1
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, 1996
Commission File Number: 33-6738-D
Eldorado Artesian Springs, Inc.
(Exact name of registrant as specified in its charter as amended)
Colorado 84-0907853
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
PO Box 445, Eldorado Springs, Colorado 80025
(Address of principal executive offices) (Zip Code)
(303)499-1316
(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 _____
Number shares of common stock outstanding at the latest
practicable date, June 30, 1996: 32,344,948 with 56,045
shares in the treasury.
Eldorado Artesian Springs, Inc.
Form 10-Q, June 30, 1996
TABLE OF CONTENTS
Part I - Financial Information Page
Balance Sheet as of March 31, 1996 and
June 30, 1996 3
Statement of Operations for the three month
ended June 30, 1996 and 1995 4
Statement of Cash Flow for the three month
ended June 30, 1996 and June 30, 1995 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
______________________________________________
The financial statements for the year ended March 31, 1996
have been audited, and the financial statements have not
been audited for the three months ended June 30, 1996 or
1995. 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, 1996 and the results of its operations and cash
flows for the three months ended June 30, 1996.
ELDORADO ARTESIAN SPRINGS, INC.
Balance Sheet
<TABLE>
<CAPTION>
June 30, March 31,
1996 1996
Assets
<S> <C> <C>
Current Assets
Cash $ 81,723 $ 89,289
Accounts Receivable
Trade Net 261,633 234,543
Other 5,293 4,809
Inventories 116,429 96,210
Prepaid Expenses and Other 16,783 16,783
Deferred Income Taxes 18,251 18,251
Total Current Assets 500,112 459,885
Property, Plant & Equipment (net of 1,158,177 1,144,308
depreciation)
Other Assets
Water Rights - net 122,471 123,593
Other - net 53,306 53,977
Total Other Assets 175,777 177,570
Total 1,834,066 1,781,763
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 69,893 53,598
Accrued Expenses 94,034 73,288
Unearned Income 21,974 23,863
Current Maturities 53,546 54,148
Total Current 239,447 204,897
Liabilities
Long Term Debt 1,189,991 1,202,967
Deferred Income Taxes 9,911 30,359
Total Liabilities 1,199,902 1,438,223
Equity
Common Stock 32,345 32,345
Additional Paid-in Capital 265,225 265,225
Retained Earnings 45,970 0
Net Earnings 51,177 45,970
Total Equity 394,717 343,540
Total 1,834,066 1,781,763
</TABLE>
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Operations
<TABLE>
<CAPTION> June
1996 1995
<S> <C> <C>
Revenue
Water and Related 589,204 480,631
Pool 20,254 12,707
Rentals 11,865 9,915
Returns and Allowances (4,384) (3,871)
NET REVENUE 616,939 499,382
Cost of Goods Sold 94,578 79,427
Gross Profit 522,361 419,955
Operating Expenses
Salaries and Related 228,083 210,682
Administrative and General 85,921 63,879
Selling and Delivery 79,634 68,755
Depreciation and Amortization 49,995 43,974
TOTAL OTHER EXPENSE 443,633 387,290
Operating Income 78,728 32,665
Other Income (expense)
Interest Income 271 826
Interest Expense (27,822) (32,572)
Net Income (loss) 51,177 919
Net Income Per Common Share - -
Weighted Average Number of Shares 32,344,948 32,164,948
Outstanding
</TABLE>
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Cash Flows
<TABLE>
<CAPTION>
June 30
1996 1995
<S> <C> <C>
Cash Flows From Activities
Net Income 51,177 919
Adjustments to Reconcile
Depreciation and amortization 49,995 43,974
Changes in Assets and Liabilities
Accounts Receivable (27,574) (19,596)
Inventory (20,219) 5,983
Prepaid Expenses and other 0 17,714
Accounts Payable 16,295 23,606
Accrued Expenses 20,746 15,943
Unearned Income (1,889) (1,785)
Net Cash From operating
activities 88,531 86,758
Cash Flows From Investing
Purchase of Property and equipment (62,742) (104,800)
Increase in Note Receivable 0 (556)
Net Cash investing (62,742) (105,356)
Cash Flows From Financing Activities
Additions to Long-Term Debt 0 98,640
Loan Fees and Other Assets 671 (21,369)
Payments on Long-Term Debt (13,578) (40,487)
Payments on Other Long-Term
liabilities (20,448) 0
Net Cash Flows from (33,355) 36,784
Financing
Net Increase (Decrease) in Cash (7,566) 18,186
Cash - beginning 89,289 44,120
Cash - ending 81,723 62,306
</TABLE>
NOTES TO FINANCIAL STATEMENTS
OPINIONS OF MANAGEMENT
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, 1996, the results of
operations and cash flow for the period then ended.
In the opinion of management, the results of operations
for the three months ended June, 30, 1996 are not
necessarily indicative of the results to be expected for the
full year.
Summary of the Company's significant accounting policies
are incorporated by reference to the Company's March 31,
1996 Annual Report filed under cover of Form 10-K.
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.
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.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Revenues for the three months ended June 30, 1996 increased
23.5% to $616,939 versus $499,382 for the same period in
1995. By comparison Costs of Goods Sold increased by only
19% even though 12.4% of revenues were derived from the
small package wholesale products, versus 10.3% of revenues
from the wholesale products in 1995. The lower cost of
goods is attributable to more aggressive purchasing programs
instituted in the quarter. Additionally, operating expenses
increased by 14.4% and interest expense decreased by 14.6%
as a result of the debt restructuring completed in March of
1996.
As a result of the increased revenues and lesser rates of
increases in the cost structure net income for the period
increased 5,468% from $919 to $51,177 for the three months
ended June 30, 1996.
During the three month period ended June 13, 1996 the
company invested $62,742 on additions to plant and
equipment. This is slightly less than the same period a
year ago when $104,800 was invested. However, whereas last
year's purchases required additional debt to be incurred
totaling $98,640 this year's purchases were 100% financed
from cash generated by operations. This was made possible
by the cash flows resulting from the positive cash impacts
of the aforementioned debt restructuring completed in March
1996.
Management believes these positive cash flow trends will
continue to provide sufficient funds to continue to allow
the company to fund growth internally with no additions to
long term debt.
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
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 thereunto duly authorized.
ELDORADO ARTESIAN SPRINGS,
INC.
By: /s/ Douglas Larson
Douglas A. Larson,
President
By: /s/ Kevin M. Sipple
Kevin M. Sipple, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 81,723
<SECURITIES> 0
<RECEIVABLES> 266,926
<ALLOWANCES> 0
<INVENTORY> 116,429
<CURRENT-ASSETS> 500,112
<PP&E> 1,158,177
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,834,066
<CURRENT-LIABILITIES> 239,447
<BONDS> 0
0
0
<COMMON> 32,345
<OTHER-SE> 362,372
<TOTAL-LIABILITY-AND-EQUITY> 1,834,066
<SALES> 616,939
<TOTAL-REVENUES> 616,939
<CGS> 94,578
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 443,633
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,822
<INCOME-PRETAX> 51,177
<INCOME-TAX> 0
<INCOME-CONTINUING> 51,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,177
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
