Vermont Pure Holdings, Ltd. Announces Financial Results for 2008
January 29 2009 - 7:00AM
PR Newswire (US)
- Sales increase 6%, Company announces impairment write down -
WATERTOWN, Conn., Jan. 29 /PRNewswire-FirstCall/ -- Vermont Pure
Holdings, Ltd. (NYSE Alternext: VPS) announced financial results
for the fiscal year ended October 31, 2008 and filed these results
on Form 10-K with the Securities and Exchange Commission yesterday.
Operating Results for Fiscal Year ended October 31, 2008 Sales
increased 6% to $69.2 million from $65.2 million in fiscal year
2007. This increase reflected higher volumes of coffee and related
products and the effect of fuel surcharges, partly offset by small
declines in water sales and cooler rentals. Operating results were
significantly impacted by a write-down of goodwill, a non-cash
charge of $22.4 million. The net loss for fiscal year 2008 was
$19.8 million compared to net income of $2.1 million in 2007. On a
per share basis, the net (loss) income was $(0.92) per fully
diluted share in fiscal 2008, compared to $0.10 per fully diluted
share in fiscal 2007. Except for the goodwill impairment charge,
the financial performance of the Company for fiscal year 2008
improved over fiscal year 2007. The improvement was a result of
increased sales and gross profit and a reduction in interest
expense, partially offset by higher selling, general, and
administrative expenses. Goodwill Impairment The Company recorded a
non-cash charge of $22.4 million for impairment of goodwill in the
fourth quarter of fiscal 2008. The non-cash impairment charge was a
result of the assessment of goodwill as of October 31, 2008.
Goodwill had been recorded for acquisitions from 1996 through 2008.
The assessment concluded that goodwill on the Company's books
exceeded the value as prescribed by Statement of Financial
Accounting Standards (SFAS) No. 142. The impairment was primarily
the result of a decline in the quoted market prices of the
Company's stock at fiscal year-end below its book carrying value,
and was not due to any changes in the core business. There was no
event or change in circumstance that would more likely than not
reduce the fair value of our underlying net assets below their
carrying amount prior to the annual impairment test. Impairment is
a non-cash charge and, while it is significant, it does not affect
the Company's business operations or its ability to meet its
financial obligations. The Company conducted a similar assessment
of goodwill as of October 31, 2007 and concluded that goodwill was
not impaired as of that date. The Company's Reaction "We feel the
decline in our stock price was primarily driven by the poor market
conditions for most stocks in 2008, and significantly contributed
to the impairment of goodwill." said Peter Baker, Chief Executive
Officer. "Obviously, the impairment charge was the most significant
component of the decrease in our operating results in 2008.
Notwithstanding the impairment charge we were pleased with our
results. However, the fourth quarter of 2008 did not trend as well
as the first three quarters, from an operating standpoint, which we
feel reflected the overall softening of the economy. Consequently
we have concerns that 2009 will be a more challenging business
environment." About Vermont Pure Vermont Pure Holdings, Ltd. (NYSE
Alternext: VPS), the largest independent home and office
distributor of its kind in the United States, markets water, coffee
and other home and office refreshment products throughout the
Northeast through its subsidiary Crystal Rock LLC. The Company
bottles and distributes natural spring water under the Vermont
Pure(R) brand and purified water with minerals added under the
Crystal Rock(R) label. The largest portion of its sales are derived
from a route distribution system that delivers water in 3- to
5-gallon reusable and recyclable bottles. The Company continues to
set high standards in the bottled water industry through its
technical innovation, commitment to the environment and by
integrating its family roots into relationships with employees and
customers. More information is available at
http://www.crystalrock.com/. VERMONT PURE HOLDINGS, LTD. Results of
Operations (Unaudited) Twelve Months Ended: Three Months Ended:
---------------------- ---------------------- October 31, October
31, October 31, October 31, 2008 2007 2008 2007
---------------------- ---------------------- (000's $) Sales
$69,237 $65,231 $17,428 $17,145 Income (Loss) from operations
$(15,862) $6,643 $(21,352) $2,077 Net Income (Loss) $(19,836)
$2,076 $(21,847) $796 Basic net earnings (loss) per share $(0.92)
$0.10 $(1.02) $0.04 Diluted net earnings (loss) per share $(0.92)
$0.10 $(1.02) $0.04 Basic Wgt. Avg. Shares Out. (000's) 21,564
21,624 21,497 21,619 Diluted Wgt. Avg. Shares Out. (000's) 21,564
21,624 21,497 21,619 Note: This press release contains forward
looking statements that involve a number of risks and uncertainties
that could cause actual results to differ materially from those
indicated by such forward looking statements, including integration
of acquisitions, ability to sustain and manage growth, changing
market conditions, and other risks detailed in the company's
filings with the Securities and Exchange Commission. DATASOURCE:
Vermont Pure Holdings, Ltd. CONTACT: Peter Baker, CEO,
+1-860-945-0661, ext. 3001, or Bruce MacDonald, CFO,
+1-802-860-1126, both of Vermont Pure Holdings, Ltd. Web Site:
http://www.crystalrock.com/
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