AMCON Distributing Company Reports Fully Diluted Earnings Per Share Of $2.05 For The Second Fiscal Quarter Ended March 31, 2011

AMCON Distributing Company (“AMCON”) (NYSE AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $2.05 on net income available to common stockholders of $1.5 million for the second fiscal quarter ended March 31, 2011. In addition, the Company has extended and expanded its revolving credit agreement with its bank group. The new facility is expandable to $80.0 million and has improved terms.

“Our management team did a good job this quarter, especially given the challenging environment our customers faced because of the higher level of energy prices. We are delighted to have an enhanced credit facility that we believe will give us additional flexibility to take advantage of potential acquisitions and merchant opportunities,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer.

Each of AMCON’s business segments had solid quarters. The wholesale distribution segment reported revenues of $206.7 million and operating income before depreciation and amortization of $3.6 million in the second quarter of fiscal 2011. The retail health food segment reported revenues of $9.9 million and operating income before depreciation and amortization of $1.2 million for the same period.

“We are taking a long range view as we continue to make investments in foodservice, technology and related value added propositions designed to increase our customers’ bottom line. Our customers appreciate this partnership approach as they build their businesses,” said Kathleen Evans, President of AMCON’s Wholesale segment.

“We are carefully evaluating new store locations in both of the regions we operate in. Our recent store opening in Tulsa, Oklahoma has met our expectations. Our niche in the retail market is well defined and we believe there is room to prudently expand,” said Eric Hinkefent, President of AMCON’s Retail Health Food segment.

“Our stockholders’ equity grew to $36.9 million and consolidated debt decreased to $20.6 million. Our focused strategy of maintaining high liquidity levels has allowed us to successfully renew our credit agreement with significantly enhanced terms. We continue to carefully evaluate growth opportunities including a number of capital projects related to information technology and foodservice that are designed to enhance our competitive position in the markets we serve,” said Andrew Plummer, AMCON’s Chief Financial Officer.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, foodservice, frozen and chilled foods, and health and beauty care products with locations in Arkansas, Illinois, Missouri, Nebraska, North Dakota and South Dakota. AMCON also operates fourteen (14) health and natural product retail stores in the Midwest and Florida. The retail stores operate under the names Chamberlin's Market & Cafe www.chamberlins.com and Akin’s Natural Foods Market www.akins.com.

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 and the other factors described under Item 1.A. of the Company’s Annual Report on Form 10-K. 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, 2011 and September 30, 2010
   
March September
2011 2010
(Unaudited)
ASSETS
Current assets:
Cash $ 398,982 $ 356,735

Accounts receivable, less allowance for doubtful accounts of $0.8 million and $1.6 million at March 2011 and September 2010, respectively
24,800,880 27,903,689
Inventories, net 33,939,682 35,005,957
Deferred income taxes 1,518,492 1,905,974
Prepaid and other current assets   4,154,742   3,013,485
Total current assets 64,812,778 68,185,840
 
Property and equipment, net 11,919,797 11,855,669
Goodwill 6,149,168 6,149,168
Other intangible assets, net 4,706,394 4,807,644
Other assets   1,177,614   1,069,050
$ 88,765,751 $ 92,067,371
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 16,307,547 $ 16,656,257
Accrued expenses 6,569,164 6,007,900
Accrued wages, salaries and bonuses 2,080,139 3,161,817
Income taxes payable 531,884 2,366,667
Current maturities of long-term debt   745,177   893,291
Total current liabilities 26,233,911 29,085,932
 
Credit facility 14,980,497 18,816,709
Deferred income taxes 1,145,250 1,075,861
Long-term debt, less current maturities 4,902,732 5,226,586
Other long-term liabilities 71,061 587,479

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 value, 1,000,000 shares authorized, 180,000 shares outstanding and issued in Series A and B referred to above

Common stock, $.01 par value, 3,000,000 shares authorized, 590,232 shares outstanding at March 2011 and 577,432 shares outstanding at September 2010
5,902 5,774
Additional paid-in capital 9,482,317 8,376,640
Retained earnings   27,444,081   24,392,390
Total shareholders’ equity   36,932,300   32,774,804
$ 88,765,751 $ 92,067,371
 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and six months ended March 31, 2011 and 2010
   
For the three months For the six months
ended March ended March
2011   2010 2011   2010

Sales (including excise taxes of $70.8 million and $76.9 million, and $152.1 million and $158.4 million, respectively)
$ 216,603,039 $ 230,499,129 $ 461,560,200 $ 474,440,167
Cost of sales   200,233,927     213,558,955     427,583,366     440,271,980  
Gross profit   16,369,112     16,940,174     33,976,834     34,168,187  
 

Selling, general and administrative expenses
12,909,642 13,365,802 26,597,013 27,144,541
Depreciation and amortization   507,133     415,572     1,004,716     802,841  
  13,416,775     13,781,374     27,601,729     27,947,382  
Operating income   2,952,337     3,158,800     6,375,105     6,220,805  
 
Other expense (income):
Interest expense 263,872 368,425 648,455 773,670
Other (income), net   (45,211 )   (23,046 )   (68,092 )   (36,426 )
  218,661     345,379     580,363     737,244  
Income from operations before income tax 2,733,676 2,813,421 5,794,742 5,483,561
Income tax expense   1,149,000     1,022,000     2,378,000     1,963,000  
Net income 1,584,676 1,791,421 3,416,742 3,520,561
Preferred stock dividend requirements   (73,239 )   (73,239 )   (148,106 )   (148,106 )
Net income available to common shareholders $ 1,511,437   $ 1,718,182   $ 3,268,636   $ 3,372,455  
 
 
Basic earnings per share available to common shareholders: $ 2.56 $ 3.05 $ 5.60 $ 6.00
Diluted earnings per share available to common shareholders: $ 2.05 $ 2.40 $ 4.47 $ 4.72
 
Basic weighted average shares outstanding 589,454 564,216 583,986 562,145
Diluted weighted average shares outstanding 771,738 746,873 765,067 745,773
 

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the six months ended March 31, 2011 and 2010
   
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,416,742 $ 3,520,561

Adjustments to reconcile net income from operations to net cash flows from operating activities:
Depreciation 845,120 678,860
Amortization 159,596 123,981
Gain on sale of property and equipment (8,722 ) (16,935 )
Stock based compensation 1,514,567 267,464
Net excess tax benefit on equity-based awards (125,904 ) (130,126 )
Deferred income taxes 456,871 (34,196 )
Provision for (recoveries) losses on doubtful accounts (843,000 ) 178,367
Provision for losses on inventory obsolescence 26,538 16,393
Other (4,022 )
 
Changes in assets and liabilities:
Accounts receivable 3,945,809 491,271
Inventories 1,039,737 1,125,441
Prepaid and other current assets (1,141,257 ) (519,415 )
Other assets (108,564 ) (47,087 )
Accounts payable (319,457 ) 1,144,665
Accrued expenses and accrued wages, salaries and bonuses (1,625,822 ) (1,878,536 )
Income tax payable   (1,708,879 )   (2,977,213 )
Net cash flows from operating activities 5,519,353 1,943,495
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (957,254 ) (1,102,929 )
Proceeds from sales of property and equipment 27,475 42,905
Acquisition       (3,099,836 )
Net cash flows from investing activities (929,779 ) (4,159,860 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings on bank credit agreements (3,836,212 ) 3,025,076
Principal payments on long-term debt (471,968 ) (433,443 )
Proceeds from exercise of stock options 68,965
Net excess tax benefit on equity-based awards 125,904 130,126
Dividends paid on convertible preferred stock (148,106 ) (148,106 )
Dividends on common stock   (216,945 )   (206,759 )
Net cash flows from financing activities   (4,547,327 )   2,435,859  
Net change in cash 42,247 219,494
 

Cash, beginning of period
  356,735     309,914  
Cash, end of period $ 398,982   $ 529,408  
 
 
2011 2010
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 668,389 $ 760,727
Cash paid during the period for income taxes 3,630,007 4,974,408
 
Supplemental disclosure of non-cash information:
Equipment acquisitions classified as accounts payable 8,953 85,939
 
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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