AMCON Announces Loss From Discontinued Operations With Second Quarter Report.Business Editors OMAHA Omaha, city, United States Omaha (ō`məhä, –hô), city (1990 pop. 335,795), seat of Douglas co., E Nebr., on the west bank of the Missouri River; inc. 1857. , Neb.--(BUSINESS WIRE)--May 15, 2001 AMCON Distributing Company (AMEX AMEX See: American Stock Exchange :DIT) announced today that it incurred a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $1.2 million for the three months ended March 31, 2001 in connection with the operations and sale of its wholesale health food distribution business in March 2001. The total loss is comprised of a $0.5 million loss from the discontinued operations of the business and a $0.7 million loss on the disposal of the discontinued operations. The $0.7 million loss includes a $1.8 million, net of tax, charge for the estimated future costs of two operating leasehold commitments and other contractual agreements associated with the disposal. For the three months ended March 31, 2001, the loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $0.4 million after taking a $0.8 million (pre-tax) LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack reserve charge to cost of sales, which was caused by price movements in cigarettes at the end of the first quarter and an increase in the related cigarette price index in the second quarter. The inventory charge brought the Company's LIFO reserve to approximately $3.2 million. The results for the quarter were a loss from continuing operations of $0.14 per diluted share compared to income from continuing operations of $0.41 per diluted share for the preceding year's second quarter. For the six months ended March 31, 2001, the Company reported income from continuing operations of $0.06 per diluted share compared to income from continuing operations of $0.72 per diluted share for the six months ended March 31, 2000. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from continuing operations, which is comprised of the Company's wholesale distribution and retail business segments, for both the three and six-month periods ended March 31, 2001 increased slightly to $101.2 and $202.3 million, respectively. Wm. F. Wright, Chairman of AMCON, noted that "the results from discontinued operations and the charge to increase the LIFO reserve make the second quarter a difficult one to characterize. Sales growth in our wholesale distribution business was slowed due to the severe winter in the Midwest, which inhibited traffic in our customers' stores. In addition to the LIFO reserve charge in the second quarter, gross profit from the wholesale distribution business for the quarter was down compared to the prior year due to the timing of cigarette price increases. We received a favorable margin impact from a cigarette price increase in the second quarter of the prior year as a result of our inventory levels at the time of the price increase turning at a lower cost relative to our new sales price, but did not receive a price increase and, therefore, such an impact in the second quarter of this fiscal year." "Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of and gross profit from our retail health food business continue to be sluggish compared to the prior year due to increased competition in our retail territories and an overall softening of the natural food retail market over the past year." Wright continued "As we enter the second half of our fiscal year, which is typically our stronger period, we believe that we can improve the results from our continuing operations. Improved weather conditions should positively impact our wholesale distribution business and management is actively reviewing strategies to improve sales in our retail business. In addition, we are seeking to expedite the release from our operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. commitments under the Arizona and Florida leaseholds related to the disposed business through subletting The leasing of part or all of the property held by a tenant, as opposed to a landlord, during a portion of his or her unexpired balance of the term of occupancy. A landlord may prohibit a tenant from subletting the leased premises without the land-lord's permission by arrangements to mitigate the charges taken this quarter for those future expenditures." "In a separate announcement, we will be announcing our declaration of a $.03 per share dividend. With the sale of our wholesale health food business, our debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. has improved from 3.33 at the start of our fiscal year to 2.42 at the close of the second quarter. In addition, most of the charges to earnings in the second quarter relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of our wholesale health food business and the LIFO charge were non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and thus did not affect cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , which exceeded $10.0 million for the six months ended March 31, 2001. Therefore, we believe the declaration and payment of a dividend in the third quarter is appropriate. However, we have engaged Tucker Anthony Sutro (NYSE NYSE See: New York Stock Exchange :TA), a well-respected investment banking firm, to advise our Company on whether our shareholders receive the greatest benefit from a dividend or whether some other form of capital transaction would be more beneficial. We expect the results of that study to be ready by mid-summer." Omaha-based 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 Missouri (2), Nebraska, North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). , South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). and Wyoming. Chamberlin's Natural Foods, Inc., and Health Food Associates, Inc., both wholly-owned subsidiaries of The Healthy Edge, Inc. (formerly Food For Health Co., Inc.), operate health and natural product retail stores in central Florida
Central Florida is the central region of the United States state of Florida, on the East Coast. (8), Kansas, Missouri, Nebraska and Oklahoma (3). The retail stores operate under the names Chamberlin's Market & Cafe and Akin's 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. Moreover, past financial performance should not be considered a reliable indicator of future performance. Accordingly, the Company claims the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 with respect to all such forward- looking statements. Visit AMCON Distributing Company's web site at: www.amcon-dist.com
AMCON Distributing Company
Condensed Consolidated Statements of Operations
for the three and six-months ended March 31, 2001 and 2000
(Unaudited)
----------------------------------------------------------------------
For the three months For the six months
ended March 31 ended March 31
------------------------ -----------------------
2001 2000 2001 2000
------------ ----------- ------------ ----------
Income (loss) from
continuing operations (378,444) 1,166,106 172,258 2,076,209
Income (loss) from
discontinued
operations,net of
income tax (benefit)
expense of
$(306,518), $23,286,
$(551,298) and
$83,272 (506,527) 39,648 (894,435) 141,788
Loss on disposal of
discontinued
operations, net of
income tax benefit
of $411,350 (675,416) - (675,416) -
------------ ----------- ------------ ----------
Net income (loss) $(1,560,387) $1,205,754 $(1,397,593) $2,217,997
============ =========== ============ ==========
Earnings (loss) per
share from continuing
operations:
Basic $ (0.14) $ 0.43 $ 0.06 $ 0.76
Diluted $ (0.14) $ 0.41 $ 0.06 $ 0.72
Earnings (loss) per
share from
discontinued
operations:
Basic $ (0.43) $ 0.01 $ (0.57) $ 0.05
Diluted $ (0.43) $ 0.01 $ (0.55) $ 0.05
Net earnings (loss)
per share:
Basic $ (0.57) $ 0.44 $ (0.51) $ 0.81
Diluted $ (0.57) $ 0.42 $ (0.49) $ 0.77
Weighted average
shares outstanding:
Basic 2,738,031 2,736,481 2,737,859 2,732,264
Diluted 2,738,031 2,864,775 2,823,479 2,864,526
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