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) April 17, 2007
-------------------------------------------------------------------
AMCON DISTRIBUTING COMPANY
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-15589 47-0702918
------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7405 Irvington Road, Omaha, NE 68122
------------------------------------
(Address of principal executive offices) (Zip Code)
(402) 331-3727
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(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 2.02 Results of Operations and Financial Condition.
On April 19, 2007, AMCON Distributing Company ("AMCON or "Company") issued a
press release announcing its financial results for the second fiscal quarter
ended March 31, 2007. 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 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As reflected in the press release referred to in Item 2.02 of this report,
all items on the agenda that were brought before our shareholders at our
annual meeting held on April 17, 2007, were approved.
Among the items approved by shareholders at our annual meeting was the grant
to our Chief Executive Officer, Christopher Atayan, of a non-qualified stock
option to purchase 25,000 shares of our common stock. The option vests and
is exercisable in three equal installments beginning December 12, 2007, and
has an exercise price of $18.00 per share. The terms of this option are more
fully described in the definitive proxy statement for the annual meeting of
shareholders filed with the Commission pursuant to Regulation 14A on March 9,
2007.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT NO. DESCRIPTION
99.1 Press release, dated April 19, 2007, issued
by AMCON Distributing Company announcing
financial results for the second fiscal quarter
ended March 31, 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: April 19, 2007 By : Andrew C. Plummer
-------------------------
Name: Andrew C. Plummer
Title: Vice President &
Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit Description
99.1 Press release, dated April 19, 2007, issued by AMCON
Distributing Company announcing financial results for the
second fiscal quarter ended March 31, 2007
Exhibit 99.1
AMCON DISTRIBUTING COMPANY ANNOUNCES SECOND QUARTER RESULTS
NEWS RELEASE
Chicago, IL, April 19, 2007 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company has announced
results for the second fiscal quarter and first half ended March 31, 2007.
"Our two core businesses are performing in line with our expectations" said
Christopher Atayan, AMCON's Chief Executive Officer. "However, we continue to
devote considerable resources towards residual litigation in connection with
our discontinued operations."
For the first half of fiscal 2007, AMCON reported revenues of $391.7 million
in its Wholesale Distribution segment and operating income before
depreciation and amortization of $4.7 million. AMCON's retail health food
business reported revenues of $18.9 million and operating income before
depreciation and amortization of $1.7 million for the first half of fiscal
2007.
"AMCON accounts for its inventory using the LIFO cost flow assumption" said
Andrew Plummer AMCON's Chief Financial Officer. "Our LIFO inventory valuation
is driven by changes in the producer price index as published by the Bureau
of Labor Statistics. During the second quarter of fiscal 2007, the increases
in the applicable producer price index resulted in a $736,000 charge to
earnings in our wholesale segment versus $49,000 in the prior year's quarter
and in the retail health food segment, the charge was $145,000 versus a
benefit of $34,000 in the same period for the prior year. Additionally, our
litigation related expenses are accounted for in continuing operations.
During the second quarter of fiscal 2007 we incurred approximately $1.0
million of legal and professional costs. When all these charges were taken
into effect, as well as the results of the discontinued operations, the
Company reported a net loss of $0.97 per diluted share," said Plummer.
In March 2007 the Wholesale division held its annual trade show in Kansas
City, Missouri. Kathleen Evans, President of the AMCON's Wholesale division
commented, "We were especially pleased with the results from our recent trade
show. Our customers and vendors were very receptive to our new E-Click
technology which we have designed to benefit our customers through both ease
of use and efficiency. Market conditions remain competitive and we continue
to emphasize our strong customer service as a competitive differentiation."
"We are selectively investing in certain store equipment to allow for a
broader selection of natural cold and frozen items" said Eric Hinkefent
President of AMCON's Retail Health Food subsidiary, "Our business model,
which emphasizes high levels of customer service, has been well received in
the market. As such we are actively searching for opportunities to add new
stores as we believe the outlook for the natural foods category continues to
be favorable.
Additionally, AMCON conducted its annual meeting of shareholders on April
17th in St. Louis. All items on the agenda that were brought to the
shareholders were approved.
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. 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, 2007 and September 30, 2006
----------------------------------------------------------------------------------------------------
March 2007 September 2006
------------ --------------
ASSETS
Current assets:
Cash $ 561,851 $ 481,138
Accounts receivable, less allowance for doubtful
accounts of $0.9 million and $0.9 million, respectively 26,579,473 27,815,751
Inventories, net 22,018,639 24,443,063
Deferred income taxes 1,847,894 1,972,988
Current assets of discontinued operations 4,332 1,172,805
Prepaid and other current assets 5,365,424 5,369,154
------------ ------------
Total current assets 56,377,613 61,254,899
Property and equipment, net 11,836,153 12,528,539
Goodwill 5,848,808 5,848,808
Other intangible assets 3,419,936 3,439,803
Deferred income taxes 6,306,489 6,772,927
Noncurrent assets from discontinued operations 2,063,393 3,774,106
Other assets 1,281,938 1,247,464
------------ ------------
$ 87,134,330 $ 94,866,546
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 11,682,815 $ 14,633,124
Accrued expenses 4,710,970 4,687,789
Accrued wages, salaries and bonuses 1,784,919 1,879,699
Income taxes payable 149,354 168,936
Current liabilities of discontinued operations 7,531,674 7,461,549
Current maturities of credit facility 3,646,000 3,896,000
Current maturities of long-term debt 477,190 524,130
------------ ------------
Total current liabilities 29,982,922 33,251,227
------------ ------------
Credit facility, less current maturities 42,319,352 44,927,429
Long-term debt, less current maturities 6,827,727 7,069,357
Noncurrent liabilities of discontinued operations 2,807,000 5,087,230
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 (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 outstanding 5,271 5,271
Additional paid-in capital 6,284,476 6,278,476
Accumulated deficit (7,370,790) (8,030,816)
------------ ------------
Total shareholders' deficiency (1,081,043) (1,747,069)
------------ ------------
$ 87,134,330 $ 94,866,546
============ ============
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three and six months ended March 31, 2007 and 2006
---------------------------------------------------------------------------------------------------------
For the three months For the six months
ended March ended March
----------------------------- -----------------------------
2007 2006 2007 2006
------------- ------------- ------------- -------------
Sales (including excise taxes of $48.4
million and $46.9 million, and $98.0
million and $95.1 million, respectively) $ 201,176,501 $ 195,803,790 $ 410,542,650 $ 394,020,871
Cost of sales 186,809,844 181,164,019 381,134,862 365,353,770
------------- ------------- ------------- -------------
Gross profit 14,366,657 14,639,771 29,407,788 28,667,101
------------- ------------- ------------- -------------
Selling, general and administrative expenses 13,045,926 12,581,580 25,451,009 25,231,796
Depreciation and amortization 456,204 482,861 914,047 961,587
------------- ------------- ------------- -------------
13,502,130 13,064,441 26,365,056 26,193,383
------------- ------------- ------------- -------------
Operating income 864,527 1,575,330 3,042,732 2,473,718
------------- ------------- ------------- -------------
Other expense (income):
Interest expense 1,237,976 1,109,885 2,506,638 2,267,350
Other (income), net (32,225) (28,810) (63,307) (49,591)
------------- ------------- ------------- -------------
1,205,751 1,081,075 2,443,331 2,217,759
------------- ------------- ------------- -------------
(Loss) income from continuing operations
before income tax (benefit) expense (341,224) 494,255 599,401 255,959
Income tax (benefit) expense (125,000) 205,000 238,000 126,000
------------- ------------- ------------- -------------
(Loss) income from continuing operations (216,224) 289,255 361,401 129,959
Discontinued operations
(Loss) gain on disposal of discontinued
operations, net of income tax (benefit)
expense of ($0.04) million and $0.6
million, respectively (66,498) - 829,090 -
Loss from discontinued operations,
net of income tax (benefit) of ($0.1)
million and ($0.4) million, and ($0.2)
million and ($1.0) million, respectively (124,283) (789,067) (321,693) (1,816,705)
------------- ------------- ------------- -------------
(Loss) income on discontinued operations (190,781) (789,067) 507,397 (1,816,705)
------------- ------------- ------------- -------------
Net (loss) income (407,005) (499,812) 868,798 (1,686,746)
Preferred stock dividend requirements (103,239) (81,239) (208,772) (156,106)
------------- ------------- ------------- -------------
Net (loss) income available to common
shareholders $ (510,244) $ (581,051) $ 660,026 $ (1,842,852)
============= ============= ============= =============
Basic (loss) earnings per share
available to common shareholders:
Continuing operations $ (0.61) $ 0.39 $ 0.29 $ (0.05)
Discontinued operations (0.36) (1.49) 0.96 (3.45)
------------- ------------- ------------- -------------
Net basic (loss) earnings per share
available to common shareholders $ (0.97) $ (1.10) $ 1.25 $ (3.50)
============= ============= ============= =============
Diluted (loss) earnings per share
available to common shareholders:
Continuing operations $ (0.61) $ 0.37 $ 0.28 $ (0.05)
Discontinued operations (0.36) (1.35) 0.93 (3.45)
------------- ------------- ------------- -------------
Net diluted (loss) earnings per share
available to common shareholders $ (0.97) $ (0.98) $ 1.21 $ (3.50)
============= ============= ============= =============
Weighted average shares outstanding:
Basic 527,062 527,062 527,062 527,062
Diluted 527,062 584,517 546,131 527,062
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the six months ended March 31, 2007 and 2006
-------------------------------------------------------------------------------
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 868,798 $ (1,686,746)
Deduct: income (loss) from discontinued operations, net of tax 507,397 (1,816,705)
------------ ------------
Income from continuing operations 361,401 129,959
Adjustments to reconcile net income from
continuing operations to net cash flows
from operating activities:
Depreciation 894,180 941,722
Amortization 19,867 19,865
(Gain) loss on sale of property and equipment (8,129) 5,171
Stock based compensation 6,000 30,000
Deferred income taxes 591,532 (830,226)
Provision for losses on doubtful accounts (50,195) 319,987
Provision for losses on inventory obsolescence 11,650 136,762
Changes in assets and liabilities:
Accounts receivable 1,286,473 1,673,877
Inventories 2,412,774 (965,064)
Prepaid and other current assets 3,730 550,967
Other assets (34,474) 90,840
Accounts payable (2,950,309) (1,553,341)
Accrued expenses and accrued wages, salaries and bonuses (71,599) (446,058)
Income taxes payable and receivable (19,582) (118,798)
------------ ------------
Net cash flows from operating activities - continuing operations 2,453,319 (14,337)
Net cash flows from operating activities - discontinued operations (1,999,042) (104,783)
------------ ------------
Net cash flows from operating activities 454,277 (119,120)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (211,340) (377,249)
Proceeds from sales of property and equipment 17,675 31,898
Purchase of trademark - (15,000)
------------ ------------
Net cash flows from investing activities - continuing operations (193,665) (360,351)
Net cash flows from investing activities - discontinued operations 3,965,394 (1,021)
------------ ------------
Net cash flows from investing activities 3,771,729 (361,372)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net principal payments on bank credit agreements (2,858,077) (1,620,228)
Net proceeds from preferred stock issuance - 1,982,372
Proceeds from borrowings of long-term debt - 109,811
Dividends paid on preferred stock (208,772) (156,106)
Principal payments on long-term debt (288,570) (334,508)
------------ ------------
Net cash flows from financing activities - continuing operations (3,355,419) (18,659)
Net cash flows from financing activities - discontinued operations (789,874) 558,679
------------ ------------
Net cash flows from financing activities (4,145,293) 540,020
------------ ------------
Net change in cash 80,713 59,528
Cash, beginning of period 481,138 546,273
------------ ------------
Cash, end of period $ 561,851 $ 605,801
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 2,530,779 $ 2,130,593
Cash paid during the period for income taxes 99,050 1,024
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 -
-end-