<PAGE>
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, 1996
----------------------------
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 jurisdiction (I.R.S Employer
of incorporation) Identification No.)
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 8,828,658 shares of its $.01 par value common stock
outstanding as of August 9, 1996.
Page 1
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Form 10-Q
2nd Quarter
INDEX
-----
PAGE
----
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements:
---------------------------------
<S> <C>
Unaudited consolidated balance sheet at June 30, 1996
and at December 31, 1995 3
Unaudited consolidated statement of operations for the
six-month and three-month periods ended June 30, 1996
and June 30, 1995 4
Unaudited consolidated statement of cash flows for the
six-month periods ended June 30, 1996 and June 30, 1995 5
Unaudited consolidated statement of changes in
stockholders' equity 6
Notes to unaudited consolidated financial statements for
the six-month period ended June 30, 1996 7
Item 2. Management's Discussion and Analysis of
-----------------------------------------
Financial Condition and Results of Operations 8
----------------------------------------------
PART II - OTHER INFORMATION 10
</TABLE>
Page 2
<PAGE>
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,
1996 1995
-------- ------------
ASSETS
- --------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 912,184 $ 576,191
Accounts receivable, net of
allowance for doubtful
accounts of $77,281 at
June 30, 1996 and $55,949 at
December 31, 1995 1,887,385 1,063,040
Inventories, net 2,353,861 1,808,257
Prepaid expenses and
other current assets 55,143 40,394
Deferred income tax assets 381,948 340,389
----------- -----------
Total Current Assets 5,590,521 3,828,271
PROPERTY AND EQUIPMENT, NET
Property and equipment less
accumulated depreciation of
$121,235 at June 30, 1996
and $99,231 at December 31,
1995 133,603 116,466
OTHER ASSETS:
Goodwill and other
intangibles, less
accumulated
amortization of
$367,087 at June 30,
1996 and $347,007 at
December 31, 1995 611,346 631,426
Investment in AMCON
Distributing Co. 99,185 99,185
Other assets 144,659 72,498
Deferred income tax assets 526,932 612,854
-------------- -------------
$ 7,106,246 $ 5,360,700
============== =============
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 977,622 $ 380,198
Other current liabilities 987,798 578,081
---------- -----------
Total Current Liabilities 1,965,420 958,279
---------- -----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par
value; 25,000,000 shares
authorized; 8,905,015
shares issued at June 30,
1996 and 8,658,349 issued
at December 31, 1995 89,050 86,584
Additional paid-in capital 9,635,409 9,502,877
Accumulated deficit (4,554,998) (5,158,405)
Less - 76,357 common shares
in treasury (28,635) (28,635)
----------- ----------
5,140,826 4,402,421
------------- --------------
$ 7,106,246 $ 5,360,700
============= ==============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page 3
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
-----------------------------------------------
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
-----------------------------------------------
<TABLE>
<CAPTION>
THREE-MONTHS SIX-MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1996 1995 1996 1995
-------- ------- ------- -------
REVENUE:
<S> <C> <C> <C> <C>
Sales $5,249,735 $3,453,111 $8,932,544 $5,342,474
COST AND EXPENSES:
Cost of goods sold 3,766,940 2,496,017 6,463,841 3,877,330
General and
administrative 273,375 221,135 515,129 362,662
Selling and
distribution 521,183 336,239 965,331 568,526
Depreciation and
amortization 22,277 15,028 42,084 30,261
---------- ---------- --------- ----------
4,583,775 3,068,419 7,986,385 4,838,780
---------- ---------- --------- -----------
INCOME FROM
OPERATIONS 665,960 384,692 946,159 503,694
---------- --------- --------- ----------
OTHER INCOME AND
(EXPENSES):
Interest income
and other
non-operating income 9,629 13,312 19,893 27,492
Interest expense (83) (691) (228) (691)
---------- ---------- ---------- ---------
INCOME BEFORE INCOME
TAXES 675,506 397,313 965,824 530,495
PROVISION FOR INCOME
TAXES 245,455 75,312 362,417 105,712
-------- -------- -------- --------
NET INCOME $430,051 $322,001 $603,407 $424,783
-------- -------- -------- --------
NET INCOME PER
COMMON SHARE: $ .05 $ .04 $ .07 $ .05
======== ======== ======== ========
WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES 9,050,647 9,035,091 9,022,000 8,933,434
========= ========= ========= =========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page 4
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS ENDED
JUNE 30,
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 603,407 $ 424,784
Adjustment to reconcile net income to
net cash from operating activities:
Depreciation and amortization 42,084 30,261
Provision for loss on accounts
receivable 21,332 13,500
Change in current assets and
liabilities:
Accounts receivable (845,677) (879,184)
Inventories (545,604) (1,010,207)
Prepaid expenses and other
current assets (14,749) (12,079)
Other assets (72,161) (25,000)
Deferred income tax assets 44,363
Accounts payable and accrued liabilities 597,424 705,594
Other current liabilities 414,106 253,803
---------- -----------
NET CASH FROM OPERATING ACTIVITIES 244,525 (498,528)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash provided by short-term investments 151,876
Property and equipment acquisitions (39,141) (45,091)
----------- ------------
NET CASH FROM INVESTING ACTIVITIES (39,141) 106,785
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principle payments on debt (4,389) (4,640)
Proceeds from issuance of stock 134,998 374,448
----------- ------------
NET CASH FROM FINANCING ACTIVITIES 130,609 369,808
----------- ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 335,993 (21,935)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 576,191 580,658
---------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 912,184 $ 558,723
========== ==========
</TABLE>
Page 5
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDARIES
----------------------------------------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES
-------------------------------------------
IN STOCKHOLDERS' EQUITY
-----------------------
COMMON STOCK ADDITIONAL
------------
NUMBER OF PAID-IN
<TABLE>
<CAPTION>
SHARES AMOUNT CAPITAL
-------- ---------- ------------
<S> <C> <C> <C>
Balance, December 31,
1995 8,658,349 $86,584 $9,502,877
Exercise of stock
options 246,666 2,466 132,532
Net Income
---------- -------- -----------
BALANCE JUNE 30, 1996 8,905,015 $89,050 $9,635,409
========= ======== ===========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page 6
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDARIES
----------------------------------------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES
-------------------------------------------
IN STOCKHOLDERS' EQUITY
-----------------------
<TABLE>
<CAPTION>
ACCUMU TREASURY STOCK
----------------
-LATED NUMBER
OF
DEFICIT SHARES AMOUNT
----------- ----------- ------------
<S> <C> <C> <C>
Balance, December 31,
1995 $(5,158,405) 76,357 $(28,635)
Exercise of stock
options
Net Income 603,407
-------------- ---------- ------------
BALANCE JUNE 30, 1996
$(4,554,998) 76,357 $(28,635)
============ ========== ============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page 6 (cont.)
<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, 1996 and for the six-month and three-
month periods ended June 30, 1996 and June 30, 1995 are unaudited. In the
opinion of management, all adjustments (consisting of 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 interim financial statements 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 June 30, 1996 are not necessarily indicative of the operating
results for the full year.
Certain reclassifications have been reflected in the prior period
financial statements to conform to the current year presentations.
Note 2 - Net Income Per Common Share:
Net 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.
Note 3 - Inventories:
Inventories consisted of:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- --------------
<S> <C> <C>
Finished Goods $1,378,115 $1,009,223
Raw Materials 975,746 799,034
------------- -------------
$2,353,861 $1,808,257
============= =============
</TABLE>
Page 7
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Note 4 - Income Taxes:
At June 30, 1996, the Company had a net deferred income tax asset of
approximately $900,000, consisting primarily of net operating loss
carryforwards and other reserves. Certain of the deferred tax assets are
classified as long-term primarily because some of the net operating loss
carryforwards are subject to certain annual utilization limits.
Item 2. Management's Discussion and Analysis of Financial Condition And
Results of Operations
Certain statements in the following discussions regarding the Company's
future product and business plans, financial results, performance and events
are forward-looking statements and are based on current expectations. Actual
results may differ materially due to a number of risks and uncertainties.
Current Developments
--------------------
The Company continued to experience growth of its line of Stewart's brand
soft drinks during the June 1996 quarter. During the second quarter of 1996,
the Company also began selling Stewart's Diet Country Orange N' Cream, a line
extension of the Stewart's brand and Stewart's Classic Key Lime, a Stewart's
seasonal product. Also during the second quarter of 1996, the Company began
selling ASPEN flavored waters, a new product line, in selected test markets.
Liquidity and Capital Resources
-------------------------------
At June 30, 1996, the Company's working capital was $3,625,101, an
increase of $755,109, or 25%, from December 31, 1995. During the six-month
period ending June 30, 1996, the Company generated $244,525 in cash from
operations, purchased equipment aggregating approximately $39,000, and
received approximately $135,000 from the exercise of stock options. This
activity resulted in an increase in the Company's cash balance of
approximately $336,000 to a June 30, 1996 balance of $912,184.
The Company intends to continue utilizing cash from operations to meet
its ongoing obligations. However, 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 June 30, 1996, the Company had net deferred income tax asset of
approximately $900,000, consisting primarily of net operating loss
carryforwards and other deferred reserves. As of June 30, 1996, the Company
has net operating loss carryforwards of approximately $1,900,000 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.
Page 8
<PAGE>
Results of Operations
---------------------
Comparison of the six-month periods ended June 30, 1996 and June 30, 1995
-------------------------------------------------------------------------
Revenue for the six-months ended June 30, 1996 was $8,932,544 versus revenue
of $5,342,474 for the six-months ended June 30, 1995. This increase of
$3,590,070, or 67%, was primarily due to increased sales of Stewart's brand
products
Cost of goods sold increased by $2,586,511 for the comparative six-months
ended June 30, 1996 and June 30, 1995. As a percentage of sales, cost of
goods sold decreased to 72.4% for the six-months ended June 30, 1996 from
72.6% for the six-months ended June 30, 1995. This decrease is primarily
due to an increased selling price on Stewart's brand products which was
partially offset by increased cost of materials.
General and administrative expenses increased by $152,466 for the
six-months ended June 30, 1996 compared to the six-months ended June 30, 1995.
General and administrative costs decreased as a percentage of sales to 5.8%
from 6.8% for the six-months ended June 30, 1996 and 1995, respectively.
This decline is the result of many administrative costs remaining constant
relative to sales.
Selling expense increased $396,805 for the comparative six-months ended
June 30, 1996 from June 30, 1995, primarily due to increased promotional
spending on the Stewart's brand products. As a percentage of sales, selling
expense was constant.
Pre-tax income increased $435,329, or 87.8% to $965,824 for the six-months
ended June 30, 1996 compared with $530,495 for the six-months ended June 30,
1995. This increase is due primarily from increased Stewart's brand sales.
Net income increased by $178,624, or 42.1%, to $603,407 for the six-months
ended June 30, 1996 form $424,783 for the six-months ended June 30, 1995.
The growth rate in net income differed from the growth rate in pre-tax income
for the comparative six-months ended June 30, 1996 and 1995 which was the
result of a higher effective tax rate used to record the provision for income
taxes in 1996. The Company recorded its provision for income taxes at a 38%
effective income tax rate compared to 20% for the six-months ended June 30,
1996 and 1995, respectively.
Comparison of the three-month periods ended June 30, 1996 and June 30, 1995
---------------------------------------------------------------------------
Revenue for the three-months ended June 30, 1996 was $5,249,735 versus
revenue of $3,453,111 for the three-months ended June 30, 1995. This
increase of $1,796,624, or 52%, was primarily due to increases sales of
Stewart's brand products
Cost of goods sold increased by $1,270,923 for the comparative three-
months ended June 30, 1996 and June 30, 1995. As a percentage of sales,
cost of goods sold decreased to 71.8% for the three-months ended June 30,
1996 from 72.3% for the three-months ended June 30, 1995. This
Page 9
<PAGE>
decrease is primarily due to an increased selling price on Stewart's brand
products which was partially offset by increased cost of materials.
General and administrative expenses increased by $52,240 for the three-
months ended June 30, 1996 compared to the three-months ended June 30, 1995.
General and administrative costs decreased as a percentage of sales to 5.2%
from 6.4% for the three-months ended June 30, 1996 and 1995, respectively.
This decline is the result of many administrative costs remaining constant
relative to sales.
Selling expense increased $184,944 for the comparative three-months ended
June 30, 1996 from June 30, 1995 primarily due to increased promotional
spending on the Stewart's brand products. As a percentage of sales, selling
expense was constant.
Pre-tax income increased $278,193, or 73.1% to $675,506 for the three-
months ended June 30, 1996 compared with $397,313 for the three-months ended
June 30, 1995. This increase is due primarily from increased Stewart's brand
sales.
Net income increased by $108,050, or 33.6%, to $430,051 for the three-
months ended June 30, 1996 form $322,001 for the three-months ended June 30,
1995. The growth rate in net income differed from the growth rate in pre-tax
income for the comparative three-months ended June 30, 1996 and 1995 which
was the result of a higher effective tax rate used to record the provision
for income taxes in 1996. The Company recorded its provision for income taxes
at a 36% effective income tax rate compared to 19% for the three-months ended
June 30, 1996 and 1995, respectively.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports
on Form 8-K
(a) Exhibits
3 (i) Certificate of Incorporation*
3 (ii) Certificate of Amendment (Changing Name)**
3 (iii) By-Laws*
27 Financial Data Schedule
* Incorporated by reference to Form 10-K dated 10/09/87
** Incorporated by reference to Form S-1 filed 09/25/89 (SEC #33-30480)
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Commission for the quarter
ended June 30, 1996.
Page 10
<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.
CABLE CAR BEVERAGE CORPORATION
(registrant)
Date: August 09, 1996 By: /s/Samuel M. Simpson
------------------------------
Samuel M. Simpson
President
/s/Myron D. Stadler
-------------------------------
Myron D. Stadler
Chief Accounting Officer
Page 11
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 912,184
<SECURITIES> 99,185
<RECEIVABLES> 1,964,666
<ALLOWANCES> 77,281
<INVENTORY> 2,353,861
<CURRENT-ASSETS> 5,590,521
<PP&E> 254,838
<DEPRECIATION> 121,235
<TOTAL-ASSETS> 7,106,246
<CURRENT-LIABILITIES> 1,965,420
<BONDS> 0
8,905,015
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,106,246
<SALES> 5,249,735
<TOTAL-REVENUES> 5,249,735
<CGS> 3,766,940
<TOTAL-COSTS> 4,583,775
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83
<INCOME-PRETAX> 675,506
<INCOME-TAX> 245,455
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 430,051
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
