AMCON Distributing Company Announces Fully Diluted Earnings Per Share of $3.67 for the Third Fiscal Quarter Ended June 30, 2010
AMCON Distributing Company ("AMCON”) (NYSE AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $3.67 for the third fiscal quarter ended June 30, 2010.
"We were able to post another solid quarter in both of our business segments,” said Christopher H. Atayan, AMCON’s Chairman and Chief Executive Officer. "Our focused business strategy is delivering results for our customers and shareholders. We are executing our corporate plan in a step-by-step fashion as we believe this fundamental approach will best position the enterprise for future growth. In addition, we are actively seeking acquisitions in both of our operating segments.”
AMCON’s wholesale distribution business reported revenues of $257.8 million and operating income before depreciation and amortization of $5.2 million in the third quarter of fiscal 2010. AMCON’s retail health food business reported revenues of $9.2 million and operating income before depreciation and amortization of $1.0 million for the same period.
Kathleen Evans, President of AMCON’s wholesale distribution business commented "We are working closely with our customers to develop product strategies to enhance their bottom line. This customer centric approach is mutually beneficial and the core of our growth strategy. We continue to expand the length and breadth of our food service program.”
Eric Hinkefent, President of AMCON’s retail health food business commented "We are pleased with the results of our new store opening in Tulsa. Our careful attention to the price value relationship of our product mix has enabled us to perform well in a challenging environment. We continue to seek additional growth opportunities where we can employ our profitable business model.”
"Our shareholders’ equity grew to $30.1 million during the period. We continue to maintain high levels of liquidity, as a central theme of our strategy is to use our balance sheet strength to develop profitable merchandising opportunities for our customers. Our Northwest Arkansas expansion is progressing according to plan,” said Andrew C. Plummer, AMCON’s Chief Financial Officer.
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 a total of 14 health and natural product retail stores in central Florida (6), Kansas, Missouri, Nebraska and Oklahoma (5). 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
| AMCON Distributing Company and Subsidiaries | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| June 30, 2010 and September 30, 2009 | ||||||
| June | September | |||||
| 2010 | 2009 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash | $ | 365,362 | $ | 309,914 | ||
| Accounts receivable, less allowance for doubtful accounts of $1.7 million and $0.9 million at June 2010 and September 2009 | 29,967,877 | 28,393,198 | ||||
| Inventories, net | 41,308,413 | 34,486,027 | ||||
| Deferred income taxes | 1,967,233 | 1,701,568 | ||||
| Prepaid and other current assets | 4,554,137 | 1,728,576 | ||||
| Total current assets | 78,163,022 | 66,619,283 | ||||
| Property and equipment, net | 11,780,603 | 11,256,627 | ||||
| Goodwill | 6,149,168 | 5,848,808 | ||||
| Other intangible assets | 4,858,269 | 3,373,269 | ||||
| Other assets | 1,062,245 | 1,026,395 | ||||
|
|
$ | 102,013,307 | $ | 88,124,382 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 18,647,475 | $ | 15,222,689 | ||
| Accrued expenses | 6,605,525 | 6,768,924 | ||||
| Accrued wages, salaries and bonuses | 3,045,321 | 3,257,832 | ||||
| Income taxes payable | 2,527,497 | 3,984,258 | ||||
| Current maturities of credit facility | — | 177,867 | ||||
| Current maturities of long-term debt | 933,256 | 1,470,445 | ||||
| Total current liabilities | 31,759,074 | 30,882,015 | ||||
| Credit facility, less current maturities | 28,480,212 | 22,655,861 | ||||
| Deferred income taxes | 1,141,803 | 1,256,713 | ||||
| Long-term debt, less current maturities | 5,435,769 | 5,066,185 | ||||
| Other long-term liabilities | 562,575 | — | ||||
|
Series A cumulative, convertible preferred stock, $.01 par value 100,000 shares authorized and issued, liquidation preference $25.00 per share |
2,500,000 | 2,500,000 | ||||
| Series B cumulative, convertible preferred stock, $.01 par value 80,000 shares authorized and issued, liquidation preference $25.00 per share | 2,000,000 | 2,000,000 | ||||
|
Shareholders’ equity: |
||||||
| Preferred stock, $0.01 par, 1,000,000 shares authorized, 180,000 shares outstanding and issued in Series A and B referred to above | — | — | ||||
| Common stock, $.01 par value, 3,000,000 shares authorized, 577,266 shares outstanding at June 2010 and 573,232 shares outstanding at September 2009 | 5,773 | 5,732 | ||||
| Additional paid-in capital | 8,250,974 | 7,617,494 | ||||
| Retained earnings | 21,877,127 | 16,140,382 | ||||
| Total shareholders’ equity | 30,133,874 | 23,763,608 | ||||
| $ | 102,013,307 | $ | 88,124,382 | |||
| AMCON Distributing Company and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Unaudited Statements of Operations | ||||||||||||||||
| for the three and nine months ended June 30, 2010 and 2009 | ||||||||||||||||
| For the three months | For the nine months | |||||||||||||||
| ended June | ended June | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales (including excise taxes of $87.9 million and $77.4 million, and $246.3 million and $171.0 million, respectively) | $ | 267,062,440 | $ | 242,817,927 | $ | 741,502,607 | $ | 655,637,536 | ||||||||
| Cost of sales | 247,932,676 | 225,753,469 | 688,204,656 | 605,481,395 | ||||||||||||
| Gross profit | 19,129,764 | 17,064,458 | 53,297,951 | 50,156,141 | ||||||||||||
| Selling, general and administrative expenses | 14,070,483 | 12,800,612 | 41,215,024 | 38,625,335 | ||||||||||||
| Depreciation and amortization | 440,466 | 273,650 | 1,243,307 | 884,972 | ||||||||||||
| 14,510,949 | 13,074,262 | 42,458,331 | 39,510,307 | |||||||||||||
| Operating income | 4,618,815 | 3,990,196 | 10,839,620 | 10,645,834 | ||||||||||||
| Other expense (income): | ||||||||||||||||
| Interest expense | 370,873 | 368,048 | 1,144,543 | 1,265,834 | ||||||||||||
| Other (income), net | (32,758 | ) | (43,600 | ) | (69,184 | ) | (84,143 | ) | ||||||||
| 338,115 | 324,448 | 1,075,359 | 1,181,691 | |||||||||||||
| Income from continuing operations before income tax | 4,280,700 | 3,665,748 | 9,764,261 | 9,464,143 | ||||||||||||
| Income tax expense | 1,532,000 | 1,411,000 | 3,495,000 | 3,614,000 | ||||||||||||
| Income from continuing operations | 2,748,700 | 2,254,748 | 6,269,261 | 5,850,143 | ||||||||||||
|
Discontinued operations |
||||||||||||||||
| Gain on asset disposal and debt settlement, net of income tax expense of $2.7 million | — | 4,666,264 | — | 4,666,264 | ||||||||||||
| Income (loss) from discontinued operations, net of income tax expense (benefit) of $0.01 million and ($0.1) million, respectively | — | 13,105 | — | (186,370 | ) | |||||||||||
| Income on discontinued operations | — | 4,679,369 | — | 4,479,894 | ||||||||||||
| Net income | 2,748,700 | 6,934,117 | 6,269,261 | 10,330,037 | ||||||||||||
| Preferred stock dividend requirements | (74,052 | ) | (74,052 | ) | (222,158 | ) | (493,786 | ) | ||||||||
| Net income available to common shareholders | $ | 2,674,648 | $ | 6,860,065 | $ | 6,047,103 | $ | 9,836,251 | ||||||||
|
Basic earnings per share available to common shareholders: |
||||||||||||||||
| Continuing operations | $ | 4.72 | $ | 3.97 | $ | 10.73 | $ | 9.78 | ||||||||
| Discontinued operations | — | 8.52 | — | 8.17 | ||||||||||||
| Net basic earnings per share available to common shareholders | $ | 4.72 | $ | 12.49 | $ | 10.73 | $ | 17.95 | ||||||||
| Diluted earnings per share available to common shareholders: | ||||||||||||||||
| Continuing operations | $ | 3.67 | $ | 3.11 | $ | 8.39 | $ | 7.37 | ||||||||
| Discontinued operations | — | 6.46 | — | 5.65 | ||||||||||||
| Net diluted earnings per share available to common shareholders | $ | 3.67 | $ | 9.57 | $ | 8.39 | $ | 13.02 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 566,224 | 549,397 | 563,505 | 547,859 | ||||||||||||
| Diluted | 749,350 | 724,833 | 747,035 | 793,610 | ||||||||||||
|
AMCON Distributing Company and Subsidiaries |
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|
Condensed Consolidated Unaudited Statements of Cash Flows |
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|
for the nine months ended June 30, 2010 and 2009 |
||||||||
| 2010 | 2009 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 6,269,261 | $ | 10,330,037 | ||||
| Deduct: Income from discontinued operations, net of tax | — | 4,479,894 | ||||||
| Income from continuing operations | 6,269,261 | 5,850,143 | ||||||
| Adjustments to reconcile net income from continuing operations to net cash flows from operating activities: | ||||||||
| Depreciation | 1,043,186 | 884,972 | ||||||
| Amortization | 200,121 | — | ||||||
| (Gain) loss on sale of property and equipment | (31,843 | ) | 26,468 | |||||
| Stock based compensation | 376,422 | 398,700 | ||||||
| Net excess tax (benefit) deficiency on equity-based awards | (130,126 | ) | 16,592 | |||||
| Deferred income taxes | (380,575 | ) | 893,851 | |||||
| Provision for losses on doubtful accounts | 750,489 | 489,038 | ||||||
| Provision for losses on inventory obsolescence | 82,778 | 331,319 | ||||||
| Other | 77,094 | — | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (2,325,168 | ) | (1,797,340 | ) | ||||
| Inventories | (4,923,666 | ) | 1,714,017 | |||||
| Prepaid and other current assets | (2,830,201 | ) | 312,759 | |||||
| Other assets | (35,850 | ) | 59,277 | |||||
| Accounts payable | 3,388,920 | (365,711 | ) | |||||
| Accrued expenses and accrued wages, salaries and bonuses | (375,910 | ) | 2,625,568 | |||||
| Income tax payable | (1,326,635 | ) | 4,713,677 | |||||
| Net cash flows from operating activities — continuing operations | (171,703 | ) | 16,153,330 | |||||
| Net cash flows from operating activities — discontinued operations | — | (2,673,712 | ) | |||||
| Net cash flows from operating activities | (171,703 | ) | 13,479,618 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (1,423,912 | ) | (784,221 | ) | ||||
| Proceeds from sales of property and equipment | 62,406 | 102,406 | ||||||
| Acquisition | (3,099,836 | ) | — | |||||
| Net cash flows from investing activities | (4,461,342 | ) | (681,815 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net borrowings (payments) on bank credit agreements | 5,646,484 | (8,955,236 | ) | |||||
| Principal payments on long-term debt | (682,574 | ) | (604,975 | ) | ||||
| Proceeds from exercise of stock options | 126,973 | — | ||||||
| Net excess tax (benefit) deficiency on equity-based awards | 130,126 | (16,592 | ) | |||||
| Redemption of Series C convertible preferred stock | — | (2,000,000 | ) | |||||
| Dividends paid on convertible preferred stock | (222,158 | ) | (272,158 | ) | ||||
| Dividends on common stock | (310,358 | ) | (171,119 | ) | ||||
| Net cash flows from financing activities — continuing operations | 4,688,493 | (12,020,080 | ) | |||||
| Net cash flows from financing activities — discontinued operations | — | (825,000 | ) | |||||
| Net cash flows from financing activities | 4,688,493 | (12,845,080 | ) | |||||
| Net change in cash | 55,448 | (47,277 | ) | |||||
|
Cash, beginning of period |
309,914 | 457,681 | ||||||
| Cash, end of period | $ | 365,362 | $ | 410,404 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for interest | $ | 1,141,934 | $ | 1,347,690 | ||||
| Cash paid during the period for income taxes | 5,202,208 | 612,473 | ||||||
| Supplemental disclosure of non-cash information: | ||||||||
| Equipment acquisitions classified as accounts payable | 35,866 | 108,546 | ||||||
| Constructive dividends on Series A, B, and C Convertible Preferred Stock | — | 221,628 | ||||||
| Acquisition of equipment through capital leases | 14,969 | 12,333 | ||||||
| Business acquisition: | ||||||||
| Inventory | 1,981,498 | — | ||||||
| Property and equipment | 122,978 | — | ||||||
| Customer relationships intangible asset | 1,620,000 | — | ||||||
| Goodwill | 300,360 | — | ||||||
| Note payable | 500,000 | — | ||||||
| Contingent consideration | 425,000 | — | ||||||
| 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 | ) | |||||
