FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the Management's Discussion and Analysis and other sections, 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. Forward looking statements include information concerning the possible or assumed future results of operations of the Company and those statements preceded by, followed by or that include the words "future," "position," "anticipate(s)," "expect," "believe(s)," "see," "plan," "further improve," "outlook," "should" or similar expressions. For these statements, we claim the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. You should understand that the following important factors, in addition to those discussed elsewhere in this document, could affect the future results of the Company and could cause those results to differ materially from those expressed in our forward looking statements:

- increases in state and federal excise taxes on cigarette and tobacco products, including proposed legislation to renew and expand the State Children's Health Insurance Program ("SCHIP"), which would be largely funded through significant increases to federal excise taxes on cigarette and tobacco products
- changing market conditions with regard to cigarettes,
- changes in promotional and incentive programs offered by manufacturers,
- credit risk associated with the Company's wholesale segment customers,
- future availability of capital,
- the demand for the Company's products,
- new business ventures,
- domestic regulatory and legislative risks,
- competition,
- poor weather conditions,
- increases in fuel prices,
- collection of guaranteed amounts,
- other risks over which the Company has little or no control, and
- any other factors not identified herein could also have such an effect.

Changes in these factors could result in significantly different results. Consequently, future results may differ from management's expectations. Moreover, past financial performance should not be considered a reliable indicator of future performance. Any forward looking statement contained herein is made as of the date of this document. Except as required by law, the Company undertakes no obligation to publicly update or correct any of these forward looking statements in the future to reflect changed assumptions, the occurrence of material events or changes in future operating results, financial conditions or business over time.

CRITICAL ACCOUNTING ESTIMATES

Certain accounting estimates used in the preparation of the Company's financial statements require us to make judgments and estimates and the financial results we report may vary depending on how we make these judgments and estimates. Our critical accounting estimates are set forth in our Form 10-K for the fiscal year ended September 30, 2007, as filed with the Securities and Exchange Commission. There have been no significant changes with respect to these policies during the six months ended March 2008.

COMPANY OVERVIEW - SECOND FISCAL QUARTER 2008 (Q2 2008)

The following discussion and analysis includes the Company's results of operations from continuing operations for the three and six months ended March 2008 and March 2007. Continuing operations are comprised of our wholesale distribution and retail health food segments. A separate discussion of our discontinued operations has been presented following our analysis of continuing operations. Accordingly, the sales, gross profit
(loss), selling, general and administrative, depreciation and amortization, direct interest, other expenses and income tax benefit from our discontinued operations have been aggregated and reported as income (loss) from discontinued operations and are not a component of the aforementioned continuing operations discussion.

During Q2 2008, the Company:

- experienced a $1.5 million increase in income from continuing operations before income taxes as compared to Q2 2007.

- recognized income from continuing operations per basic share of $2.16 and $0.43 for the three months ended March 2008 and March 2007, respectively, and $3.92 and $1.39 for the six months ended March 2008 and March 2007, respectively.

- recognized (loss) income from discontinued operations per basic share of ($0.18) and ($0.36) for the three months ended March 2008 and March 2007, respectively, and ($0.36) and $0.85 for the six months ended March 2008 and March 2007, respectively.

Wholesale Distribution Segment (ADC)

Our wholesale distribution segment represents approximately 95% of the Company's consolidated sales. ADC serves approximately 4,000 retail outlets in the Great Plains and Rocky Mountain regions and is ranked as a top ten convenience store supplier according to Convenience Store News. While we provide our retailers with a broad selection of merchandise in all product categories, we remain largely dependent on cigarette sales, which account for approximately 74% of ADC total sales. ADC is also focused on growing its sales of non-tobacco products, which offer higher profit margins and greater revenue stream diversity.

The wholesale distribution industry (the "Industry") is mature and highly competitive. To differentiate itself, ADC leverages a number of strategies focused around providing market leading customer service programs and offering flexible delivery capabilities. These strategies have helped position ADC as a distributor of choice for both small independent retail outlets and multi-location retail outlets.

ADC has significant alliances with the major cigarette manufacturers which we believe control over 90% of the cigarette industry volume. While some of our competitors have focused on the lower priced cigarette brands, ADC has made a conscious decision to support and grow our national brand segment and align our business with the major players in the industry. We believe that it is important not to compete against the major cigarette manufacturers because of their commitment to growing and maintaining their market share in a declining category. Additionally, we believe that consumers' preference for premium brands currently drives the category volume.

The Industry continues to experience significant changes driven by high fuel costs, higher excise taxes, the popularity of deep-discount cigarette brands, and consolidation within the Industry's customer base (particularly convenience stores and tobacco shops). Collectively, we expect these items will continue to pressure profit margins industry-wide and potentially diminish the Company's profits.

To capitalize on the industry-wide changes mentioned above, ADC aggressively manages its cost structure, heavily leverages inventory management strategies, and deploys new technologies and automation tools where possible. These actions have allowed ADC to maintain competitive pricing and position itself to capture new business, sell new services to our existing customers, explore acquisition opportunities, and further penetrate the convenience store market.

Retail Health Food Segment

AMCON's retail health food stores, which are operated as Chamberlin's Market & Cafe ("Chamberlin's" or "CNF") and Akin's Natural Foods Market ("Akin's" or "ANF"), offer thousands of different product selections to their customers. Chamberlin's, which was first established in 1935, is an award-winning and highly-acclaimed chain of six health and natural product retail stores, all offering an extensive selection of natural supplements and herbs, baked goods, dairy products, and organic produce. Chamberlin's operates all of its stores in and around Orlando, Florida.

Akin's, established in 1935, is also an award winning chain of seven health and natural product retail stores, each offering an extensive line of natural supplements and herbs, dairy products, and organic produce. Akin's has locations in Tulsa and Oklahoma City, Oklahoma; Lincoln, Nebraska; Springfield, Missouri; and Topeka, Kansas.

The retail health food industry has experienced strong growth in recent years driven primarily by the demand for natural products and more health conscious consumers. Our retail health food segment has benefited from this trend, experiencing sales growth in many key product categories. Our management team continues to evaluate locations for new stores.

RESULTS OF OPERATIONS - Continuing Operations

SALES:

Changes in sales are driven by two primary components:

(i) changes to selling prices, which are largely controlled by our product suppliers, and excise taxes imposed on cigarettes and tobacco products by various states; and

(ii) changes in the volume of products sold to our customers, either due to a change in purchasing patterns resulting from consumer preferences or the fluctuation in the comparable number of business days in our reporting period.

Sales by business segment for the three and six month periods ended March 2008 and March 2007 are as follows (dollars in millions):

                                           Three months                  Six months
                                           ended March                   ended March
                                     -----------------------      ------------------------
                                                       Incr.                         Incr.
                                      2008     2007   (Decr)       2008     2007    (Decr)
                                     ------   ------  ------      ------   ------   ------
Wholesale distribution segment       $179.9   $191.4  $(11.5)     $381.1   $391.6   $(10.5)
Retail health food segment             10.5      9.8     0.7        20.0     18.9      1.1
                                     ------   ------  ------      ------   ------   ------
                                     $190.4   $201.2  $(10.8)     $401.1   $410.5   $ (9.4)
                                     ======   ======  ======      ======   ======   ======

SALES - Q2 2008 vs. Q2 2007 (continuing operations)

Sales for Q2 2008 decreased $10.8 million, or 5.4%, as compared to Q2 2007. Sales are reported net of costs associated with sales incentives provided to retailers, totaling $3.8 million and $4.0 million, for Q2 2008 and Q2 2007, respectively.

Sales in our wholesale distribution segment ("wholesale") decreased $11.5 million, or 6.0%, in Q2 2008 as compared to Q2 2007. This change included a $11.2 million decrease in sales, primarily due to lower cigarette sales, and a $0.3 million net decrease in our other product categories sales (tobacco, beverages, candy, grocery, health & beauty products, and food service).

Significant items impacting our Q2 2008 wholesale segment sales included:

- $3.3 million increase in cigarette sales due to higher excise taxes.

- $1.8 million increase in cigarette sales due to prices increases implemented by major manufacturers.

- $16.3 million decrease in sales, primarily the result of a 11.1% decrease in cigarette shipment volumes.

- $0.3 million net decrease in our other product category sales, primarily the result of lower sales volumes.

Rising fuel prices and weakening economic conditions have generally impacted discretionary spending, which has had the impact of reducing sales. In addition, recent legislative actions, including smoking bans and higher cigarette excise taxes, and a general decline in the number of cigarette consumers, has negatively impacted our sales of cigarettes.

Sales from our retail health food segment increased approximately $0.7 million, or 7.1%, in Q2 2008 as compared to Q2 2007. Sales growth has been achieved in most product categories. We believe this growth is largely attributable to the continuing popularity of vitamin supplements and natural food products among more health conscious consumers. We continue to capitalize on this trend with more targeted promotional insert programs and recent online efforts.

SALES - Six Months Ended March 2008 (continuing operations)
Sales for the six month period ended March 2008 decreased $9.4 million, or 2.3%, as compared to the same prior year period. Sales for the six months ended March 2008 and 2007, were net of costs associated with sales incentives provided to retailers, totaling $7.3 million and $7.9 million, respectively.

Sales from our wholesale segment decreased $10.5 million for the six months ended March 2008 as compared to the same prior year period. This change included a $12.3 million decrease in sales primarily related to lower cigarette sales, partially offset by a $1.8 million net increase in our other product categories sales (tobacco, beverages, candy, grocery, health & beauty products, and food service).

Significant items impacting wholesale segment sales for the six months ended March 2008 included:

- $9.6 million increase in cigarette sales due to higher excise taxes.

- $6.5 million increase in cigarette sales due to prices increases implemented by major manufacturers.

- $28.4 million decrease in sales, primarily the result of a 9.9% decrease in cigarette shipment volumes.

- $1.8 million net increase in our other product category sales, primarily the result of higher tobacco and food service sales, partially offset by lower sales in our beverage category.

Rising fuel prices and weakening economic conditions have generally impacted discretionary spending, which has had the impact of reducing sales. In addition, recent legislative actions, including smoking bans and higher cigarette excise taxes, and a general decline in the number of cigarette consumers, has negatively impacted our sales of cigarettes.

Sales from our retail health food segment increased approximately $1.1 million, or 5.8%, for the six month period ended March 2008, as compared to the same prior year period. Sales growth has been achieved in most product categories. We believe this growth is largely attributable to the continuing popularity of vitamin supplements and natural food products among more health conscious consumers. We continue to capitalize on this trend with more targeted promotional insert programs and recent online efforts.

GROSS PROFIT - Q2 2008 vs. Q2 2007 (continuing operations)
Our gross profit does not include fulfillment costs and costs related to the distribution network which are included in selling, general and administrative costs, and may not be comparable to those of other entities. Some entities may classify such costs as a component of cost of sales.

Cost of sales, a component used in determining gross profit, for the wholesale and retail segments includes the cost of products purchased from manufacturers, less incentives we receive which are netted against such costs.

Gross profit by business segment for the three and six month periods ended March 2008 and March 2007 are as follows (dollars in millions):

                                           Three Months                Six Months
                                           ended March                ended March
                                     -----------------------     -----------------------
                                                       Incr                        Incr
                                      2008     2007   (Decr)      2008     2007   (Decr)
                                     ------   ------  ------     ------  -------  ------
Wholesale distribution segment       $ 11.2   $ 11.1  $  0.1      $22.5  $  22.7  $ (0.2)
Retail health food segment              4.5      4.1     0.4        8.4      7.6     0.8
                                     ------   ------  ------     ------  -------  ------
                                     $ 15.7   $ 15.2  $  0.5     $ 30.9  $  30.3  $  0.6
                                     ======   ======  ======     ======  =======  ======

GROSS PROFIT - Q2 2008 vs. Q2 2007 (continuing operations)
Overall gross profit for Q2 2008 increased $0.5 million, or 3.3%, as compared to Q2 2007.

Gross profit in our wholesale segment increased $0.1 million, or 1.0%, as compared to the same prior year period. During Q2 2008, our wholesale gross profit benefited by approximately $0.9 million as a result of price increases and higher manufacturer promotional allowances. These items were partially offset by a $0.6 million reduction in benefits received from cigarette excise tax increases, as compared to Q2 2007. The remaining change in gross profit is primarily attributable to lower cigarette shipment volumes, offset by fluctuations in our product mix sold.

Gross profit for the retail health segment increased $0.4 million in Q2 2008 as compared to Q2 2007. Of this increase, approximately $0.3 million related to higher sales volume and improved sales mix, with the remaining change primarily attributable to higher vendor allowances.

GROSS PROFIT - Six months ended March 2008 (continuing operations)
Overall gross profit for the six months ended March 2008 increased $0.6 million, or 2.0%, as compared to the same prior year period.

Gross profit in our wholesale segment decreased $0.2 million, or 1.0%, for the six month period ended March 2008, as compared to the same period in the prior year. During Q2 2008, our wholesale gross profit benefited by approximately $0.7 million as a result of price increases and lower product promotional spending, as compared to the same prior year period. These items were partially offset by a $0.6 million reduction in benefits received from cigarette excise tax increases, as compared to the same prior year period. The remaining change in gross profit is primarily attributable to lower cigarette shipment volumes, partially offset by fluctuations in our product mix sold.

Gross profit for the retail health segment increased $0.8 million for the six month period ended March 2008. Of this increase, approximately $0.5 million related to higher sales volume and improved sales mix, with the remaining change primarily attributable to higher vendor allowances.

OPERATING EXPENSE - three and six months ended March 2008 comparison
Operating expense includes selling, general and administrative expenses and depreciation and amortization. Selling, general and administrative include costs related to our sales, warehouse, delivery and administrative departments for all segments. Specifically, purchasing and receiving costs, warehousing costs and costs of picking and loading customer orders are all classified as selling, general and administrative expenses. Our most significant expenses relate to employee costs, facility and equipment leases, transportation costs, fuel costs, insurance and professional fees.

Q2 2008 operating expenses decreased approximately $0.5 million as compared to Q2 2007. This decrease was primarily related to $0.6 million reduction in professional and legal costs, a $0.2 million reduction in compensation expense, and a $0.1 million reduction in depreciation charges. These decreases were partially offset by higher fuel cost and bad debt expenses.

Operating expenses for the six month period ended March 2008 decreased approximately $0.8 million as compared to the same period in the prior year. This decrease was primarily related to $0.7 million reduction in professional and legal costs, a $0.4 million reduction in compensation expense, and a $0.2 million reduction in depreciation charges. These decreases were partially offset by higher fuel costs and bad debt expenses.

INTEREST EXPENSE - three and six months ended March 2008 comparison
Q2 2008 interest expense decreased approximately $0.5 million as compared to Q2 2007, and interest expense for the six months ended March 2008 decreased approximately $0.8 million as comparable to the prior year period. These decreases in interest expense were principally related to lower prime interest rates and lower average borrowings.

The Company primarily borrows at the prime interest rate. On average, the Company's borrowing rates on variable rate debt were 2.03% lower and the average borrowings on variable rate debt were $13.9 million lower in Q2 2008 as compared to Q2 2007. For the six months ended March 2008, variable interest rates were on average 1.41% lower and average borrowings on variable rate debt were $11.4 million lower as compared to the same prior year period.

DISCONTINUED OPERATIONS - three and six months ended March 2008 comparison
--------------------------------------------------------------------------
(Loss) income from discontinued operations totaled ($0.1) million and
($0.2) million for the three and six months ended March 2008 as compared to
a loss of ($0.2) million and a gain of $0.4 million for the three and six
month periods ended March 2007.

A summary of discontinued operations is as follows:


                                                Three months ended               Six months ended
                                                      March                            March
                                            -------------------------      ---------------------------
                                                2008 /1/    2007 /2/          2008 /1/        2007 /2/
                                            -----------   -----------      ------------   ------------
Sales                                       $         -   $         -      $          -   $    862,647
Operating loss /3/                              (42,695)     (112,305)          (81,940)      (425,677)
(Loss) gain on disposal of discontinued
 operations, before income taxes                      -      (107,255)                -      1,455,333
Income tax (benefit) expense                    (59,000)     (120,000)         (118,000)       396,244
(Loss) income from discontinued operations      (97,445)     (190,781)         (193,440)       446,760


/1/ Includes the results for operations of TSI.

/2/ Includes the results of operations for TSI and HNWC. The residual assets and
    liabilities of HNWC were classified as continuing operations in October 2007 (Q1 2008).
    The six month period ended March 2007 also included a pre-tax gain of approximately
    $1.6 million related to the November 2006 of HNWC's assets.

/3/ Operating loss is before interest expense on discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Operating Activities. The Company requires cash to pay operating expenses, purchase inventory, and make capital investments. In general, the Company finances its cash flow requirements with cash generated from operating activities and credit facility borrowings. During the six months ended March 2008, the Company generated cash of approximately $6.0 million from operating activities. The cash generated primarily resulted from higher overall earnings, and a reduction in accounts receivable and deferred income tax balances. These items were partially offset by higher inventory purchases and a reduction in accounts payable.

Our variability in cash flows from operating activities is dependent on the timing of inventory purchases and seasonal fluctuations. For example, periodically we have inventory "buy-in" opportunities which offer more favorable pricing terms. As a result, we may have to hold inventory for a period longer than the payment terms. This generates a cash outflow from operating activities which we expect to reverse in later periods. Additionally, during the warm weather months, which is our peak time of operations, we generally carry higher amounts of inventory to ensure high fill rates and maintain customer satisfaction.

Investing Activities. The Company used approximately $0.5 million of cash during the six month period ended March 2008 for investing activities, primarily related to capital expenditures for property and equipment.

Financing Activities. The Company used net cash of $5.7 million from financing activities during the six month period ended March 2008. Of this net change in cash, $5.3 million related to payments on the Company's credit facility, $0.2 million related to preferred stock dividend payments, $0.1 million related to cash received on the exercise of stock options, and $0.3 million related to principal payments on long-term debt.

Cash on Hand/Working Capital. At March 2008, the Company had cash on hand of $0.5 million and working capital (current assets less current liabilities) of $32.5 million. This compares to cash on hand of $0.7 million and working capital of $34.9 million as of September 2007.

TSI Financing

As previously disclosed, TSI has approximately $2.8 million in related party debt obligations, which are in default at March 2008. TSI has not obtained associated debt default waivers for these related party obligations. At this time, the Company does not anticipate the defaults will materially impact the Company's future liquidity position.

In September 2007 AMCON and TSI settled all litigation with Crystal Paradise Holdings, Inc. ("CPH") regarding an April 24, 2004 Asset Purchase Agreement under which TSI acquired certain assets from CPH. No monetary exchanges between the Company and CPH were required under the settlement agreement. The Company has recorded a $1.5 million pre-tax deferred gain in connection with the above settlement. This deferred gain has been classified as a component of noncurrent liabilities of discontinued operations in the

Company's March 2008 condensed consolidated balance sheet. The deferred gain will be recognized upon the earlier of CPH's election to exercise its TSI asset purchase option or the expiration of the asset purchase option. With this final settlement, the Company does not expect its future cash flows to be significantly impacted by future litigation related to the April 24, 2004 Asset Purchase Agreement.

Contractual Obligations

There have been no significant changes to the Company's contractual obligations as set forth in the Company's Form 10-K for the fiscal period ended September 30, 2007.

CREDIT AGREEMENT

The Company's primary source of borrowing for liquidity purposes is its revolving credit facility with Bank of America (formerly LaSalle Bank)(the "Facility"). The significant terms of the Facility at March 2008 include:

- A $55.0 million revolving credit limit, plus the outstanding balance on Term Note A, discussed below, for a total credit facility limit of $55.5 million at March 2008. As a component of the credit agreement, the Company has a term note ("Term Note A") with Bank of America (formerly LaSalle Bank). Term Note A bears interest at the bank's prime rate and is payable in monthly installments of $16,333. Term Note A had an outstanding balance of approximately $0.5 million at March 2008.

- Bears interest at the bank's prime interest rate.

- Lending limits subject to accounts receivable and inventory limitations, an unused commitment fee equal to 0.25% per annum on the difference between the maximum loan limit and average monthly borrowings.

- Collateral including all of the Company's equipment, intangibles, inventories, and accounts receivable.

- A prepayment penalty of one percent (1%) of the prepayment loan limit of $55.0 million if prepayment occurs on or before April 30, 2008.

- Provides that the Company may not pay dividends on its common stock in excess of $0.72 per share on an annual basis.

The Facility also includes quarterly debt service and cumulative earnings . . .