FORM 10-QSB
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, 1997
Commission File Number: 0-18235
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
- -----------------------------------------------------------------------------
(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, 1997: 32,344,948 with 56,045 shares in the treasury.
Eldorado Artesian Springs, Inc.
Form 10-QSB, June 30, 1997
TABLE OF CONTENTS
Part I - Financial Information Page
------
Balance Sheet as of March 31, 1997 and
June 30, 1997 3
Statement of Operations for the three month
ended June 30, 1997 and 1996 4
Statement of Cash Flow for the three month
ended June 30, 1997 and June 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
ELDORADO ARTESIAN SPRINGS, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30, 1997 MARCH 31, 1997
------------- --------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 595,192 $ 244,765
Accounts Receivable
Trade Net 426,212 278,421
Employee 400 400
Other 4,322 3,525
Inventories 92,761 92,548
Prepaid Expenses and Other 7,645 10,893
Deferred Income Taxes 11,845 11,845
--------- ---------
Total Current Assets 1,138,377 642,397
--------- ---------
Property, Plant & Equipment
(net of depreciation) 1,227,810 1,212,535
--------- ---------
Other Assets
Water Rights - net 117,984 119,106
Other - net 69,247 50,376
--------- ---------
Total Other Assets 187,231 169,482
--------- ---------
Total $2,553,418 $2,024,414
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 121,853 $ 97,803
Accrued Expenses 87,944 82,230
Unearned Income 30,782 33,558
Current Maturities 113,585 78,680
--------- ---------
Total Current Liabilities 354,164 292,271
--------- ---------
Long Term Debt 1,638,951 1,223,569
Deferred Income Taxes 40,882 40,882
--------- ---------
Total Liabilities 2,033,997 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 51,729 0
--------- ---------
Total Equity 519,421 467,692
--------- ---------
Total $2,553,418 $2,024,414
========= =========
</TABLE>
ELDORADO ARTESIAN SPRINGS, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
JUNE JUNE
1997 1996
--------- ---------
<S> <C> <C>
Revenue
Water and Related
Pool $ 736,905 $ 589,204
Rentals 21,740 20,254
Returns and Allowances 11,865 11,865
-------- --------
NET REVENUE (1,656) (4,384)
-------- --------
768,854 616,939
Cost of Goods Sold 118,866 94,578
-------- --------
Gross Profit 649,987 522,361
-------- --------
Operating Expenses
Salaries and Related 295,978 228,083
Administrative and General 99,510 85,921
Selling and Delivery 112,205 79,634
Depreciation and Amortization 57,093 49,995
-------- --------
TOTAL OTHER EXPENSE 564,786 443,633
-------- --------
Operating Income 85,202 78,728
-------- --------
Other Income (expense)
Interest Income 1,281 271
Interest Expense (34,754) (27,822)
Net Income (loss) $ 51,729 $ 51,177
======== ========
Net Income Per Common Share - -
-------- --------
Weighted Average Number of Shares Outstanding 32,344,948 32,344,948
======== ========
</TABLE>
ELDORADO ARTESIAN SPRINGS, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
JUNE 30
--------
1997 1996
-------- --------
<S> <C> <C>
Cash Flows From Activities
Net Income $ 51,729 $51,177
Adjustments to Reconcile
Depreciation and Amortization 57,093 49,995
-------- -------
Changes in Assets and Liabilities
Accounts Receivable (148,588) (27,574)
Inventory (212) (20,219)
Prepaid Expenses and Other 3,248 0
Accounts Payable 24,050 16,295
Accrued Expenses 5,714 20,746
Unearned Income (2,776) (1,889)
-------- -------
Net Cash From Operating Activities (9,742) 88,531
-------- -------
Cash Flows From Investing
Purchase of Property and Equipment (70,345) (62,742)
Increase in Note Receivable 0 0
-------- -------
Net Cash Investing (70,345) (62,742)
-------- -------
Cash Flows From Financing Activities
Additions to Long-Term Debt 1,500,000 0
Loan Fees and Other Assets (19,771) 671
Payments on Long-Term Debt (1,049,715) (13,578)
Payments on Other Long-Term Liabilities 0 (20,448)
-------- -------
Net Cash Flows From Financing 430,514 (33,355)
-------- -------
Net Increase (Decrease) in Cash 350,427 (7,566)
Cash - beginning 244,765 89,289
-------- -------
Cash - ending $595,192 $81,723
======== =======
</TABLE>
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, 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 three
months ended June, 30, 1997
C. These are not necessarily indicative of the results to be expected for the
full year.
D. 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-KSB.
E. 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.
F. 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, 1997 increased by 24.6% to
$768,854 versus $616,939 for the same period in 1996. Sales of five gallon
products increased by 17.5%, one gallon container sales increased by 35% and
sales of the pet bottle products increased by 65%. The disproportionate
increases in the smaller packages raised their contribution of revenues to
14.5% of revenues versus 12.4% for the same period a year ago.
The increased proportion of smaller packages resulted in the cost of goods
sold increasing by 25.6% over the same period last year. Or , slightly more
than the rate of increase in revenues. Operating expenses increased by 27.3%.
Wages, salaries and related items accounted for this increase by increasing
29.8% over the same period a year ago. This is a result of a wage increase for
all rank and file employees that went into effect on July 1, 1996.
During the month of May 1997 the company instituted the use of a new computer
system. The new system should eventually reduce costs in the delivery, billing
and inventory portions of the company's operations. However, in the meantime
the delays associated with the switch over have resulted in a dramatic rise in
accounts receivable. Receivables have increased to $426,212 from $261,633 a
year ago. This represents 45.5 days sales in receivables, up from the target
and historic 38 days sales in receivables.
In June 1997 the company completed a restructuring of the company debt. The
new debt structure provided a $1,200,000 loan secured by the company's
property, a $300,000 loan for new equipment and plant reconstruction, and a
$100,000 working capital revolving line of credit. The company then used the
proceeds to retire previously outstanding notes secured by the property, and
to purchase faster bottling equipment for the pet bottle products fill line.
Construction was also commenced on much needed improvements to the bottling
plant that will ultimately increase floor space by 100%.
Net income for the three months ended June 30, 1997 was $51,729 versus $51,177
for the same period one year ago. This represents an increase of 1.1% over the
previous year
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
August 14, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 595,192
<SECURITIES> 0
<RECEIVABLES> 430,934
<ALLOWANCES> 0
<INVENTORY> 92,760
<CURRENT-ASSETS> 1,138,377
<PP&E> 2,645,660
<DEPRECIATION> 1,417,850
<TOTAL-ASSETS> 2,553,418
<CURRENT-LIABILITIES> 354,164
<BONDS> 0
0
0
<COMMON> 297,570
<OTHER-SE> 221,851
<TOTAL-LIABILITY-AND-EQUITY> 2,553,418
<SALES> 768,854
<TOTAL-REVENUES> 768,854
<CGS> 118,866
<TOTAL-COSTS> 564,785
<OTHER-EXPENSES> (1,281)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,754
<INCOME-PRETAX> 51,729
<INCOME-TAX> 0
<INCOME-CONTINUING> 51,729
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,729
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
