-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JxARdcTAvsU9q+D3vMpW8KPJydqxAHI0RS/863jxl5TYkW6uw5C2DBJRCDPUrK0v dblIgyfBkouYv+CxM7VYsQ== 0001042645-98-000190.txt : 19980825 0001042645-98-000190.hdr.sgml : 19980825 ACCESSION NUMBER: 0001042645-98-000190 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980824 FILED AS OF DATE: 19980824 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPARKLING SPRING WATER GROUP LTD CENTRAL INDEX KEY: 0001050760 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 333-43061 FILM NUMBER: 98696778 BUSINESS ADDRESS: STREET 1: ONE LANDMARK SQUARE CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2033250077 MAIL ADDRESS: STREET 1: ONE LANDMARK SQUARE CITY: STAMFORD STATE: CT ZIP: 06901 6-K 1 SPARKLING SPRING WATER GROUP LIMITED FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of August, 1998 SPARKLING SPRING WATER GROUP LIMITED ONE LANDMARK SQUARE, STAMFORD CT, USA 06901 (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 --------- --------- On August 18, 1998 Sparkling Spring Water Group Limited issued a press release announcing its 2nd Quarter 1998 Financial Results. Exhibit I Press release dated August 18, 1998 announcing 2nd Quarter 1998 Financial Results. 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/ David M. Arnold ------------------------------ Name: David M. Arnold Title: Vice President Finance, Treasurer Date: August 24, 1998 Exhibit I --------- PRESS RELEASE (For Immediate Release) August 18, 1998 SPARKLING SPRING WATER GROUP LIMITED ANNOUNCES 2ND QUARTER FINANCIAL RESULTS (ALL CURRENCY AMOUNTS IN $US) VANCOUVER, B.C. ---- Sparkling Spring Water Group Limited released financial results for the second quarter ended June 30, 1998. Revenues increased by 13.1% to $14.5 million, operating income increased by 22.7% to $2.4 million and earnings before interest, taxes, depreciation and amortization ("EBITDA") increased by $ 637,000 to $4.2 million up 17.8% over the sixteen week period ended July 11, 1997. In the second quarter of 1998 the Company recorded net income of $535,000 after interest expense and estimated income taxes. (See accompanying financial tables for the second quarter "Table 1"and six-month results "Table 2".) The second quarter 1998 is not necessarily comparable to the 1997 period. In 1998, the Company changed its internal reporting timeframe from the thirteen four-week periods used in 1997 to twelve monthly periods. As a result, the 1998 second quarter reporting period included 63 delivery days versus 77 delivery days in the 1997 sixteen-week reporting period, a reduction of 18.2%. The Company also acquired several additional operations since the 1997 reporting period which increased the 1998 results. On a pro-forma basis (assuming all operations owned during the second quarter 1998 were owned for the same period last year) the Company achieved revenue growth of approximately 9%, 5-gallon unit sales growth of approximately 17% and a customer base increase of approximately 18% on a year over year basis. In addition, during the 1998 second quarter, the Company added (excluding acquisitions) over 7,000 net new customer locations. Inclusive of acquisitions, the Company ended the quarter with approximately 137,000 customer locations of which approximately 81% were rental locations. This represents an approximate 18% total increase in customer locations since December 31, 1998. The Company's gross profit margin increased in the second quarter of 1998 to 82.3% from 81.9% in the 1997 period due to a slightly lower percentage mix of both lower margin small pack sales (1 gallon and 2.5 gallon) and other lower margin products including cups and coffee. In addition, the Company experienced improved efficiencies in the production of its main package 5-gallon containers for its home and office business. 2 The net income of $535,000 for the quarter was primarily the result of a $1.9 million benefit accrued in relation to its cross currency debt swaps that reduced interest expense. Excluding the impact of this benefit, the Company would have recorded significantly higher interest expense on significantly higher debt levels incurred to finance acquisitions and complete the reorganization implemented last November. The Company also had a higher average interest rate on its debt due to the issuance of its 11.5% Senior Subordinated Notes last November. The Company had $9.1 million in cash and cash equivalents at the end of the second quarter. It is anticipated that this cash will be used primarily for acquisitions and capital investment in the Company's existing operations. According to Stewart Allen, Sparkling Spring's President, "We are pleased with our performance in the second quarter. I am particularly pleased with our addition in the second quarter of over 7,000 net new customer locations, up more than 40% over net new customer placements in the year ago period. When this organic growth is combined with the Krystal Fountain acquisition in May and further organic growth in July, we now have over 140,000 customer locations" Sparkling Spring is a leading producer and distributor of bottled water to the home and office segment now serving over 140,000 customer locations. The Company does business as "Nature Springs" in the United Kingdom, "Water at Work" in Scotland, "Sparkling Springs" in the Atlantic Provinces of Canada, "Canadian Springs" in British Columbia Canada, "Cullyspring" in Washington State and "Crystal Springs" in Oregon State. INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements as defined by the Private Securities Reform Act of 1995, which are inherently subject to various risks and uncertainties. These include, 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 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 monitoring 3 operations, controlling costs and maintaining effective quality and inventory controls; (vi) the market for attractive acquisitions in the bottle 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 or impose additional costs on the Company or otherwise have a material adverse affect on its financial position or results of operations; (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; and (ix) other risks and uncertainties indicated from time to time in the Company's filings with the SEC. CONTACT: K. DILLON SCHICKLI Sparkling Spring Water Group Limited c/o C.F. Capital Corporation 200 Sea Pines Rd Bellingham, WA 98226 360-671-2602 Fax: 360-671-2604
TABLE 1 SPARKLING SPRING WATER GROUP LIMITED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1998 (US $ IN THOUSANDS) 3 MONTHS ENDED % OF 16 WEEKS ENDED % OF % CHANGE JUNE 30, 1998 REVENUES JULY 11,1997 REVENUES 98 VS 97 ------------- -------- ------------ -------- -------- REVENUE: WATER $ 9,139 63.2% $ 7,817 61.2% 16.9% RENTAL 3,442 23.8% 3,065 24.0% 12.3% OTHER 1,871 13.0% 1,891 14.8% -1.0% -------- ------- TOTAL REVENUE 14,452 100.0% 12,773 100.0% 13.1% COST OF SALES: WATER 1,797 12.4% 1,543 12.1% 16.5% OTHER 764 5.3% 770 6.0% -0.8% -------- ------- TOTAL COST OF SALES 2,561 17.7% 2,313 18.1% 10.7% GROSS PROFIT 11,891 82.3% 10,460 81.9% 13.7% EXPENSES: SELLING, DELIVERY & ADMIN. 7,668 53.1% 6,874 53.8% 11.5% DEPRECIATION & AMORTIZATION 1,814 12.6% 1,622 12.7% 11.9% -------- ------- OPERATING PROFIT 2,409 16.6% 1,964 15.4% 22.7% INTEREST EXPENSE (1) 929 6.4% 1,053 8.3% -11.7% -------- ------- INCOME BEFORE INCOME TAXES 1,480 10.2% 911 7.1% N/A PROVISION FOR INCOME TAXES 945 6.5% 421 3.3% N/A -------- ------- NET INCOME $ 535 3.7% $ 490 3.8% N/A ======== ======= "EBITDA" $ 4,223 29.2% $ 3,586 28.1% 17.8% DELIVERY DAYS 63 77 -18.2% EXCHANGE RATES - AVERAGE - ------------------------------ English Pound 1.6536 1.6358 1.1% Canadian Dollar 0.6912 0.7214 -4.2% EXCHANGE RATES - ENDING - ------------------------------ English Pound 1.6695 1.6935 -1.4% Canadian Dollar 0.6795 0.7241 -6.2% (1) Interest Expense was reduced in the 1998 2nd-quarter by a non cash benefit of $1,940 due to the increased net value of the Company's currency swaps from fluctuating interest rates, market volatility and the drop in value of the Canadian Dollar and British Pound.
TABLE 2 SPARKLING SPRING WATER GROUP LIMITED CONSOLIDATED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998 (US $ IN THOUSANDS) 6 MONTHS ENDED % OF 28 WEEKS ENDED % OF % CHANGE JUNE 30, 1998 REVENUES JULY 11,1997 REVENUES 98 VS 97 ------------- -------- ------------ -------- -------- REVENUE: WATER $ 16,481 62.6% $12,325 60.7% 33.7% RENTAL 6,314 24.0% 4,987 24.6% 26.6% OTHER 3,518 13.4% 2,988 14.7% 17.7% -------- ------- TOTAL REVENUE 26,313 100.0% 20,300 100.0% 29.6% COST OF SALES: WATER 3,457 13.1% 2,405 11.8% 43.7% OTHER 1,442 5.5% 1,237 6.1% 16.6% -------- ------- TOTAL COST OF SALES 4,899 18.6% 3,642 17.9% 34.5% GROSS PROFIT 21,414 81.4% 16,658 82.1% 28.6% EXPENSES: SELLING, DELIVERY & ADMIN. 14,416 54.8% 11,161 55.1% 29.2% DEPRECIATION & AMORTIZATION 3,592 13.7% 2,771 13.6% 29.6% -------- ------- OPERATING PROFIT 3,406 12.9% 2,726 13.4% 24.9% INTEREST EXPENSE (1) 4,303 16.3% 1,728 8.5% 149.0% -------- ------- INCOME BEFORE INCOME TAXES (897) -3.4% 998 4.9% N/A PROVISION FOR INCOME TAXES (187) -0.7% 516 2.5% N/A -------- ------- NET INCOME $ (710) -2.7% $ 482 2.4% N/A ======== ======= "EBITDA" $ 6,998 26.6% $ 5,497 27.1% 27.3% DELIVERY DAYS 126 134 -6.0% EXCHANGE RATES - AVERAGE - ------------------------------ English Pound 1.6498 1.6335 1.0% Canadian Dollar 0.6951 0.7288 -4.6% EXCHANGE RATES - ENDING - ------------------------------ English Pound 1.6695 1.6935 -1.4% Canadian Dollar 0.6795 0.7241 -6.2%
(1) Interest Expense was reduced in the 1998 six-months by a non cash benefit of $1,322 due to the increased net value of the Company's currency swaps from fluctuating interest rates, market volatility and the drop in value of the Canadian Dollar and British Pound. -----END PRIVACY-ENHANCED MESSAGE-----