Arrowhead Water Products Ltd.
TSX VENTURE : AWP.A

Arrowhead Water Products Ltd.

February 29, 2008 08:30 ET

Arrowhead Water Announces First Quarter Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - Feb. 29, 2008) - Arrowhead Water Products Ltd. ("Arrowhead" or the "Company") (TSX VENTURE:AWP.A) is pleased to report its interim consolidated financial and operating results for the three months ended December 31, 2007. For complete disclosure of Arrowhead's first quarter financial results and Management's Discussion and Analysis ("MD&A"), please go to www.SEDAR.com and view documents listed under Arrowhead Water Products Ltd. The following are the highlights for the three months ended December 31, 2007 when compared to the first quarter ended December 31, 2006:

Company Highlights for the Quarter

- Gross profit decreased from $853,349 to $725,976

- Retail Sales increased from $1,532,376 to $1,605,402

- Increased cash on hand by $663,873 to $937,754

- Cash flow from operations decreased to $138,271 from $311,771

- Incurred a loss from operations for the quarter of $108,505 compared to a loss of $38,381 for the quarter ended December 31, 2006.

Operations and Outlook

Arrowhead is engaged in the production, distribution and sale of large format (15 litre and 18.9 litre) bottles of drinking water in Western Canada. Arrowhead's primary distribution channels include the Western Canadian retail and wholesale grocery market (currently 71% of total revenues). By focusing on the retail and wholesale channel, it is Management's view that the Company can significantly improve sales, cashflow and profitability.

The Company continues to position itself to grow the new 15 litre channel which has increased the Company's revenues and bottled water volumes in the past year. The new 15 litre bottles are currently being produced from the Company's plant in Edmonton and are a lighter, crushable and blue box disposable PET bottle. The single use bottle is 100% recyclable and compatible with any water cooler. The bottle has a $0.20 refundable deposit and may be returned in Alberta or British Columbia at any bottle depot for a refund. As a result of the introduction of the new 15 litre channel and an agreement to purchase a second Siappi blow molding machine to produce the new format 15 litre bottles, the Company will continue to expand its business at retail locations in Western Canada, primarily in Alberta, with expansion opportunities in British Columbia.

The Company advises that, as noted in the MD&A, it has been working to increase profitability as its primary business goal through revenue growth, cost controls, reduction of G&A and more timely collection of accounts receivable. As a result of these initiatives, the Company advised that it ceased all operations and dealings with a major retailer in Western Canada. As a result of failed negotiations between the Company and the retailer to remedy the shortfall in margins and increasing costs, all of the Company's products including racks and bottles were pulled from that retailer's stores in January, 2008. Management believes that the savings and cost recovery resulting from the elimination of non-profitable operations will be recognized in the third and subsequent quarters. This will also allow the Company to better service its other major retail and wholesale customers while expanding its new 15 litre bottle business in Western Canada.

About Arrowhead Water

Arrowhead Water is Canada's largest Canadian owned, publicly traded water company which is engaged in the production, sale and distribution of large format (15 and 18.9 litre) bottled drinking water. Arrowhead produces and delivers bottles of reverse osmosis, distilled and natural spring water to the Western Canadian retail and wholesale market. Arrowhead remains committed to continually improve its level of service to its customers and to provide positive returns to its shareholders.

READER ADVISORY


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.
    Donald W. Wood
    President and Chief Executive Officer
    (403) 692-8259
    (403) 243-1485 (FAX)
    Email: dwood@arrowheadwater.ca
    or
    Arrowhead Water Products Ltd.
    Russell Rogers
    Vice-President and General Manager
    (403) 692-8260
    (403) 243-1485 (FAX)
    Email: rrogers@arrowheadwater.ca
    or
    Arrowhead Water Products Ltd.
    5730 Burbank Road SE
    Calgary, Alberta T2H 1Z4