AMCON Distributing Company (“AMCON”) (AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per common share of $2.40 per share for the second fiscal quarter ended March 31, 2010.

“We were delighted with the progress our management team has made in integrating our recent acquisition in Northwest Arkansas. We continue to seek acquisitions that will expand our geographic reach and penetration,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer.

AMCON’s wholesale distribution business reported revenues of $221.0 million and operating income before depreciation and amortization of $3.9 million in the second fiscal quarter of 2010. AMCON’s retail health food business reported revenues of $9.5 million and operating income before depreciation of $1.2 million for the same period.

Kathleen M. Evans, President of AMCON’s wholesale distribution business commented, “We had a highly successful trade show this year that highlighted our continued efforts to develop profit making opportunities for our customers. Our continued emphasis on food service products has been met with a positive reception. We were especially proud of our ability to maintain continuity of services to our customers during this very harsh winter season.”

Eric Hinkefent, President of AMCON’s retail health food business commented, “We were delighted to open our new store in Tulsa at the end of the quarter. We are actively exploring opportunities to open additional stores in our existing markets as well as expanding into new markets. Conditions are challenging; however, our continued focus on providing high levels of customer service with a broad product selection at value oriented price is what consumers are seeking.”

“Our business strategy is predicated on maintaining high levels of liquidity. This liquidity enables us to develop proprietary opportunities for our customers to enhance their profitability,” said Andrew C. Plummer, AMCON’s Chief Financial Officer. “We expect the various state and federal governmental authorities who regulate the tobacco industry will continue to seek tax increases in the coming quarters. Our careful working capital management is an important tool for us as we navigate these treacherous waters,” added Plummer.

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 locations in Arkansas, 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 (5). 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

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, 2010 and September 30, 2009
 
  March 2010   September
(Unaudited) 2009
 
ASSETS
Current assets:
Cash $ 529,408 $ 309,914

Accounts receivable, less allowance for doubtful accounts of $1.1 million and $0.9 million, at March 2010 and September 2009
27,723,560 28,393,198
Inventories, net 35,325,691 34,486,027
Deferred income taxes 1,706,641 1,701,568
Prepaid and other current assets   2,243,351   1,728,576
Total current assets 67,528,651 66,619,283
 
Property and equipment, net 11,863,643 11,256,627
Goodwill 6,149,168 5,848,808
Other intangible assets 4,908,894 3,373,269
Other assets   1,073,482   1,026,395
$ 91,523,838 $ 88,124,382
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,453,293 $ 15,222,689
Accrued expenses 5,706,747 6,768,924
Accrued wages, salaries and bonuses 2,441,473 3,257,832
Income taxes payable 876,919 3,984,258
Current maturities of credit facility 76,267 177,867
Current maturities of long-term debt   965,905   1,470,445
Total current liabilities 26,520,604 30,882,015
 
Credit facility, less current maturities 25,782,537 22,655,861
Deferred income taxes 1,227,590 1,256,713
Long-term debt, less current maturities 5,637,282 5,066,185
Other long-term liabilities 459,966 -
 
Series A cumulative, convertible preferred stock, $.01 par value
100,000 shares authorized and issued, liquidation preference
$25.00 per share 2,500,000 2,500,000
Series B cumulative, convertible preferred stock, $.01 par value
80,000 shares authorized and issued, liquidation preference
$25.00 per share 2,000,000 2,000,000
 
 
Shareholders' equity:

Preferred stock, $0.01 par, 1,000,000 shares authorized, 180,000 shares outstanding and issued in Series A and B referred to above
- -

Common stock, $0.01 par value, 3,000,000 shares authorized, 575,508 shares outstanding at March 2010 and 573,232 shares outstanding at September 2009
5,755 5,732
Additional paid-in capital 8,084,026 7,617,494
Retained earnings   19,306,078   16,140,382
Total shareholders' equity   27,395,859   23,763,608
$ 91,523,838 $ 88,124,382
 
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and six months ended March 31, 2010 and 2009
  For the three months   For the six months
ended March ended March
2010   2009 2010   2009
 
Sales (including excise taxes of $76.9
million and $43.3 million, and $158.4
million and $93.6 million, respectively) $ 230,499,129 $ 195,442,246 $ 474,440,167 $ 412,819,608
 
Cost of sales   213,558,955   178,195,212   440,271,980   379,727,926
Gross profit   16,940,174   17,247,034   34,168,187   33,091,682
Selling, general and administrative expenses 13,365,802 13,027,140 27,144,541 25,824,722
Depreciation and amortization   415,572   300,988   802,841   611,322
  13,781,374   13,328,128   27,947,382   26,436,044
Operating income   3,158,800   3,918,906   6,220,805   6,655,638
Other expense (income):
Interest expense 368,425 408,587 773,670 897,786
Other (income), net   (23,046 )   (26,476 )   (36,426 )   (40,543 )
  345,379   382,111   737,244   857,243

Income from continuing operations before income tax
2,813,421 3,536,795 5,483,561 5,798,395
Income tax expense   1,022,000   1,343,000   1,963,000   2,203,000
Income from continuing operations 1,791,421 2,193,795 3,520,561 3,595,395
Loss from discontinued operations,
net of income tax benefit of $0.1
million in each fiscal period -   (97,437 ) -   (199,475 )
Net income 1,791,421 2,096,358 3,520,561 3,395,920
 
Preferred stock dividend requirements   (73,239 )   (314,201 )   (148,106 )   (419,734 )
 
Net income available to common shareholders $ 1,718,182 $ 1,782,157 $ 3,372,455 $ 2,976,186
Basic earnings (loss) per share
available to common shareholders:
Continuing operations $ 3.05 $ 3.43 $ 6.00 $ 5.80
Discontinued operations -   (0.18 ) -   (0.36 )
Net basic earnings per share
available to common shareholders $ 3.05 $ 3.25 $ 6.00 $ 5.44
Diluted earnings (loss) per share
available to common shareholders:
Continuing operations $ 2.40 $ 2.72 $ 4.72 $ 4.33
Discontinued operations -   (0.12 ) -   (0.24 )
Net diluted earnings per share
available to common shareholders $ 2.40 $ 2.60 $ 4.72 $ 4.09
Weighted average shares outstanding:
Basic 564,216 548,619 562,145 547,089
Diluted 746,873 805,236 745,773 830,923
 
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the six months ended March 31, 2010 and 2009
 
  2010   2009
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,520,561 $ 3,395,920
Deduct: Loss from discontinued operations, net of tax -   (199,475 )
Income from continuing operations 3,520,561 3,595,395
 
Adjustments to reconcile net income from
continuing operations to net cash flows
from operating activities:
Depreciation 678,860 611,322
Amortization 123,981 -
Gain on sale of property and equipment (16,935 ) (47,700 )
Stock based compensation 267,464 265,800
Net excess tax (benefit) deficiency on equity-based awards (130,126 ) 16,592
Deferred income taxes (34,196 ) (222,412 )
Provision for losses on doubtful accounts 178,367 346,000
Provision for losses on inventory obsolescence 16,393 327,673
Changes in assets and liabilities:
Accounts receivable 491,271 5,859,370
Inventories 1,125,441 6,480,136
Prepaid and other current assets (519,415 ) (735,490 )
Other assets (47,087 ) 107,646
Accounts payable 1,144,665 (2,852,021 )
Accrued expenses and accrued wages, salaries and bonuses (1,878,536 ) 2,641,991
Income tax payable   (2,977,213 )   2,045,058
Net cash flows from operating activities - continuing operations 1,943,495 18,439,360
Net cash flows from operating activities - discontinued operations -   42,692
Net cash flows from operating activities 1,943,495 18,482,052
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,102,929 ) (497,401 )
Proceeds from sales of property and equipment 42,905 76,405
Acquisition   (3,099,836 ) -
Net cash flows from investing activities (4,159,860 ) (420,996 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) on bank credit agreements 3,025,076 (15,380,790 )
Principal payments on long-term debt (433,443 ) (397,410 )
Proceeds from exercise of stock options 68,965 -
Net excess tax benefit (deficiency) on equity-based awards 130,126 (16,592 )
Redemption of Series C convertible preferred stock - (2,000,000 )
Dividends paid on preferred stock (148,106 ) (198,106 )
Dividends on common stock   (206,759 )   (114,079 )
Net cash flows from financing activities   2,435,859   (18,106,977 )
Net change in cash 219,494 (45,921 )
 
Cash, beginning of period   309,914   457,681
Cash, end of period $ 529,408 $ 411,760
 
 
 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 760,727 $ 968,296
Cash paid during the period for income taxes 4,974,408 264,355
 
Supplemental disclosure of non-cash information:
Equipment acquisitions classified as accounts payable 85,939 -
Constructive dividends on Series A, B, and C
Convertible Preferred Stock - 221,628
 
Business acquisition:
Inventory 1,981,498 -
Property and equipment 122,978 -
Customer relationships intangible asset 1,620,000 -
Goodwill 300,360 -
Note payable 500,000 -
Contingent consideration 425,000 -

Copyright Business Wire 2010

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