quarter of 2006, the
half year period ended March 31, 2006 and the corresponding filing of its
related Quarterly Report on Forms 10-Q with the Securities and Exchange
Commission.
William F. Wright, AMCON's Chairman and CEO, commented: "We continue to see
the benefits of our new internal holding company structure. AMCON now has the
necessary human resources in place to facilitate our objective of timely
reporting of results. This, in turn, has enabled our Senior Operating
Executives to focus on profitably growing their businesses. Our core
enterprises remain strong and well recognized as industry leaders."
For the first half of the fiscal 2006, AMCON's wholesale consumer products
distribution business reported segment operating income before depreciation
of approximately $3.5 million and the Retail Health Food Division reported
segment operating income before depreciation of approximately $1.8 million.
Christopher Atayan, AMCON's Vice Chairman and Chief Corporate Officer, noted:
"Our entire organization continues to work around the clock to restore the
financial vitality of the enterprise. Our objective in the short to medium
term is to reduce the levels of debt AMCON employs in the business 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 AMCON's tradition of superior customer service we are in a
position to enhance shareholder value."
Kathleen Evans, AMCON's president, reported "We were able to continue to
carry forward positive momentum during the first half of the year in our
Wholesale business. Our strategy of enhanced customer service differentiates
us from our competition and makes for long lasting and mutually beneficial
customer relationships. As a result, AMCON continues to be awarded new
business from leaders in the convenience store industry."
Eric Hinkefent, President of AMCON's Retail Health Food Division, said "Both
our Akins's and Chamberlin's retail stores are performing at high levels.
Customer satisfaction continues to be a primary mission of ours. This
strategy enables us to generate repeat business with our customers and we
benefit from attractive gross margins as well."
During the second quarter of fiscal 2006, AMCON began reporting its Trinity
Springs subsidiary as a discontinued operation. The reported results for the
second quarter of fiscal 2006 included consolidated revenues of approximately
$197.4 million, operating income of approximately $1.2 million and income
from continuing operations before taxes of approximately $0.1 million. After
giving effect to the losses from discontinued operations, income taxes, and
preferred dividends, the net loss available to common shareholders for the
second fiscal quarter of 2006 was $0.6 million. For the first half of fiscal
2006, the reported revenues were $397.0 million and operating earnings were
$1.7 million. The total net loss available to common shareholders for the
first half of fiscal 2006 was $1.8 million.
"It is important to note that incorporated into both our three and six month
periods for fiscal 2006 were segment operating losses of approximately $0.4
million and $0.8 million, respectively, from our water bottling subsidiary,
Hawaiian Natural Water Company, as well as additional net losses of
approximately $0.5 million and $1.3 million from our discontinued operations
at Trinity Springs, Inc. and The Beverage Group, Inc. for the three and six
month periods in fiscal 2006" reported Andrew Plummer, AMCON's Acting Chief
Financial Officer. As previously reported, AMCON has been actively exploring
the sale of Hawaiian Natural Water Company and has ceased operations at
Trinity Springs and is engaged in settlement discussions.
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
March 31, 2006 and September 30, 2005
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March 2006 September 2005
(Unaudited)
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ASSETS
Current assets:
Cash $ 605,801 $ 546,273
Accounts receivable, less allowance for doubtful
accounts of $1.0 million and $0.6 million, respectively 25,736,271 28,202,857
Inventories 24,711,252 23,977,889
Deferred income taxes 1,642,212 1,642,212
Current assets of discontinued operations 89,747 1,159,228
Prepaid and other current assets 4,666,230 5,269,784
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Total current assets 57,451,513 60,798,243
Property and equipment 14,425,882 15,162,007
Deferred income taxes 7,130,729 6,300,503
Noncurrent assets from discontinued operations 2,414,795 2,475,803
Goodwill 5,848,808 5,848,808
Other intangible assets 3,459,669 3,464,534
Other assets 1,165,879 1,258,899
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$ 91,897,275 $ 95,308,797
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 15,713,441 $ 17,047,833
Accrued expenses 4,409,843 4,990,814
Accrued wages, salaries and bonuses 1,322,565 1,601,666
Income taxes payable - 118,798
Current liabilities of discontinued operations 5,096,627 4,098,412
Current portion of revolving credit facility 1,432,000 1,432,000
Current portion of long-term debt 879,437 936,198
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Total current liabilities 28,853,913 30,225,721
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Revolving credit facility, less current portion 46,110,160 47,730,388
Long-term debt, less current portion 7,319,558 7,636,468
Noncurrent liabilities of discontinued operations 5,424,032 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 (Note 12)
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 6,248,476 6,218,476
Accumulated other comprehensive income,
net of tax of $0.1 million in 2006 and 2005 53,814 101,294
Accumulated deficit (8,396,321) (6,553,469)
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Total shareholders' deficiency (2,088,760) (228,428)
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$ 91,897,275 $ 95,308,797
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AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and six month periods ended March 31, 2006 and 2005
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For the three months For the six months
ended March ended March
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2006 2005 2006 2005
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Sales (including excise taxes of
$46.9 million and $45.4 million,
and $95.1 million and $95.0 million,
respectively) $ 197,372,151 $ 193,058,021 $ 397,018,642 $ 406,735,741
Cost of sales 182,725,769 179,443,803 368,454,419 377,862,039
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Gross profit 14,646,382 13,614,218 28,564,223 28,873,702
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Selling, general and administrative
expenses 12,986,065 12,774,757 25,892,724 25,784,749
Depreciation and amortization 494,867 553,928 985,597 1,146,270
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13,480,932 13,328,685 26,878,321 26,931,019
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Operating income 1,165,450 285,533 1,685,902 1,942,683
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Other expense (income):
Interest expense 1,112,440 1,015,348 2,277,969 2,051,435
Other (income) expense, net (28,809) 43,538 (49,591) (15,852)
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1,083,631 1,058,886 2,228,378 2,035,583
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Income (loss) from continuing operations
before income taxes 81,819 (773,353) (542,476) (92,900)
Income tax expense (benefit) 65,000 (281,000) (146,000) 11,000
Minority interest - - - (97,100)
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Income (loss) from continuing operations 16,819 (492,353) (396,476) (6,800)
Loss from discontinued operations,
net of income tax benefit
of $0.3 million and $0.9 million,
$0.8 million and $1.5 million, respectively (516,631) (1,412,055) (1,290,270) (2,361,650)
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Net loss (499,812) (1,904,408) (1,686,746) (2,368,450)
Preferred stock dividend requirements (81,239) (73,239) (156,106) (145,720)
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Net loss available to common shareholders $ (581,051) $ (1,977,647) $ (1,842,852) $ (2,514,170)
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Basic loss per share
available to common shareholders:
Continuing operations $ (0.12) $ (1.07) $ (1.05) $ (0.29)
Discontinued operations (0.98) (2.68) (2.45) (4.48)
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Net basic loss per share
available to common shareholders $ (1.10) $ (3.75) $ (3.50) $ (4.77)
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Diluted loss per share
available to common shareholders:
Continuing operations $ (0.12) $ (1.07) $ (1.05) $ (0.29)
Discontinued operations (0.98) (2.68) (2.45) (4.48)
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Net diluted loss per share
available to common shareholders $ (1.10) $ (3.75) $ (3.50) $ (4.77)
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Weighted average shares outstanding:
Basic 527,062 527,062 527,062 527,062
Diluted 527,062 527,062 527,062 527,062
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the six month periods ended March 31, 2006 and 2005
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2006 2005
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,686,746) $ (2,368,450)
Deduct: Loss from discontinued operations, net of tax 1,290,270 2,361,650
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Loss from continuing operations (396,476) (6,800)
Adjustments to reconcile loss from
continuing operations to net cash flows
from operating activities:
Depreciation 1,074,655 1,147,762
Amortization 19,865 107,432
(Gain) loss on sale of property and equipment 5,171 (5,006)
Stock based compensation 30,000 -
Deferred income taxes (830,226) (1,416,076)
Provision for losses on doubtful accounts 394,792 230,447
Provision for losses on inventory obsolescence 16,313 139,852
Minority interest - (97,100)
Changes in assets and liabilities,
net of effect of acquisitions:
Accounts receivable 2,071,794 (630,591)
Inventories (749,676) 5,732,428
Other current assets 556,074 (490,474)
Other assets 93,020 92,095
Accounts payable (1,334,392) (4,238,611)
Accrued expenses and accrued wages, salaries and bonuses (860,072) 163,232
Income taxes payable and receivable (118,798) 205,241
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Net cash flows from operating activities - continuing operations (27,956) 933,831
Net cash flows from operating activities - discontinued operations (91,164) (1,401,642)
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Net cash flows from operating activities (119,120) (467,811)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (392,349) (2,244,584)
Proceeds from sales of property and equipment 48,648 77,447
Purchase of trademark (15,000) -
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Net cash flows from investing activities - continuing operations (358,701) (2,167,137)
Net cash flows from investing activities - discontinued operations (2,671) (67,568)
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Net cash flows from investing activities (361,372) (2,234,705)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings on revolving credit facility (1,620,228) 11,231,412
Net proceeds from preferred stock issuance 1,982,372 1,857,645
Proceeds from borrowings of long-term debt 109,811 1,295,988
Dividends paid on preferred stock (156,106) (145,720)
Principal payments on long-term debt and subordinated debt (483,482) (11,396,176)
Debt issue costs - (446,641)
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Net cash flows from financing activities - continuing operations (167,633) 2,396,508
Net cash flows from financing activities - discontinued operations 707,653 465,237
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Net cash flows from financing activities 540,020 2,861,745
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Net change in cash 59,528 159,229
Cash, beginning of period 546,273 416,073
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Cash, end of period $ 605,801 $ 575,302
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Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 2,130,593 $ 1,748,264
Cash paid (refunded) during the period for income taxes 1,024 (197,425)
-end-