<PAGE>
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 April, 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 April 12, 1999, Sparkling Spring Water Group Limited issued a
press release announcing its record revenue for 1998 and improved 1st quarter
1999 performance.
Exhibit I Press release dated April 12, 1999 announcing record revenue
for 1998 and improved 1st quarter 1999 performance.
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: April 16, 1999
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EXHIBIT I
PRESS RELEASE (For Immediate Release) April 12, 1999
SPARKLING SPRING WATER GROUP LIMITED ANNOUNCES
RECORD REVENUE FOR 1998
IMPROVED 1ST QUARTER 1999 PERFORMANCE
(ALL CURRENCY AMOUNTS IN US$)
VANCOUVER, B.C. ---- Sparkling Spring Water Group Limited announced full-year
1998 financial results which included record revenue of $57 million, up over
35% from 1997. The Company also announced that the strong growth trends
continued in the first quarter of 1999 with revenue expected to be up at
least 22% over the 1st quarter 1998.
The Company announced today that 1998 revenue was $57.0 million up
approximately 35% from 1997. Earnings before depreciation, amortization,
acquisition integration, interest and tax (adjusted EBITDA) were $12.3
million up approximately 10% from 1997. EBITDA was adversely impacted by $2.8
million in previously announced charges taken in the fourth quarter and $3.4
million in the full year for increased receivable reserves, write-down of
inventory and accounting issues at one subsidiary. After these charges the
Company reported a net loss of $8.1 million in 1998 versus a $5.4 million
loss in 1997 (see attached "Table 1").
"As previously announced, Sparkling Spring faced several challenges in 1998
arising from its rapid growth and acquisition strategy. However, our
concentrated focus on internal operations, improvement of accounting controls
and working capital management is beginning to show signs of paying off,"
said G. John Krediet, Chairman. Mr. Krediet added, "Our strong first quarter
underscores our prospects for significant improvement in EBITDA in 1999."
The 1998 year-end customer location count of approximately 156,000 was up
approximately 35% from the 1997 year-end level. However, the Company expects
to revise its customer location count downward in the first quarter by
approximately 8,000 as it has tightened its definition to exclude all
customers that have not purchased water in the last 84 days. This adjustment
is preliminary and principally relates to the Western Canadian operations
where new computer systems have enabled the Company to better track its
customer base.
The Company also announced preliminary results for the first quarter of 1999
ending March 31. Revenues are expected to be up at least 22% over 1998.
EBITDA will be up over 23% although operating income is expected to be about
equal to last year due to significantly higher depreciation and amortization
charges. Interest expense will be down about $500,000 as the company
experienced an approximate $1,000,000 reduction in interest expense from the
mark-to-market of its currency swap position in the first quarter of 1999
versus 1998.
Pro-forma first quarter revenues and EBITDA (including results from
operations not owned in the first quarter of last year) are estimated to be
up over 8% and 9% respectively. These improved results were achieved despite
weak currencies with both the Canadian Dollar and Pound Sterling down from
last year depressing the revenue and EBITDA growth rates by about 3%. Final
1st quarter results are expected to be released in mid-May.
Commenting on the preliminary first quarter results, Mr. Stewart Allen,
President of Sparkling Spring noted, "Over the last few months the Company
has purposely reduced its focus on growth in customer location base and has
concentrated on improving operating performance. The results are starting to
show in the first quarter. While we still have more work to do to improve
working capital management, I remain confident that we will see further
substantial improvements in operating results over the balance of 1999."
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Page 2: SSWGL Press Release
At fiscal year end, the Company continued to enjoy strong liquidity, with
cash in excess of US $9 million approximately $2 million more than borrowings
on its senior credit line. At the end of the first quarter, the Company also
had approximately $2 million more cash than outstanding loans on its senior
credit lines. The charges taken in the fourth quarter of 1998 resulted in the
Company being in non-compliance of one of its covenants on its Senior Bank
loan. The Company is in discussions with its Bank regarding modification of
the Loan Agreement and is seeking to obtain a waiver of that covenant.
Sparkling Spring is a leading producer and distributor of bottled water to
the home and office segment now serving approximately 149,000 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; (ix) risks
associated with issues surrounding Year 2000 for the Company, its customers
and suppliers; and (x) 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
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TABLE 1
SPARKLING SPRING WATER GROUP LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(US $ IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED % OF YEAR ENDED % OF % CHANGE
DECEMBER 31, 1998 REVENUES DECEMBER 31, 1997 REVENUES 98 VS 97
----------------- -------- ----------------- -------- ---------
<S> <C> <C> <C> <C> <C>
REVENUE:
WATER $ 36,196 63.5% $ 25,507 60.6% 41.9%
RENTAL 13,715 24.0% 10,346 24.6% 32.6%
OTHER 7,135 12.5% 6,221 14.8% 14.7%
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TOTAL REVENUE 57,046 100.0% 42,074 100.0% 35.6%
COST OF SALES:
WATER 6,548 11.5% 5,294 12.6% 23.7%
OTHER 3,472 6.1% 2,698 6.4% 28.7%
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TOTAL COST OF SALES 10,020 17.6% 7,992 19.0% 25.4%
GROSS PROFIT 47,026 82.4% 34,082 81.0% 38.0%
EXPENSES:
SELLING, DELIVERY & ADMIN. 34,677 60.8% 22,870 54.4% 51.6%
ACQUISITION INTEGRATION CHARGE(1) 1,828 3.2% - 0.0%
DEPRECIATION & AMORTIZATION 8,880 15.6% 5,691 13.5% 56.0%
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OPERATING PROFIT 1,641 2.9% 5,521 13.1% -70.3%
INTEREST EXPENSE (2) 9,714 17.0% 5,018 11.9% 93.6%
REDEMPTION OF STOCK OPTIONS - 0.0% 4,588 10.9% N/M
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INCOME BEFORE INCOME TAXES (8,073) -14.2% (4,085) -9.7% N/M
EXTRAORDINARY ITEM 0.0% (834) -2.0% N/M
RECOVERY/(PROVISION)FOR INCOME TAXES - 0.0% (439) -1.0% N/M
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NET INCOME / (LOSS) $ (8,073) -14.2% $ (5,358) -12.7% N/M
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"EBITDA" (Includes add back of Acquisition
Charge) $ 12,349 21.6% $ 11,212 26.6% 10.1%
EXCHANGE RATES - AVERAGE
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English Pound 1.6573 1.6384 1.2%
Canadian Dollar 0.6740 0.7223 -6.7%
EXCHANGE RATES - ENDING
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English Pound 1.6628 1.6424 1.2%
Canadian Dollar 0.6504 0.6997 -7.0%
</TABLE>
(1) Includes expenses related to the closing of acquired facilities, blending
of delivery routes, conversion of computer systems, severance, relocation
and other costs related to the acquisitions completed in 1998.
(2) Interest Expense was reduced in 1998 by $2,529 due to the increase in the
net value of the Company's currency swaps from fluctuating interest rates,
market volatility and the drop in value of the Canadian Dollar offset
somewhat by an increase in the Pound Sterling.
