UNITED STATES
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) July 14, 2008
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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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17
---- CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
---- 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
---- Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
---- Exchange Act (17 CFO 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 14, 2008, the Company refinanced a real estate note payable that is
collateralized by two of the Company's distribution facilities (Bismarck, ND and
Quincy, IL). The note payable was originally due in April 2009 and had a
balance of approximately $5.6 million at June 2008. The terms of the new note
payable include a fixed interest rate of 6.8% with monthly principal and
interest installments of $58,303 due through June 2013. The remaining principal
is due at maturity in June 2013.
On July 17, 2008, the Company amended and executed an early renewal of its
$55.0 million credit agreement with Bank of America (the "Facility"), which
originally was scheduled to mature in April 2009. The significant changes to
the Facility agreement include:
- The Facility bears interest at either the bank's prime rate or at
a LIBOR based rate depending on the election made by the Company.
- The Facility matures on June 30, 2011.
- The Facility provides for an additional $5.0 million of credit
available for inventory purchases. These advances bear interest
at the bank's prime rate plus one-quarter of one percent (1/4%) per
annum and are payable within 45 days of each advance.
- The Facility includes a prepayment penalty equal to one percent (1%)
of the prepayment loan limit of $55.0 million if prepayment occurs on
or before June 30, 2009 and one-half of one percent (1/2%) if prepayment
occurs subsequent to June 30, 2009 but on or before June 30, 2010.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 18, 2008, AMCON Distributing Company ("AMCON or "Company") issued a
press release announcing its financial results for the third fiscal quarter
ended June 30, 2008. A copy of the press release is attached to this report
as an exhibit and is incorporated herein by reference.
The information in this 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 report (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 July 18, 2008, issued
by AMCON Distributing Company announcing
financial results for the third fiscal quarter
ended June 30, 2008
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: July 18, 2008 By: Andrew C. Plummer
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Name: Andrew C. Plummer
Title: Vice President &
Chief Financial Officer
Exhibit 99.1
AMCON DISTRIBUTING COMPANY REPORTS FULLY DILUTED EARNINGS PER SHARE FOR THE
QUARTER ENDED JUNE 30, 2008
NEWS RELEASE
Chicago, IL, July 18, 2008 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to
announce fully diluted earnings per share of $1.63 for the third fiscal
quarter ended June 30, 2008.
"This quarter's performance was exceptional when all the external factors are
taken into consideration. We experienced catastrophic floods in our market,
all time record fuel prices and an overall declining economy. Despite this
adverse background, our team was able to turn in another strong performance.
Our corporate focus on delivering superior service to our customers continues
to differentiate AMCON and as a result we were able to gain new customers in
our wholesale segment and continue to show leadership in retail," said
Christopher Atayan, AMCON's Chairman and Chief Executive Officer. "We
emphasize fundamentals and that is why we can adapt in difficult conditions.
Our banks recognized this and renewed our credit facility one year early."
AMCON reported revenues of $213.6 million in its Wholesale Distribution
business and operating income before depreciation and amortization of $3.5
million in the third fiscal quarter. AMCON's Retail Health Food business
reported revenues of $9.8 million and operating income before depreciation
and amortization of $0.9 million.
Kathleen Evans, President of AMCON's Wholesale Distribution business
commented, "Our managers worked diligently to make sure our customer base in
the flood impacted areas experienced minimal disruptions. Clearly the fuel
environment is challenging for us, our customers and their retail consumers.
We are working closely with our vendors and customers to create value added
propositions that we believe enable the consumer to stretch their budget and
enhance loyalty."
Eric Hinkefent, President of AMCON's Retail Health Food business commented,
"The market for natural products continues to be strong. We are committed to
investing in our stores to maintain our position as the quality leader. We
were especially pleased with the reintroduction of our website at our Akins
subsidiary www.akins.com."
Income from continuing operations before income taxes was $1.5 million for
the third fiscal quarter ended June 30, 2008 compared to $1.6 million in the
comparable period in the prior year. The litigation matters that were
resolved in the prior fiscal year have reduced our professional and legal
costs during the period with significantly higher fuel costs partially
offsetting that decrease. Additionally, interest expense decreased during
the period because of lower borrowings and interest rates.
"We are aggressively managing expenses in this tough environment," commented
Andrew Plummer AMCON's Chief Financial Officer. "We are especially pleased
to announce that we were able to renew our credit facility one year early and
extend it for another three years. This is a testament to our conservative
financial posture given the tight credit markets. There is a direct
correlation between our liquidity and our ability to develop opportunities
for our customers."
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.
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
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, 2008 and September 30, 2007
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June 2008 September
(Unaudited) 2007
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ASSETS
Current assets:
Cash $ 646,696 $ 717,554
Accounts receivable, less allowance for doubtful
accounts of $0.5 million and $0.3 million, respectively 25,537,979 27,848,938
Inventories, net 37,730,061 29,738,727
Deferred income taxes 1,588,880 1,446,389
Current assets of discontinued operations 3,485 18,897
Prepaid and other current assets 4,261,048 5,935,208
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Total current assets 69,768,149 65,705,713
Property and equipment, net 11,080,791 11,190,768
Goodwill 5,848,808 5,848,808
Other intangible assets, net 3,373,269 3,400,070
Deferred income taxes 625,261 2,768,043
Non-current assets of discontinued operations 2,057,033 2,057,033
Other assets 1,346,397 1,093,150
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$ 94,099,708 $ 92,063,585
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,017,107 $ 15,253,562
Accrued expenses 5,176,143 5,293,923
Accrued wages, salaries and bonuses 1,654,009 2,202,594
Income taxes payable 197,407 367,773
Current liabilities of discontinued operations 4,199,466 4,035,863
Current maturities of credit facility 3,046,000 3,046,000
Current maturities of long-term debt 726,548 568,024
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Total current liabilities 30,016,680 30,767,739
Credit facility, less current maturities 35,354,698 35,808,180
Long-term debt, less current maturities 6,794,247 7,123,453
Noncurrent liabilities of discontinued operations 6,542,310 6,542,310
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 1,982,372
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par, 1,000,000 shares authorized,
260,000 shares outstanding and issued in Series A, B and C
referred to above - -
Common stock, $.01 par value, 3,000,000 shares authorized,
568,564 shares outstanding at June 2008 and 529,436
shares outstanding at September 2007 5,686 5,295
Additional paid-in capital 6,817,726 6,396,131
Retained earnings (deficit) 2,289,989 (857,895)
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Total shareholders' equity 9,113,401 5,543,531
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$ 94,099,708 $ 92,063,585
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AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and nine months ended June 30, 2008 and 2007
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For the three months For the nine months
ended June ended June
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2008 2007 2008 2007
As Restated/1/ As Restated/1/
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Sales (including excise taxes of $53.6
million and $54.5 million, and $151.5
million and $152.5 million, respectively) $ 223,397,392 $ 220,072,350 $ 624,472,299 $ 630,615,000
Cost of sales 207,135,083 203,027,613 577,272,429 583,227,961
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Gross profit 16,262,309 17,044,737 47,199,870 47,387,039
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Selling, general and administrative expenses 12,959,518 12,950,796 37,866,602 38,401,805
Depreciation and amortization 340,983 450,902 1,043,266 1,364,949
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13,300,501 13,401,698 38,909,868 39,766,754
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Operating income 2,961,808 3,643,039 8,290,002 7,620,285
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Other expense (income):
Interest expense 635,523 1,176,313 2,354,883 3,682,951
Other (income), net (17,958) (81,510) (90,437) (144,816)
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617,565 1,094,803 2,264,446 3,538,135
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Income from continuing operations
before income tax expense 2,344,243 2,548,236 6,025,556 4,082,150
Income tax expense 857,000 995,000 2,226,000 1,586,000
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Income from continuing operations 1,487,243 1,553,236 3,799,556 2,496,150
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 ($0.1)
million and ($0.1) million, and ($0.2)
million and ($0.3) million, respectively (98,441) (131,740) (291,881) (514,070)
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(Loss) income on discontinued operations (98,441) (131,740) (291,881) 315,020
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Net income 1,388,802 1,421,496 3,507,675 2,811,170
Preferred stock dividend requirements (104,386) (104,386) (314,306) (313,158)
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Net income available to common shareholders $ 1,284,416 $ 1,317,110 $ 3,193,369 $ 2,498,012
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Basic earnings (loss) per share
available to common shareholders:
Continuing operations $ 2.57 $ 2.75 $ 6.50 $ 4.14
Discontinued operations (0.18) (0.25) (0.54) 0.60
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Net basic earnings per share
available to common shareholders $ 2.39 $ 2.50 $ 5.96 $ 4.74
============= ============= ============= =============
Diluted earnings (loss) per share
available to common shareholders:
Continuing operations $ 1.75 $ 1.80 $ 4.46 $ 2.91
Discontinued operations (0.12) (0.15) (0.34) 0.37
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Net diluted earnings per share
available to common shareholders $ 1.63 $ 1.65 $ 4.12 $ 3.28
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Weighted average shares outstanding:
Basic 537,064 527,062 536,002 527,062
Diluted 851,911 862,598 850,898 858,085
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the nine months ended June 30, 2008 and 2007
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2008 2007
As restated/1/
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,507,675 $ 2,811,170
Deduct: (Loss) income from discontinued operations, net of tax (291,881) 315,020
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Income from continuing operations 3,799,556 2,496,150
Adjustments to reconcile net income from
continuing operations to net cash flows
from operating activities:
Depreciation 1,016,465 1,335,149
Amortization 26,801 29,800
(Gain) on sale of property and equipment (36,417) (16,667)
Stock based compensation 302,350 37,800
Deferred income taxes 2,000,291 1,815,598
Provision (benefit) for losses on doubtful accounts 238,000 (93,192)
Provision for losses on inventory obsolescence 118,976 148,568
Changes in assets and liabilities:
Accounts receivable 2,072,959 1,255,235
Inventories (8,110,310) (1,500,965)
Prepaid and other current assets 1,674,160 (1,001,873)
Other assets (253,247) 96,420
Accounts payable (236,455) (2,310,087)
Accrued expenses and accrued wages, salaries and bonuses (666,365) 563,828
Income tax payable (170,366) (13,220)
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Net cash flows from operating activities - continuing operations 1,776,398 2,842,544
Net cash flows from operating activities - discontinued operations (112,866) (1,915,011)
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Net cash flows from operating activities 1,663,532 927,533
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (667,268) (345,637)
Proceeds from sales of property and equipment 74,821 34,275
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Net cash flows from investing activities - continuing operations (592,447) (311,362)
Net cash flows from investing activities - discontinued operations - 3,965,394
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Net cash flows from investing activities (592,447) 3,654,032
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on bank credit agreements (453,482) (2,956,248)
Dividends on preferred stock (314,306) (313,158)
Dividends on common stock (45,485) -
Proceeds from exercise of stock options 119,636 -
Principal payments on long-term debt (448,306) (415,288)
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Net cash flows from financing activities - continuing operations (1,141,943) (3,684,694)
Net cash flows from financing activities - discontinued operations - (789,874)
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Net cash flows from financing activities (1,141,943) (4,474,568)
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Net change in cash (70,858) 106,997
Cash, beginning of period 717,554 481,138
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Cash, end of period $ 646,696 $ 588,135
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Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 2,488,101 $ 3,729,280
Cash paid during the period for income taxes 221,076 99,050
Supplemental disclosure of non-cash information:
Buyer's assumption of HNWC lease in connection with
the sale of HNWC's assets - discontinued operations - (225,502)
Acquisition of equipment through capital leases 277,624 -
/1/ As previously disclosed in the Company's Fiscal 2007 Annual Report on Form 10-K, during 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. As required by U.S. generally accepted accounting principles, this
change in accounting principle was reflected in the Company's financials statements through the retroactive
application of the FIFO method and the restatement of prior fiscal periods, including the three and nine month
fiscal periods ended June 30, 2007.