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- 3 -
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-14784
CABLE CAR BEVERAGE CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 52-0880815
(State or other (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
717 17th Street, Suite 1475, Denver, CO 80202-3314
(Address of principal executive offices)
(303) 298-9038
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
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 [ ]
The Registrant had 8,581,992 shares of its $.01 par value common
stock outstanding as of August 3, 1995.
<PAGE>
Form 10-Q
2nd Quarter
INDEX
PAGE
PART I FINANCIAL INFORMATION
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Item 1. CONSOLIDATED FINANCIAL STATEMENTS:
Unaudited consolidated balance sheet
at June 30, 1995 and at December 31, 3
1994
Unaudited consolidated statement of
operations for the six-month and three-
month periods ended June 30, 1995 and 4
June 30, 1994
Unaudited consolidated statement of
cash flows for the six-month periods
ended June 30, 1995 and June 30, 1994 5
Notes to unaudited consolidated 6
financial statements
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 11
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PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION> June 30, December 31,
1995 1994
____________ ____________
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 558,723 $ 580,658
Short-term investments 0 151,876
Accounts receivable, net 1,523,508 657,824
Inventories 1,609,144 598,937
Prepaid expenses and other current 44,453 32,374
assets
_____________ ___________
Total Current Assets 3,735,828 2,021,669
PROPERTY AND EQUIPMENT, NET 80,265 46,155
OTHER ASSETS:
Intangibles, net 610,973 630,253
Investment in AMCON Distributing Co. 1,746,934 1,746,934
Other assets 28,821 3,821
_____________ ___________
$ 6,202,821 $ 4,448,832
_____________ ___________
_____________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 809,079 $ 103,484
Other current liabilities 639,614 385,814
Current portion of long-term debt 8,545 8,786
____________ ___________
Total Current Liabilities 1,457,238 498,084
____________ ___________
LONG-TERM DEBT 1,571 5,970
____________ ___________
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
25,000,000 shares 86,584 81,546
authorized; 8,658,349 shares
issued
Additional paid-in capital 9,502,876 9,133,466
Accumulated deficit (4,816,813) (5,241,599)
Less - 76,357 common shares in (28,635) (28,635)
treasury ____________ ___________
4,744,012 3,944,778
____________ ___________
$ 6,202,821 $ 4,448,832
____________ ___________
____________ ___________
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION> THREE-MONTHS SIX-MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
__________ __________ __________ __________
<S> <C> <C> <C> <C>
REVENUE:
Sales $ 3,453,111 $ 2,521,483 $ 5,342,474 $ 3,766,590
Other income 5,874 4,863 10,183 7,574
__________ __________ __________ __________
3,458,985 2,526,346 5,352,657 3,774,164
__________ __________ ___________ __________
COST AND EXPENSES:
Cost of goods sold 2,496,017 1,815,950 3,877,330 2,727,954
General and 221,135 176,090 362,662 310,749
administrative
Selling and 336,239 260,366 568,526 404,524
distribution
Depreciation and
amortization 15,028 14,265 30,261 28,336
Interest (income) (6,747) 594 (16,618) 1,265
expense __________ __________ __________ __________
3,061,672 2,267,265 4,822,161 3,472,828
__________ __________ __________ __________
Income Before Income 397,313 259,081 530,496 301,336
Taxes
Provision for Income 75,312 0 105,712 0
Taxes __________ __________ __________ __________
NET INCOME $ 322,001 $ 259,081 $ 424,784 $ 301,336
__________ __________ __________ __________
__________ __________ __________ __________
EARNINGS PER COMMON
SHARE:
Net Income $ .04 $ .03 $ .05 $ .04
__________ __________ __________ __________
__________ __________ __________ __________
WEIGHTED AVERAGE
COMMON SHARES AND 9,035,091 8,017,283 8,933,434 7,938,277
EQUIVALENTS __________ __________ __________ __________
__________ __________ __________ __________
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX-MONTHS ENDED
JUNE 30,
1995 1994
_________ _________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 424,784 $ 301,336
Adjustment to reconcile net income to
net cash from
operating activities:
Depreciation and amortization 30,261 28,336
Provision for loss on accounts 13,500 20,000
receivable
(Increase) decrease in assets and
increase (decrease) in liabilities:
Accounts receivable (879,184) (797,818)
Inventories (1,010,207) (357,744)
Prepaid expenses and other current (12,079) (17,399)
assets
Other assets (25,000) 9,478
Accounts payable and accrued liabilities 705,594 701,398
Other current liabilities 253,803 34,683
NET CASH FROM OPERATING ACTIVITIES (498,528) (77,730)
___________ __________
CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term investments 151,876
Property and equipment (45,091) (10,730)
Acquisition of licensing fee (12,500)
___________ __________
NET CASH FROM INVESTING ACTIVITIES 106,785 (23,230)
___________ __________
CASH FLOWS FROM FINANCING ACTIVITIES:
Principle payments on debt (4,640)
Proceeds from issuance of stock 374,448 158,913
Principle payments on debt (124,092)
___________ __________
NET CASH FROM FINANCING ACTIVITIES 369,808 34,821
___________ __________
NET DECREASE IN CASH AND CASH
EQUIVALENTS (21,935) (66,139)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIIOD 580,658 373,183
___________ __________
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 558,723 $ 307,044
___________ __________
___________ __________
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Financial Statements Presented:
The consolidated interim financial statements of Cable Car
Beverage Corporation (the "Company") at June 30, 1995 and for the
six-month period ended June 30, 1995 and June 30, 1994 are
unaudited. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the consolidated financial position, results of operations
and cash flows for all periods presented have been made.
The Company's consolidated financial statements at and for the
six-months ended June 30, 1995 include the accounts of its wholly-
owned subsidiaries, Old San Francisco Seltzer, Inc. and Fountain
Classics, Inc.
Certain information and substantially all footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted.
It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto
included in the Companys consolidated financial statements,
filed in Form 10-K for December 31, 1994. The results of
operations for the period ended June 30, 1995 are not necessarily
indicative of the operating results for the full year.
Certain reclassifications have been reflected in the prior year
financial statements to conform to the current year
presentations.
Note 2 - Income Per Common Share:
Income per common share was computed under the treasury stock
method using the weighted average number of common shares and
dilutive common stock equivalent shares outstanding during the
period.
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Note 3 - Inventories:
Inventories consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
___________ ___________
<S> <C> <C>
Finished Goods $ 814,547 $ 398,470
Raw Materials 794,597 200,467
___________ ___________
1,609,144 598,937
$___________ $ ___________
___________ ___________
</TABLE>
Note 4 - Income Taxes:
As of June 30, 1995, the Company had a net deferred income tax
asset of approximately $932,000, consisting primarily of
approximately $862,000 in net operating loss carryforwards and
other deferred accruals. The net operating loss carryforwards
are subject to certain annual utilization limits. The net
deferred income tax asset was offset by a valuation allowance for
the entire amount under the applicable accounting literature
provisions that, based on the weight of available evidence, it is
more likely than not that some portion or all of the net
operating loss carryforwards will not be realized before they
expire. This position is deemed appropriate given the Companys
lack of historical earnings and the fact that the Company has
operated as a proprietary brands business for only a short time.
The valuation allowance associated with the Companys deferred
income tax asset decreased from December 31, 1994 as a result of
the utilization of net operating loss carryforwards to offset
current taxable income for the period ended June 30, 1995.
Note 5 - Events Subsequent to June 30, 1995
As of June 30, 1995, the Company owned 306,143 shares of AMCON
Distributing Company (AMCON) common stock. On July 31, 1995,
the Company distributed, as a dividend to its shareholders,
approximately 260,000 of these shares of AMCON common stock.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations
Current Developments
The Company continued to experience growth of its line of
Stewart's brand soft drinks during the June 1995 quarter. Also,
in May 1995, the Company introduced a new flavor to its Stewart's
line, Stewart's Country Orange N' Cream. The Company also began
selling its new beverage brand, ASPEN EXTREME, during May 1995.
ASPEN EXTREME is a non-carbonated, fruit-flavored beverage. In
addition, the Company started selling ASPEN Mountain Spring
Water, a non-carbonated spring water in May 1995.
During June 1995, one of the Company's contract bottlers
experienced production problems which management believes will
result in the return of merchandise in the amount of
approximately $50,000 and the Company has reduced sales and
established a reserve for return merchandise in that amount as of
June 30, 1995. Although the Company anticipates that its
contract bottler will absorb most of the costs incurred by the
Company related to said bottlers production problems, the Company
has nevertheless set up an additional contingency reserve against
inventory at June 30, 1995 in the amount of $30,000.
As of June 30, 1995, the Company owned 306,143 shares of AMCON
Distributing Company (AMCON) common stock. On July 31, 1995,
the Company distributed, as a dividend to its shareholders,
approximately 260,000 of these shares of AMCON common stock.
Liquidity and Capital Resources
The Company's current ratio at June 30, 1995 was 2.56 as compared
to 4.06 at December 31, 1994. Working capital at June 30, 1995
was $2,278,590 as compared to $1,523,585 at December 31, 1994.
For the six-months ended June 30, 1995, cash decreased by
$21,935. The principal sources were the investing and financing
activities, but such sources were more than offset by cash used
in operations. A majority of the cash used in operations related
to increases in accounts receivable and inventories offset by
increases in accounts payable and accrued liabilities of
$705,594. Financing activities generated cash of $369,808,
primarily from the net proceeds of stock issuances from exercised
options and warrants. Investing activities provided a net of
$106,785 from short-term investments less costs associated with
package designs.
The Company intends to utilize cash from operations to meet its
ongoing obligations. The Company has also established a bank
line of credit in the amount of $500,000 which it may utilize
from time to time to meet seasonal cash needs. Management does
not expect liquidity problems during 1995 assuming the Company
can maintain or exceed its current sales volume and expenses as a
percentage of sales remain relatively constant.
As of June 30, 1995, the Company had a net deferred income tax
asset of approximately $932,000, consisting primarily of
approximately $862,000 in net operating loss carryforwards and
other deferred reserves. This net deferred income tax asset was
<PAGE>
offset by a valuation allowance for the entire amount under the
applicable accounting literature provisions that, based on the
weight of available evidence, it is more likely than not that
some portion or all of the net operating loss carryforwards will
not be realized before they expire. This position is deemed
appropriate given the Company's lack of historical earnings and
the fact that the Company has operated as a proprietary brands
business for only a short time. The valuation allowance
associated with the Company's deferred income tax asset decreased
from December 31, 1994 as a result of the utilization of net
operating loss carryforwards to offset current taxable income for
the period ended June 30, 1995.
Results of Operations
Comparison of the six-month periods ended June 30, 1995 and June
30, 1994
The Company had net income of $424,784 for the six-months ended
June 30, 1995 versus net income of $301,336 for the six-months
ended June 30, 1994.
Revenue from the sale of products increased to $5,336,322 in 1995
from $3,761,788 in 1994. This increase of $1,597,534 or 42% was
due primarily to increased Stewart's case sales.
Cost of goods sold increased $1,149,376 in the six-months ended
June 30, 1995 versus 1994, and increased slightly as a percentage
of sales from 72.5% to 72.7%. The percentage increase was due
primarily to increased glass costs.
Selling expense increased $164,002 from 1994 to 1995, but
decreased slightly as a percentage of sales from 10.8% to 10.7%.
The dollar increase was due primarily to the following factors:
(1) salary and relating selling expenses associated with
expanding distribution and (2) expenses incurred in 1995 for
designing packaging and introducing the Company's new proprietary
products.
General and administrative expense increased $51,913 from 1994 to
1995, but decreased as a percentage of sales from 8.3% to 6..8%.
The percentage decrease in general and administrative expenses
was primarily attributable to a 43% increase in sales while
administrative expense increased only 17%. The dollar increase
was due primarily to the following factors: (1) salary and
related expenses and (2) administrative expenses incurred in the
development of the Company's new proprietary products.
Comparison of the three-month periods ended June 30, 1995 and
June 30, 1994
The Company had net income of $322,001 for the three-months ended
June 30, 1995 versus net income of $259,081 for the three-months
ended June 30, 1994.
Revenue from the sale of products increased to $3,446,959 in 1995
from $2,516,681 in 1994. This increase of $930,278 or 37% was
due primarily to increased Stewart's case sales.
<PAGE>
Cost of goods sold increased $680,067 in the second quarter of
1995 versus 1994, and increased slightly as a percentage of sales
from 72.2% to 72.4%. The percentage increase was due primarily
to increased glass costs.
Selling expense increased $75,873 from 1994 to 1995, but
decreased slightly as a percentage of sales from 10.3% to 9.7%.
The dollar increase was due primarily to the following factors:
(1) salary and related selling expenses associated with expanding
distribution and (2) expenses incurred in 1995 for designing
packaging and introducing the Company's new proprietary products.
General and administrative expense increased $45,045 from 1994 to
1995, but decreased as a percentage of sales from 7.0% to 6.4%.
The percentage decrease in general and administrative expenses
was primarily attributable to a 37% increase in sales while
administrative expense increased only 26%. The dollar increase
was due primarily to the following factors: (1) salary and
related expenses and (2) administrative expenses incurred in the
development of the Company's new proprietary products.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed by the Company during the
quarter ended June 30, 1995.
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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, hereunto duly authorized.
(REGISTRANT) CABLE CAR BEVERAGE CORPORATION
BY (SIIGNATURE) /s/ Dennis J. Johanningmeier
(DATE) August 7, 1995
(NAME AND TITLE) Dennis J. Johanningmeier, Chief financial officer
