Arrowhead Water Products Ltd.

Arrowhead Water Products Ltd.

June 05, 2006 20:05 ET

Arrowhead Water Announces Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - June 5, 2006) - Arrowhead Water Products Ltd. ("Arrowhead" or the "Company") (TSX VENTURE:AWP.A) is pleased to report its consolidated financial and operating results for the second quarter ended March 31, 2006. The following are the highlights for the second quarter of 2006 as compared to the second quarter of 2005.

Three months ended March 31 2006 2005
$ $
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Sales 2,064,673 1,955,627
Cost of Sales 1,223,828 1,075,211
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Gross Profit 840,845 880,416
Total expenses 901,802 846,746
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Income (loss) before taxes (60,957) 33,670
Future income taxes (recovery) - 32,475
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Net earnings (loss) (60,957) 1,195
Retained earnings, (deficit)
beginning (498,510) 504,671
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Retained earnings, (deficit)
end (559,467) 505,866
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For complete disclosure of Arrowhead's March 31, 2006 second quarter financial results and Management Discussion & Analysis, please go to and view documents listed under Arrowhead Water Products Ltd.

Overall Performance

After the significant growth, management changes and operational changes that have occurred over the past two years, management has now mandated the first and second quarters of fiscal 2006 as the time period to integrate these changes and return the Company to profitability.

Results from the second quarter ended March 31, 2006 when compared to fiscal 2005 are:

- Gross margin increased to 41% from 37%;

- Total expenses as a percentage of sales decreased to 44% from 49%;

- Cash flow for the quarter was $215,239 as compared to $12,485 for fiscal 2005;

- Net loss for the quarter of $60,957 as compared to $838,671 for fiscal 2005;

- Working capital decreased to 96:1 from 1:03:1;

- Total assets increased 4% to $9,319,195 from $9,001,909;

- Debt to equity ratio increased to 1.35:1 from 1.17:1;

Results from the second quarter ended March 31, 2006 when compared to the second quarter ended March 31, 2005 are:

- Sales increased 6% to $2,064,673 from $1,955,627;

- Gross margin decreased to 41% from 45%;

- Total expenses as a percentage of sales increased to 44% from 43%;

- Cash flow for the quarter was $215,239 as compared to $280,124 for the prior year;

- Net loss for the quarter of $60,957 as compared to a net profit of $1,195 for the prior year:

- Working capital increased to .96:1 from .79:1;

- Total assets increased 21% to $9,319,195 from $7,715,912;

- Debt to equity ratio has decreased to 1.35:1 from 1.41:1;

Improvements in the first quarter and second quarter over fiscal 2005 represent the commencement of Arrowhead's commitment to returning gross margins to historical rates of 40-45% and controlling operating expenses while simultaneously maintaining annual sales growth in the 15-25% range. Going forward, the Company's focus will be to improve its profitability through revenue growth and cost controls.

The Company is pleased to announce the appointment of Don Wood as Sales & Marketing Director. Mr. Wood is responsible for providing leadership and business development for all sales channels within the Company. Mr. Wood comes to the Company with more than 13 years of experience in the bottled water industry working with Nestle-Perrier, Coastal Mountain Water and Trojan Technologies in Canada and South East Asia.

On May 26, 2006, the Company issued 750,000 options to purchase Class A Common Shares of the Company to employees at a exercisable price of $0.32 per option. The options have a term of five years with standard vesting provisions.

About Arrowhead

Arrowhead Water Products is a bottled water company that generates the majority of its revenues through the sale and rental of water coolers and the delivery of spring, distilled and drinking water throughout Western Canada. Provincial coverage is achieved by operating production facilities located in Edmonton and Calgary, Alberta and Dawson Creek, B.C. Arrowhead remains committed to continually improve its level of service to its customers and to provide positive returns to its shareholders.


This press release includes forward-looking statements and assumptions respecting the Company's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which the company may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any intention or obligation to update or revise these forward-looking statements, as a result of new information future events or otherwise.

Issued and Outstanding Shares: 30,832,530

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Arrowhead Water Products Ltd.
    Dan DeMaere
    (780) 486-2467
    (780) 486-2878 (FAX)
    Arrowhead Water Products Ltd.
    4372 - 97 Street
    Edmonton, Alberta T6E 5R9