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 September 30, 1997
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
or organization) No.)
PO 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 _____
-
Number shares of common stock outstanding at the latest practicable date,
September 30, 1997 : 32,344,948 with 56,045 shares in the treasury.
<PAGE>
Eldorado Artesian Springs, Inc.
Form 10-Q, September 30, 1997
TABLE OF CONTENTS
Part I - Financial Information
Page
----
Balance Sheet as of March 31, 1997 and
September 30, 1997 3
Statement of Operations for the six month and 3 month
ended September 30, 1997 and 1996 4
Statement of Cash Flow for the six month and 3 month
ended September 30, 1997 and September 30, 1996 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
<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
Balance Sheet
<TABLE>
<CAPTION>
September 30, 1997 March 31, 1997
------------------ --------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 308,654 $ 244,765
Accounts Receivable
Trade Net 443,593 278,421
Employee 0 400
Other 4,109 3,525
Inventories 123,606 92,548
Prepaid Expenses and Other 9,767 10,893
Deferred Income Taxes 11,845 11,845
-------- --------
Total Current Assets 901,574 642,397
------- -------
Property, Plant & Equipment (net of
depreciation) 1,337,150 1,212,535
--------- ---------
Other Assets
Water Rights - net 116,862 119,106
Other - net 68,572 50,376
-------- --------
Total Other Assets 185,434 169,482
------- -------
Total $2,424,157 $2,024,414
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $131,876 $97,803
Accrued Expenses 54,883 82,230
Unearned Income 31,034 33,558
Current Maturities 103,729 78,680
------- -------
Total Current Liabilities 321,523 292,271
------- -------
Long Term Debt 1,465,688 1,223,569
Deferred Income Taxes 40,882 40,882
------- -------
Total Liabilities 1,828,094 1,556,722
--------- ---------
Equity
Common Stock 32,345 32,345
Additional Paid-in Capital 265,225 265,225
Retained Earnings 170,122 170,122
Net Earnings 128,372 0
------- -------
Total Equity 596,064 467,692
------- -------
Total $2,424,157 $2,024,414
========= =========
</TABLE>
<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
3 MONTHS 6 MONTHS
-------- --------
SEPT. 30, 1997 SEPT. 30, 1996 SEPT. 30, 1997 SEPT. 30,1996
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenue
Water and Related $853,674 $712,605 $1,590,579 $1,301,809
Pool 46,648 55,165 68,388 75,419
Rentals 19,025 11,865 30,890 23,730
Returns and Allowances (1,030) (5,578) (2,686) (9,962)
-------- -------- --------- --------
NET REVENUE 918,317 774,057 1,687,171 1,390,996
Cost of Goods Sold 140,525 147,000 259,391 241,578
-------- -------- --------- --------
Gross Profit 777,792 627,057 1,427,780 1,149,418
-------- -------- --------- ---------
Operating Expenses
Salaries and Related 362,677 274,175 658,655 502,258
Administrative and
General 152,712 79,861 252,222 165,782
Selling and Delivery 84,424 120,937 196,629 200,571
Depreciation &
Amortization 56,863 53,654 113,956 103,649
------ ------- ------- -------
TOTAL OTHER EXPENSE 656,676 528,627 1,221,462 972,260
------- ------- --------- -------
Operating Income 121,116 98,430 206,318 177,158
------- ------- --------- -------
Other Income (expense)
Interest Income 1,686 273 2,967 544
Interest Expense (36,027) (28,614) (70,781) (56,436)
Income Tax Expense (10,132) - (10,132) -
------- ------ ------- --------
Net Income (loss) 76,643 70,089 128,372 121,266
------- ------ ------- -------
Net Income Per
Common Share - - - -
------- ------ ------ -------
Weighted Average Number
of Shares Outstanding 32,344,948 32,344,948 32,344,948 32,344,948
---------- ---------- ---------- ----------
</TABLE>
<PAGE>
ELDORADO ARTESIAN SPRINGS, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
3 MONTHS ENDED 6 MONTHS ENDED
-------------- --------------
SEPT. 30, 1997 SEPT. 30, 1996 SEPT. 30, 1997 SEPT. 30, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash Flows From
Activities
Net Income $76,643 $70,089 $128,372 $121,266
Adjustments to
Reconcile
Depreciation &
Amortization 56,863 53,654 113,956 103,649
------ ------ ------- -------
Changes in Assets &
Liabilities
Accounts Receivable (16,768) (41,572) (165,356) (69,146)
Inventory (30,846) 8,891 (31,058) (11,328)
Prepaid Expenses &
Other (2,122) 0 1,126 0
Accounts Payable 10,023 (25,963) 34,073 (9,668)
Accrued Expenses (33,061) (25,230) (27,347) (24,932)
Unearned Income 252 (3,695) (2,524) (5,584)
------ ------- ------ ------
Net Cash from
Operating 60,984 36,174 51,242 104,257
------ ------- ------ -------
Cash Flows From Investing
Purchase of Property
& Equip (165,081) (38,874) (236,327) (101,616)
Increase in Note
Receivable 0 0 0 0
------- ------ ------- -------
Net Cash from
Investing (165,081) (38,874) (236,327) (101,616)
------- ------ ------- -------
Cash Flows From Financing
Additions to
Long-Term Debt 0 0 1,500,000 0
Loan Fees and Other
Assets 675 670 (18,196) 1,341
Payments on Long-Term
Debt (183,116) (13,266) (1,232,830) (26,844)
--------- -------- --------- ------
Net Cash from
Financing (182,441) (12,596) 248,974 (25,503)
-------- ------- --------- -------
Net Increase
(Decrease) in Cash (286,538) (15,296) 63,889 (22,862)
Cash - beginning 595,192 81,723 244,765 89,289
Cash - ending 308,654 66,427 308,654 66,427
------- ------ ------- -------
</TABLE>
<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 September 30, 1997,
the results of operations and cash flow for the period then ended.
B. In the opinion of management, the results of operations for the six
months ended September, 30, 1997 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, 1997 Annual Report filed
under cover of Form 10-K.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Revenues for the six months ended September 30, 1997 increased by 22.2% to
$1,590,579 versus $1,301,809 for the same period in 1996. Sales of five
gallon products increased by 19.7%, one gallon sales increased by 19.0% and
sales of the pet bottle products increased by 47.1%.
Cost of goods sold increased by 7.3% for the first six months. This compares
to an increase of 23.1 for the same period a year ago. This decrease in costs
is due in large part to improved pricing from suppliers due to the increase in
order quantity. Operating expenses increased 25.6%. Wages, salaries and
related items increased 31.1% over the same period a year ago. This increase
is due to the increase in sales commissions for the new accounts generated
during this period.
During the month of May 1997 the company installed a new route accounting
system. Ultimately the new system will reduce costs in the delivery and
billing for accounts. Currently the company is experiencing an increase in
accounts receiveable since the switch to the new system. Receivables have
increased to $447,702 from $308,498 a year ago. This increase in receivables
is a concern for management. However, now that the computer system is
completely operational, management is confident that with additional
collection procedures accounts receivable will be reduced in the near future.
Net income for the six months ended September 30, 1997 increased to $128,372
from $121,266 for the same period last year. This represents an increase of
5.8% over the previous year.
<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
<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 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 308,654
<SECURITIES> 0
<RECEIVABLES> 447,702
<ALLOWANCES> 0
<INVENTORY> 123,606
<CURRENT-ASSETS> 901,574
<PP&E> 1,448,862
<DEPRECIATION> 111,712
<TOTAL-ASSETS> 2,424,157
<CURRENT-LIABILITIES> 321,523
<BONDS> 0
0
0
<COMMON> 297,570
<OTHER-SE> 298,494
<TOTAL-LIABILITY-AND-EQUITY> 2,424,157
<SALES> 1,590,579
<TOTAL-REVENUES> 1,687,171
<CGS> 259,391
<TOTAL-COSTS> 1,480,853
<OTHER-EXPENSES> 80,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,781
<INCOME-PRETAX> 138,504
<INCOME-TAX> 10,132
<INCOME-CONTINUING> 128,372
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,372
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
