<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995
Commission File Number: 33-6738-D
Eldorado Artesian Springs, Inc.
(Exact name of registrant as specified in its charter as amended)
Colorado 84-0907853
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
P.O. Box 445, Eldorado Springs, Colorado 80025
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(Address of principal executive offices) (Zip Code)
(303) 499-1316
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(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
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Number shares of common stock outstanding at the latest practicable date, June
30, 1995: 32,164,948 with 56,045 shares in the treasury.
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Eldorado Artesian Springs, Inc.
Form 10-Q, June 30, 1995
TABLE OF CONTENTS
Page
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Part I - Financial Information
Balance Sheet as of March 31, 1995 and
June 30, 1995 3
Statement of Operations for the three month
ended June 30, 1995 and June 30, 1994 4
Statement of Cash Flow for the three month
ended June 30, 1995 and June 30, 1994 5
Notes to Financial Statements 6
Management's Discussion and Analysis of Financial
Condition & Results of Operations 7
Part II - Other Information 8
Signature Page 9-10
--------------------------
The financial statements for the year ended March 31, 1995 have been
audited, and the financial statements have not been audited for the three months
ended June 30, 1995 or 1994. However, the management of Eldorado Artesian
Springs, Inc. believes that all necessary adjustments have been reflected to
present fairly the Company's financial position at June 30, 1995 and the results
of its operations and cash flows for the three months ended June 30, 1995.
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<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
Balance Sheet
<TABLE>
<CAPTION>
June 30, 1995 March 31, 1995
------------- --------------
Assets
<S> <C> <C>
Current Assets
Cash $ 62,306 $ 44,120
Accounts Receivable
Trade Net 214,002 195,673
Other 6,345 5,078
Inventories 85,489 91,472
Prepaid Expenses and Other 19,412 37,126
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Total Current Assets 387,554 373,469
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Property, Plant & Equipment (net of depreciation) 980,726 918,778
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Other Assets
Notes Receivable - stockholders 40,644 40,088
Water Rights - net 126,959 128,081
Other - net 132,832 111,463
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Total Other Assets 300,435 279,632
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Total 1,668,715 1,571,879
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------------- --------------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 69,850 46,244
Accured Expenses 63,968 48,025
Unearned Income 10,483 12,268
Current Maturities 181,751 155,327
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Total Current Liabilities 326,052 261,864
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Long Term Debt 1,082,828 1,034,859
Deferred Income Taxes 16,240
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1,051,099
Equity
Common Stock 32,165 32,165
Additional Paid-in Capital 266,303 266,303
Accumulated Deficit (27,357) (27,357)
Less Cost of Treasury Stock (12,195) (12,195)
Net Earnings 919 --
------------- --------------
Total Equity 259,835 258,916
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Total 1,668,715 1,571,879
------------- --------------
------------- --------------
</TABLE>
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<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Operations
<TABLE>
<CAPTION>
June
-------------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Revenue
Water and Related $ 480,631 $ 375,325
Pool 12,707 31,586
Rentals 9,915 10,115
Returns and Allowances (3,871) (2,292)
----------- -----------
Net Revenue 499,382 414,734
Cost of Goods Sold 79,427 54,002
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Gross Profit 419,955 360,732
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Operating Expenses
Salaries and Related 210,682 154,651
Administrative and General 63,879 58,273
Selling and Delivery 68,755 58,832
Depreciation and Amortization 43,974 34,464
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387,290 306,220
----------- -----------
Operating Income 32,665 54,512
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Other Income (expense)
Interest Income 826 634
Interest Expense (32,572) (24,618)
----------- -----------
Net Income (loss) 919 30,528
----------- -----------
----------- -----------
Net Income Per Common Share -- --
----------- -----------
Weighted Average Number of Shares Outstanding 32,164,948 32,164,948
----------- -----------
----------- -----------
</TABLE>
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<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Cash Flows
<TABLE>
<CAPTION>
June 30
--------------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash Flows From Activities
Net Income $ 919 $ 30,528
Adjustments to Reconcile
Depreciation and Amortization 43,974 34,464
----------- -----------
Changes in Assets and Liabilities
Accounts Receivable (19,596) (12,375)
Inventory 5,983 (3,058)
Prepaid Expenses and Other 17,714 6,644
Accounts Payable 23,606 24,289
Accrued Expenses 15,943 19,357
Unearned Income (1,785) (1,348)
----------- -----------
Net Cash From Operating Activities 86,758 98,501
Cash Flows From Investing
Purchase of Property and Equipment (104,800) (92,156)
Increase in Note Receivable (556) (556)
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Net Cash Investing (105,356) (92,712)
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Cash Flows From Financing Activities
Additions to Long-Term Debt 98,640 71,140
Loan Fees and Other Assets (21,369) (7,010)
Payments on Long-Term Debt (40,487) (26,293)
----------- -----------
Net Cash Flows From Financing 36,784 37,837
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Net Increase (Decrease) in Cash 18,186 43,626
Cash -- beginning 44,120 41,962
----------- -----------
Cash -- ending 62,306 85,588
----------- -----------
----------- -----------
</TABLE>
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
OPINIONS OF MANAGEMENT
A. In the opinion of management, the accompanying financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1995, the results of
operations and cash flow for the period then ended.
B. In the opinion of management, the results of operations for the three
months ended June 30, 1995 are not necessarily indicative of the results to
be expected for the full year.
C. Summary of the Company's significant accounting policies are incorporated
by reference to the Company's March 31, 1995 Annual Report filed under
cover of Form 10-K.
D. The financial statements presented were prepared on a proforma consolidated
basis. This gives effect to the combination of Eldorado Artesian Springs,
Inc. and Lexington Funding, Inc. as if it had occurred April 1, 1986. This
business combination was accounted for as a reverse acquisition using the
purchase method in a manner similar to a pooling of interests. The
management of Eldorado Artesian Springs, Inc. has retained control of the
combined entity.
E. Income per common share is computed by dividing the net income by the
weighted average number of shares of common stock outstanding during the
period.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Revenues for the three months ended June 30, 1995 were $499,382; up 20.4% over
the same period a year ago. However, cost of goods sold increased 47% from the
same period a year ago, labor costs increased 36.2%, and depreciation increased
27.6%. The cost increases when combined with unseasonably cold and wet weather
had a negative impact on profitability. Net income for the three months ended
June 30, 1995 was $919; down 97% from the $30,528 reported for the same period a
year ago.
Interest expense for the quarter was $32,572 versus $24,618 a year ago. This
increase is result of the Company financing equipment additions with debt. The
aforementioned increases in depreciation expense also reflect these equipment
additions. These equipment additions also impact the liquidity of the Company by
increasing the current maturities of debt. The net effect is that the equipment
added between June 30, 1994 and June 30, 1995 was done so in order to handle the
anticipated volumes expected, but due to unseasonable weather, unit sales volume
and revenues were less than expected, culminating in the substantial drop in net
income and underutilization of assets.
The Company has historically financed additions to property, plant, and
equipment through additions to debt. Most of this financing is provided by
manufacturer's programs as they related to additional bottled water dispensers.
While these sources of capital continue to be available to the Company, it is
becoming quite apparent that financing excessive growth with all debt capital
makes the Company quite vulnerable to such things as bad weather, less than
expected growth, and decreases in revenue. Therefore, management has undertaken
the task of adding equity capital to the Company. While no funds have been
acquired and no additional shares issued at this time, management believes it
must be done. In an effort to reduce the aggregate payments made to service the
Company debt, management is also seeking to restructure the combined debts into
one note. Management believes this will have a positive impact on cash flow and
profitability. In essence, even though the traditionally used methods of
financing of the Company are still available, it is imperative that new
financial structuring be done to allow the growth of the Company to reach its
potential.
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<PAGE>
PART II -- OTHER INFORMATION
Item 1 -- Legal Proceedings
No legal proceedings have been filed on behalf of or against the Company, nor
have any claims been made.
Item 2 -- Change in Securities
None
Item 3 -- Defaults Upon Senior Obligations
There have been no defaults on any securities. The Company has no obligations
with regard to dividends and no preferred stock outstanding.
Item 4 -- Submission of Matters to a Vote of the Security Holders
None
Item 5 -- Other Information
None
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<PAGE>
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 thereonto duly authorized.
ELDORADO ARTESIAN SPRINGS INC.
By:/s/ Douglas Larson
-------------------------------
Douglas A. Larson, President
By:/s/ Kevin Sipple
-------------------------------
Kevin M. Sipple, Secretary
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<PAGE>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 62306
<SECURITIES> 0
<RECEIVABLES> 220347
<ALLOWANCES> 0
<INVENTORY> 85489
<CURRENT-ASSETS> 387554
<PP&E> 980726
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<TOTAL-ASSETS> 1668715
<CURRENT-LIABILITIES> 326052
<BONDS> 1082828
<COMMON> 32165
0
0
<OTHER-SE> 227670
<TOTAL-LIABILITY-AND-EQUITY> 1668715
<SALES> 499382
<TOTAL-REVENUES> 504079
<CGS> 79427
<TOTAL-COSTS> 68755
<OTHER-EXPENSES> 318535
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32572
<INCOME-PRETAX> 919
<INCOME-TAX> 624
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<CHANGES> 0
<NET-INCOME> 919
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</TABLE>
