<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-14784
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CABLE CAR BEVERAGE CORPORATION
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(Exact name of Registrant as specified in its charter)
DELAWARE 52-0880815
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(State or other jurisdiction (I.R.S Employer
of incorporation) Identification No.)
717 17th Street, Suite 1475, Denver, CO 80202-3314
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(Address of principal executive offices)
(303) 298-9038
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(Registrant's telephone number, including area code)
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(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
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The Registrant had 8,825,015 shares of its $.01 par value common stock
outstanding as of May 9, 1996.
<<PAGE>
Form 10-Q
1st Quarter
INDEX
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PAGE
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PART 1- FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
---------------------------------
Unaudited consolidated balance sheet at March 31, 1996
and at December 31, 1995 3
Unaudited consolidated statement of operations for the
three-month periods ended March 31, 1996 and March 31,
1995 4
Unaudited consolidated statement of cash flows for the
three-month periods ended March 31, 1996 and March 31,
1995 5
Notes to unaudited consolidated financial statements 6
Item 2 Management's Discussion and Analysis of
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Financial Condition and Results of Operations 8
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PART II. OTHER INFORMATION 9
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED BALANCE SHEET
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March 31, December 31,
1996 1995
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ASSETS
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<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $504,399 $576,191
Accounts receivable,
net of allowance for doubtful
accounts of $65,156 at March 31,
1996 and $55,949 at December 31,
1995 1,373,099 1,063,040
Inventories 2,125,747 1,808,257
Prepaid expenses and other
current assets 57,621 40,394
Deferred income tax assets 381,948 340,389
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Total current assets 4,442,814 3,828,271
PROPERTY AND EQUIPMENT, NET
Property and equipment less
accumulated depreciation of
$108,998 at March 31, 1996
and $99,231 at December 31,
1995 119,720 116,466
OTHER ASSETS:
Goodwill and other intangibles,
less accumulated amortization
of $357,048 at March 31, 1996
and $347,007 at December 31, 1995 621,385 631,426
Investment in AMCON Distributing Co. 99,185 99,185
Other assets 79,030 72,498
Deferred income tax assets 526,932 612,854
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$5,889,066 $5 ,360,700
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued
liabilites $564,161 $380,198
Other current liabilities 745,332 572,121
Current portion of long-term debt 3,796 5,960
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Total current liabilities 1,313,289 958,279
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LONG-TERM DEBT 0 0
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STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value;
25,000,000 shares authorized;
8,658,349 shares issued at
March 31, 1996, and 8,658,349
issued at December 31, 1995 86,584 86,584
Additional paid-in capital 9,502,877 9,502,877
Accumulated deficit (4,985,049) (5,158,405)
Less - 76,357 common shares
in treasury (28,635) (28,635)
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4,575,777 4,402,421
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$5,889,066 $5,360,700
========== ==========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
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<TABLE>
<CAPTION>
THREE-MONTHS ENDED
MARCH 31,
1996 1995
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<S> <C> <C>
REVENUE:
Sales $3,682,809 $1,889,363
COST AND EXPENSES:
Cost of goods sold 2,696,901 1,381,313
General and administrative 241,754 140,055
Selling and distribution 444,148 233,760
Depreciation and amortization 19,807 15,233
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3,402,610 1,770,361
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INCOME FROM OPERATIONS 280,199 119,002
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OTHER INCOME AND (EXPENSES):
Interest income and other non-operating income 10,264 14,180
Interest expense (145) 0
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INCOME BEFORE INCOME TAXES 290,318 133,182
PROVISION FOR INCOME TAXES 116,962 30,400
NET INCOME $173,356 $102,782
======== ========
EARNINGS PER COMMON SHARE:
Net Income $ .02 $ .01
======= =======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES 9,041,650 8,688,042
========= =========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
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<TABLE>
<CAPTION>
THREE-MONTHS ENDED
MARCH 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $173,356 $102,782
Adjustment to reconcile net income to
net cash from operating activities:
Depreciation and amortization 19,807 15,233
Provision for loss on accounts receivable 9,207 6,516
Change in current assets and liabilities:
Accounts receivable (319,266) (91,193)
Inventories (317,490) (175,617)
Prepaid expenses and other current assets (17,227) (6,332)
Other assets (6,532) 0
Deferred income tax assets 44,363 0
Accounts payable and accrued liabilities 183,963 182,217
Other current liabilities 173,211 17,921
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NET CASH FROM (FOR) OPERATING ACTIVITIES (56,608) 51,527
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CASH FLOWS FOR INVESTING ACTIVITIES:
Property and equipment, net (13,020) (24,050)
Acquisition of licensing fee -------- --------
NET CASH FOR INVESTING ACTIVITIES (13,020) (24,050)
-------- --------
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
Principle payments on debt (2,164) (2,676)
Proceeds from issuance of stock 209,450
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NET CASH FROM (FOR) FINANCING ACTIVITIES (2,164) 206,774
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (71,792) 234,251
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 576,191 580,658
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $504,399 $814,909
======== ========
</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 March 31, 1996 and for the three-month periods
ended March 31, 1996 and March 31, 1995 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 three-months
ended March 31, 1996 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 Company's consolidated financial statements,
filed in Form 10-K for December 31, 1995. The results of operations for the
period ended March 31, 1996 are not necessarily indicative of the operating
results for the full year.
Certain reclassifications have been reflected in the prior year financial
statements to confirm to the current year presentation.
Note 2 - Income Per Common Share:
- --------------------------------
Net income per common and common share equivalent 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.
Note 3 - Inventories:
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Inventories consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
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<S> <C> <C>
Finished Goods $1,212,429 $1,009,223
Raw Materials 913,318 799,034
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$2,125,747 $1,808,257
========== ==========
</TABLE>
<PAGE>
Note 4 - Income Taxes:
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As of March 31, 1996, the Company had a net deferred income tax asset of
approximately $908,880, consisting primarily of net operating loss
carryforwards and $673,000 of other future deductible temporary differences.
The net operating loss carryforwards are subject to certain annual
utilization limits.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition And
Results of Operations
Current Developments
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The Company continued to experience growth of its line of Stewart's brand
soft drinks during the March 1996 quarter. Also during the March 1996
quarter, the Company completed designs for Stewart's Diet Country Orange N'
Cream, a line extension of the Stewart's brand. The Company intends to begin
selling Stewart's Diet Country Orange N' Cream in 1996. The Company also
completed product and package development during the March 1996 quarter for
ASPEN flavored waters, a new product line that the Company intends to
introduce in selected test markets during May 1996.
Liquidity and Capital Resources
- -------------------------------
The Company's current ratio at March 31, 1996 was 3.38 as compared to 3.99 at
December 31, 1995. Working capital at March 31, 1996 was $3,129,524 as
compared to $2,869,992 at December 31, 1995. For the three-months ended
March 31, 1996, cash decreased by approximately $71,792. The principal uses
were for operating and investing activities. Net income adjusted for
depreciation, amortization and other provisions generated $202,370 in cash.
Accounts receivable and inventories increased by a total of $636,756, and
accounts payable increased $183,963. Financing activities used cash of
$2,164, primarily for the payment of capital leases.
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 1996
assuming the Company can maintain or exceed its current sales volume and
expenses as a percentage of sales remain relatively constant.
As of March 31, 1996, the Company had net deferred income tax assets of
approximately $908,880, consisting primarily of approximately $673,000 in net
operating loss carryforwards and other deferred reserves. As of March 31,
1996, the Company has net operating loss carryforwards of approximately
$1,892,250 which expire from 1997 through 2005. Pursuant to Section 382 of
the Internal Revenue Code, the Company is limited in the amount of net
operating loss carryforwards it may use each year to offset taxable income.
The Company's consolidated Section 382 annual limitation is approximately
$343,000.
Results of Operations
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Comparison of the three-month periods ended March 31, 1996 and March 31, 1995
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Revenue for the three-months ended March 31, 1996 was $3,682,809 versus
revenue of $1,889,363 for the three-months ended March 31, 1995. This
increase of $1,793,446, or 95%, was primarily due to increased sales of
Stewart's brand beverages.
<PAGE>
Pre-tax income increased $157,136, or 118%, to $290,318 for the three-months
ended March 31, 1996 from $133,182 for the three-months ended March 31,
1995. This increase in pre-tax income is primarily due to increased revenues.
Net income increased by $70,574, or 69%, to $173,356 for the three-months
ended March 31, 1996 from $102,782 for the three-months ended March 31, 1995.
Net income growth differed from growth in pre-tax income due to the fact that
the Company's provision for income taxes was recorded at a higher effective
tax rate for 1996 than for 1995. The Company recorded its provision for
income taxes at a 38% income tax rate for the three-months ended March 31,
1996, as opposed to a 21% income tax rate for the three-months ended March
31, 1995.
The following table reflects certain financial information for the Company
for the comparable three-months ended March 31, 1996 and 1995:
<TABLE>
<CAPTION>
March 31, March 31,
1996 1995
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<S> <C> <C>
Revenue $3,602,809 $1,889,363
Cost of goods sold 2,696,901 1,381,313
Expenses 705,709 389,048
Other income 10,119 14,180
Income before income taxes 290,318 133,182
Net Income 173,356 102,782
</TABLE>
Cost of goods sold increased $1,315,588 in the first quarter of 1996 versus
1995, but remained at a percentage of sales of 73%.
General and administrative expense increased $101,699 from 1995 to 1996, and
decreased as a percentage of sales from 7.4% to 6.6%. The decrease was
primarily attributable to increased sales and constant administrative expense.
Selling expense increased $210,388 from 1995 to 1996, and remained constant
as a percentage of sales at 12%. The dollar increase was due primarily to
the following factors: (1) expenses incurred in 1996 for designing packaging
of the Company's proprietary products; and (2) salary and relating selling
expenses associated with expanding distribution.
PART II - 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, hereunto duly authorized.
(REGISTRANT) CABLE CAR BEVERAGE CORPORATION
BY (signature) /s/Samuel M. Simpson
BY (signature) /s/Myron D. Stadler
(DATE) May 10,1996
(NAME AND TITLE) Samuel M. Simpson, President
(NAME AND TITLE) Myron D Stadler, Cheif accounting Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 504,399
<SECURITIES> 79,030
<RECEIVABLES> 2,190,903
<ALLOWANCES> 65,156
<INVENTORY> 57,621
<CURRENT-ASSETS> 4,442,814
<PP&E> 228,718
<DEPRECIATION> 108,998
<TOTAL-ASSETS> 5,889,066
<CURRENT-LIABILITIES> 1,313,289
<BONDS> 0
<COMMON> 8,658,349
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,889,066
<SALES> 3,682,809
<TOTAL-REVENUES> 3,682,809
<CGS> 2,696,901
<TOTAL-COSTS> 3,402,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 145
<INCOME-PRETAX> 290,318
<INCOME-TAX> 116,962
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 173,356
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
