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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of February, 1999
Sparkling Spring Water Group Limited
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200 Sea Pines Rd., Bellingham, WA, USA 98226
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(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
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[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
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On February 7, 1999 Sparkling Spring Water Group Limited issued a press
release announcing its preliminary 1998 revenue, customer location count
and charges that will affect 4th quarter earnings.
Exhibit I Press release dated February 7, 1999 announcing
preliminary 1998 revenue, customer location count and
charges that will affect 4th quarter earnings.
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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:
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Name: David M. Arnold
Title: Vice President Finance, Treasurer
Date: February 12, 1999
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Exhibit I
PRESS RELEASE (For Immediate Release) February 7, 1999
SPARKLING SPRING WATER GROUP LIMITED
ANNOUNCES PRELIMINARY 1998 REVENUE,
CUSTOMER LOCATION COUNT AND CHARGES THAT
WILL AFFECT 4TH QUARTER EARNINGS
(ALL CURRENCY AMOUNTS IN US$)
VANCOUVER, B.C. ---- Sparkling Spring Water Group Limited experienced
significant growth in both revenue and its customer location base in 1998 and is
optimistic about its prospects for continued growth in 1999.
The Company announced today that it expects 1998 revenue to exceed $56 million
up approximately 34% from 1997. The year-end 1998 customer location count of
approximately 155,000 was up over 34% from the 1997 year-end level.
Approximately 19,000 net new customer locations were added from internal growth
and 21,000 locations were added through business acquisitions.
"Sparkling Spring's future prospects are strong due to the continued growth of
the industry, the company's increased installed customer base, recurring nature
of its revenue and the company's leading market share position in its markets."
said G. John Krediet, Chairman.
The Company also announced it would be taking charges totaling approximately
$2.2 to $2.5 million in the fourth quarter which will adversely affect earnings
for its fiscal year and fourth fiscal quarter ended December 31, 1998, resulting
in earnings that will be below analysts' estimates.
Approximately half of the charges are attributable to increased receivable and
inventory reserves primarily for operations in Canada and the United States. The
remainder of the charges relates to accounting issues uncovered at an operating
subsidiary that represents approximately 10% of the company's revenue. This
resulted in an overstatement of previously reported income.
The final amount of fourth quarter charges will be determined based on the
results from the completion of the Company's annual audit expected in late
March. The Company will announce full year earnings after completion of the
audit.
Commenting on the charges, Mr. Krediet noted, "The Company immediately addressed
the local management issue and commenced a process of strengthening internal
controls at all of our operations."
Mr. Krediet added, "The company had paid the price for its compound growth of
close to 60% over the past five years. During recent years we acquired a new
operation every three months. Our business building strategy now includes
reducing the pace of acquisitions and focus on improving results from our
existing operations."
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Page 2: SSWGL Press Release
Mr. Krediet continued "The company's increased focus on working capital
management as well as price increases in several of its markets makes management
optimistic about a significant increase in cash flow during 1999."
Sparkling Spring is a leading producer and distributor of bottled water to the
home and office segment now serving approximately 155,000 customer locations.
The Company does business as "Nature Springs" in England, "Water at Work" in
Scotland, "Sparkling Springs" in the Atlantic Provinces of Canada, "Canadian
Springs" and "Springfield Water" in British Columbia Canada, "Cullyspring" and
"Crystal Springs" 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
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
