Glacier Water Announces Third Quarter 2012 Results

VISTA, Calif.--(BUSINESS WIRE)-- Glacier Water Services, Inc. (GWSV.pk) announced results for the third quarter ended September 30th, 2012.

Brian McInerney, Chief Executive Officer of Glacier Water, said, "Our third quarter revenues increased 4.5% versus the same quarter last year and our year-to-date September 30, 2012 revenues increased 5.5%. Same-store revenues have increased 3.0% year-to-date. We continued to aggressively expand our network of machines across the U.S. and Canada adding more than 1,100 machines across multiple retail channels compared to one year ago. Our third quarter income from operations increased to $2,781,000 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 third quarter, Glacier operated more than 21,500 machines located at retailers across the U.S. and Canada, providing high quality, great tasting drinking water and ice."


Revenues for the third quarter ended September 30, 2012 increased 4.5% to $31,330,000 compared to $29,970,000 for the same quarter one year ago. For the nine-month period ended September 30, 2012, revenues increased 5.5% to $84,295,000 compared to $79,901,000 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 third quarter ended September 30, 2012 was $2,781,000 compared to $1,839,000 for the same period last year. For the nine-month period ended September 30, 2012, income from operations was $4,266,000 compared to $3,500,000 for the same period last year. Income from operations year-to-date was positively impacted by the margin generated from the increased revenues, offset in part by increased operating costs to support the growth in machines, and in particular, labor and benefits and vehicle costs. The prior year income from operations included expenses associated to the initial public offering effort of $960,000 and $1,135,000 for the third quarter and nine months year-to-date, respectively. Income from operations for the first nine months of 2012 and 2011 included non-cash compensation expense of $87,000 and $361,000, respectively.

The Company's net income applicable to common stockholders for the quarter ended September 30, 2012 was $195,000 or $0.06 per basic and diluted share, compared to a net loss of $487,000, or $0.18 per basic and diluted share for the same period last year. For the nine-month period ended September 30, 2012, the net loss applicable to common stockholders was $3,404,000, or $1.04 per basic and diluted share, compared to a net loss of $3,378,000 or $1.24 per basic share and diluted share, for the same period last year.

In September 2012, the Company converted its U.S. operating subsidiary, GW Services Inc., from a corporation to a limited liability company ("GW Services, LLC"), enabling the Company to raise new equity. Initially, the Company raised $10,000,000 from a partnership made up of certain existing Company shareholders, in order to fund expansion of water vending and ice machine placements. The investors received $10,000,000 of Preferred Interests and 83,333 Common Membership Shares (2.39%) in GW Services, LLC. The Preferred Interests bear distributions at an annual rate equal to the one-year treasury rate plus 6%, distributable quarterly to the extent the Company has adequate cash flow. Subsequent to the third quarter on November 1, 2012, the Company raised an additional $5,000,000 from the same partnership in exchange for $5,000,000 of additional Preferred Interests and 34,420 Common Membership Shares (0.98%) in GW Services, LLC. The Preferred Interests may be redeemed at a premium amount by GW Services, LLC under certain conditions, including in the event of certain interest rate increases or liquidation.

Also subsequent to the third quarter, the Company amended its credit agreement with City National Bank in October 2012, increasing the amount available under the revolving facility to $50,000,000 through September 30, 2015. City National Bank is the Lead Arranger and Administrative Agent under the amended credit agreement with a second lender added to the facility. The amended credit agreement also includes an accordion feature allowing the Company to request an increase in the credit commitment up to an additional $25,000,000.

On October 26 2012, Glacier announced the completion of the acquisition of the assets of the Aqua Fill water vending business, which includes approximately 1,600 water vending machines in operation mainly in the western U.S., bringing the total number of machines in operation to more than 23,000.

With more than 23,000 machines located in 47 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 Nine Months Ended
October 2, September 30, October 2, September 30,
2011 2012 2011 2012
Revenues $ 29,970 31,330 79,901 84,295
Cost of revenues:
Operating expenses 19,905 20,610 53,643 56,542
Depreciation and amortization 3,302   3,416 9,527   9,827  
Total cost of revenues 23,207   24,026 63,170   66,369  
Gross profit 6,763 7,304 16,731 17,926
Selling, general, and administrative expenses 4,924   4,523 13,231   13,660  
Income from operations 1,839 2,781 3,500 4,266
Interest expense 2,314   2,574 6,843   7,637  
Income (loss) before income taxes (475 ) 207 (3,343 ) (3,371 )
Income taxes expense 12   12 35   33  
Net income (loss) $ (487 ) 195 (3,378 ) (3,404 )
 
Basic and diluted net income (loss) per share
Basic net income (loss) per share $ (0.18 ) 0.06 (1.24 ) (1.04 )
Weighted average shares used in calculation 2,720,048   3,276,482 2,720,048   3,276,286  
 
Diluted net income (loss) per share $ (0.18 ) 0.06 (1.24 ) (1.04 )
Weighted average shares used in calculation 2,720,048   3,340,463 2,720,048   3,276,286  
 

 

FINANCIAL RESULTS

GLACIER WATER SERVICES, INC.

 
GLACIER WATER SERVICES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
 
      January 1,     September 30,
Assets

2012

2012
Current assets:
Cash and cash equivalents $ 3,425 11,362
Accounts receivable, net of allowance for doubtful accounts
of $64 as of January 1, 2012 and September 30, 2012 1,777 2,113
Repair parts 3,934 4,285
Prepaid expenses and other 7,201   1,941  
Total current assets 16,337 19,701
 
Property and equipment, net 53,896 60,696
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 4,173
Other assets 872   773  
Total assets $ 89,728   100,135  
 

Liabilities and Stockholders' Deficit

Current liabilities:
Accounts payable $ 2,715 2,452
Accrued commissions 4,026 4,941
Accrued liabilities 2,654 3,618
Bank overdraft 1,027   2,231  
Total current liabilities 10,422 13,242
 
Junior subordinated debentures 87,629 87,629
Line of credit 32,056 33,500
Series B junior subordinated debentures 10,002 10,118
Long-term portion of deferred rent 121   150  
Total liabilities 140,230   144,639  
 
Commitments and contingencies
 
Stockholders' deficit:
Preferred interests LLC investment - 9,856
Preferred stock, $0.01 par value; Authorized 100,000 shares;
issued and outstanding, 0 shares at January 1, 2012 and September 30, 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 September 30, 2012, respectively 49 50
Additional paid-in capital 24,153 23,602
Accumulated deficit (42,500 ) (45,904 )
Treasury stock, at cost, 1,587,606 shares at January 1, 2012 and September 30, 2012 (32,562 ) (32,562 )
Accumulated other comprehensive income 358   454  
Total stockholders' deficit (50,502 ) (44,504 )
Total liabilities and stockholders' deficit $ 89,728   100,135  



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

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:

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