SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1998
OR
/ / Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
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COMMISSION FILE NUMBER 0-24708
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AMCON DISTRIBUTING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of Incorporation)
10228 "L" Street
Omaha, NE 68127
(Address of principal executive offices)
(Zip Code)
47-0702918
(I.R.S. Employer Identification No.)
(402) 331-3727
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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The Registrant had 2,479,903 shares of its $.01 par value common stock
outstanding as of January 29, 1999.
Form 10-Q
1st Quarter
INDEX
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PAGE
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 3
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
2.1 Stock Purchase Agreement dated November 3, 1997, between the
Company and FFH Holdings, Inc. (incorporated by reference to
Exhibit 2.1 of the Company's Current Report on Form 8-K filed on
November 25, 1997)
3.1 Restated Certificate of Incorporation of the Company, as amended
March 19, 1998 (incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q filed on May 11, 1998)
3.3 Bylaws of the Company (incorporated by reference to Exhibit 3.2
of the Company's Registration Statement on Form S-1 (Registration
No. 33-82848) filed on August 15, 1994)
4.1 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 of the Company's Registration Statement on Form S-1
(Registration No. 33-82848) filed on August 15, 1994)
10.1 Grant of Exclusive Manufacturing Rights, dated October 1, 1993,
between the Company and Famous Value Brands, a division of Philip
Morris Incorporated, including Private Label Manufacturing
Agreement and Amended and Restated Trademark License Agreement
(incorporated by reference to Exhibit 10.1 of Amendment No. 1 to
the Company's Registration Statement on Form S-1 (Registration
No. 33-82848) filed on November 8, 1994)
10.2 Amendment No. 1 to Grant of Exclusive Manufacturing Rights, dated
October 1, 1998, between the Company and Famous Value Brands, a
division of Philip Morris Incorporated, including Amendment No. 1
To Private Label Manufacturing Agreement and Amendment No. 1 to
Amended and Restated Trademark License Agreement (incorporated by
reference to Exhibit 10.2 of the Company's Annual Report on Form
10-K filed on December 24, 1998)
10.3 Loan Agreement, dated November 10, 1997, between the Company and
LaSalle National Bank (incorporated by reference to Exhibit 10.1
of the Company's Current Report on Form 8-K filed on November 25,
1997)
10.4 Amended Loan Agreement, dated February 25, 1998, between the
Company and LaSalle National Bank (incorporated by reference to
Exhibit 10.5 of the Company's Quarterly Report on Form 10-Q
filed on May 11, 1998)
10.5 Note, dated November 10, 1997, between the Company and LaSalle
National Bank (incorporated by reference to Exhibit 10.2 of the
Company's Current Report on Form 8-K filed on November 25, 1997)
10.6 First Allonge to Note, dated February 25, 1998, between the
Company and LaSalle National Bank (incorporated by reference to
Exhibit 10.7 of the Company's Quarterly Report on Form 10-Q filed
on May 11, 1998)
10.7 Loan and Security Agreement, dated February 25, 1998, between the
Company and LaSalle National Bank (incorporated by reference to
Exhibit 10.8 of the Company's Quarterly Report on Form 10-Q filed
on May 11, 1998)
10.8 Promissory Note, dated February 25, 1998, between the Company and
LaSalle National Bank (incorporated by reference to Exhibit 10.9
of the Company's Quarterly Report on Form 10-Q filed on May 11,
1998)
10.9 Loan and Security Agreement, dated February 25, 1998, between
Food For Health Co., Inc. and LaSalle National Bank (incorporated
by reference to Exhibit 10.10 of the Company's Quarterly Report
on Form 10-Q filed on May 11, 1998)
10.10 Promissory Note, dated February 25, 1998, between Food For
Health Co., Inc. and LaSalle National Bank (incorporated by
reference to Exhibit 10.11 of the Company's Quarterly Report on
Form 10-Q filed on May 11, 1998)
10.11 First Amendment to Loan and Security Agreement, dated November
18, 1998, between Food For Health Co., Inc. and LaSalle National
Bank
10.12 First Amendment and Allonge to Promissory Note, dated November
18, 1998, between Food For Health Co., Inc. and LaSalle National
Bank
10.13 Unconditional Guarantee, dated February 25, 1998, between the
Company and LaSalle National Bank (incorporated by reference to
Exhibit 10.12 of the Company's Quarterly Report on Form 10-Q
filed on May 11, 1998)
10.14 AMCON Distributing Company 1994 Stock Option Plan (incorporated
by reference to Exhibit 10.7 of the Company's Registration
Statement on Form S-1 (Registration No. 33-82848) filed on
August 15, 1994)
10.15 AMCON Distributing Company Profit Sharing Plan (incorporated by
reference to Exhibit 10.8 of Amendment No. 1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-82848)
filed on November 8, 1994)
10.16 Employment Agreement, dated May 22, 1998, between the Company
and William F. Wright (incorporated by reference to Exhibit
10.14 of the Company's Quarterly Report on Form 10-Q filed on
August 6, 1998)
10.17 Employment Agreement, dated May 22, 1998, between the Company
and Kathleen M. Evans (incorporated by reference to Exhibit
10.15 of the Company's Quarterly Report on Form 10-Q filed on
August 6, 1998)
10.18 Employment Agreement, dated May 22, 1998, between the Food For
Health Co., Inc. and Jerry Fleming (incorporated by reference to
Exhibit 10.16 of the Company's Quarterly Report on Form 10-Q
filed on August 6, 1998)
11.1 Statement re: computation of per share earnings (incorporated by
reference to footnote 3 to the financial statements included in
Item 1 of AMCON's Quarterly Report on Form 10-Q filed on February
8, 1999)
27.0 Financial Data Schedules (incorporated by reference to Exhibit
27.0 of AMCON's Quarterly Report on Form 10-Q filed on February
8, 1999)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AMCON DISTRIBUTING COMPANY
(registrant)
Date: August 5, 1999 Kathleen M. Evans
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Kathleen M. Evans
President & Principal
Executive Officer
Date: August 5, 1999 Michael D. James
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Michael D. James
Treasurer & CFO and
Principal Financial and
Accounting Officer
November 18, 1998
Food For Health Co., Inc.
3655 West Washington Street
Phoenix, Arizona 85009
Re: First Amendment
Gentlemen:
Food For Health Co., Inc., an Arizona corporation ("Borrower") and LaSalle
National Bank, a national banking association ("Bank") have entered into that
certain Loan and Security Agreement dated February 25, 1998 (the "Security
Agreement"). From time to time thereafter, Borrower and Bank may have
executed various amendments (each an "Amendment" and collectively the
"Amendments") to the Security Agreement (the Security Agreement and the
Amendments hereinafter are referred to, collectively, as the "Agreement").
Borrower and Bank now desire to further amend the Agreement as provided
herein, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) Paragraph 9 of the Agreement is deleted in its entirety and
the following is substituted in its place:
(9) TERMINATION: This Agreement shall be in effect from the
date hereof until May 31, 2004 (the "Term"); provided, however, that Bank
shall not make any Loans pursuant to subparagraphs (1)(a) and (1)(b) of
Exhibit A of the Agreement after February 25, 2002 and shall review the Loans
and the facility provided for in this Agreement annually; and, provided
further, that the security interests and liens created under this Agreement
and the Other Agreements shall survive until the payment in full of the
Liabilities. At such time as Borrower has repaid all of the Liabilities and
this Agreement has terminated, Borrower shall deliver to Bank a release, in
form and substance satisfactory to Bank, of all obligations and liabilities of
Bank and its officers, directors, employees, agents, parents, subsidiaries and
affiliates to Borrower. At such time as Borrower has repaid all of the
Liabilities and this Agreement has terminated and Borrower has delivered such
release to Bank, Bank shall release its liens in the Collateral and deliver to
Borrower such lien releases, terminations and reassignment as Borrower shall
reasonably request and deliver any Collateral then in its possession to
Borrower.
(b) Subparagraph of 11(o) of the Agreement is deleted in its
entirety and the following is substituted in its place:
(o) TANGIBLE NET WORTH: Borrower shall, at all times from
the date hereof through September 30, 1999 and thereafter on the first day of
each fiscal quarter, maintain a Tangible Net Worth of not less than the
Minimum Tangible Net Worth, as hereinafter defined. From the date hereof
through September 30, 1999 "Minimum Tangible Net Worth" shall equal Two
Hundred Thousand and No/100 Dollars ($200,000.00). On each of October 1,
1999, January 1, 2000, April 1, 2000, July 1, 2000 and on the first day of
each fiscal quarter thereafter, "Minimum Tangible Net Worth" shall be equal to
$200,000.00 plus the greater of (i) One Hundred Thousand and No/100 Dollars
($100,000.00), and (ii) fifty percent (50%) of Borrower's net profits during
such preceding fiscal year. "Tangible Net Worth" shall mean, as of any time
the same is to be determined, an amount equal to shareholder's equity in
Borrower reflected on the most recent balance sheet of Borrower prepared in
accordance with generally accepted accounting principles consistently applied,
less the aggregate book value of all assets which would be classified as
intangible assets under generally accepted accounting principles, including,
without limitation, goodwill, patents, trademarks, trade names, copyrights,
franchises and deferred charges (including, without limitation, unamortized
debt discount and expense, organization and cost and deferred research and
development expense) and similar assets.
(c) Paragraph (1) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
(1) LOAN LIMIT: Subject to the terms and conditions of the
Agreement and the Other Agreements, Bank shall, absent the occurrence of an
Event of Default, advance an amount up to the sum of the following sublimits
(the "Loan Limit"):
(a) Up to eighty-five percent (85%) of the face amount
(less maximum discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith) of Borrower's Eligible
Accounts; plus
(b) Up to seventy percent (70%) of the lower of the cost
or market value of Borrower's Eligible Inventory; plus
(c) Subject to Paragraph (1).(1) of this Exhibit A, up
to One Million Eighty Thousand and No /100 Dollars ($1,080,000.00) as a
Special Accommodation; minus
(d) Such reserves as Bank elects, in its sole
discretion, to establish from time to time; provided, that (i) the aggregate
amount of advances made pursuant to subparagraphs (a) and (b) above shall in
no event exceed Six Million Five Hundred Eighty Thousand and No/100 Dollars
($6,580,000.00).
(d) Paragraph (1) of Exhibit A of the Agreement is amended to add
the following provision:
(1).(1) AVAILABILITY REDUCTIONS: The availability described
in subparagraph (1)(c) of this Exhibit A shall be automatically curtailed by
Eighteen Thousand and No/100 Dollars ($18,000.00) per month, commencing May
31, 1999, and continuing on the corresponding day of each month thereafter (or
if there is no corresponding day, on the last Business Day of such month)
until the earliest to occur of (i) the date on which said availability shall
be reduced in full; and (ii) the date upon which this Agreement terminates
pursuant to the provisions of Paragraph 9 of the Agreement, on which date said
availability shall be reduced in full.
(e) Subparagraph (3)(a) of Exhibit A of the Agreement is deleted
in its entirety and the following is substituted in its place:
(a) (i) All loans made pursuant to subparagraphs (1)(a) and
(1)(b) of this Exhibit A shall bear interest at the rate of one-half of one
percent (1/2 of 1%) per annum below Bank's publicly announced prime rate
(which is not intended to be Bank's lowest or most favorable rate in effect at
any time) (the "Prime Rate") in effect from time to time, and (ii) all loans
made pursuant to subparagraph (1)(c) of this Exhibit A shall bear interest at
the rate of one-fourth of one percent (1/4th of 1%) per annum below Bank's
Prime Rate in effect from time to time, all payable on the last Business Day
of each month in arrears. Said rates of interest shall increase or decrease
by an amount equal to each increase or decrease in the Prime Rate effective on
the effective date of each such change in the Prime Rate.
(f) Paragraph (6) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
(6) YEAR 2000: Borrower and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely
basis, the "Year 2000 Problem" (that is, the risk that computer applications
used by Borrower and its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any
date on or after December 31, 1999), and have made related appropriate inquiry
of material suppliers and vendors. Based on such review and program, Borrower
believes that the "Year 2000 Problem" will not have a material adverse effect
on its business, assets or condition, financial or otherwise. From time to
time, at the request of Bank, Borrower[, Parent] and its Subsidiaries shall
provide to Bank such updated information or documentation as is requested
regarding the status of their efforts to address the "Year 2000 Problem."
(g) Paragraph (10) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
(10) CONSENT TO STOCK ACQUISITION: Borrower has requested
that Bank consent to a purchase of all of the outstanding common stock of U.S.
Health Distributors, Inc., a Florida corporation ("U.S. Health"), pursuant to
the terms and conditions set forth in the following documents in the form of
Exhibit C attached hereto and made a part hereof (the "Acquisition
Documents"):(i) Stock Purchase Agreement dated as of November 6, 1998 executed
by the Shareholders of U.S. Health and by Borrower; Consents/Resolutions to
the Stock Purchase Agreement executed by the Board of Directors and
Shareholders of Borrower and of U.S. Health, each dated November 18, 1998; and
Closing Statement; provided, however, the purchase price of the stock
purchased shall not exceed One Million Two Hundred Sixty Thousand and No/100
Dollars ($1,260,000.00) in the aggregate. In reliance upon the foregoing and
the terms of the documents set forth above and notwithstanding anything
contained in subparagraph 11(m) of the Agreement to the contrary, Bank hereby
grants its consent to the acquisition of all of the common stock of U.S.
Health, subject to the receipt by Bank of the following documents, which shall
be in form and substance satisfactory to Bank: (a) the executed Acquisition
Documents and any related agreements; (b) a Solvency Certificate executed by
Borrower; (c) Attorney's Opinion Letters upon which Bank may rely; (d) any
other certificates, agreements or documents reasonably requested by Bank; and
(e) an Assignment of Undertakings.
(h) Subparagraph (14)(b) of Exhibit A of the Agreement is deleted
in its entirety and the following is substituted in its place:
(b) Guaranties: Borrower has caused to be executed in favor
of Bank and delivered to Bank by AMCON a guaranty of the Liabilities of
Borrower to Bank. Borrower shall cause to be executed in favor of Bank and
delivered to Bank by U.S. Health a guaranty of the Liabilities of Borrower to
Bank.
2. This Amendment shall not become effective until fully executed by
all parties hereto.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to
effectuate the transactions contemplated hereby, the Agreement and Exhibit A
thereto hereby are ratified and confirmed by the parties hereto and remain in
full force and effect in accordance with the terms thereof.
LASALLE NATIONAL BANK,
a national banking association
By: Michael W. Kiss
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Title: Sr. Vice President
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Accepted and agreed to this
18th day of November, 1998.
FOOD FOR HEALTH CO., INC.
By: Jerry Fleming
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Title: President
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Consented and agreed to by the following guarantor(s) of the obligations of
Food For Health Co., Inc. to LaSalle National Bank.
AMCON Distributing Company, a
Delaware corporation
By: William F. Wright
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Title: Chairman
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FIRST AMENDMENT AND ALLONGE TO THAT CERTAIN
NOTE DATED FEBRUARY 25, 1998 EXECUTED BY
FOOD FOR HEALTH CO., INC. ("UNDERSIGNED") IN
FAVOR OF LASALLE NATIONAL BANK ("BANK") IN
THE ORIGINAL PRINCIPAL AMOUNT OF $5,000,000.00 ("NOTE")
This First Amendment and Allonge to the Note is made and accepted by the
Undersigned as of this 18th day of November, 1998. All capitalized terms used
herein but not otherwise defined will have the same meanings herein as in the
Note.
Bank and the Undersigned have agreed to amend the Note as herein
provided. Accordingly the Note is hereby amended as follows:
1. The face amount of the Note is hereby amended to read Six Million
Five Hundred Eighty Thousand and No/100 Dollars ($6,580,000.00) from Five
Million and No/100 Dollars ($5,000,000.00).
Except as specifically amended hereby, the Note shall remain in full
force and effect as issued. An executed original of this First Amendment and
Allonge shall be attached to the original Note and will constitute an integral
part thereof.
FOOD FOR HEALTH CO., INC.
By: Jerry Fleming
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Title: President
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Accepted and Agreed to this
18th day of November, 1998.
LASALLE NATIONAL BANK
By: Michael W. Kiss
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Title: Sr. Vice President
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