DIT AMCON Distributing Co

AMCON Distributing Company (�AMCON�) (AMEX:DIT), an Omaha, Nebraska based consumer products company, is pleased to report fully diluted earnings available to common stock holders of 41 cents per share on net income of $241,865 for the period end June 30, 2006. �We are delighted at the continued progress the corporation has made since we announced our internal reorganization in March 2006� said Christopher Atayan, AMCON�s Chief Executive Officer. �Our core businesses continued their trend of strong performance during the quarter and we began to reap some of the benefits of the aggressive efforts we have instituted to control our non-core water businesses. Our corporate strategic objective in the short to medium term is to reduce the levels of debt we employ at AMCON, 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 our tradition of superior customer service we are well positioned to enhance shareholder value. We are diligently working as a Company on resolving the issues presented by our Beverage businesses and as a result have expended very little cash resources into those businesses. This has resulted in increasing liquidity and financial strength for the entire company� added Atayan. For the first nine months of fiscal 2006, AMCON�s wholesale consumer products distribution business reported segment operating income before depreciation and amortization of approximately $6.6 million and the retail health food business reported segment operating income before depreciation and amortization of approximately $2.4 million. This compares to $5.6 million and $1.2 million for the wholesale and retail businesses, respectively, in the comparable periods one year ago. �AMCON�s legacy of premium customer service has served us well as we remain highly competitive in the market place� noted Kathleen Evans, President of AMCON�s wholesale distribution business, � Our solid performance year to date is a direct reflection of the programs and systems we are developing to enhance our customers profits.� �Our retail health food stores are continuing to perform at historically high levels of revenues and profitability. Consumers are continuing to move in the direction of natural products and we are well positioned to serve them� commented Eric Hinkefent, President of AMCON�s retail health food business, �We continue to differentiate our self in the market place by our high levels of customer service. This has a direct bottom line effect as we benefit from repeat customer business.� Another positive factor in the quarter was the narrowing of losses from Hawaiian Natural Water Company in our beverage segment. Price increases and active financial management of the enterprise contributed to this result. Senior management has invested a significant amount of time and energy toward revitalizing this enterprise. As previously announced, AMCON is actively in negotiations to divest the business. AMCON received an extension of its Revolving Credit agreement through July 2007 and is in active discussions with the bank group with respect to a long term extension. �Our bank group has been very responsive to our needs. Their solid support has enabled us to take advantage of several short term profit opportunities developed by our management team,� commented Andy Plummer, AMCON�s Acting Chief Financial Officer. Plummer also added, �During the recently completed fourth quarter we have incurred substantial professional fees in connection with our prior period audit and the Trinity Springs, Inc. litigation settlement discussions which will impact bottom line profitability when we report those results.� Concurrently with this press release AMCON has filed its third quarter 10-Q with the Securities and Exchange Commission. This now brings AMCON into compliance with the financial reporting compliance requirements of the American Stock Exchange. 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 Set forth below are the full unaudited results for the three and nine month periods ended June 30, 2006: AMCON Distributing Company and Subsidiaries Condensed Consolidated Balance Sheets June 30, 2006 and September 30, 2005 June 2006(Unaudited) September 2005 � ASSETS Current assets: Cash $ 84,020� $ 546,273� Accounts receivable, less allowance for doubtful accounts of $1.0 million and $0.6 million, respectively 30,134,256� 28,202,857� Inventories 30,492,996� 23,977,889� Deferred income taxes 1,642,212� 1,642,212� Current assets of discontinued operations 37,544� 1,159,228� Prepaid and other current assets 4,843,534� 5,269,784� Total current assets 67,234,562� 60,798,243� � Property and equipment 14,102,301� 15,162,007� Deferred income taxes 6,863,737� 6,300,503� Noncurrent assets from discontinued operations 2,382,801� 2,475,803� Goodwill 5,848,808� 5,848,808� Other intangible assets 3,449,736� 3,464,534� Other assets 1,084,769� 1,258,899� $100,966,714� $ 95,308,797� LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $ 15,550,519� $ 17,047,833� Accrued expenses 4,837,193� 4,990,814� Accrued wages, salaries and bonuses 1,171,914� 1,601,666� Income taxes payable -� 118,798� Current liabilities of discontinued operations 4,339,022� 4,098,412� Current maturities of revolving credit facility 3,932,000� 1,432,000� Current maturities of long-term debt 815,005� 936,198� Total current liabilities 30,645,653� 30,225,721� Revolving credit facility, less current maturities 52,768,394� 47,730,388� Long-term debt, less current maturities 7,508,260� 7,636,468� Noncurrent liabilities of discontinued operations 5,651,744� 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 � 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 6,263,476� 6,218,476� Accumulated other comprehensive income, net of tax of $0.1 million in 2005 -� 101,294� Accumulated deficit (8,154,456) (6,553,469) Total shareholders' deficiency (1,885,709) (228,428) $100,966,714� $ 95,308,797� AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and nine month periods ended June 30, 2006 and 2005 For the three monthsended June For the nine monthsended June 2006 2005 2006 2005 Sales (including excise taxes of $52.5 million and $50.1 million, and $147.7 million and $145.2 million, respectively) � � $ 223,954,710� $ 215,124,070� $ 620,973,352� $ 621,859,811� � Cost of sales 208,168,019� 199,928,910� 576,622,438� 577,790,948� Gross profit 15,786,691� 15,195,160� 44,350,914� 44,068,863� Selling, general and administrative expenses 13,096,950� 12,720,659� 38,989,674� 38,533,701� Depreciation and amortization 525,170� 571,940� 1,510,767� 1,718,209� 13,622,120� 13,292,599� 40,500,441� 40,251,910� Operating income 2,164,571� 1,902,561� 3,850,473� 3,816,953� Other (income) expense: Interest expense 1,227,561� 1,063,338� 3,505,530� 3,114,773� Other (income) expense, net (44,424) (32,827) � (94,015) (48,679) 1,183,137� 1,030,511� 3,411,515� 3,066,094� Income from continuing operations before income taxes 981,434� 872,050� 438,958� 750,859� Income tax expense 392,000� 347,000� 246,000� 358,000� Minority interest -� -� -� (97,100) Income from continuing operations 589,434� 525,050� 192,958� 489,959� Loss from discontinued operations, net of income tax benefit of $0.1 million and $0.5 million, $0.9 million and $1.9 million, respectively � � (243,183) (751,473) � (1,533,453) (3,084,832) Net income (loss) 346,251� (226,423) � (1,340,495) (2,594,873) Preferred stock dividend requirements (104,386) (74,053) � (260,492) (219,773) Net income (loss) available to common shareholders $ 241,865� $ (300,476) � $ (1,600,987) $ (2,814,646) Basic earnings (loss) per share available to common shareholders: � Continuing operations $ 0.92� $ 0.86� $ (0.13) $ 0.51� Discontinued operations (0.46) (1.43) � (2.91) (5.85) Net basic earnings (loss) per share available to common shareholders $ 0.46� $ (0.57) � $ (3.04) $ (5.34) Diluted earnings (loss) per share available to common shareholders: � Continuing operations $ 0.69� $ 0.73� $ (0.13) $ 0.49� Discontinued operations (0.28) (1.05) � (2.91) (5.63) Net diluted earnings (loss) per share available to common shareholders $ 0.41� $ (0.32) � $ (3.04) $ (5.14) Weighted average shares outstanding: Basic 527,062� 527,062� 527,062� 527,062� Diluted 854,187� 712,881� 527,062� 547,774� AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the nine month periods ended June 30, 2006 and 2005 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net (Loss) $ (1,340,495) $ (2,594,873) Deduct: (Loss) from discontinued operations, net of tax 1,533,453� 3,084,832� Income from continuing operations Adjustments to reconcile net (loss) income from continuing operations to net cash flows from operating activities: 192,958� 489,959� � � � Depreciation 1,606,824� 1,735,404� Amortization 29,798� 146,196� (Gain) loss on sale of property and equipment 11,570� (20,361) Stock based compensation 45,000� -� Deferred income taxes (563,234) (1,558,608) Provision for losses on doubtful accounts 505,295� 259,080� Provision for losses on inventory obsolescence 46,204� 237,167� Impairment on assets held for sale -� 77,680� Minority interest -� (97,100) Changes in assets and liabilities, net of effect of acquisitions: � Accounts receivable (2,436,694) (3,698,445) Inventories (6,561,311) 7,338,879� Other current assets 324,956� (494,133) Other assets 174,130� (42,286) Accounts payable (1,134,598) (2,391,119) Accrued expenses and accrued wages, salaries and bonuses (583,373) 935,587� Income tax payable and receivable (118,798) 190,445� Net cash flows from operating activities - continuing operations (8,461,273) 3,108,345� Net cash flows from operating activities - discontinued operations (779,463) (1,761,749) Net cash flows from operating activities (9,240,736) 1,346,596� � CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (609,637) (2,469,156) Proceeds from sales property and equipment 50,949� 85,265� Purchase of trademark (15,000) -� Net cash flows from investing activities - continuing operations (573,688) (2,383,891) Net cash flows from investing activities - discontinued operations (2,671) (92,872) Net cash flows from investing activities (576,359) (2,476,763) � CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (payments) on revolving credit facility 7,538,006� 10,977,882� Net proceeds from preferred stock issuance 1,982,372� 1,857,645� Proceeds from borrowings of long-term debt 125,988� 1,399,636� Dividends paid on preferred stock (260,492) (219,773) Principal payments on long-term debt and subordinated debt (738,105) (12,907,705) Debt issue costs -� (446,641) Net cash flows from financing activities - continuing operations 8,647,769� 661,044� Net cash flows from financing activities - discontinued operations 707,073� 421,489� Net cash flows from financing activities 9,354,842� 1,082,533� Net change in cash (462,253) (47,634) � Cash, beginning of period 546,273� 416,073� Cash, end of period $ 84,020� $ 368,439� Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 3,488,161� $ 2,661,734� Cash refunded during the period for income taxes (1,577) (185,630) � Supplemental disclosure of non-cash information: Issuance of note payable in exchange for accounts payable $ 362,716� $ -� Acquisition of equipment through capital leases -� 91,343� AMCON Distributing Company ("AMCON") (AMEX:DIT), an Omaha, Nebraska based consumer products company, is pleased to report fully diluted earnings available to common stock holders of 41 cents per share on net income of $241,865 for the period end June 30, 2006. "We are delighted at the continued progress the corporation has made since we announced our internal reorganization in March 2006" said Christopher Atayan, AMCON's Chief Executive Officer. "Our core businesses continued their trend of strong performance during the quarter and we began to reap some of the benefits of the aggressive efforts we have instituted to control our non-core water businesses. Our corporate strategic objective in the short to medium term is to reduce the levels of debt we employ at AMCON, 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 our tradition of superior customer service we are well positioned to enhance shareholder value. We are diligently working as a Company on resolving the issues presented by our Beverage businesses and as a result have expended very little cash resources into those businesses. This has resulted in increasing liquidity and financial strength for the entire company" added Atayan. For the first nine months of fiscal 2006, AMCON's wholesale consumer products distribution business reported segment operating income before depreciation and amortization of approximately $6.6 million and the retail health food business reported segment operating income before depreciation and amortization of approximately $2.4 million. This compares to $5.6 million and $1.2 million for the wholesale and retail businesses, respectively, in the comparable periods one year ago. "AMCON's legacy of premium customer service has served us well as we remain highly competitive in the market place" noted Kathleen Evans, President of AMCON's wholesale distribution business, " Our solid performance year to date is a direct reflection of the programs and systems we are developing to enhance our customers profits." "Our retail health food stores are continuing to perform at historically high levels of revenues and profitability. Consumers are continuing to move in the direction of natural products and we are well positioned to serve them" commented Eric Hinkefent, President of AMCON's retail health food business, "We continue to differentiate our self in the market place by our high levels of customer service. This has a direct bottom line effect as we benefit from repeat customer business." Another positive factor in the quarter was the narrowing of losses from Hawaiian Natural Water Company in our beverage segment. Price increases and active financial management of the enterprise contributed to this result. Senior management has invested a significant amount of time and energy toward revitalizing this enterprise. As previously announced, AMCON is actively in negotiations to divest the business. AMCON received an extension of its Revolving Credit agreement through July 2007 and is in active discussions with the bank group with respect to a long term extension. "Our bank group has been very responsive to our needs. Their solid support has enabled us to take advantage of several short term profit opportunities developed by our management team," commented Andy Plummer, AMCON's Acting Chief Financial Officer. Plummer also added, "During the recently completed fourth quarter we have incurred substantial professional fees in connection with our prior period audit and the Trinity Springs, Inc. litigation settlement discussions which will impact bottom line profitability when we report those results." Concurrently with this press release AMCON has filed its third quarter 10-Q with the Securities and Exchange Commission. This now brings AMCON into compliance with the financial reporting compliance requirements of the American Stock Exchange. 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 Set forth below are the full unaudited results for the three and nine month periods ended June 30, 2006: -0- *T AMCON Distributing Company and Subsidiaries Condensed Consolidated Balance Sheets June 30, 2006 and September 30, 2005 ---------------------------------------------------------------------- June 2006 (Unaudited) September 2005 -------------- -------------- ASSETS Current assets: Cash $84,020 $546,273 Accounts receivable, less allowance for doubtful accounts of $1.0 million and $0.6 million, respectively 30,134,256 28,202,857 Inventories 30,492,996 23,977,889 Deferred income taxes 1,642,212 1,642,212 Current assets of discontinued operations 37,544 1,159,228 Prepaid and other current assets 4,843,534 5,269,784 -------------- -------------- Total current assets 67,234,562 60,798,243 Property and equipment 14,102,301 15,162,007 Deferred income taxes 6,863,737 6,300,503 Noncurrent assets from discontinued operations 2,382,801 2,475,803 Goodwill 5,848,808 5,848,808 Other intangible assets 3,449,736 3,464,534 Other assets 1,084,769 1,258,899 -------------- -------------- $100,966,714 $95,308,797 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $15,550,519 $17,047,833 Accrued expenses 4,837,193 4,990,814 Accrued wages, salaries and bonuses 1,171,914 1,601,666 Income taxes payable - 118,798 Current liabilities of discontinued operations 4,339,022 4,098,412 Current maturities of revolving credit facility 3,932,000 1,432,000 Current maturities of long-term debt 815,005 936,198 -------------- -------------- Total current liabilities 30,645,653 30,225,721 -------------- -------------- Revolving credit facility, less current maturities 52,768,394 47,730,388 Long-term debt, less current maturities 7,508,260 7,636,468 Noncurrent liabilities of discontinued operations 5,651,744 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 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 6,263,476 6,218,476 Accumulated other comprehensive income, net of tax of $0.1 million in 2005 - 101,294 Accumulated deficit (8,154,456) (6,553,469) -------------- -------------- Total shareholders' deficiency (1,885,709) (228,428) -------------- -------------- $100,966,714 $95,308,797 ============== ============== *T -0- *T AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Operations for the three and nine month periods ended June 30, 2006 and 2005 ---------------------------------------------------------------------- For the three months For the nine months ended June ended June --------------------------- --------------------------- 2006 2005 2006 2005 ------------- ------------- ------------- ------------- Sales (including excise taxes of $52.5 million and $50.1 million, and $147.7 million and $145.2 million, respectively) $223,954,710 $215,124,070 $620,973,352 $621,859,811 Cost of sales 208,168,019 199,928,910 576,622,438 577,790,948 ------------- ------------- ------------- ------------- Gross profit 15,786,691 15,195,160 44,350,914 44,068,863 ------------- ------------- ------------- ------------- Selling, general and administrative expenses 13,096,950 12,720,659 38,989,674 38,533,701 Depreciation and amortization 525,170 571,940 1,510,767 1,718,209 ------------- ------------- ------------- ------------- 13,622,120 13,292,599 40,500,441 40,251,910 ------------- ------------- ------------- ------------- Operating income 2,164,571 1,902,561 3,850,473 3,816,953 ------------- ------------- ------------- ------------- Other (income) expense: Interest expense 1,227,561 1,063,338 3,505,530 3,114,773 Other (income) expense, net (44,424) (32,827) (94,015) (48,679) ------------- ------------- ------------- ------------- 1,183,137 1,030,511 3,411,515 3,066,094 ------------- ------------- ------------- ------------- Income from continuing operations before income taxes 981,434 872,050 438,958 750,859 Income tax expense 392,000 347,000 246,000 358,000 Minority interest - - - (97,100) ------------- ------------- ------------- ------------- Income from continuing operations 589,434 525,050 192,958 489,959 Loss from discontinued operations, net of income tax benefit of $0.1 million and $0.5 million, $0.9 million and $1.9 million, respectively (243,183) (751,473) (1,533,453) (3,084,832) ------------- ------------- ------------- ------------- Net income (loss) 346,251 (226,423) (1,340,495) (2,594,873) Preferred stock dividend requirements (104,386) (74,053) (260,492) (219,773) ------------- ------------- ------------- ------------- Net income (loss) available to common shareholders $241,865 $ (300,476) $(1,600,987) $(2,814,646) ============= ============= ============= ============= Basic earnings (loss) per share available to common shareholders: Continuing operations $0.92 $0.86 $(0.13) $0.51 Discontinued operations (0.46) (1.43) (2.91) (5.85) ------------- ------------- ------------- ------------- Net basic earnings (loss) per share available to common shareholders $0.46 $ (0.57) $(3.04) $(5.34) ============= ============= ============= ============= Diluted earnings (loss) per share available to common shareholders: Continuing operations $0.69 $0.73 $(0.13) $0.49 Discontinued operations (0.28) (1.05) (2.91) (5.63) ------------- ------------- ------------- ------------- Net diluted earnings (loss) per share available to common shareholders $0.41 $ (0.32) $(3.04) $(5.14) ============= ============= ============= ============= Weighted average shares outstanding: Basic 527,062 527,062 527,062 527,062 Diluted 854,187 712,881 527,062 547,774 *T -0- *T AMCON Distributing Company and Subsidiaries Condensed Consolidated Unaudited Statements of Cash Flows for the nine month periods ended June 30, 2006 and 2005 ---------------------------------------------------------------------- 2006 2005 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net (Loss) $(1,340,495) $(2,594,873) Deduct: (Loss) from discontinued operations, net of tax 1,533,453 3,084,832 ------------ ------------ Income from continuing operations 192,958 489,959 Adjustments to reconcile net (loss) income from continuing operations to net cash flows from operating activities: Depreciation 1,606,824 1,735,404 Amortization 29,798 146,196 (Gain) loss on sale of property and equipment 11,570 (20,361) Stock based compensation 45,000 - Deferred income taxes (563,234) (1,558,608) Provision for losses on doubtful accounts 505,295 259,080 Provision for losses on inventory obsolescence 46,204 237,167 Impairment on assets held for sale - 77,680 Minority interest - (97,100) Changes in assets and liabilities, net of effect of acquisitions: Accounts receivable (2,436,694) (3,698,445) Inventories (6,561,311) 7,338,879 Other current assets 324,956 (494,133) Other assets 174,130 (42,286) Accounts payable (1,134,598) (2,391,119) Accrued expenses and accrued wages, salaries and bonuses (583,373) 935,587 Income tax payable and receivable (118,798) 190,445 ------------ ------------ Net cash flows from operating activities - continuing operations (8,461,273) 3,108,345 Net cash flows from operating activities - discontinued operations (779,463) (1,761,749) ------------ ------------ Net cash flows from operating activities (9,240,736) 1,346,596 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (609,637) (2,469,156) Proceeds from sales property and equipment 50,949 85,265 Purchase of trademark (15,000) - ------------ ------------ Net cash flows from investing activities - continuing operations (573,688) (2,383,891) Net cash flows from investing activities - discontinued operations (2,671) (92,872) ------------ ------------ Net cash flows from investing activities (576,359) (2,476,763) CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (payments) on revolving credit facility 7,538,006 10,977,882 Net proceeds from preferred stock issuance 1,982,372 1,857,645 Proceeds from borrowings of long-term debt 125,988 1,399,636 Dividends paid on preferred stock (260,492) (219,773) Principal payments on long-term debt and subordinated debt (738,105) (12,907,705) Debt issue costs - (446,641) ------------ ------------ Net cash flows from financing activities - continuing operations 8,647,769 661,044 Net cash flows from financing activities - discontinued operations 707,073 421,489 ------------ ------------ Net cash flows from financing activities 9,354,842 1,082,533 ------------ ------------ Net change in cash (462,253) (47,634) Cash, beginning of period 546,273 416,073 ------------ ------------ Cash, end of period $84,020 $368,439 ============ ============ Supplemental disclosure of cash flow information: Cash paid during the period for interest $3,488,161 $2,661,734 Cash refunded during the period for income taxes (1,577) (185,630) Supplemental disclosure of non-cash information: Issuance of note payable in exchange for accounts payable $362,716 $- Acquisition of equipment through capital leases - 91,343 *T