Glacier Water Services, Inc. Reports 3.7 Percent Annual Revenue Gain

Glacier Water Services, Inc. announced results for the fiscal year ended Jan. 1, 2012.

Brian McInerney, chief executive officer of Glacier Water, said in a prepared statement, “Our revenues increased 3.7 percent over the prior year and same-store revenues have increased 1.8 percent year-over-year. We continued to aggressively expand our network of machines across the U.S. and Canada adding approximately 1,400 machines across multiple retail channels. The 2011 income from operations was $3,430,000 and was impacted by an investment in infrastructure to support our continued growth in water vending locations that are on the front-end of the revenue growth curve, and the launch of premium ice machines. Operating income was also impacted by $1,159,000 in costs associated with the company’s efforts to file for an initial public offering during 2011, which was withdrawn on Oct. 17, 2011 due to unfavorable market conditions. At the end of the fiscal year 2011, Glacier operated approximately 20,500 machines located at retailers across the U.S. and Canada, providing high quality, great tasting drinking water and premium ice.”

Revenues for the year ended Jan. 1, 2012 increased to $103,796,000 from $100,056,000 representing a 3.7 percent increase versus fiscal year 2010. Sales growth was driven primarily from the increase in machines on location and also from positive growth in same-store productivity.

The company’s income from operations for the year ended Jan. 1, 2012 was $3,430,000 compared to $7,643,000 for the prior year. Income from operations for 2011 was positively impacted by the margin generated from the increased revenues, but offset by increased operating costs to support the growth in machines, and in particular, labor and benefits, vehicle and fuel costs. The impact on operating income from expenses associated with the initial public offering effort was $1,159,000 for the year. The company made additional investments to accelerate growth, including personnel additions in the areas of sales, marketing and product development. Income from operations for fiscal year 2011 and 2010 included non-cash stock-based compensation expense of $482,000 and $118,000, respectively.

The company’s net loss applicable to common stockholders for the year ended Jan. 1, 2012 was $5,855,000 or $2.15 per basic and diluted share, compared to a net loss of $900,000, or $0.33 per basic and diluted share for the prior year.

During the fourth quarter of 2011, the company raised $20,000,000, with $10,000,000 from the sale of 500,000 shares of common stock and $10,000,000 from the sale of $12,500,000 in principal amount of 9.0625 percent subordinated debt due in 2028. The proceeds from this financing were used to repay a $10,000,000 term loan, with the balance paid against the company’s revolving line-of-credit debt, which revolving facility will remain available for future use.

With approximately 20,500 machines located in 42 states throughout the U.S. and Canada, Glacier is a provider of high quality, low-priced drinking water dispensed to consumers through self-service bottled water machines located at supermarkets and other retail locations.