This was filed on the 15th. Might have had some effect.
CABLE CAR BEVERAGE CORP (NASDAQ:DRNK) files SEC Form 10-Q
EDGAR Online, Thursday, May 15, 1997 at 11:34
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 first quarter of 1997. During the first
quarter of 1997, the Company entered into a long-term distribution
agreement with Mr. Natural, Inc. whereby Mr. Natural has agreed to
distribute the Company's entire line of Stewart's gourmet sodas in the
five boroughs of New York City and in Westchester county. Mr. Natural
also distributes Snapple and Gatorade in New York City.
Results of Operations
---------------------
Comparison of the three-month periods ended March 31, 1997 and March 31,
------------------------------------------------------------------------
1996
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Revenue for the three-months ended March 31, 1997 was $5,357,864 versus
revenue of $3,682,809 for the three-months ended March 31, 1996. This
increase of $1,675,055, or 45%, was primarily due to increased sales of
Stewart's brand beverages. Stewart's sales grew in most U.S. markets and
Canada during the first quarter of 1997.
Pre-tax income increased $297,893, or 103%, to $588,211 for the three-
months ended March 31, 1997 from $290,318 for the three-months ended March
31, 1996. This increase in pre-tax income is primarily due to increased
revenues and an increase in gross margins. Cost of goods sold increased
$1,143,264 in the first quarter of 1997 versus 1996, but decreased as a
percentage of sales to 71.7% from 73.2%. The improved gross margin was
primarily due to favorable sweetner costs throughout the U.S. during the
first quarter of 1997.
Net income increased by $177,636, or 102%, to $350,992 for the three-
months ended March 31, 1997 from $173,356 for the three-months ended March
31, 1996. The Company's provision for income taxes reflects a 39% income
tax rate for the three-months ended March 31, 1997, as opposed to a 38%
income tax rate for the three-months ended March 31, 1996.
General and administrative expense increased $29,967 from 1996 to 1997,
and decreased as a percentage of sales from 6.6% to 5.1%. The percentage
decrease was primarily attributable to increased sales and relatively
constant administrative expenses.
Selling expense increased $206,024 from 1996 to 1997, and remained
constant as a percentage of sales at 12%. The dollar increase was due
primarily to the following factors: salaries, promotional spending,
delivery costs and other related selling expenses associated with expanding
distribution.
Liquidity and Capital Resources
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The Company's current ratio at March 31, 1997 was 3.6 as compared to
5.0 at December 31, 1996. Working capital at March 31, 1997 was $5,024,448
-7-
as compared to $4,628,636 at December 31, 1996. For the three-months ended
March 31, 1997, cash decreased by approximately $133,587. The principal
use of cash during the quarter was for operating activities. Inventories
and accounts receivables increased significantly as a result of increased
sales. Net income adjusted for depreciation, amortization and other
provisions generated approximately $392,000 in cash. Accounts receivable
and inventories increased by a total of roughly $1,358,000, and accounts
payable increased roughly $572,000. Investing activities provided cash of
approximately $178,000, primarily from the proceeds from short-term
investments.
The Company intends to utilize cash from operations to meet its ongoing
obligations. The Company also maintains 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 1997
assuming the Company can maintain or exceed its current sales volume, and
expenses as a percentage of sales remain relatively constant. |
