- Sales increase 6%, Company announces impairment write down -
WATERTOWN, Conn., Jan. 29 /PRNewswire-FirstCall/ -- Vermont Pure Holdings, Ltd. (NYSE Alternext: VPS) announced financial results for the fiscal year ended October 31, 2008 and filed these results on Form 10-K with the Securities and Exchange Commission yesterday.
Operating Results for Fiscal Year ended October 31, 2008
Sales increased 6% to $69.2 million from $65.2 million in fiscal year 2007. This increase reflected higher volumes of coffee and related products and the effect of fuel surcharges, partly offset by small declines in water sales and cooler rentals.
Operating results were significantly impacted by a write-down of goodwill, a non-cash charge of $22.4 million. The net loss for fiscal year 2008 was $19.8 million compared to net income of $2.1 million in 2007. On a per share basis, the net (loss) income was $(0.92) per fully diluted share in fiscal 2008, compared to $0.10 per fully diluted share in fiscal 2007.
Except for the goodwill impairment charge, the financial performance of the Company for fiscal year 2008 improved over fiscal year 2007. The improvement was a result of increased sales and gross profit and a reduction in interest expense, partially offset by higher selling, general, and administrative expenses.
Goodwill Impairment
The Company recorded a non-cash charge of $22.4 million for impairment of goodwill in the fourth quarter of fiscal 2008. The non-cash impairment charge was a result of the assessment of goodwill as of October 31, 2008. Goodwill had been recorded for acquisitions from 1996 through 2008. The assessment concluded that goodwill on the Company's books exceeded the value as prescribed by Statement of Financial Accounting Standards (SFAS) No. 142. The impairment was primarily the result of a decline in the quoted market prices of the Company's stock at fiscal year-end below its book carrying value, and was not due to any changes in the core business. There was no event or change in circumstance that would more likely than not reduce the fair value of our underlying net assets below their carrying amount prior to the annual impairment test.
