AMCON Distributing Company Reports First Half Fiscal 2006 Financial Results

Business Wire, Oct 2, 2006

CHICAGO -- AMCON Distributing Company ("AMCON") (AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to announce its financial results for the first and second quarter of 2006, the half year period ended March 31, 2006 and the corresponding filing of its related Quarterly Report on Forms 10-Q with the Securities and Exchange Commission.

William F. Wright, AMCON's Chairman and CEO, commented: "We continue to see the benefits of our new internal holding company structure. AMCON now has the necessary human resources in place to facilitate our objective of timely reporting of results. This, in turn, has enabled our Senior Operating Executives to focus on profitably growing their businesses. Our core enterprises remain strong and well recognized as industry leaders."

For the first half of the fiscal 2006, AMCON's wholesale consumer products distribution business reported segment operating income before depreciation of approximately $3.5 million and the Retail Health Food Division reported segment operating income before depreciation of approximately $1.8 million.

Christopher Atayan, AMCON's Vice Chairman and Chief Corporate Officer, noted: "Our entire organization continues to work around the clock to restore the financial vitality of the enterprise. Our objective in the short to medium term is to reduce the levels of debt AMCON employs in the business which will enhance our ability to grow in the long term. The two primary elements supporting this objective are to preserve and enhance the operating earnings we generate from our core business units and the disposition of assets no longer central to our mission. We believe that by taking this approach and continuing AMCON's tradition of superior customer service we are in a position to enhance shareholder value."

Kathleen Evans, AMCON's president, reported "We were able to continue to carry forward positive momentum during the first half of the year in our Wholesale business. Our strategy of enhanced customer service differentiates us from our competition and makes for long lasting and mutually beneficial customer relationships. As a result, AMCON continues to be awarded new business from leaders in the convenience store industry."

Eric Hinkefent, President of AMCON's Retail Health Food Division, said "Both our Akins's and Chamberlin's retail stores are performing at high levels. Customer satisfaction continues to be a primary mission of ours. This strategy enables us to generate repeat business with our customers and we benefit from attractive gross margins as well."

During the second quarter of fiscal 2006, AMCON began reporting its Trinity Springs subsidiary as a discontinued operation. The reported results for the second quarter of fiscal 2006 included consolidated revenues of approximately $197.4 million, operating income of approximately $1.2 million and income from continuing operations before taxes of approximately $0.1 million. After giving effect to the losses from discontinued operations, income taxes, and preferred dividends, the net loss available to common shareholders for the second fiscal quarter of 2006 was $0.6 million. For the first half of fiscal 2006, the reported revenues were $397.0 million and operating earnings were $1.7 million. The total net loss available to common shareholders for the first half of fiscal 2006 was $1.8 million.

"It is important to note that incorporated into both our three and six month periods for fiscal 2006 were segment operating losses of approximately $0.4 million and $0.8 million, respectively, from our water bottling subsidiary, Hawaiian Natural Water Company, as well as additional net losses of approximately $0.5 million and $1.3 million from our discontinued operations at Trinity Springs, Inc. and The Beverage Group, Inc. for the three and six month periods in fiscal 2006" reported Andrew Plummer, AMCON's Acting Chief Financial Officer. As previously reported, AMCON has been actively exploring the sale of Hawaiian Natural Water Company and has ceased operations at Trinity Springs and is engaged in settlement discussions.

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 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. Hawaiian Natural Water Company, Inc. produces and sells natural spring water under the Hawaiian Springs label in Hawaii and other foreign markets and purified bottled water on the Island of Oahu in Hawaii. The natural spring water is bottled at the source on the Big Island of Hawaii.