Glacier Water Announces Third Quarter 2012 Results

Fri Jan 4, 2013 9:02pm EST

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VISTA, Calif.--(Business Wire)--
Glacier Water Services, Inc. (GWSV.pk) announced results for the third quarter
ended September 30th, 2012. 

Brian McInerney, Chief Executive Officer of Glacier Water, said, "Our third
quarter revenues increased 4.5% versus the same quarter last year and our
year-to-date September 30, 2012 revenues increased 5.5%. Same-store revenues
have increased 3.0% year-to-date. We continued to aggressively expand our
network of machines across the U.S. and Canada adding more than 1,100 machines
across multiple retail channels compared to one year ago. Our third quarter
income from operations increased to $2,781,000 and was impacted by an investment
in infrastructure to support our continued growth in both water and ice machine
placements. These infrastructure costs are incurred in advance of the machine
placements reaching maturity in revenue and profits. At the end of the third
quarter, Glacier operated more than 21,500 machines located at retailers across
the U.S. and Canada, providing high quality, great tasting drinking water and
ice." 

Revenues for the third quarter ended September 30, 2012 increased 4.5% to
$31,330,000 compared to $29,970,000 for the same quarter one year ago. For the
nine-month period ended September 30, 2012, revenues increased 5.5% to
$84,295,000 compared to $79,901,000 for the same period last year. Sales growth
was driven by both same store productivity and the increase in machines on
location. 

The Company`s income from operations for the third quarter ended September 30,
2012 was $2,781,000 compared to $1,839,000 for the same period last year. For
the nine-month period ended September 30, 2012, income from operations was
$4,266,000 compared to $3,500,000 for the same period last year. Income from
operations year-to-date was positively impacted by the margin generated from the
increased revenues, offset in part by increased operating costs to support the
growth in machines, and in particular, labor and benefits and vehicle costs. The
prior year income from operations included expenses associated to the initial
public offering effort of $960,000 and $1,135,000 for the third quarter and nine
months year-to-date, respectively. Income from operations for the first nine
months of 2012 and 2011 included non-cash compensation expense of $87,000 and
$361,000, respectively. 

The Company`s net income applicable to common stockholders for the quarter ended
September 30, 2012 was $195,000 or $0.06 per basic and diluted share, compared
to a net loss of $487,000, or $0.18 per basic and diluted share for the same
period last year. For the nine-month period ended September 30, 2012, the net
loss applicable to common stockholders was $3,404,000, or $1.04 per basic and
diluted share, compared to a net loss of $3,378,000 or $1.24 per basic share and
diluted share, for the same period last year. 

In September 2012, the Company converted its U.S. operating subsidiary, GW
Services Inc., from a corporation to a limited liability company ("GW Services,
LLC"), enabling the Company to raise new equity. Initially, the Company raised
$10,000,000 from a partnership made up of certain existing Company shareholders,
in order to fund expansion of water vending and ice machine placements. The
investors received $10,000,000 of Preferred Interests and 83,333 Common
Membership Shares (2.39%) in GW Services, LLC. The Preferred Interests bear
distributions at an annual rate equal to the one-year treasury rate plus 6%,
distributable quarterly to the extent the Company has adequate cash flow.
Subsequent to the third quarter on November 1, 2012, the Company raised an
additional $5,000,000 from the same partnership in exchange for $5,000,000 of
additional Preferred Interests and 34,420 Common Membership Shares (0.98%) in GW
Services, LLC. The Preferred Interests may be redeemed at a premium amount by GW
Services, LLC under certain conditions, including in the event of certain
interest rate increases or liquidation. 

Also subsequent to the third quarter, the Company amended its credit agreement
with City National Bank in October 2012, increasing the amount available under
the revolving facility to $50,000,000 through September 30, 2015. City National
Bank is the Lead Arranger and Administrative Agent under the amended credit
agreement with a second lender added to the facility. The amended credit
agreement also includes an accordion feature allowing the Company to request an
increase in the credit commitment up to an additional $25,000,000. 

On October 26 2012, Glacier announced the completion of the acquisition of the
assets of the Aqua Fill water vending business, which includes approximately
1,600 water vending machines in operation mainly in the western U.S., bringing
the total number of machines in operation to more than 23,000. 

With more than 23,000 machines located in 47 States throughout the United States
and Canada, Glacier is the leading provider of high quality, low-priced drinking
water dispensed to consumers through self-service bottled water machines located
at supermarkets and other retail locations. 

Statements in this announcement that are not purely historical are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.A copy of the Company`s audited financial
statements for the year ended January 1, 2012 are available on the Company`s
website, www.glacierwater.com, or can be obtained by contacting Steve Stringer
at (760) 560-1111.

                                                                                                                                                                                             
 FINANCIAL RESULTS                                                        GLACIER WATER SERVICES, INC.                                                                                       
                                                                                                                                                                                             
 GLACIER WATER SERVICES, INC. AND SUBSIDIARIES                                                                                                                                               
 Consolidated Statements of Operations                                                                                                                                                       
 (In thousands, except share and per share data)                                                                                                                                             
 (Unaudited)                                                                                                                                                                                 
                                                                                                                                                                                             
                                                                                  Three Months Ended                                        Nine Months Ended                                
                                                                                  October 2,                     September 30,              October 2,                   September 30,       
                                                                                  2011                           2012                       2011                         2012                
 Revenues                                                                     $   29,970                         31,330                     79,901                       84,295              
 Cost of revenues:                                                                                                                                                                           
          Operating expenses                                                      19,905                         20,610                     53,643                       56,542              
          Depreciation and amortization                                           3,302                          3,416                      9,527                        9,827               
                   Total cost of revenues                                         23,207                         24,026                     63,170                       66,369              
          Gross profit                                                            6,763                          7,304                      16,731                       17,926              
 Selling, general, and administrative expenses                                    4,924                          4,523                      13,231                       13,660              
          Income from operations                                                  1,839                          2,781                      3,500                        4,266               
 Interest expense                                                                 2,314                          2,574                      6,843                        7,637               
          Income (loss) before income taxes                                       (475       )                   207                        (3,343     )                 (3,371     )        
 Income taxes expense                                                             12                             12                         35                           33                  
          Net income (loss)                                                   $   (487       )                   195                        (3,378     )                 (3,404     )        
                                                                                                                                                                                             
 Basic and diluted net income (loss) per share                                                                                                                                               
          Basic net income (loss) per share                                   $   (0.18      )                   0.06                       (1.24      )                 (1.04      )        
                   Weighted average shares used in calculation                    2,720,048                      3,276,482                  2,720,048                    3,276,286           
                                                                                                                                                                                             
          Diluted net income (loss) per share                                 $   (0.18      )                   0.06                       (1.24      )                 (1.04      )        
                   Weighted average shares used in calculation                    2,720,048                      3,340,463                  2,720,048                    3,276,286           
                                                                                                                                                                                             


                                                                                                                                                                                         
 FINANCIAL RESULTS                                                                                                               GLACIER WATER SERVICES, INC.                            
                                                                                                                                                                                         
 GLACIER WATER SERVICES, INC. AND SUBSIDIARIES                                                                                                                                           
 Consolidated Balance Sheets                                                                                                                                                             
 (In thousands, except share data)                                                                                                                                                       
 (Unaudited)                                                                                                                                                                             
                                                                                                                                                                                         
                                                                                                                                        January 1,                     September 30,     
 Assets                                                                                                                                 2012                           2012              
 Current assets:                                                                                                                                                                         
            Cash and cash equivalents                                                                                            $      3,425                          11,362            
            Accounts receivable, net of allowance for doubtful accounts                                                                                                                  
                            of $64 as of January 1, 2012 and September 30, 2012                                                         1,777                          2,113             
            Repair parts                                                                                                                3,934                          4,285             
            Prepaid expenses and other                                                                                                  7,201                          1,941             
                                                                               Total current assets                                     16,337                         19,701            
                                                                                                                                                                                         
 Property and equipment, net                                                                                                            53,896                         60,696            
 Goodwill                                                                                                                               7,080                          7,515             
 Investment in Glacier Water Trust I Common Securities                                                                                  2,629                          2,629             
 Investment in Glacier Water Trust I Preferred Securities                                                                               3,648                          3,648             
 Equity investment                                                                                                                      1,000                          1,000             
 Deferred financing costs, net                                                                                                          4,266                          4,173             
 Other assets                                                                                                                           872                            773               
                                                                               Total assets                                      $      89,728                         100,135           
                                                                                                                                                                                         
 Liabilities and Stockholders` Deficit                                                                                                                                                   
 Current liabilities:                                                                                                                                                                    
            Accounts payable                                                                                                     $      2,715                          2,452             
            Accrued commissions                                                                                                         4,026                          4,941             
            Accrued liabilities                                                                                                         2,654                          3,618             
            Bank overdraft                                                                                                              1,027                          2,231             
                                                                               Total current liabilities                                10,422                         13,242            
                                                                                                                                                                                         
 Junior subordinated debentures                                                                                                         87,629                         87,629            
 Line of credit                                                                                                                         32,056                         33,500            
 Series B junior subordinated debentures                                                                                                10,002                         10,118            
 Long-term portion of deferred rent                                                                                                     121                            150               
                                                                               Total liabilities                                        140,230                        144,639           
                                                                                                                                                                                         
 Commitments and contingencies                                                                                                                                                           
                                                                                                                                                                                         
 Stockholders` deficit:                                                                                                                                                                  
            Preferred interests LLC investment                                                                                          -                              9,856             
            Preferred stock, $0.01 par value; Authorized 100,000 shares;                                                                                                                 
                            issued and outstanding, 0 shares at January 1, 2012 and September 30, 2012                                  -                              -                 
            Common stock, $0.01 par value. Authorized 10,000,000 shares,                                                                                                                 
                            issued and outstanding, 3,225,767 and 3,276,482 shares at                                                                                                    
                            January 1, 2012 and September 30, 2012, respectively                                                        49                             50                
            Additional paid-in capital                                                                                                  24,153                         23,602            
            Accumulated deficit                                                                                                         (42,500  )                     (45,904  )        
            Treasury stock, at cost, 1,587,606 shares at January 1, 2012 and September 30, 2012                                         (32,562  )                     (32,562  )        
            Accumulated other comprehensive income                                                                                      358                            454               
                                                                               Total stockholders` deficit                              (50,502  )                     (44,504  )        
                                                                               Total liabilities and stockholders` deficit       $      89,728                         100,135           


Glacier Water Services, Inc.
Steve Stringer, Chief Financial Officer
(760) 560-1111 

Copyright Business Wire 2013
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