DIT AMCON Distributing Co

AMCON Distributing Company (“AMCON”) (AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce record fully diluted earnings per share of $16.61 on net income available to common stockholders of $12.4 million for the fiscal year ended September 30, 2009.

“Our management team has once again delivered record results despite the recessionary environment. Throughout the year we maintained a conservative posture and took advantage of opportunities when they were presented,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. Atayan continued, “We believe that if we continue to add value for our customers, our shareholders will benefit. The results this year are a testament to the high degree of collaboration that we have with our customers.”

“As previously announced, our Board of Directors recently raised our quarterly dividend to $0.18 per share, an increase of 80 percent, and also authorized a share repurchase program of up to 50,000 shares to benefit our shareholders. Our recently announced acquisition in Northwest Arkansas is in furtherance of our long-term strategy which is to both grow our geographic base and increase penetration in existing markets. Integrating this acquisition will be a high priority for our management team in the coming quarters. I am also pleased to announce that our retail health food division will open a new store in Tulsa in calendar 2010. We will continue to look for acquisition opportunities in both our business segments,” noted Atayan.

Each of AMCON’s business segments reported excellent years. The wholesale distribution segment reported revenues of $243.3 million and operating income before depreciation of $5.6 million for the fourth fiscal quarter and revenues and operating income before depreciation of $871.3 million and $18.4 million, respectively, for all of fiscal 2009. The retail health food segment reported revenues of $9.0 million and operating income before depreciation of $1.0 million for the fourth fiscal quarter and annual revenue of $36.6 million and operating income before depreciation of $3.7 million for fiscal 2009. AMCON ended the year with stockholders' equity of $23.8 million.

“We continue to expend significant energy and resources developing profit making opportunities and programs for our customers. For example, a well run food service program drives traffic to our customer’s stores and increases their bottom line. Our new northwest Arkansas customers have expressed significant interest in these programs,” said Kathleen Evans, President of AMCON’s wholesale distribution segment. “We strive to be the service leader in the market because we believe that will keep us in a leadership position during tough times,” added Evans.

“Our customers have a strong identity of interest with our Akins and Chamberlin’s brands. The stores stand for quality, service and a wide variety of products at an attractive price. We are enthusiastic about our new store opening in Tulsa in 2010. We have maintained discipline in terms of opening new stores over the years. However, we felt the timing was appropriate and the terms of this particular situation made sense for our stockholders. We will continue to be looking to open new stores as well as acquire existing stores as the opportunities present themselves. Our long term objective is to increase the penetration in the markets we presently serve and to opportunistically add new markets which are suited to our business model. Additionally, we have made prudent capital expenditures to make sure that our existing base of stores are at the high levels our customers expect,” said Eric Hinkefent, President of AMCON’s retail health food segment.

“We are focused on maintaining high degrees of liquidity in our balance sheet in the short term. We were able to increase our stockholders equity by $12.8 million and reduce total debt by $20.9 million in fiscal 2009,” said Andrew Plummer, AMCON’s Chief Financial Officer. “We believe a conservative balance sheet is prudent in anticipation of softness in the broader economy that will continue to impact our customers in fiscal 2010. This positions our organization to move decisively from a financial perspective when events and circumstances warrant. It also enables us to best deliver value to our customers and to draw down on the line from time-to-time to develop profitable opportunities on their behalf,” added Plummer.

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 locations in Arkansas, 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

                 

CONSOLIDATED BALANCE SHEETS

 

AMCON Distributing Company and Subsidiaries

                     

September 30,

         

2009

       

2008

ASSETS

Current assets:   Cash $ 309,914 $ 457,681 Accounts receivable, less allowance for doubtful accounts of $0.9 million and $0.8 million in 2009 and 2008, respectively 28,393,198 27,198,414 Inventories, net 34,486,027 37,330,969 Deferred income taxes 1,701,568 1,260,609 Current assets of discontinued operations - 18,947 Prepaid and other current assets   1,728,576           3,519,650 Total current assets 66,619,283 69,786,270   Property and equipment, net 11,256,627 10,907,541 Goodwill 5,848,808 5,848,808 Other intangible assets, net 3,373,269 3,373,269 Deferred income taxes - 234,171 Non-current assets of discontinued operations - 2,032,047 Other assets   1,026,395           1,123,252 $ 88,124,382         $ 93,305,358

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities: Accounts payable $ 15,222,689 $ 14,738,214 Accrued expenses 6,768,924 5,275,697 Accrued wages, salaries and bonuses 3,257,832 2,636,699 Income taxes payable 3,984,258 313,021 Current liabilities of discontinued operations - 4,041,837 Current maturities of credit facility 177,867 3,046,000 Current maturities of long-term debt   1,470,445           787,128 Total current liabilities 30,882,015 30,838,596   Credit facility, less current maturities 22,655,861 32,155,005 Deferred income taxes 1,256,713 - Long-term debt, less current maturities 5,066,185 6,525,881 Noncurrent liabilities of discontinued operations - 6,542,310   Series A cumulative, convertible preferred stock, $.01 par value 100,000 authorized and issued, liquidation preference $25.00 per share 2,500,000 2,438,355   Series B cumulative, convertible preferred stock, $.01 par value 80,000 authorized and issued, liquidation preference $25.00 per share 2,000,000 1,857,645   Series C cumulative, convertible preferred stock, $.01 par value 80,000 authorized and issued at September 30, 2008, liquidation preference $25.00 per share - 1,982,372 Commitments and contingencies   Shareholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized, 180,000 shares outstanding and issued in Series A and B at September 2009 and 260,000 shares outstanding and issued in Series A, B and C at September 2008 referred to above - - Common stock, $0.01 par value, 3,000,000 shares authorized, 573,232 shares outstanding at September 2009 and 570,397 shares outstanding at September 2008 5,732 5,704 Additional paid-in capital 7,617,494 6,995,948 Retained earnings   16,140,382           3,963,542 Total shareholders' equity   23,763,608           10,965,194 $ 88,124,382         $ 93,305,358  

CONSOLIDATED STATEMENTS OF OPERATIONS

                     

AMCON Distributing Company and Subsidiaries

                       

Fiscal Years Ended September

           

2009

       

2008

  Sales (including excise taxes of $263.7 million and $206.8 million, respectively) $ 907,953,044 $ 860,451,122   Cost of sales   839,813,225             795,774,780   Gross profit   68,139,819             64,676,342     Selling, general and administrative expenses 51,539,775 51,631,324 Depreciation and amortization   1,216,089             1,386,218     52,755,864             53,017,542   Operating income 15,383,955 11,658,800   Other expense (income): Interest expense 1,627,373 2,986,215 Other income, net   (104,259 )           (114,613 )   1,523,114             2,871,602   Income from continuing operations before income tax expense 13,860,841 8,787,198 Income tax expense   5,367,000             3,194,000   Income from continuing operations 8,493,841 5,593,198   Discontinued operations Gain on asset disposal and debt settlement, net of income tax expense of $2.7 million 4,666,264 -   Loss from discontinued operations, net of income tax benefit of $0.1 million and $0.2 million, respectively   (186,370 )           (260,952 )   Income (loss) on discontinued operations   4,479,894             (260,952 )

 

 

Net income 12,973,735 5,332,246 Dividends on convertible preferred stock   (568,653 )           (419,839 )

 

 

Net income available to common shareholders $ 12,405,082           $ 4,912,407     Basic earnings (loss) per share available to common shareholders: Continuing operations $ 14.45 $ 9.65 Discontinued operations   8.16             (0.49 )   Net basic earnings per share available to common shareholders $ 22.61           $ 9.16     Diluted earnings (loss) per share available to common shareholders: Continuing operations $ 10.87 $ 6.57 Discontinued operations   5.74             (0.31 )   Net diluted earnings per share available to common shareholders $ 16.61           $ 6.26   Weighted average shares outstanding: Basic 548,616 536,319 Diluted 781,265 851,298                

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

AMCON Distributing Company and Subsidiaries

                   

Fiscal Years Ended September

         

2009

     

2008

  CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12,973,735 $ 5,332,246 Deduct: Income (loss) from discontinued operations, net of tax   4,479,894           (260,952 )   Income from continuing operations 8,493,841 5,593,198   Adjustments to reconcile income from continuing operations to net cash flows from operating activities: Depreciation 1,216,089 1,359,417 Amortization - 26,801 Loss (gain) on sale of property and equipment 24,915 (39,619 ) Stock based compensation 531,600 435,250 Net excess tax benefit on equity-based awards (2,245 ) (16,592 ) Deferred income taxes 1,049,925 2,719,652 Provision for losses on doubtful accounts 124,574 505,000 Provision for losses on inventory obsolescence 299,155 101,998   Changes in assets and liabilities: Accounts receivable (1,319,358 ) 145,524 Inventories 2,545,787 (7,694,240 ) Prepaid and other current assets 1,791,074 2,415,558 Other assets 96,857 (30,102 ) Accounts payable (80,446 ) (515,348 ) Accrued expenses and accrued wages, salaries and bonuses 2,113,154 415,879 Income taxes payable   3,673,482           (38,160 )   Net cash flows from operating activities - continuing operations 20,558,404 5,384,216 Net cash flows from operating activities - discontinued operations   (2,673,712 )         (230,042 )   Net cash flows from operating activities   17,884,692           5,154,174     CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (1,673,432 ) (845,156 ) Proceeds from sales of property and equipment   107,255           86,209     Net cash flows from investing activities   (1,566,177 )         (758,947 )   CASH FLOWS FROM FINANCING ACTIVITIES: Net payments on bank credit agreements (12,367,277 ) (3,653,175 ) Principal payments on long-term debt (788,712 ) (656,092 ) Proceeds from exercise of stock options 87,729 148,384 Net excess tax benefit on equity-based awards 2,245 16,592 Redemption of Series C convertible preferred stock (2,000,000 ) - Dividends paid on convertible preferred stock (347,025 ) (419,839 ) Dividends on common stock   (228,242 )         (90,970 )   Net cash flows from financing activities - continuing operations (15,641,282 ) (4,655,100 )   Net cash flows from financing activities - discontinued operations   (825,000 )       -     Net cash flow from financing activities   (16,466,282 )         (4,655,100 )   Net change in cash (147,767 ) (259,873 )   Cash, beginning of year   457,681           717,554     Cash, end of year $ 309,914         $ 457,681                         Fiscal Years           2009       2008 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 1,719,895 $ 3,116,098 Cash paid during the year for income taxes 3,249,594 354,508   Supplemental disclosure of non-cash information: Constructive dividends on Series A, B and C Convertible Preferred Stock $ 221,628 - Acquisition of equipment through capital leases 12,333 277,624 Equipment acquisitions classified as accounts payable 11,580 -   TSI disposition - discontinued operations: Property and equipment, net $ (2,032,047 ) - Accrued expenses (925,452 ) - Long-term debt (6,945,548 ) - Deferred gain on CPH settlement (1,542,312 ) -