6-K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934

For the quarter ended September 30, 2001

Sparkling Spring Water Group Limited

6560 McMillan Way, Vancouver, British Columbia, Canada V6W 1L2
(Address of principal executive offices)

    [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F]

Form 20-F      /x/   Form 40-F      / /  

    [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3 - 2(b) under the Securities Exchange Act of 1934.]

Yes      / /   No      /x/  

SIGNATURE

    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, thereunto duly authorized.

	SPARKLING SPRING WATER GROUP LIMITED
	By:	/s/ Name: David M. Arnold Title:   Vice President Finance
Date: November 15, 2001

TABLE OF ADDITIONAL REGISTRANTS

Exact name of registrant as specified in its charter	State or other jurisdiction of incorporation of organization	Primary Standard Industrial Classification Code Number
Canadian Spring Water International Limited	Nova Scotia	5149
Canadian Springs Water Company AB Limited	Nova Scotia	5149
Rocky Mountain Springs Water, Inc.	Nova Scotia	5149
Spring Water, Inc.	Delaware	5149
Cullyspring Water Co., Inc.	Washington	5149
Crystal Springs Acquisition, Inc.	Delaware	5149
Nature Springs Water Company Limited	England	5149
Krystal Fountain Water Co. Limited	England	5149
Water at Work Limited	Scotland	5149
Natural Water Limited	Scotland	5149

    The address of the principal executive offices of each of the Additional Registrants is the same as for Sparkling Spring Water Group Limited, as set forth on the cover page of this Report.

SPARKLING SPRING WATER GROUP LIMITED

QUARTERLY REPORT ON FORM 6-K
FOR THE QUARTER ENDED SEPTEMBER 30, 2001

INDEX

			Page
Part I		Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000	1
		Consolidated Statements of Operations for the three and nine month periods ended September 30, 2001 and 2000	2
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2001 and 2000	3
		Notes to Consolidated Financial Statements	4
	Item 2.	Management's Discussion And Analysis Of Financial Condition and Results of Operations	8
Part II		Other Information
	Item 6.	Exhibits and Reports on Form 6-K	13

Part I  Financial Information

Item 1.  Financial Statements

SPARKLING SPRING WATER GROUP LIMITED

CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)		September 30, 2001			December 31, 2000
		(Unaudited)
ASSETS
Current
Cash and cash equivalents		$	—		$	556
Accounts receivable			14,039			11,650
Inventories [note 3]			1,483			1,635
Prepaid expenses			2,265			2,083
	Total current assets		17,787			15,924
Fixed assets			42,466			39,842
Goodwill and deferred charges			48,429			48,814
Other assets			1,973			2,166
	Total assets	$	110,655		$	106,746
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIENCY)
Current
Senior bank indebtedness—operating line [note 7]		$	9,633		$	—
Accounts payable and accrued liabilities			12,284			7,697
Income tax payable			55			418
Customer deposits			6,751			5,810
Current portion of long-term debt			2,717			3,779
	Total current liabilities		31,440			17,704
Obligations under capital leases and other debt			2,193			3,035
Obligations under non-compete agreements			162			247
Senior bank debt [note 7]			20,019			24,530
Subordinated notes payable			81,105			83,600
Other liabilities			1,452			915
	Total long-term liabilities		104,931			112,327
Shareholder's equity (deficiency)
Capital Stock
Issued and outstanding:
Class D common shares—1,383,328			5,574			5,954
Class E common shares—5,860			158			169
			5,732			6,123
Additional paid-in capital [note 4]			1,809			—
Cumulative translation adjustment			(5,851	)		(4,733	)
Deficit			(27,406	)		(24,675	)
	Total shareholder's equity (deficiency)		(25,716	)		(23,285	)
	Total liabilities and shareholder's equity (deficiency)	$	110,655		$	106,746

See accompanying notes

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SPARKLING SPRING WATER GROUP LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands of U.S. dollars)			Three Months Ended 9/30/01			Three Months Ended 9/30/00			Nine Months Ended 9/30/01			Nine Months Ended 9/30/00
Revenue:
	Water		$	14,240		$	13,135		$	38,595		$	34,772
	Rental			4,461			4,317			12,295			11,900
	Other			2,361			2,218			6,782			6,146
		Total revenue		21,062			19,670			57,672			52,818
Cost of sales:
	Water			2,480			2,966			7,201			7,208
	Other			824			893			2,326			2,386
		Total cost of sales		3,304			3,859			9,527			9,594
Gross profit				17,758			15,811			48,145			43,224
Expenses:
	Selling, delivery and administrative			11,173			10,742			31,292			28,778
	Integration and related expenses [note 8]			1,037			238			1,337			408
	Depreciation			2,679			2,291			7,589			6,751
	Amortization			477			448			1,381			1,300
Operating profit				2,392			2,092			6,546			5,987
Interest and related expenses				3,144			748			9,282			5,493
Income (loss) before income taxes and extraordinary item				(752	)		1,344			(2,736	)		494
Provision for income taxes				—			(57	)		(475	)		(423	)
Net income (loss) before extraordinary item				(752	)		1,287			(3,211	)		71
Extraordinary item [note 4]				—			—			480			—
Net income (loss)				(752	)		1,287			(2,731	)		71
Other comprehensive income (loss):
	Foreign currency translation adjustment			122			(550	)		(1,118	)		(2,607	)
Comprehensive income (loss)			$	(630	)	$	737		$	(3,849	)	$	(2,536	)
Basic earnings (loss) per share before extraordinary item			$	(0.54	)	$	0.93		$	(2.31	)	$	0.05
Diluted earnings (loss) per share before extraordinary item			$	(0.54	)	$	0.91		$	(2.31	)	$	0.05
Basic earnings (loss) per share			$	(0.54	)	$	0.93		$	(1.96	)	$	0.05
Diluted earnings (loss) per share			$	(0.54	)	$	0.91		$	(1.96	)	$	0.05

See accompanying notes

2

SPARKLING SPRING WATER GROUP LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands of U.S. dollars)		Nine Months Ended September 30, 2001			Nine Months Ended September 30, 2000
OPERATING ACTIVITIES
Net income (loss)		$	(2,731	)	$	71
Items not requiring cash
	Depreciation		7,589			6,751
	Amortization		1,381			1,300
	Deferred taxes		(139	)		—
	Amortization of deferred financing costs		342			404
	Extraordinary item		(480	)		—
	Cross currency swap		—			79
			5,962			8,605
Net change in non-cash working capital balances			2,676			(1,380	)
Cash provided by operating activities			8,638			7,225
INVESTING ACTIVITIES
Purchase of fixed assets, net			(8,335	)		(6,316	)
Acquisitions [note 6]			(5,071	)		(5,253	)
Cash used in investing activities			(13,406	)		(11,569	)
FINANCING ACTIVITIES
Increase in long-term debt			4,813			6,012
Repayment of long-term debt			(962	)		(998	)
Increase in other liabilities			412			—
Decrease (increase) in deferred charges and other assets			154			(70	)
Cash provided by financing activities			4,417			4,944
Effect of foreign currency translation on cash			(205	)		—
Increase (decrease) in cash and cash equivalents during the period			(556	)		600
Cash and cash equivalents, beginning of period			556			567
Cash and cash equivalents, end of period		$	—		$	1,167
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid		$	6,562		$	6,620
Income taxes paid		$	975		$	528

See accompanying notes

3

SPARKLING SPRING WATER GROUP LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

(Unaudited)

1.  Basis of Presentation

    Sparkling Spring Water Group Limited ("Sparkling Spring") is incorporated under the laws of the Province of Nova Scotia, Canada and provides containered water to home and office markets in British Columbia, Alberta and the Maritime provinces of Canada, England, Scotland and the Pacific Northwestern United States.

    The Company uses the U.S. dollar as its reporting currency. Balance sheet accounts of all non-U.S. entities which are considered to be self-sustaining are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Income statement accounts of all non-U.S. entities are translated into U.S. dollars at average exchange rates prevailing during the period. Gains and losses on translation are included in a separate component of shareholder's equity titled "cumulative translation adjustment".

    The accompanying unaudited consolidated financial statements have been prepared on a historical cost basis by management in accordance with United States generally accepted accounting principles for interim financial information. Accordingly, they do not include all information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited interim consolidated financial statements of the Company reflect all adjustments necessary to present fairly the financial position of the Company, the results of its operations and the changes in its cash flows for the interim periods presented. All such adjustments are of a normal recurring nature.

    The accompanying consolidated financial statements should be read in conjunction with the Audited Financial Statements for the year ended December 31, 2000 and the notes thereto contained in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission.

2.  Seasonal Nature of Business

    Operating results for the three and nine month periods ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001 due to the seasonal nature of the business. This seasonality results from a combination of higher unit sales of the Company's products in the second and third quarters and the accounting for such administrative and other overhead costs including but not limited to depreciation, amortization and interest expense which are not significantly impacted by business seasonality.

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3.  Inventories

    Inventories consist of the following (thousands of dollars):

	September 30, 2001		December 31, 2000
	(unaudited)
Packaging materials	$	312	$	408
Coolers not yet in service		315		228
Goods for resale		515		563
Cooler parts		258		271
Other		83		165
	$	1,483	$	1,635

4.  Extraordinary Item

    In February 2001, Sparkling Spring Water Holdings Limited, parent of Sparkling Spring, paid approximately $1.8 million plus accrued interest to repurchase $2.495 million face value of Sparkling Spring's outstanding Subordinated Notes Payable. In May 2001, the Notes were contributed to Sparkling Spring as additional paid-in capital and the Notes were retired. A gain of $480,000 related to the repurchase and retirement of the Notes has been recorded net of applicable income taxes of $139,000 and costs of $67,000 representing a write-off of a proportionate amount of deferred charges incurred in connection with the issuance of the Subordinated Notes in November of 1997.

5.  Earnings per Share

    The weighted average number of shares used to calculate basic and diluted earnings per share for the three and nine month periods ended September 30, 2001 and 2000 is 1,389,188 and 1,436,975, respectively.

6.  Acquisitions

    On May 31, 2000, the Company purchased 100% of the outstanding stock of Mr. Softwater Ltd. for approximately $4.0 million. In May 2001, the Company changed its name to Canadian Springs Water Company AB Limited. Canadian Springs Water Company AB Limited operates primarily in the Calgary, Alberta Canada market.

    On July 17, 2000, the Company purchased all of the outstanding shares of Rocky Mountain Springs Water, Inc. ("Rocky Mountain") for approximately $0.7 million. Rocky Mountain operated in the Edmonton, Alberta Canada market.

    On August 8, 2000, the Company purchased the operating assets of Sparta Water, Inc. and subsidiaries ("Sparta") for approximately $0.7 million. Sparta operated in the Edmonton, Calgary and Grand Prairie Alberta, Canada markets.

    On May 2, 2001, the Company purchased the operating assets of the home and office business of CC Beverage (US) Corporation, operating under the product name "Cascade Clear", for approximately

5

$5.1 million including the net present value of leases assumed. Cascade Clear operates in Washington State from the city of Everett north to the Canadian border.

    The following unaudited pro forma information presents a summary of consolidated results of operations as if the acquisitions of Canadian Springs Water Company AB Limited, Rocky Mountain, Sparta and Cascade Clear had occurred at January 1, 2000.

(thousands of dollars except per share amounts)	Three Months Ended 9/30/01			Three Months Ended 9/30/00		Nine Months Ended 9/30/01			Nine Months Ended 9/30/00
Total revenue	$	21,062		$	20,512	$	58,639		$	57,200
Net income (loss)		(752	)		1,141		(2,891	)		(747	)
Extraordinary item		—			—		480			—
Basic earnings (loss) per share		(0.54	)		0.82		(2.08	)		(0.54	)

7.  Senior Bank Debt

    The Company has available a $37 million multi—currency facility that provides for a $15 million operating line (the "Operating Line Facility") which is renewable annually by April 30^th, a $13 million five year acquisition line (the "Acquisition Facility") and a $9 million term loan facility (the "Term Loan Facility") that provided the Company with flexibility to repurchase, at its discretion, certain of the Company's outstanding Subordinated Notes Payable. In December 2000, $3 million was transferred from the Acquisition Facility to the Term Loan Facility as permitted under the terms of the loan facility. In April 2001, the terms of the Senior Credit Facility were amended to eliminate any principal repayments required prior to March 31, 2002. Amounts outstanding under the Term Loan Facility and Acquisition Facility are repayable in varying amounts extending to October 2005 and April 2006 respectively. The Company has pledged as collateral a first priority security interest granted in favor of the lenders over substantially all of the assets of the Company. The Company's obligations under the facility rank senior to the payment of the Company's Subordinated Notes Payable.

8.  Integration and Related Expenses

    As part of integrating Canadian Springs Water Company AB Limited, Rocky Mountain and Sparta into the Company's existing business, non-recurring costs of $0.4 million were incurred in the nine months ended September 30, 2000 ($0.2 million in the three months ended September 30, 2000) to reduce and relocate staff, convert the acquired business' computer systems, close acquired facilities and eliminate small pack production operations.

    On May 15, 2001, Sparkling Spring Water Holdings Limited ("Holdings"), parent of Sparkling Spring Water Group Limited ("Group") acquired all of the outstanding shares of Pure Water Corporation ("Pure Water"), located in Seattle, Washington, and Polaris Water Company Incorporated ("Polaris"), located in Vancouver, Canada. Group and Holdings have agreed to enter into a Customer Service Agreement whereby Group will manage the approximate 20,000 home and office bottled water customer locations in Vancouver acquired through the Polaris acquisition, and Holdings will mange the approximate 14,000 bottled water customer locations of Group in the Seattle, Washington market. As a

6

result of this Agreement, Group has shut down its Seattle production facility. For the three months ended September 30, 2001, the Company has accrued $0.6 million to cover shutdown costs of the Seattle facility and integration costs associated with merging the Polaris Vancouver customer locations into Group's existing operations.

    In the nine months ended September 30, 2001, the Company accrued costs of approximately $0.5 million ($0.4 million for the three months ended September 30, 2001) to cover shutdown costs of its vacated Scotland facilities and consolidation of its administrative operations in England and Scotland to one facility in Scotland. In addition, non-recurring costs of $0.2 million have been accrued in the nine months ended September 30, 2001 (nil in the three months ended September 30, 2001) to integrate Cascade Clear into the Company's existing operations. The costs incurred related to training, conversion of computer systems, closing costs and other business integration costs.

9.  Summary of Business Segments

    The Company's business segments derive substantially all their revenues from the sale of bottled water and the rental of water coolers. The Company has identified three primary business segments: Canada, the United Kingdom and the United States.

    Segment detail is summarized as follows:

(thousands of dollars)	Three Months Ended 9/30/01			Three Months Ended 9/30/00			Nine Months Ended 9/30/01			Nine Months Ended 9/30/00
Revenue:
Canada	$	10,377		$	8,914		$	26,580		$	22,404
United Kingdom		6,956			6,731			19,109			19,218
United States		3,729			4,025			11,983			11,196
	$	21,062		$	19,670		$	57,672		$	52,818
Net income before depreciation, interest, income taxes and extraordinary item:
Canada	$	2,962		$	2,317		$	7,613		$	6,119
United Kingdom		2,158			2,336			5,814			7,016
United States		762			848			3,061			2,650
Unallocated corporate overhead		(334	)		(670	)		(972	)		(1,747	)
	$	5,548		$	4,831		$	15,516		$	14,038
Average Exchange Rates:
Canadian Dollar	$	0.6468		$	0.6746		$	0.6502		$	0.6794
U.K. Pounds Sterling	$	1.4386		$	1.4767		$	1.4393		$	1.5390

10.  Comparative Figures

    Certain of the comparative figures have been reclassified to conform with the presentation adopted in the current period.

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ITEM 2.  Management's Discussion And Analysis Of Financial Condition And Results Of Operations

    The following is management's discussion and analysis of certain significant factors which have affected the Company's financial position and operating results during the periods included in the accompanying consolidated financial statements.

Results of Operations

    The following table sets forth, for the periods indicated, certain statement of operations and other data of the Company as a percentage of revenue.

	Three Months Ended 9/30/01		Three Months Ended 9/30/00		Nine Months Ended 9/30/01		Nine Months Ended 9/30/00
Revenue	100	%	100	%	100	%	100	%
Cost of sales	15.7		19.6		16.5		18.2
Gross profit	84.3		80.4		83.5		81.8
Selling, delivery and administrative	53.0		54.7		54.3		54.5
Integration and related expenses	4.9		1.2		2.3		0.8
EBITDA	26.4		24.5		26.9		26.5
Depreciation and amortization	15.0		13.9		15.5		15.2
Operating profit	11.4		10.6		11.4		11.3
Interest and related expenses	14.9		3.8		16.1		10.4
Income (loss) before income taxes and extraordinary item	(3.5	)	6.8		(4.7	)	0.9
Provision for income taxes	—		(0.3	)	(0.8	)	(0.8	)
Net income (loss) before extraordinary item	(3.5	)	6.5		(5.5	)	0.1
Extraordinary item	—		—		0.8		—
Net income (loss) before extraordinary item	(3.5	)	6.5		(4.7	)	0.1

Three Months Ended September 30, 2001 Compared To The Three Months Ended September 30, 2000

    Revenue.  Revenue increased $1.4 million or 7.1% to $21.1 million in the three months ended September 30, 2001 compared to $19.7 million in the three months ended September 30, 2000. Revenues from acquisitions completed during and after the 2000 third quarter accounted for approximately $1.0 million of the increase. Revenue was reduced by approximately $0.9 million or 4.8% due to declines in the Pound Sterling and the Canadian dollar against the U.S. dollar. The balance of the increase was from growth in sales from the Company's higher customer location base. The Company's customer location base was approximately 207,000 as at September 30, 2001 compared to 182,600 as at December 31, 2000. The Company's customer location base grew by approximately 13,000 during the third quarter of 2001. This increase was driven almost equally by organic growth and an increase in customer locations resulting from the Customer Service Agreement entered into with the Company's parent company, Sparkling Spring Water Holdings Limited (For a summary description of the Customer Service Agreement, see Note 8 of the Notes to Consolidated Financial Statements included elsewhere in this Report).

    Cost of Sales.  The cost of sales decreased by $0.6 million or 14.4% to $3.3 million in the 2001 third quarter compared to $3.9 million in the 2000 period. The cost of sales as a percentage of revenue

8

was 15.7% for the three months ended September 30, 2001 compared to 19.6% in the 2000 period. This decrease was primarily attributable to the cessation in August 2001 of small pack production at the Company's Seattle location. The Seattle small pack business was purchased by Pure Water Corporation, a subsidiary of Sparkling Spring Water Holdings Limited.

    Operating Expenses.  Selling, delivery, and administrative operating expenses (excluding integration and related expenses of $1.0 million) increased by $0.4 million or 4.0% to $11.1 million in the third quarter from $10.7 million in the 2000 period. General and administrative expenses increased by approximately $0.4 million as a result of growth in the Company's customer location base and increased expenditures required to manage the acquisitions completed during and after the 2000 period. The 2001 period benefitted from the absorption of approximately $0.3 million of executive and administrative expense by Sparkling Spring Water Holdings Limited, parent company of Sparkling Spring. As a percentage of revenue, selling, delivery and administrative expenses decreased from 54.7% in the 2000 period to 53.0% in the 2001 third quarter.

    Depreciation and Amortization.  Depreciation and amortization expense increased by 15.2% or $0.4 million in the 2001 third quarter to $3.1 million from $2.7 million in the 2000 period. This increase was the result of depreciation of capital expenditures made since the third quarter of 2000 to support the growth in the Company's water cooler customer base and due to the significant increase in fixed and intangible assets acquired as a result of acquisitions completed in the 2000 second and third quarters. As a percentage of revenue, depreciation and amortization expense was 15.0% in the 2001 third quarter compared to 13.9% in the 2000 quarter.

    Operating Profit.  The Company's operating profit increased by $0.3 million to $2.4 million in the 2001 third quarter from $2.1 million in the 2000 period due to an increase in gross profit which more than offset the increase in selling, delivery and administrative expenses. Operating profit was reduced by $1.0 million in the third quarter of 2001 ($0.2 million in 2000) as a result of one-time integration and related expenses accrued related to the integration of the Polaris home and office customers managed by Group, shutdown costs related to three vacated facilities in Scotland and the closing of the Company's Seattle production facilities and costs associated with the integration of the Company's England and Scotland administrative operations. As a percentage of revenue, operating profit increased to 11.4% in the 2001 third quarter from 10.6% in the 2000 period due principally to the increase in gross profit as discussed above. Earnings before interest, taxes, and depreciation and amortization expense ("EBITDA") for the three months ended September 30, 2001 was $5.5 million compared to $4.8 million in the 2000 third quarter. As a percentage of revenue, EBITDA increased to 26.4% in the 2001 third quarter from 24.5% in the 2000 period. Excluding one-time charges, EBITDA increased from $5.1 million in the 2000 third quarter to $6.6 million in the 2001 quarter.

    Interest Expense.  Interest expense increased by $2.4 million from $0.7 million in the third quarter of 2000 to $3.1 million in the 2001 quarter. Interest expense was reduced by $2.5 million in the third quarter of 2000 (nil in the 2001 third quarter) as a result of the fluctuating value of the Company's cross currency swap. As at September 30, 2001 all of the Company's cross currency swaps have been terminated. Excluding the impact of accounting for the cross currency swap, interest expense in the 2001 third quarter decreased by $0.1 million from the 2000 period. An increase in interest expense associated with increased borrowings under the Company's Senior Credit Facility was offset by lower interest costs arising from the redemption of $7.0 million of the Company's Subordinated Notes Payable. These Notes were redeemed at a discount after the 2000 third quarter using Senior Debt that carries a lower effective interest rate.

Nine Months Ended September 30, 2001 Compared To The Nine Months Ended September 30, 2000

    Revenue.  Revenue increased $4.9 million or 9.2% to $57.7 million in the nine months ended September 30, 2001 compared to $52.8 million in the nine months ended September 30, 2000.

9

Revenues from acquisitions completed in 2000 and 2001 accounted for approximately $3.5 million of the increase over the 2000 period. Revenue growth was reduced by approximately $2.5 million or 4.8% due to declines in the Pound Sterling and the Canadian Dollar against the U.S. dollar. The balance of the increase was from growth in water sales from the Company's higher customer location base. The Company's customer location base was 207,000 as at September 30, 2001 compared to 182,600 as at December 31, 2000. The acquisition of Cascade Clear on May 2, 2001, accounted for 9,800 of the increase. The remaining growth in customer locations came from an increase of approximately 6,000 customer locations added as a result of the Customer Service Agreement entered into with Sparkling Spring Water Holdings Limited and organic growth of the Company's customer location base (For a summary description of the Customer Service Agreement, see Note 8 of the Notes to Consolidated Financial Statements included elsewhere in this Report).

    Cost of Sales.  The cost of sales decreased by $0.1 million or 0.7% to $9.5 million in the nine months ended September 30, 2001 compared to $9.6 million in the comparable 2000 period. The cost of sales as a percentage of revenue decreased by 1.7% from 18.2% in the 2000 period to 16.5% in the 2001 period. This decrease was primarily attributable to the cessation in August 2001 of small pack production at the Company's Seattle location. The Seattle small pack business was purchased by Pure Water Corporation, a subsidiary of Sparkling Spring Water Holdings Limited.

    Operating Expenses.  Selling, delivery, and administrative operating expenses (excluding integration and related expenses of $1.3 million) increased by $2.5 million or 8.7% to $31.3 million for the nine months ended September 30, 2001 compared to $28.8 million in the comparable 2000 period. This increase is primarily due to a $1.1 million increase in distribution costs due to higher fuel costs and additional expenses necessary to support the Company's increased customer volume which was up over 21% from the year ago period. General and administrative expenses increased by approximately $1.5 million as a result of growth in the Company's customer location base and increased expenditures required to manage the acquisitions completed during and after the 2000 period. The 2001 period benefitted from the absorption of approximately $0.9 million of executive and administrative expense by Sparkling Spring Water Holdings Limited, parent company of Sparkling Spring. As a percentage of revenue, operating expenses decreased from 54.5% in 2000 to 54.3% in 2001.

    Depreciation and Amortization.  Depreciation and amortization expense increased by 11.4% or $0.9 million to $8.9 million in the nine months ended September 30, 2001 from $8.0 million in the comparable 2000 period. This increase was the result of depreciation of capital expenditures made since the third quarter of 2000 to support the growth in the Company's water cooler customer base and due to the significant increase in fixed and intangible assets acquired as a result of acquisitions completed in the 2000 second and third quarters. As a percentage of revenue, depreciation and amortization expense was 15.5% in the 2001 period compared to 15.2% in the 2000 period.

    Operating Profit.  The Company's operating profit increased $0.5 million from $6.0 million in the nine months ended September 30, 2000 to $6.5 million in the comparable 2001 period as the increase in gross profit more than offset the increase in selling, delivery and administrative expenses. Operating profit was reduced by $1.3 million in the 2001 period ($0.4 million in 2000) as a result of one-time integration and related expenses accrued related to the acquisition of Cascade Clear and the integration of the Polaris home and office customers managed by Group, shutdown costs related to three vacated facilities in Scotland and the closing of the Company's Seattle production facilities and costs associated with the integration of the Company's England and Scotland administrative operations. As a percentage of revenue, operating profit increased from 11.3% in the 2000 period to 11.4% in the nine months ended September 30, 2001 due principally to the increase in gross profit as noted above. EBITDA increased by 10.5% or $1.5 million to $15.5 million in the 2001 period from $14.0 million in the 2000 period. As a percentage of revenues, EBITDA increased to 26.9% in the nine months ended

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September 30, 2001 from 26.5% in the 2000 period. Excluding one-time charges, EBITDA increased from $14.4 million in the nine months ended September 30, 2000 to $16.9 million in the 2001 period.

    Interest Expense.  Interest expense increased by $3.8 million from $5.5 million in the 2000 period to $9.3 million in the 2001 period. Interest expense was reduced by approximately $4.0 million in the nine months ended September 30, 2000 (nil in the nine months ended September 30, 2001) as a result of the fluctuating value of the Company's cross currency swap. As at September 30, 2001 all of the Company's cross currency swaps have been terminated. Excluding the impact of accounting for the cross currency swap, interest expense for the nine months ended September 30, 2001 decreased by approximately $0.2 million. The decreased interest costs were driven by lower average interest rates, which offset higher borrowing levels incurred to fund capital expenditures and business acquisitions completed during and after the 2000 period. The lower average interest rate arose from the redemption of $7.0 million of the Company's Subordinated Notes Payable which were redeemed after the 2000 third quarter.

Liquidity and Capital Resources

    Historically, the Company has funded its capital and operating requirements with a combination of cash flow from operations, borrowings under bank credit facilities and equity investments from shareholders. The Company has utilized these sources of funds to make acquisitions, to fund significant capital expenditures at its properties, to fund operations and to service debt. The Company presently expects to fund its future capital and operating requirements at its existing operations through a combination of cash generated from operations and borrowings under the Senior Credit Facility (see below).

    Net cash provided by operating activities was $8.6 million for the nine months ended September 30, 2001 and $7.2 million for the nine months ended September 30, 2000. Net cash used in investment activities was $13.4 million in 2001 and $11.6 million in 2000. The 2001 uses include $5.1 million related to the acquisition of Cascade Clear and the 2000 uses include $5.3 million related to the acquisitions of Mr. Softwater Ltd., Rocky Mountain Springs Water Inc. and the purchase of the assets of Sparta Water, Inc. The Company made net capital expenditures of $8.3 million in the nine months ended September 30, 2001 and $6.3 million in the nine months ended September 30, 2000. Capital expenditures in the 2001 period include approximately $1.3 million related to plant improvements at the Company's Alberta and Scotland operations and also $0.6 million in England for extraordinary truck purchases and expenditures related to the conversion to 18.9 litre bottles. The remaining capital expenditures in 2001 were primarily related to the purchase of water bottles, water coolers, delivery trucks and computer equipment. Based on the Company's existing operations, management expects that the Company's capital expenditures will total approximately $9.5 million in 2001.

    The Company believes that existing cash balances together with cash generated from operations and available borrowings under the Senior Credit Facility will be sufficient to finance the Company's working capital and capital expenditure requirements for 2001. However, there can be no assurance that such resources will be sufficient to meet the Company's anticipated requirements or that capital will be available to the Company on terms and conditions acceptable to the Company.

Senior Credit Facility

    The Company has available a $37 million multi—currency facility that provides for a $15 million operating line (the "Operating Line Facility") which is renewable annually by April 30^th, a $13 million five year acquisition line (the "Acquisition Facility") and a $9 million term loan facility (the "Term Loan Facility") that provided the Company with flexibility to repurchase, at its discretion, certain of the Company's outstanding Subordinated Notes Payable. In December 2000, $3 million was transferred

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from the Acquisition Facility to the Term Loan Facility as permitted under the terms of the loan facility. In April 2001, the terms of the Senior Credit Facility were amended to eliminate any principal repayments required prior to March 31, 2002. Amounts outstanding under the Term Loan Facility and Acquisition Facility are repayable in varying amounts extending to October 2005 and April 2006 respectively. The Company has pledged as collateral a first priority security interest granted in favor of the lenders over substantially all of the assets of the Company. The Company's obligations under the facility rank senior to the payment of the Company's Subordinated Notes Payable.

    Amounts outstanding under the Senior Credit Facility bear interest at specified rates based on the Canadian prime, U.S. prime, London inter-bank market and Bankers' Acceptances rates. As of September 30, 2001, the Company had approximately $11.0 million outstanding under the Operating Line Facility including $2.6 million of outstanding letters of credit, $10.0 million outstanding under the Acquisition Facility and $11.5 million outstanding under the Term Loan Facility.

Recent Accounting Pronouncements

    In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by Statements 137 and 138. These new statements require all derivatives to be recorded on the balance sheet at fair value and establish new accounting rules for hedging instruments. These statements are effective for years beginning after June 15, 2000. The adoption of these statements did not have an impact on the results or financial position of the Company for the period ended September 30, 2001.

    In July 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" which supersedes Accounting Principles Board ("APB") Opinion No. 16, "Business Combinations". SFAS 141 eliminates the pooling-of-interests method of accounting for business combinations and modifies the application of the purchase accounting method for transactions initiated after June 30, 2001. In July 2001, the FASB also issued Statement of Financial Accounting Standards No. 142, "Goodwill and Intangible Assets" which supersedes APB Opinion No. 17, "Intangible Assets". SFAS 142 eliminates the current requirement to amortize goodwill, addresses the impairment testing for goodwill and intangible assets and addresses the amortization of intangible assets with a defined life. SFAS 142 is effective for fiscal years beginning after December 15, 2001. The Company is currently assessing the Statements to determine the impact on the consolidated financial statements.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

    Statements included in this Report that do not relate to present or historical conditions are "forward looking statements" within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "1995 Reform Act"). Additional oral or written forward-looking statements may be made by the Company from time to time, and such statements may be included in documents other than this Report that are filed with the SEC. Such forward-looking statements involve risks and uncertainties that could cause results or outcomes to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this Report and elsewhere may include without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources and are intended to be made pursuant to the safe harbor provisions of the 1995 Reform Act. Words such as "believes," "forecasts," "intends," "possible," "expects," "estimates," "anticipates," or "plans" and similar expressions are intended to identify forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's ability to expand by acquisitions is dependent upon, and may be limited by, the availability of suitable acquisition candidates and the availability of financing therefor on

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suitable terms; (iii) the Company's ability to obtain financing will be affected by restrictions contained in the Indenture and the Company's other existing and future financing arrangements; (iv) the Company's proposed expansion strategy will be substantially dependent upon the Company's ability to hire and retain skilled management, financial, marketing and other personnel; (v) the Company's plans and results of operations will be affected by the Company's ability to successfully manage growth (including assimilating the employees and operations of acquired companies into the Company and monitoring operations, controlling costs and maintaining effective quality and inventory controls; (vi) the market for attractive acquisitions in the bottled water industry is becoming increasingly competitive, which could make the Company's acquisition strategy more difficult to achieve; (vii) the Company's operations are subject to the jurisdiction of various governmental and regulatory agencies which regulate the quality of drinking water and other products and any failure by the Company to comply with existing and future laws and regulations could subject the Company to significant penalties, stop workage orders or impose additional costs on the Company; (viii) any interruption in the availability of water to the Company from municipal sources and local natural springs could have a material adverse affect on the Company's operations until suitable replacement sources are located; (ix) risks associated with currency fluctuations; (x) risks associated with an increase in costs required to produce and deliver the Company's products to its customers and (xi) other risks and uncertainties indicated from time to time in the Company's filings with the SEC.

Part II  Other Information

Item 6.  Exhibits and Reports on Form 6-K

    (a)  Exhibits

Customer Service Agreement dated July 1, 2001 between Sparkling Spring Water Holdings Limited and Sparkling Spring Water Group Limited.

(b)

Reports on 6-K (incorporated by reference)



•

Report on Form 6-K dated August 20, 2001 covering the Press Release dated August 15, 2001 announcing record second quarter revenue and EBITDA.

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SIGNATURE
TABLE OF ADDITIONAL REGISTRANTS
SPARKLING SPRING WATER GROUP LIMITED QUARTERLY REPORT ON FORM 6-K FOR THE QUARTER ENDED SEPTEMBER 30, 2001
INDEX
Part I Financial Information
Item 1. Financial Statements
SPARKLING SPRING WATER GROUP LIMITED CONSOLIDATED BALANCE SHEETS
SPARKLING SPRING WATER GROUP LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
SPARKLING SPRING WATER GROUP LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
SPARKLING SPRING WATER GROUP LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited)
ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operations
Part II Other Information
Item 6. Exhibits and Reports on Form 6-K

EX-99.1

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Exhibit

CUSTOMER SERVICE AGREEMENT

    This Agreement made effective as of July 1, 2001,

Between:

SPARKLING SPRING WATER HOLDINGS LIMITED

- -and-

SPARKLING SPRING WATER GROUP LIMITED ("SSW Group")

WHEREAS:

(a)

Sparkling Spring Water Holdings Limited, through its wholly-owned subsidiary, Pure Water Corporation (collectively sometimes hereinafter referred to as "SSW Holdings Pure Water"), is engaged in the home and office bottled water business in the Seattle and Spokane Washington markets under the "Pure Water" brand and produces 1 gallon and 2.5 gallon HDPE bottles for customers throughout the Northwest Washington area (the "Pure Water Business");

(b)

SSW Group, through its wholly-owned subsidiary, Cullyspring Water Co., Inc. ("Cullyspring"), is engaged in the home and office bottled water business in the Greater Seattle area of the State of Washington (the "Cullyspring Seattle Division") and the Northwest Washington area operating out of Burlington, Washington (the "Cullyspring Burlington Division") under the "Crystal Springs" and "Cascade Clear" brands and produces 1 gallon and 2.5 gallon HDPE bottles for customers throughout the Northwest;

(c)

Sparkling Spring Water Holdings Limited, through its wholly-owned subsidiary, Polaris Water Company Inc.(collectively sometimes hereinafter referred to as "SSW Holdings Polaris"), is engaged in the home and office bottled water business in the Province of British Columbia under the "Polaris" brand;

(d)

SSW Group is engaged in the home and office bottled water business in the Province of British Columbia under the "Canadian Springs" brand;

(e)

SSW Group is a wholly-owned subsidiary of Sparkling Spring Water Holdings Limited, and the parties have determined that it is in the best interests of each of Sparkling Spring Water Holdings Limited and SSW Group that certain of their business operations be integrated and managed by the other;

(f)

Following execution of this Customer Service Agreement, (i) the home and office rental/total customer location counts of Cullyspring in the Greater Seattle area to be managed by SSW Holdings Pure Water will be approximately 12,000/14,000, net of the Greater Seattle area customers to be transferred to the Cullyspring Burlington Division from the Cullyspring Seattle Division and SSW Holdings Pure Water, and (ii) the home and office rental/total customer location counts of SSW Holdings Polaris to be managed by SSW Group will be approximately 14,000/20,000;

(g)

The EBITDA to be gained by SSW Group from management of the SSW Holdings Polaris customers is estimated to be greater than the EBITDA to be lost from management of the Cullyspring Greater Seattle area customers by SSW Holdings Pure Water;

    NOW THEREFORE in consideration of the mutual covenants and agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby by each party acknowledged, the parties hereto covenant and agree as follows:

ARTICLE 1.  CUSTOMER SERVICE

1.1

Washington Business.  In order to achieve operational efficiencies through the integration of compatible businesses in markets in the Greater Seattle area of Washington served by both of SSW Group and SSW Holdings Pure Water, the parties agree as follows:

(a)

SSW Holdings Pure Water shall be responsible for the management and operation of the home and office bottled water business of the Cullyspring Seattle Division. SSW Group will cause the Seattle plant of Cullyspring Water Co., Inc. to be closed and the Cullyspring Seattle Division operations to be integrated with the Pure Water Business. The combined business is hereafter referred to as the "Greater Seattle Operations". Certain customers south of Everett, Washington heretofore serviced by the Cullyspring Burlington Division will be transferred to the Pure Water Business and form part of the Greater Seattle Operations. Certain customers of the Pure Water Business and the Cullyspring Seattle Division that are in and north of the Everett, Washington market will be transferred to the Cullyspring Burlington Division. All customers in the Pure Water Business together with those serviced by the Cascade Clear brand will be changed to the "Crystal Springs" brand so that Crystal Springs will be a unified brand throughout the State of Washington;

(b)

In managing the Greater Seattle Operations, SSW Holdings Pure Water shall serve the customers of the Cullyspring Seattle Division as if they were customers of SSW Holdings Pure Water, and SSW Holdings Pure Water hereby undertakes that it shall be responsible as follows:

(i)

SSW Holdings Pure Water shall manage all assets of the Greater Seattle Operations and shall make all capital expenditures considered necessary to properly and duly serve the customers of the Greater Seattle Operations;

(ii)

SSW Holdings Pure Water shall bear all expenses incurred in serving customers of the Greater Seattle Operations;

(iii)

SSW Holdings Pure Water shall hire all of the employees of the Cullyspring Seattle Division needed to manage the Greater Seattle Operations. Cullyspring will be responsible for any costs related to the shutdown of its plant in Seattle;

(iv)

SSW Holdings Pure Water will purchase the small pack business and equipment that produces 1 gallon and 2.5 gallon HDPE products from Cullyspring for a purchase price of $250,000 plus the receivable and inventory balances net of liabilities assumed of $116,740 for a total payment of $366,740.

(c)

SSW Holdings Pure Water will purchase the receivables, inventory and prepaid expenses of the Cullyspring Seattle Division to be managed by it at their face value of $972,171 less liabilities assumed, including bottle deposit liabilities of $604,092 for a net payment of $368,079. SSW Holdings Pure Water shall be entitled to invoice customers of the Greater Seattle Operations that are served by it and shall be entitled to retain all revenue received for sales to customers in the Greater Seattle Operations;



(d)

In consideration for management, accounting and receivable support services from Spring Water, Inc. (parent of Cullyspring and its sister company Crystal Spring Acquisition, Inc.) to assist SSW Holdings Pure Water in management of the Greater Seattle Operations, SSW Holdings Pure Water shall cause a fee of US $10,000 to be paid monthly to Spring Water, Inc.

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1.2

British Columbia Business.  In order to achieve operational efficiencies through the integration of compatible businesses in markets in the Province of British Columbia served by both of SSW Group and SSW Holdings Polaris, the parties agree as follows:

(a)

SSW Group shall be responsible for the management and operation of the home and office bottled water business of Polaris Water Company Inc. in the Province of British Columbia under the "Polaris" brand (the "Polaris H & O Division");

(b)

In managing the Polaris H & O Division, SSW Group shall serve the customers of the Polaris H & O Division as if they were customers of SSW Group, and SSW Group hereby undertakes that it shall be responsible as follows:

(i)

SSW Group shall manage all assets of the Polaris H & O Division and shall make all capital expenditures considered necessary to properly and duly serve the customers of the Polaris H & O Division;

(ii)

SSW Group will change the brand provided to the Polaris direct delivery customers to "Canadian Springs" to improve operational efficiencies and will only use the Polaris Brand for 3 and 5 gallon bottles in the retail market;

(iii)

SSW Group shall bear all expenses incurred in serving customers of the Polaris H & O Division and

(iv)

SSW Group shall hire all of the employees of the Polaris H & O Division needed to manage its operations. SSW Holdings Polaris will be responsible for all severance and related costs of transfer of the management of its H & O Division.

(c)

SSW Group will purchase the receivables of the Polaris H & O Division from SSW Holdings Polaris at their face value of approximately C$898,532 less liabilities assumed including bottle deposit liabilities of C$892,041 for a net payment of C$6,491 by SSW Group to SSW Holdings Polaris. In addition, SSW Group will assume the leases related to the route delivery fleet serving the Polaris Home and Office customers. SSW Group shall be entitled to invoice customers of the Polaris H & O Division that are served by it and shall be entitled to retain all revenue received for sales to customers of the Polaris H & O Division;



(d)

In consideration for the opportunity to serve the customers of the Polaris H & O Division, SSW Group shall provide SSW Holdings Polaris with management services in respect of the "small pack" business operated by SSW Holdings Polaris under the "Polaris" and "Whistler Water" brands (the "Small Pack Business");



(e)

SSW Group undertakes and assumes responsibility for the provision of management services to SSW Holdings Polaris and its subsidiaries, as and when reasonably required, in the operation of the Small Pack Business, with the intent that SSW Group will involve itself through its management personnel in the general administration and management of the operations of the Small Pack Business, as required, including, without limiting the generality of the foregoing:



(i)

assistance in distribution and coordination;



(ii)

review and development of quality control procedures and assistance in implementing efficient production;



(iii)

assistance in development of effective marketing programs and monthly financial reporting and



(iv)

assistance in reviewing computer requirements and staff training.

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1.3

Transfer Pricing.  Sparkling Spring Water Holdings Limited and SSW Group agree that for purposes of transferring any product between divisions, the transfer price for product sold will be determined on the basis of the policy applicable to product sold in the ordinary course of business (variable cost plus 15%).

1.4

Management Services.  In consideration for executive management, production and quality control, distribution and marketing support, Sparkling Spring Water Holdings Limited agrees to pay a monthly fee of US$ 30,000 to SSW Group for personnel support to assist it in managing its other operations.

ARTICLE 2.  TERM

2.1

Term and Renewal.  The initial term of this Agreement shall be for a period commencing effective July 1, 2001 and terminating on December 31, 2002. This Agreement shall be automatically renewed for a further term of one year commencing upon the expiration of each successive term hereof unless terminated by either party in accordance with Section 2.2.

2.2

Termination.  This Agreement may be terminated by either party upon six months prior written notice to the other party. Upon termination, Sparkling Spring Water Holdings Limited and SSW Group will cause the return of the same number of Home and Office customers initially transferred to the other to be managed by them. These initial transferred customer counts will be a net transfer of approximately 12,000 rental customer locations from the Cullyspring Seattle Division to SSW Holdings Pure Water (net of those transferred to the Cullyspring Burlington Division) and 14,000 from SSW Holdings Polaris to SSW Group.

2.3

No Partnership or Joint Venture.  This Agreement shall not be construed as constituting SSW Group and SSW Holdings as partners or joint venturers.

ARTICLE 3.  GENERAL

3.1

Construction.  In this Agreement, unless otherwise expressly provided:

(a)

words denoting the singular include the plural and vice versa, and words denoting any gender include all genders;

(b)

the word "includes" or "including" shall mean "includes without limitation" or "including without limitation", respectively and

(c)

the division of this Agreement into Articles, sections, subsections and paragraphs and the insertion of headings in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

3.2

Assignment.  Neither party may assign this Agreement without the prior written consent of the other party, the granting of which consent is in the sole discretion of the other party.

3.3

Acknowledgement.  Each party hereto hereby acknowledges that it has not entered into this Agreement in reliance upon any representation, warranty, covenant or agreement other than those contained in this Agreement.

3.4

Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of Nova Scotia and the laws of Canada applicable therein, and the parties hereto attorn and irrevocably submit to the non-exclusive jurisdiction of the Supreme Court of Nova Scotia.

3.5

Execution in Counterpart.  This Agreement may be executed by the parties in counterpart.

3.6

Further Assurances.  The parties mutually covenant that they shall from time to time hereafter upon every reasonable request so to do, make, do, execute and deliver, cause to be made, done,

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executed and delivered all such further acts, deeds, assurances and things as may be necessary in order effectively to implement this Agreement.

3.7

Time of the Essence.  Time shall be of the essence hereof in all respects.

3.8

Severance.  If any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions herein shall not in any way be affected or impaired thereby.

3.9

Enurement.  This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns subject to the restrictions on assignment herein contained.

3.10

Amendments.  If at any time during the term of this Agreement the parties hereto deem it necessary or expedient to make any alteration or addition to this Agreement they shall do so by means of a written agreement which shall be supplemental hereto and form part hereof.

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IN WITNESS WHEREOF the parties hereto have properly executed this Agreement on the day and year first above written.

SPARKLING SPRING WATER GROUP LIMITED		SPARKLING SPRING WATER HOLDINGS LIMITED
By:	/s/	By:	/s/
	Stewart E. Allen President		David M. Arnold Vice President, Finance

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