-----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, V0aBWsOj4PHBRcLB6B7x6y4q5Rx+dIwS9oB+/LMNsJ7FuxNFEwW38EahUQvB8g6x 95hunmfp19EBjekcXcaXvQ== 0000912057-96-016491.txt : 19960903 0000912057-96-016491.hdr.sgml : 19960903 ACCESSION NUMBER: 0000912057-96-016491 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960807 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLACIER WATER SERVICES INC CENTRAL INDEX KEY: 0000883505 STANDARD INDUSTRIAL CLASSIFICATION: 5960 IRS NUMBER: 330493559 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11012 FILM NUMBER: 96605046 BUSINESS ADDRESS: STREET 1: 2261 COSMOS CT CITY: CARLSBAD STATE: CA ZIP: 92009 BUSINESS PHONE: 6199302420 MAIL ADDRESS: STREET 1: 2261 COSMOS CT CITY: CARLSBAD STATE: CA ZIP: 92009 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1996 [ ] 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: 1-11012 GLACIER WATER SERVICES, INC. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 33-0493559 ------------------------------------------------------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2261 Cosmos Court, Carlsbad, California 92009 ------------------------------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code)
(619) 930-2420 --------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES [ X ] NO [ ] Indicate the number of shares outstanding of each of issuer's class of common stock as of the latest practicable date: 3,351,075 shares of common stock, $.01 par value, outstanding at July 31, 1996. PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS GLACIER WATER SERVICES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
JUNE 30, DECEMBER 31, 1996 1995* ----------- ------------- ASSETS (unaudited) - - ------ Current assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12 $ 29 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 614 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,537 2,200 Prepaid commissions and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,359 888 ------- ------- Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,185 3,731 Property and equipment, net of accumulated depreciation . . . . . . . . . . . . . . . . . . 34,080 33,272 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,220 3,635 ------- ------- Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,485 $40,638 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY - - ------------------------------------ Current liabilities: Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 353 $ 342 Accrued commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 998 1,289 Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,973 734 ------- ------ Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,324 2,365 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,177 11,087 Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,099 3,099 Stockholders' equity: Preferred stock, $.01 par value; 100,000 shares authorized, no shares issued or outstanding . . . . . . . . . . . . . . . . . . . . . . . . . -- -- Common stock, $.01 par value; 10,000,000 shares authorized, 3,348,575 and 3,367,825 shares issued and outstanding, respectively . . . . . . . . . . . . . . 34 34 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,135 15,125 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,087 8,928 Treasury stock; 20,000 shares, at cost. . . . . . . . . . . . . . . . . . . . . . . . . . . (371) -- ------- ------- Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,885 24,087 ------- ------- Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . $41,485 $40,638 ======= ======= * Amounts derived from audited information
See accompanying notes 2 GLACIER WATER SERVICES, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except shares and per share data) (unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 1996 1995 1996 1995 --------- ---------- --------- --------- Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,036 $ 10,470 $ 22,051 $ 19,663 Operating costs and expenses: Operating expenses . . . . . . . . . . . . . . . . . . . . 7,368 6,371 13,633 12,087 Selling, general and administrative expenses . . . . . . . 1,499 1,425 2,821 2,677 Depreciation and amortization . . . . . . . . . . . . . . 1,653 1,365 3,287 2,665 -------- -------- -------- --------- Total operating costs and expenses . . . . . . . . . . 10,520 9,161 19,741 17,429 -------- -------- -------- --------- Income from operations . . . . . . . . . . . . . . . . . . . . 1,516 1,309 2,310 2,234 Interest expense (net) and other . . . . . . . . . . . . . . . 184 207 379 345 -------- -------- -------- --------- Income before provision for income taxes . . . . . . . . . . . 1,332 1,102 1,931 1,889 Provision for income taxes . . . . . . . . . . . . . . . . . . 533 441 772 756 -------- -------- -------- --------- Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 799 $ 661 $ 1,159 $ 1,133 ======== ======== ======== ======== Net income per common and common equivalent share . . . . . . $ .24 $ .20 $ .34 $ .33 ======== ======== ======== ======== Weighted average common and common equivalent shares outstanding . . . . . . . . . . . 3,389,589 3,385,400 3,396,029 3,403,900 ========= ========= ========= =========
See accompanying notes 3 GLACIER WATER SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
SIX MONTHS ENDED JUNE 30, 1996 1995 ------- ------ Cash flows from operating activities: Net income $ 1,159 $ 1,133 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,287 2,665 Change in operating assets and liabilities: Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 162 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (337) (126) Prepaid commissions and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (471) (386) Payments for prepaid marketing incentives . . . . . . . . . . . . . . . . . . . . . . . (276) (457) Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (214) (103) Accounts payable, accrued commissions and other accrued liabilities . . . . . . . . . . 939 42 ------ ------ Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . 4,422 2,930 ------ ------ Cash flows from investing activities: Purchase of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . (353) (59) Net investment in vending equipment . . . . . . . . . . . . . . . . . . . . . . . . . . (2,815) (5,779) ------ ------- Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . . (3,168) (5,838) Cash flows from financing activities: Proceeds from long-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,605 8,698 Principal payments on long-term borrowings. . . . . . . . . . . . . . . . . . . . . . . (8,515) (5,225) Proceeds from issuance of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 376 Purchase of treasury stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (371) -- ------ ------ Net cash provided by (used in) financing activities. . . . . . . . . . . . . . . . . (1,271) 3,849 ------ ----- Net increase (decrease) in cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17) 941 Cash, beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 73 -------- ------ Cash, end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12 $1,014 ======== ====== Supplemental disclosure of cash flow information: Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400 $ 256 ======== ======= Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 246 $ 234 ======== =======
See accompanying notes 4 GLACIER WATER SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1996 (unaudited) 1. BASIS OF PRESENTATION In the opinion of the Company's management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the consolidated financial position of the Company and the consolidated results of its operations and its cash flows for the three- and six-month periods ending June 30, 1996 and 1995. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information, including footnote information, normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results of operations for the period ended June 30, 1996 are not necessarily indicative of results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. RECLASSIFICATION Certain prior year amounts have been reclassified to conform to the current presentation. 3. INVENTORIES Inventories consist of raw materials, repair and spare parts and vending machines in process of assembly, and are stated at the lower of cost (weighted moving average) or market. Costs associated with the assembly of vending machines are accumulated until machines are completed, at which time the costs are transferred to property and equipment. At June 30, 1996 and December 31, 1995, inventories consist primarily of raw materials and repair and spare parts. 4. SUPPLEMENTARY BALANCE SHEET INFORMATION Included in Prepaid commissions and other are commission payments made to certain retailers based on a percentage of estimated quarterly vending machine revenues, as well as other prepaid expenses incurred in the normal course of business. Prepaid commissions were $599,000 and $371,000, respectively, at June 30, 1996 and December 31, 1995. Included in Other assets are prepaid marketing incentives which represent payments made to the Company's customers for the placement of the Company's machines at retail locations. Prepaid marketing incentives, net of accumulated amortization, were $2,701,000 and $3,180,000 at June 30, 1996 and December 31, 1995, respectively. 5. NET INCOME PER SHARE Net income per share of common stock is computed on the basis of the weighted average shares of common stock outstanding plus common equivalent shares arising from the effect of dilutive stock options, using the treasury stock method. 5 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS OVERVIEW The Company continued to expand its operations in the second quarter of 1996, adding 106 machines, to finish the quarter with a total of 8,809 machines installed, compared to 7,755 at June 30, 1995. SALES Sales for the quarter and six months ended June 30, 1996 increased 15.0% and 12.1%, respectively, over the same periods in the prior year. The increases are primarily a result of the installation of new machines. COSTS AND EXPENSES Operating expenses were 61.2% and 61.8% of sales for the quarter and six months ended June 30, 1996, respectively, compared to 60.9% and 61.5% of sales for the same periods in 1995. Operating expenses as a percentage of sales remained consistent with the prior year as the Company continued to maintain its efficiencies in route servicing while continuing to install new machines. Selling, general and administrative expenses were 12.5% and 12.8% of sales for the quarter and six months ended June 30, 1996, respectively, compared to 13.6% for both the quarter and six months ended June 30, 1995. The slight decrease as a percentage of sales is a result of the Company's continuing effort to control costs in the adminstrative area. Depreciation and amortization expense increased 21.1% for the quarter and 23.3% for the six months ended June 30, 1995 over the same periods in 1995, primarily as a result of the addition of 1,054 machines since June 30, 1995. Interest expense decreased 11.1% for the quarter ended June 30, 1996 due to lower average outstanding balances on the Company's line of credit. Interest expense for the six months ended June 30, 1996 increased 9.9% over the same period in 1995, primarily as a result of significantly higher average outstanding balances on the line of credit during the first quarter of 1996 compared to the first quarter of 1995. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of liquidity and capital resources are cash flows from operations and funds available under the Company's bank credit agreement. The Company's borrowing limit under its credit agreement was increased from $16 million to $18 million in July 1996. The agreement requires monthly interest payments at the bank's prime rate (8.25% per annum at June 30, 1996) or LIBOR plus 1.75%. The credit agreement provides for a two-year interest-only revolving period which converts to a five-year term note due and payable July 1, 2003. The agreement is collateralized by substantially all assets of the Company and requires, among other things, that the Company maintain certain debt coverage and other financial ratios. 6 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) Net cash provided by operations for the six months ended June 30, 1996 was $4.4 million. As of June 30, 1996, the Company had working capital of approximately $861,000. Approximately $10.2 million of borrowings were outstanding and $5.8 million was available under the credit agreement. The Company believes its cash flow generated from operations and borrowings available under its credit agreement will be sufficient to meet its anticipated operating and capital requirements, including its investment in vending equipment, for at least the next twelve months. In January 1996, the Company's Board of Directors authorized the repurchase of up to 250,000 shares of the Company's common stock. The Company has repurchased 20,000 shares as of June 30, 1996. This report may be deemed to contain certain forward-looking statements with respect to the financial condition and results of operations of Glacier which involve risks and uncertainties including, but not limited to, trade relations, dependence on certain locations and competition. Further information on potential factors which could affect the financial condition and results of operations of Glacier are included in the filings of Glacier with the Securities and Exchange Commission, including, but not limited to, Glacier's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. 7 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. EXHIBITS None. b. REPORTS ON FORM 8-K None. 8 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 thereunto duly authorized. GLACIER WATER SERVICES, INC. Date: August 7, 1996 By: /s/ Jerry A. Gordon -------------- -------------------------------- Jerry A. Gordon President and Chief Operating Officer Date: August 7,1996 By: /s/ Brenda K. Foster ------------- ---------------------------------- Brenda K. Foster Vice President, Controller 9 EX-27 2 EXHIBIT 27-FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 12 0 277 0 2,537 4,185 49,139 (15,059) 41,485 3,324 0 0 0 34 24,851 41,485 22,051 22,051 13,633 19,741 0 0 379 1,931 772 1,159 0 0 0 1,159 .34 0
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