Glacier Water Services, Inc. (Pink Sheets: GWSV) announced results for the quarter and six-month period ended June 29, 2008.

Brian McInerney, Chief Executive Officer of Glacier Water, said, “Total revenues for the second quarter and the six-month period were up 4.2% and 2.8%, respectively, versus the same periods last year. Same store revenue growth for the six-month period was 7.6%. Income from operations for the second quarter increased slightly to $1,212,000, and was impacted by higher operating costs to support new location growth and increased fuel costs. Glacier has approximately 16,600 machines at retailers across the U.S. and Canada providing high quality, great tasting drinking water.”

Revenues for the quarter ended June 29, 2008 increased 4.2% to $23,832,000 compared to $22,870,000 for the same quarter a year ago. For the six-month period ended June 29, 2008, revenues increased 2.8% to $44,711,000 compared to $43,508,000 for the same period a year ago. The increases in revenue for the quarter and the six-month periods were primarily the result of growth in the number of locations this year (plus 500 machines) compared to the same periods last year, coupled with an increase in average volume per machine.

The Company’s income from operations for the quarter ended June 29, 2008 was $1,212,000 compared to $1,172,000 for the same period last year. For the six-month period ended June 29, 2008, income from operations was $967,000 compared to $1,299,000 for the same period last year. Income from operations in the three- and six-month periods were negatively impacted by higher operating costs, including labor and machine maintenance associated with new location growth, and fuel costs. Fuel costs for the first six months of 2008 increased $140,000 as compared to the same period last year. Additionally, income from operations for the first six months of 2008 included non-cash compensation expense of $160,000 as compared to $136,000 for the first six months of 2007.

The Company’s net loss applicable to common stockholders for the quarter ended June 29, 2008 was $922,000, or $0.34 per basic and diluted share, compared to a loss of $1,102,000, or $0.42 per basic and diluted share, for the same period last year. For the six-month period ended June 29, 2008, the net loss applicable to common stockholders was $3,362,000, or $1.25 per basic and diluted share, compared to a loss of $3,273,000, or $1.25 per basic and diluted share, for the same period last year.

With approximately 16,600 machines located in 43 states throughout the United States and Canada, Glacier is the leading provider of high quality, low-priced drinking water dispensed to consumers through self-service bottled water machines located at supermarkets and other retail locations.

Statements in this announcement that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A copy of the Company’s audited financial statements for the year ended December 30, 2007 are available on the Company’s website, www.glacierwater.com, or can be obtained by contacting Steve Stringer at (760) 560-1111.

Summary Financial Information

GLACIER WATER SERVICES, INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
                 
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
2008 2007 2008 2007
Revenues $ 23,832 $ 22,870 $ 44,711 $ 43,508
Operating costs and expenses:
Operating expenses 15,138 14,419 28,824 27,610
Depreciation and amortization 3,907   3,954   7,844   7,874  
Cost of goods sold 19,045 18,373 36,668 35,484
Selling, general, and administrative expenses 3,575   3,325   7,076   6,725  
Total operating costs and expenses 22,620   21,698   43,744   42,209  
Income from operations 1,212 1,172 967 1,299
Interest expense 2,134   2,274   4,329   4,572  
Loss before income taxes (922 ) (1,102 ) (3,362 ) (3,273 )
Income tax benefit -   -   -   -  
Net loss applicable to common stockholders $ (922 ) $ (1,102 ) $ (3,362 ) $ (3,273 )
Basic and diluted loss per share:
Net loss applicable to common stockholders $ (0.34 ) $ (0.42 ) $ (1.25 ) $ (1.25 )
Weighted average shares used in calculation 2,704,133 2,620,707 2,697,373 2,610,123
 
 
Cash dividend per common share $ 0.50 $ 0.40 $ 1.00 $ 0.80
 
Consolidated Balance Sheets
(In thousands, except share data)
             
June 29, December 30,
Assets 2008 2007
(unaudited)
Current assets:
Cash and cash equivalents $ 3,282 $ 3,120

Accounts receivable, net of allowance for doubtful accounts of $63 and $61 as of June 29, 2008 and December 30, 2007, respectively

1,738 1,617
Repair parts 2,717 2,561
Prepaid expenses and other 1,342   1,161  
Total current assets 9,079 8,459
 
Property and equipment, net 45,349 47,698
Goodwill 7,080 7,080

Intangible assets, net of accumulated amortization of $1,294 and $1,279 as of June 29, 2008 and December 30, 2007, respectively

67 88
Investment in Glacier Water Trust I Common Securities 2,629 2,629
Investment in Glacier Water Trust I Preferred Securities 3,357 3,357
Deferred financing costs, net 4,617 4,661
Other assets 767   465  
Total assets $ 72,945   $ 74,437  
 
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable $ 1,636 $ 1,148
Accrued commissions 3,392 2,580
Accrued liabilities 3,588 4,386
Bank overdraft 2,286 2,068
Current portion of long-term notes payable 3 57
Current portion of deferred rent 54   50  
Total current liabilities 10,959 10,289
 
Long-term debt 87,629 87,629
Long-term line of credit and notes payable 22,767 19,197
Long-term portion of deferred rent 40   67  
Total liabilities 121,395   117,182  
 
Commitments and contingencies
 
Stockholders’ deficit:

Common stock, $0.01 par value. Authorized 10,000,000 shares; issued and outstanding 2,706,193, and 2,690,568 shares at June 29, 2008 and December 30, 2007, respectively

44 44
Additional paid-in capital 16,953 19,244
Retained deficit (33,239 ) (29,877 )

Treasury stock, at cost, 1,587,606 shares at June 29, 2008 and December 30, 2007

(32,562 ) (32,562 )
Accumulated other comprehensive income 354   406