Vermont Pure Holdings Ltd (VPS, Financial) filed Quarterly Report for the period ended 2009-01-31.
Vermont Pure Holdings Inc. bottles markets and distributes natural spring water under the `Vermont Pure` and `Hidden Spring` brands to the consumer natural foods and home/office markets. The Company sells to the consumer and natural food markets primarily in the New England Mid-Atlantic and Mid-Western states while it sells to the home/office market primarily in Vermont and parts of Northern New York Massachusetts and New Hampshire. Vermont Pure Holdings Ltd has a market cap of $7.3 million; its shares were traded at around $0.34 with a P/E ratio of 2.8 and P/S ratio of 0.1. Vermont Pure Holdings Ltd had an annual average earning growth of 5.5% over the past 5 years.
Advertising expenses were $283,000 in the first quarter of 2009 compared to $341,000 in the first quarter of 2008, a decrease of $58,000, or 17%. The decrease in advertising costs is primarily related to a decrease in yellow page advertising and other traditional promotional activity that more than offset an increase in internet advertising.
Income before income taxes was $150,000 for the three months ended January 31, 2009 compared to income before income taxes of $765,000 in the corresponding period in 2008, a decrease of $615,000. The tax expense for the first quarter of fiscal year 2009 was $56,000 and was based on the expected effective tax rate of 37%. We recorded a tax expense of $253,000 related to income from operations in the first quarter of fiscal year 2008 based on an effective tax rate of 33%. The lower effective tax rate in 2008 was primarily a result of the affect of tax credits for the installation of solar electricity generating equipment during fiscal year 2008.
As of January 31, 2009, we had working capital of $2,862,000 compared to $3,103,000 as of October 31, 2008, a decrease of $241,000. The decrease in working capital was primarily attributable to the reduction of cash generated by operation during the first three months of fiscal year 2009 even though less cash was used for capital expenditures and acquisitions in the first quarter of 2009 compared to the first quarter of 2008. Net cash provided by operating activities decreased $873,000 to $258,000 in 2009 from $1,131,000 in 2008. The decrease was attributable to lower net income, and higher cash usage for inventory and expenses.
As mentioned above, we use cash provided by operations to repay debt and fund capital expenditures. In the first three months of fiscal year 2009, we used $834,000 for scheduled repayments of our term debt. In addition, we used $191,000 for capital expenditures. Capital expenditures were substantially higher last year for the same period last year because of $706,000 expended on our solar electricity generation project. We spent less for coolers, brewers, bottles and racks related to home and office distribution in the first quarter of 2009 compared to the respective period in 2008 as a result of lower demand for rental units.
As of January 31, 2009 we had outstanding balances of $15,979,167 on our term loan and $1,300,000 on our $10,000,000 acquisition line of credit with Bank of America. In addition, there was an outstanding letter of credit for $1,485,000 issued against our $6,000,000 revolving line of credit. As of January 31, 2009 there was $8,700,000 and $4,515,000 available on the acquisition and revolving lines of credit, respectively.
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Vermont Pure Holdings Inc. bottles markets and distributes natural spring water under the `Vermont Pure` and `Hidden Spring` brands to the consumer natural foods and home/office markets. The Company sells to the consumer and natural food markets primarily in the New England Mid-Atlantic and Mid-Western states while it sells to the home/office market primarily in Vermont and parts of Northern New York Massachusetts and New Hampshire. Vermont Pure Holdings Ltd has a market cap of $7.3 million; its shares were traded at around $0.34 with a P/E ratio of 2.8 and P/S ratio of 0.1. Vermont Pure Holdings Ltd had an annual average earning growth of 5.5% over the past 5 years.
Highlight of Business Operations:
Selling, general and administrative (SG&A) expenses of $6,810,000 in the first quarter of 2009 decreased $235,000, or 3%, from $7,045,000 in the comparable period in 2008. Of total SG&A expenses, route distribution costs decreased $145,000, or 4%, as a result of lower fuel and sales-related compensation costs; selling costs decreased $4,000, or 1% as a result of lower sales-related compensation costs; and administration costs decreased $86,000 as a result of lower professional fees.Advertising expenses were $283,000 in the first quarter of 2009 compared to $341,000 in the first quarter of 2008, a decrease of $58,000, or 17%. The decrease in advertising costs is primarily related to a decrease in yellow page advertising and other traditional promotional activity that more than offset an increase in internet advertising.
Income before income taxes was $150,000 for the three months ended January 31, 2009 compared to income before income taxes of $765,000 in the corresponding period in 2008, a decrease of $615,000. The tax expense for the first quarter of fiscal year 2009 was $56,000 and was based on the expected effective tax rate of 37%. We recorded a tax expense of $253,000 related to income from operations in the first quarter of fiscal year 2008 based on an effective tax rate of 33%. The lower effective tax rate in 2008 was primarily a result of the affect of tax credits for the installation of solar electricity generating equipment during fiscal year 2008.
As of January 31, 2009, we had working capital of $2,862,000 compared to $3,103,000 as of October 31, 2008, a decrease of $241,000. The decrease in working capital was primarily attributable to the reduction of cash generated by operation during the first three months of fiscal year 2009 even though less cash was used for capital expenditures and acquisitions in the first quarter of 2009 compared to the first quarter of 2008. Net cash provided by operating activities decreased $873,000 to $258,000 in 2009 from $1,131,000 in 2008. The decrease was attributable to lower net income, and higher cash usage for inventory and expenses.
As mentioned above, we use cash provided by operations to repay debt and fund capital expenditures. In the first three months of fiscal year 2009, we used $834,000 for scheduled repayments of our term debt. In addition, we used $191,000 for capital expenditures. Capital expenditures were substantially higher last year for the same period last year because of $706,000 expended on our solar electricity generation project. We spent less for coolers, brewers, bottles and racks related to home and office distribution in the first quarter of 2009 compared to the respective period in 2008 as a result of lower demand for rental units.
As of January 31, 2009 we had outstanding balances of $15,979,167 on our term loan and $1,300,000 on our $10,000,000 acquisition line of credit with Bank of America. In addition, there was an outstanding letter of credit for $1,485,000 issued against our $6,000,000 revolving line of credit. As of January 31, 2009 there was $8,700,000 and $4,515,000 available on the acquisition and revolving lines of credit, respectively.
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