CONSOLIDATED STATEMENTS OF CASH FLOWS
AMCON Distributing Company and Subsidiaries
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Fiscal Years 2007 2006 2005
As restated/1/ As restated/1/
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,440,304 $ (978,548) $(12,253,136)
Deduct: Income (loss) from discontinued operations,
net of tax 234,551 (2,435,766) (11,960,904)
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Income (loss) from continuing operations 4,205,753 1,457,218 (292,232)
Adjustments to reconcile income (loss) from
continuing operations to net cash flows
from operating activities:
Depreciation 1,791,907 1,897,166 2,039,553
Amortization 39,733 39,731 116,430
Impairment charges - - 4,234,856
Loss (gain) on sale of property and equipment 27,235 30,082 (13,116)
Stock based compensation 70,993 60,000 -
Deferred income taxes 2,621,261 (722,727) (5,691,019)
(Benefit) provision for losses on doubtful accounts (250,196) 179,196 (189,604)
(Benefit) provision for losses on inventory obsolescence 52,242 77,940 (33,520)
Minority interest - - (97,100)
Changes in assets and liabilities,
net of effect of acquisitions:
Accounts receivable 217,009 (814,916) 1,383,923
Inventories (383,768) (1,396,154) 9,288,767
Other current assets (566,058) (205,819) (4,848,246)
Other assets 254,314 (10,891) (160,509)
Accounts payable 739,188 (805,235) (670,130)
Accrued expenses and accrued wages, salaries and bonuses 1,574,429 641,863 1,280,966
Income taxes payable and receivable 198,837 50,138 1,281,423
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Net cash flows from operating activities
- continuing operations 10,592,879 477,592 7,630,442
Net cash flows from operating activities
- discontinued operations (1,929,323) (820,913) 897,434
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Net cash flows from operating activities 8,663,556 (343,321) 8,527,876
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (514,277) (980,510) (2,464,694)
Proceeds from sales of property and equipment 101,328 39,665 116,597
Purchase of trademark - (15,000) -
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Net cash flows from investing activities
- continuing operations (412,949) (955,845) (2,348,097)
Net cash flows from investing activities
- discontinued operations 3,965,394 (16,818) (585,451)
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Net cash flows from investing activities 3,552,445 (972,663) (2,933,548)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net principal (payments) borrowings on bank credit
agreements (9,969,248) (338,959) 4,352,573
Net proceeds from preferred stock issuance - 1,982,372 1,857,645
Proceeds from borrowings of long-term debt - 237,266 1,399,638
Payments on long-term and subordinated debt (734,416) (670,966) (8,413,374)
Proceeds from exercise of stock options 46,686 - -
Debt issuance costs (100,000) - (446,641)
Dividends paid on preferred stock (418,692) (366,042) (294,640)
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Net cash flows from financing activities
- continuing operations (11,175,670) 843,671 (1,544,799)
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Fiscal Years 2007 2006 2005
As restated/1/ As restated/1/
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Net cash flows from financing activities
- discontinued operations (803,915) 407,178 (3,919,329)
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Net cash flow from financing activities (11,979,585) 1,250,849 (5,464,128)
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Net change in cash 236,416 (65,135) 130,200
Cash, beginning of year 481,138 546,273 416,073
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Cash, end of year $ 717,554 $ 481,138 $ 546,273
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Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 4,890,997 $ 4,858,960 $ 4,376,251
Cash paid (refunded) during the year for
income taxes 94,901 (647) (911,278)
Supplemental disclosure of non-cash information:
Forgiveness of debt and related interest in
connection with settlement of TSI litigation $(3,735,145) $ - $ -
Forgiveness of water royalty in connection
with settlement of TSI litigation (2,807,000) - -
Issuance of note payable in connection with
TSI litigation 5,000,000 - -
Issuance of note payable in settlement for accounts
payable and accrued liability in connection
with settlement of TBG litigation 763,983 - -
Buyer's assumption of HNWC lease in connection with
the sale of HNWC's assets - discontinued operations (225,502) - -
Issuance of note payable in exchange for
accounts payable - discontinued operations - 362,716 -
Acquisition of equipment through capital leases 68,422 - 91,343
/1/ In 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. The change is preferable as it
provides a more meaningful presentation of the Company's financial position as it values inventory in a
manner which more closely approximates current cost; better represents the underlying commercial substance
of selling the oldest products first; and more accurately reflects the Company's realized periodic income.
As required by U.S. generally accepted accounting principles, this change in accounting principle has been
reflected in the consolidated statements of financial position, consolidated statements of operations, and
consolidated statements of cash flows through retroactive application of the FIFO method. Accordingly,
inventories from continuing operations as of the beginning of fiscal 2005 were increased by the LIFO
reserve ($4.0 million), net current deferred tax assets were decreased ($0.7 million), current assets of
discontinued operations were increased for the impact of related LIFO reserves ($0.1 million), net
non-current deferred tax liabilities were increased ($0.9 million), and shareholders' equity was increased
by the after-tax effect ($2.5 million). Previously reported net income (loss) available to common
shareholders' for the fiscal years 2006 and 2005 were also increased by $0.1 million and $0.5 million
after income taxes, respectively.
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