Glacier Water Announces Second Quarter 2012 Results

Glacier Water Announces Second Quarter 2012 Results

VISTA, Calif.--(BUSINESS WIRE)-- Glacier Water Services, Inc. (Pink Sheets:GWSV) announced results for the second quarter ended July 1, 2012.

Brian McInerney, Chief Executive Officer of Glacier Water, said, "Our second quarter revenues increased 6.4% versus the same quarter last year and our year-to-date July 1, 2012 revenues increased 6.1%. Same-store revenues have increased 4.6% year-to-date. We continued to aggressively expand our network of machines across the U.S. and Canada adding approximately 1,100 machines across multiple retail channels compared to one year ago. Our second quarter income from operations increased to $1,320,000 and was impacted by an investment in infrastructure to support our continued growth in both water and ice machine placements. These infrastructure costs are incurred in advance of the machine placements reaching maturity in revenue and profits. At the end of the second quarter, Glacier operated more than 21,000 machines located at retailers across the U.S. and Canada, providing high quality, great tasting drinking water and premium ice."


Revenues for the second quarter ended July 1, 2012 increased 6.4% to $27,966,000 compared to $26,281,000 for the same quarter one year ago. For the six-month period ended July 1, 2012, revenues increased 6.1% to $52,965,000 compared to $49,930,000 for the same period last year. Sales growth was driven by both same store productivity and the increase in machines on location.

The Company's income from operations for the second quarter ended July 1, 2012 was $1,320,000 compared to $1,283,000 for the same period last year. For the six-month period ended July 1, 2012, income from operations was $1,485,000 compared to $1,662,000 for the same period last year. Income from operations year-to-date was positively impacted by the margin generated from the increased revenues, but was offset by increased operating costs to support the growth in machines, and in particular, labor and benefits, refurbishment, and vehicle costs. Income from operations for the first six months of 2012 and 2011 included non-cash compensation expense of $43,000 and $241,000 respectively.

The Company's net loss applicable to common stockholders for the quarter ended July 1, 2012 was $1,200,000 or $0.37 per basic and diluted share, compared to a net loss of $1,002,000, or $0.37 per basic share and diluted share, for the same period last year. For the six-month period ended July 1, 2012, the net loss applicable to common stockholders was $3,599,000, or $1.10 per basic and diluted share, compared to a net loss of $2,891,000 or $1.06 per basic share and diluted share, for the same period last year.

Subsequent to the quarter ending July 1, 2012, the Company converted its operating subsidiary, GW Services, organizational form from a corporation to a limited liability company ("GW Services, LLC") and raised $10,000,000 in equity from a limited liability company whose members are existing Company shareholders. This capital will fund our ongoing expansion of water vending and premium ice machine placements. GW Services, LLC issued $10,000,000 of preferred membership interests and 83,333 common membership interests. The preferred interests pay a dividend at an annual rate equal to the one-year treasury rate plus 6%, payable quarterly to the extent GW Services, LLC has adequate cash flow. The preferred interests may be redeemed at a premium amount by GW Services, LLC under certain conditions, including certain interest rate increases and/or liquidation.

With more than 21,000 machines located in 46 States throughout the United States and Canada, Glacier is the leading provider of high quality, low-priced drinking water dispensed to consumers through self-service bottled water machines located at supermarkets and other retail locations.

Statements in this announcement that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.A copy of the Company's audited financial statements for the year ended January 1, 2012 are available on the Company's website,www.glacierwater.com, or can be obtained by contacting Steve Stringer at (760) 560-1111.

FINANCIAL RESULTS

GLACIER WATER SERVICES, INC.

GLACIER WATER SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended

Six Months Ended

July 3,

July 1,

July 3,

July 1,

2011

2012

2011

2012

Revenues

$

26,281

27,966

49,930

52,965

Cost of revenues:

Operating expenses

17,575

18,742

33,738

35,933

Depreciation and amortization

3,187

3,247

6,225

6,411

Total cost of revenues

20,762

21,989

39,963

42,344

Gross profit

5,519

5,977

9,967

10,621

Selling, general, and administrative expenses

4,236

4,657

8,305

9,136

Income from operations

1,283

1,320

1,662

1,485

Interest expense

2,268

2,509

4,530

5,063

Loss before income taxes

(985

)

(1,189

)

(2,868

)

(3,578

)

Income taxes expense

17

11

23

21

Net loss

$

(1,002

)

(1,200

)

(2,891

)

(3,599

)

Basic and diluted net loss per share

$

0.37

0.37

1.06

1.10

Weighted average shares used in calculation

2,720,048

3,276,195

2,720,048

3,276,189

FINANCIAL RESULTS

GLACIER WATER SERVICES, INC.

GLACIER WATER SERVICES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

January 1,

July 1,

Assets

2012

2012

Current assets:

Cash and cash equivalents

$

3,425

4,177

Accounts receivable, net of allowance for doubtful accounts

of $64 as of January 1, 2012 and July 1, 2012

1,777

1,986

Repair parts

3,934

3,920

Prepaid expenses and other

7,201

2,075

Total current assets

16,337

12,158

Property and equipment, net

53,896

57,832

Goodwill

7,080

7,515

Investment in Glacier Water Trust I Common Securities

2,629

2,629

Investment in Glacier Water Trust I Preferred Securities

3,648

3,648

Equity investment

1,000

1,000

Deferred financing costs, net

4,266

4,204

Other assets

872

898

Total assets

$

89,728

89,884

Liabilities and Stockholders' Deficit

Current liabilities:

Accounts payable

$

2,715

2,322

Accrued commissions

4,026

4,672

Accrued liabilities

2,654

3,011

Bank overdraft

1,027

2,157

Total current liabilities

10,422

12,162

Junior subordinated debentures

87,629

87,629

Line of credit

32,056

34,538

Series B junior subordinated debentures

10,002

10,079

Long-term portion of deferred rent

121

164

Total liabilities

140,230

144,572

Commitments and contingencies

Stockholders' deficit:

Preferred Stock, $0.01 par value; Authorized 100,000 shares;

issued and outstanding, 0 shares at January 1, 2012 and July 1, 2012

-

-

Common stock, $0.01 par value. Authorized 10,000,000 shares,

issued and outstanding, 3,225,767 and 3,276,482 shares at

January 1, 2012 and July 1, 2012, respectively

49

50

Additional paid-in capital

24,153

23,557

Accumulated deficit

(42,500

)

(46,099

)

Treasury stock, at cost, 1,587,606 shares at January 1, 2012 and July 1, 2012

(32,562

)

(32,562

)

Accumulated other comprehensive income

358

366

Total stockholders' deficit

(50,502

)

(54,688

)

Total liabilities and stockholders' deficit

$

89,728

89,884



Glacier Water Services, Inc.
Steve Stringer, Chief Financial Officer
760-560-1111

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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