0000081057-95-000004.txt : 19950810 0000081057-95-000004.hdr.sgml : 19950810 ACCESSION NUMBER: 0000081057-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CABLE CAR BEVERAGE CORP CENTRAL INDEX KEY: 0000081057 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] IRS NUMBER: 520880815 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14784 FILM NUMBER: 95559809 BUSINESS ADDRESS: STREET 1: 717 17TH ST STREET 2: STE 1475 CITY: DENVER STATE: CO ZIP: 80202-3314 BUSINESS PHONE: 3032989038 MAIL ADDRESS: STREET 1: 717 17TH ST STREET 2: STE 1475 CITY: DENVER STATE: CO ZIP: 80202-3314 FORMER COMPANY: FORMER CONFORMED NAME: GREAT EASTERN INTERNATIONAL INC DATE OF NAME CHANGE: 19890810 FORMER COMPANY: FORMER CONFORMED NAME: GREAT EASTERN ENERGY CORP DATE OF NAME CHANGE: 19840815 FORMER COMPANY: FORMER CONFORMED NAME: PUBLISHING COMPUTER SERVICE INC DATE OF NAME CHANGE: 19810817 10-Q 1 - 3 - FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-14784 CABLE CAR BEVERAGE CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 52-0880815 (State or other (I.R.S. Employer jurisdiction Identification No.) of incorporation) 717 17th Street, Suite 1475, Denver, CO 80202-3314 (Address of principal executive offices) (303) 298-9038 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] The Registrant had 8,581,992 shares of its $.01 par value common stock outstanding as of August 3, 1995. Form 10-Q 2nd Quarter INDEX PAGE PART I FINANCIAL INFORMATION - Item 1. CONSOLIDATED FINANCIAL STATEMENTS: Unaudited consolidated balance sheet at June 30, 1995 and at December 31, 3 1994 Unaudited consolidated statement of operations for the six-month and three- month periods ended June 30, 1995 and 4 June 30, 1994 Unaudited consolidated statement of cash flows for the six-month periods ended June 30, 1995 and June 30, 1994 5 Notes to unaudited consolidated 6 financial statements 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 8-K 11 PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEET
June 30, December 31, 1995 1994 ____________ ____________ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 558,723 $ 580,658 Short-term investments 0 151,876 Accounts receivable, net 1,523,508 657,824 Inventories 1,609,144 598,937 Prepaid expenses and other current 44,453 32,374 assets _____________ ___________ Total Current Assets 3,735,828 2,021,669 PROPERTY AND EQUIPMENT, NET 80,265 46,155 OTHER ASSETS: Intangibles, net 610,973 630,253 Investment in AMCON Distributing Co. 1,746,934 1,746,934 Other assets 28,821 3,821 _____________ ___________ $ 6,202,821 $ 4,448,832 _____________ ___________ _____________ ___________ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 809,079 $ 103,484 Other current liabilities 639,614 385,814 Current portion of long-term debt 8,545 8,786 ____________ ___________ Total Current Liabilities 1,457,238 498,084 ____________ ___________ LONG-TERM DEBT 1,571 5,970 ____________ ___________ STOCKHOLDERS' EQUITY: Common stock, $.01 par value; 25,000,000 shares 86,584 81,546 authorized; 8,658,349 shares issued Additional paid-in capital 9,502,876 9,133,466 Accumulated deficit (4,816,813) (5,241,599) Less - 76,357 common shares in (28,635) (28,635) treasury ____________ ___________ 4,744,012 3,944,778 ____________ ___________ $ 6,202,821 $ 4,448,832 ____________ ___________ ____________ ___________
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
THREE-MONTHS SIX-MONTHS ENDED JUNE 30, ENDED JUNE 30, 1995 1994 1995 1994 __________ __________ __________ __________ REVENUE: Sales $ 3,453,111 $ 2,521,483 $ 5,342,474 $ 3,766,590 Other income 5,874 4,863 10,183 7,574 __________ __________ __________ __________ 3,458,985 2,526,346 5,352,657 3,774,164 __________ __________ ___________ __________ COST AND EXPENSES: Cost of goods sold 2,496,017 1,815,950 3,877,330 2,727,954 General and 221,135 176,090 362,662 310,749 administrative Selling and 336,239 260,366 568,526 404,524 distribution Depreciation and amortization 15,028 14,265 30,261 28,336 Interest (income) (6,747) 594 (16,618) 1,265 expense __________ __________ __________ __________ 3,061,672 2,267,265 4,822,161 3,472,828 __________ __________ __________ __________ Income Before Income 397,313 259,081 530,496 301,336 Taxes Provision for Income 75,312 0 105,712 0 Taxes __________ __________ __________ __________ NET INCOME $ 322,001 $ 259,081 $ 424,784 $ 301,336 __________ __________ __________ __________ __________ __________ __________ __________ EARNINGS PER COMMON SHARE: Net Income $ .04 $ .03 $ .05 $ .04 __________ __________ __________ __________ __________ __________ __________ __________ WEIGHTED AVERAGE COMMON SHARES AND 9,035,091 8,017,283 8,933,434 7,938,277 EQUIVALENTS __________ __________ __________ __________ __________ __________ __________ __________
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
SIX-MONTHS ENDED JUNE 30, 1995 1994 _________ _________ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 424,784 $ 301,336 Adjustment to reconcile net income to net cash from operating activities: Depreciation and amortization 30,261 28,336 Provision for loss on accounts 13,500 20,000 receivable (Increase) decrease in assets and increase (decrease) in liabilities: Accounts receivable (879,184) (797,818) Inventories (1,010,207) (357,744) Prepaid expenses and other current (12,079) (17,399) assets Other assets (25,000) 9,478 Accounts payable and accrued liabilities 705,594 701,398 Other current liabilities 253,803 34,683 NET CASH FROM OPERATING ACTIVITIES (498,528) (77,730) ___________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Short-term investments 151,876 Property and equipment (45,091) (10,730) Acquisition of licensing fee (12,500) ___________ __________ NET CASH FROM INVESTING ACTIVITIES 106,785 (23,230) ___________ __________ CASH FLOWS FROM FINANCING ACTIVITIES: Principle payments on debt (4,640) Proceeds from issuance of stock 374,448 158,913 Principle payments on debt (124,092) ___________ __________ NET CASH FROM FINANCING ACTIVITIES 369,808 34,821 ___________ __________ NET DECREASE IN CASH AND CASH EQUIVALENTS (21,935) (66,139) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIIOD 580,658 373,183 ___________ __________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 558,723 $ 307,044 ___________ __________ ___________ __________
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Financial Statements Presented: The consolidated interim financial statements of Cable Car Beverage Corporation (the "Company") at June 30, 1995 and for the six-month period ended June 30, 1995 and June 30, 1994 are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows for all periods presented have been made. The Company's consolidated financial statements at and for the six-months ended June 30, 1995 include the accounts of its wholly- owned subsidiaries, Old San Francisco Seltzer, Inc. and Fountain Classics, Inc. Certain information and substantially all footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Companys consolidated financial statements, filed in Form 10-K for December 31, 1994. The results of operations for the period ended June 30, 1995 are not necessarily indicative of the operating results for the full year. Certain reclassifications have been reflected in the prior year financial statements to conform to the current year presentations. Note 2 - Income Per Common Share: Income per common share was computed under the treasury stock method using the weighted average number of common shares and dilutive common stock equivalent shares outstanding during the period. Note 3 - Inventories: Inventories consisted of:
June 30, December 31, 1995 1994 ___________ ___________ Finished Goods $ 814,547 $ 398,470 Raw Materials 794,597 200,467 ___________ ___________ 1,609,144 598,937 $___________ $ ___________ ___________ ___________
Note 4 - Income Taxes: As of June 30, 1995, the Company had a net deferred income tax asset of approximately $932,000, consisting primarily of approximately $862,000 in net operating loss carryforwards and other deferred accruals. The net operating loss carryforwards are subject to certain annual utilization limits. The net deferred income tax asset was offset by a valuation allowance for the entire amount under the applicable accounting literature provisions that, based on the weight of available evidence, it is more likely than not that some portion or all of the net operating loss carryforwards will not be realized before they expire. This position is deemed appropriate given the Companys lack of historical earnings and the fact that the Company has operated as a proprietary brands business for only a short time. The valuation allowance associated with the Companys deferred income tax asset decreased from December 31, 1994 as a result of the utilization of net operating loss carryforwards to offset current taxable income for the period ended June 30, 1995. Note 5 - Events Subsequent to June 30, 1995 As of June 30, 1995, the Company owned 306,143 shares of AMCON Distributing Company (AMCON) common stock. On July 31, 1995, the Company distributed, as a dividend to its shareholders, approximately 260,000 of these shares of AMCON common stock. Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations Current Developments The Company continued to experience growth of its line of Stewart's brand soft drinks during the June 1995 quarter. Also, in May 1995, the Company introduced a new flavor to its Stewart's line, Stewart's Country Orange N' Cream. The Company also began selling its new beverage brand, ASPEN EXTREME, during May 1995. ASPEN EXTREME is a non-carbonated, fruit-flavored beverage. In addition, the Company started selling ASPEN Mountain Spring Water, a non-carbonated spring water in May 1995. During June 1995, one of the Company's contract bottlers experienced production problems which management believes will result in the return of merchandise in the amount of approximately $50,000 and the Company has reduced sales and established a reserve for return merchandise in that amount as of June 30, 1995. Although the Company anticipates that its contract bottler will absorb most of the costs incurred by the Company related to said bottlers production problems, the Company has nevertheless set up an additional contingency reserve against inventory at June 30, 1995 in the amount of $30,000. As of June 30, 1995, the Company owned 306,143 shares of AMCON Distributing Company (AMCON) common stock. On July 31, 1995, the Company distributed, as a dividend to its shareholders, approximately 260,000 of these shares of AMCON common stock. Liquidity and Capital Resources The Company's current ratio at June 30, 1995 was 2.56 as compared to 4.06 at December 31, 1994. Working capital at June 30, 1995 was $2,278,590 as compared to $1,523,585 at December 31, 1994. For the six-months ended June 30, 1995, cash decreased by $21,935. The principal sources were the investing and financing activities, but such sources were more than offset by cash used in operations. A majority of the cash used in operations related to increases in accounts receivable and inventories offset by increases in accounts payable and accrued liabilities of $705,594. Financing activities generated cash of $369,808, primarily from the net proceeds of stock issuances from exercised options and warrants. Investing activities provided a net of $106,785 from short-term investments less costs associated with package designs. The Company intends to utilize cash from operations to meet its ongoing obligations. The Company has also established a bank line of credit in the amount of $500,000 which it may utilize from time to time to meet seasonal cash needs. Management does not expect liquidity problems during 1995 assuming the Company can maintain or exceed its current sales volume and expenses as a percentage of sales remain relatively constant. As of June 30, 1995, the Company had a net deferred income tax asset of approximately $932,000, consisting primarily of approximately $862,000 in net operating loss carryforwards and other deferred reserves. This net deferred income tax asset was offset by a valuation allowance for the entire amount under the applicable accounting literature provisions that, based on the weight of available evidence, it is more likely than not that some portion or all of the net operating loss carryforwards will not be realized before they expire. This position is deemed appropriate given the Company's lack of historical earnings and the fact that the Company has operated as a proprietary brands business for only a short time. The valuation allowance associated with the Company's deferred income tax asset decreased from December 31, 1994 as a result of the utilization of net operating loss carryforwards to offset current taxable income for the period ended June 30, 1995. Results of Operations Comparison of the six-month periods ended June 30, 1995 and June 30, 1994 The Company had net income of $424,784 for the six-months ended June 30, 1995 versus net income of $301,336 for the six-months ended June 30, 1994. Revenue from the sale of products increased to $5,336,322 in 1995 from $3,761,788 in 1994. This increase of $1,597,534 or 42% was due primarily to increased Stewart's case sales. Cost of goods sold increased $1,149,376 in the six-months ended June 30, 1995 versus 1994, and increased slightly as a percentage of sales from 72.5% to 72.7%. The percentage increase was due primarily to increased glass costs. Selling expense increased $164,002 from 1994 to 1995, but decreased slightly as a percentage of sales from 10.8% to 10.7%. The dollar increase was due primarily to the following factors: (1) salary and relating selling expenses associated with expanding distribution and (2) expenses incurred in 1995 for designing packaging and introducing the Company's new proprietary products. General and administrative expense increased $51,913 from 1994 to 1995, but decreased as a percentage of sales from 8.3% to 6..8%. The percentage decrease in general and administrative expenses was primarily attributable to a 43% increase in sales while administrative expense increased only 17%. The dollar increase was due primarily to the following factors: (1) salary and related expenses and (2) administrative expenses incurred in the development of the Company's new proprietary products. Comparison of the three-month periods ended June 30, 1995 and June 30, 1994 The Company had net income of $322,001 for the three-months ended June 30, 1995 versus net income of $259,081 for the three-months ended June 30, 1994. Revenue from the sale of products increased to $3,446,959 in 1995 from $2,516,681 in 1994. This increase of $930,278 or 37% was due primarily to increased Stewart's case sales. Cost of goods sold increased $680,067 in the second quarter of 1995 versus 1994, and increased slightly as a percentage of sales from 72.2% to 72.4%. The percentage increase was due primarily to increased glass costs. Selling expense increased $75,873 from 1994 to 1995, but decreased slightly as a percentage of sales from 10.3% to 9.7%. The dollar increase was due primarily to the following factors: (1) salary and related selling expenses associated with expanding distribution and (2) expenses incurred in 1995 for designing packaging and introducing the Company's new proprietary products. General and administrative expense increased $45,045 from 1994 to 1995, but decreased as a percentage of sales from 7.0% to 6.4%. The percentage decrease in general and administrative expenses was primarily attributable to a 37% increase in sales while administrative expense increased only 26%. The dollar increase was due primarily to the following factors: (1) salary and related expenses and (2) administrative expenses incurred in the development of the Company's new proprietary products. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) No reports on Form 8-K were filed by the Company during the quarter ended June 30, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. (REGISTRANT) CABLE CAR BEVERAGE CORPORATION BY (SIIGNATURE) /s/ Dennis J. Johanningmeier (DATE) August 7, 1995 (NAME AND TITLE) Dennis J. Johanningmeier, Chief financial officer