AMCON Distributing Company Announces Fully Diluted Earnings of $2.32 Per Common Share for the First Fiscal Quarter Ended December 31, 2009

CHICAGO--(BUSINESS WIRE)--AMCON Distributing Company (“AMCON”) (AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce fully diluted earnings per share of $2.32 for the first fiscal quarter ended December 31, 2009.

“We have carefully integrated our Northwest Arkansas acquisition into the AMCON system. The most immediate impact of this effort is the bottom line benefits our new customers have enjoyed with the length and breadth of our product mix including food service.”

“This was a very solid quarter as both of our business segments performed well. Additionally, our recently announced acquisition in Northwest Arkansas is meeting our expectations,” said Christopher H. Atayan AMCON’s Chairman and Chief Executive Officer. “Our pursuit of superior customer service is the foundation of our focused business strategy. In a difficult economy, we believe that our management emphasis on fundamentals serves both our customers and shareholders well. We were particularly pleased that we were able to maintain deliveries during the recent spate of severe weather.”

AMCON’s wholesale distribution business reported revenues of $235.0 million and operating income before depreciation and amortization of $4.3 million in the first quarter of fiscal 2010. AMCON’s retail health food business reported revenues of $8.9 million and operating income before depreciation and amortization of $1.0 million for the same period.

Kathleen M. Evans, President of AMCON’s wholesale distribution business commented, “We have carefully integrated our Northwest Arkansas acquisition into the AMCON system. The most immediate impact of this effort is the bottom line benefits our new customers have enjoyed with the length and breadth of our product mix including food service.”

Eric Hinkefent, President of AMCON’s retail health food business commented, “We are diligently working on our new store opening in Tulsa. Overall market conditions continue to be challenging. Our strategy of providing a broad selection of products at an attractive price has developed considerable customer loyalty which drove our performance this quarter.”

“Our stockholders’ equity grew to $25.7 million during the period. Moreover, we continue to maintain high levels of liquidity, which enabled us to develop profitable opportunities for our customers. The recent acquisition in Northwest Arkansas also contributed positively to our overall net income during the quarter,” 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 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 www.chamberlins.com and Akins Natural Foods Market www.akins.com.

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
December 31, 2009 and September 30, 2009
	December 2009		September
	(Unaudited)		2009
ASSETS
Current assets:
Cash	$	517,964	$	309,914
Accounts receivable, less allowance for doubtful accounts
of $0.9 million at December 2009 and September 2009		23,681,183		28,393,198
Inventories, net		32,948,314		34,486,027
Deferred income taxes		1,703,413		1,701,568
Prepaid and other current assets		4,407,930		1,728,576
Total current assets		63,258,804		66,619,283
Property and equipment, net		11,642,259		11,256,627
Goodwill		6,149,168		5,848,808
Other intangible assets		4,959,519		3,373,269
Other assets		1,025,876		1,026,395
	$	87,035,626	$	88,124,382
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	13,914,745	$	15,222,689
Accrued expenses		5,895,614		6,768,924
Accrued wages, salaries and bonuses		2,003,255		3,257,832
Income taxes payable		904,099		3,984,258
Current maturities of credit facility		127,067		177,867
Current maturities of long-term debt		995,327		1,470,445
Total current liabilities		23,840,107		30,882,015
Credit facility, less current maturities		25,476,512		22,655,861
Deferred income taxes		1,268,662		1,256,713
Long-term debt, less current maturities		5,858,402		5,066,185
Other long-term liabilities		440,420		-
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,
575,439 shares outstanding at December 2009 and 573,232
shares outstanding at September 2009		5,754		5,732
Additional paid-in capital		7,954,295		7,617,494
Retained earnings		17,691,474		16,140,382
Total shareholders' equity		25,651,523		23,763,608
	$	87,035,626	$	88,124,382

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
for the three months ended December 31, 2009 and 2008
	2009			2008
Sales (including excise taxes of $81.6 million
and $50.3 million, respectively	$	243,941,038		$	217,377,363
Cost of sales		226,713,025			201,532,714
Gross profit		17,228,013			15,844,649
Selling, general and administrative expenses		13,778,739			12,797,583
Depreciation and amortization		387,269			310,334
		14,166,008			13,107,917
Operating income		3,062,005			2,736,732
Other expense (income):
Interest expense		405,245			489,199
Other (income), net		(13,380	)		(14,067	)
		391,865			475,132
Income from continuing operations
before income taxes		2,670,140			2,261,600
Income tax expense		941,000			860,000
Income from continuing operations		1,729,140			1,401,600
Loss from discontinued operations, net of income
tax benefit of $0.1 million		-			(102,038	)
Net income		1,729,140			1,299,562
Preferred stock dividend requirements		(74,867	)		(105,533	)
Net income available to common shareholders	$	1,654,273		$	1,194,029
Basic earnings (loss) per share
available to common shareholders:
Continuing operations	$	2.95		$	2.38
Discontinued operations		-			(0.19	)
Net basic earnings per share
available to common shareholders	$	2.95		$	2.19
Diluted earnings (loss) per share
available to common shareholders:
Continuing operations	$	2.32		$	1.64
Discontinued operations		-			(0.12	)
Net diluted earnings per share
available to common shareholders	$	2.32		$	1.52
Weighted average shares outstanding:
Basic		560,119			545,593
Diluted		745,223			856,052

AMCON Distributing Company and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
for the three months ended December 31, 2009 and 2008
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,729,140		$	1,299,562
Deduct: Loss from discontinued operations, net of tax		-			(102,038	)
Income from continuing operations		1,729,140			1,401,600
Adjustments to reconcile net income from
continuing operations to net cash flows
from operating activities:
Depreciation		338,099			310,334
Amortization		49,170			-
Gain on sale of property and equipment		(16,935	)		(43,697	)
Stock based compensation		163,364			132,900
Net excess tax (benefit) deficiency
on equity-based awards		(107,048	)		16,592
Deferred income taxes		10,104			47,411
Provision for losses on doubtful accounts		16,426			77,006
Provision for losses on inventory obsolescence		76,703			92,790
Changes in assets and liabilities, net of effect of acquisition:
Accounts receivable		4,695,589			3,791,365
Inventories		3,442,508			1,733,268
Prepaid and other current assets		(2,679,354	)		833,568
Other assets		519			(351,942	)
Accounts payable		(1,329,456	)		1,023,735
Accrued expenses and accrued wages, salaries and bonuses		(2,127,887	)		(1,321,463	)
Income tax payable		(2,973,111	)		572,219
Net cash flows from operating activities - continuing operations		1,287,831			8,315,686
Net cash flows from operating activities - discontinued operations		-			19,727
Net cash flows from operating activities		1,287,831			8,335,413
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(596,612	)		(265,971	)
Proceeds from sales of property and equipment		34,306			71,900
Acquisition		(3,099,836	)		-
Net cash flows from investing activities		(3,662,142	)		(194,071	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) on bank credit agreement		2,769,851			(7,866,594	)
Principal payments on long-term debt		(182,901	)		(197,731	)
Proceeds from exercise of stock options		66,411			-
Net excess tax benefit (deficiency)
on equity-based awards		107,048			(16,592	)
Dividends paid on preferred stock		(74,867	)		(105,533	)
Dividends on common stock		(103,181	)		(57,039	)
Net cash flows from financing activities		2,582,361			(8,243,489	)
Net change in cash		208,050			(102,147	)
Cash, beginning of period		309,914			457,681
Cash, end of period	$	517,964		$	355,534
	2009			2008
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	381,746		$	544,238
Cash paid during the period for income taxes		3,903,998			182,371
Supplemental disclosure of non-cash information:
Equipment acquisitions classified as accounts payable		21,512			-
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			-