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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Crystal Rock Holdings Class A | AMEX:CRVP | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.9652 | 0 | 01:00:00 |
[X] |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
03-0366218
|
|
State or other jurisdiction of incorporation or organization
|
I.R.S. Employer Identification Number
|
Title of each class
Common Stock, par value $.001 per share
|
Name of exchange on which registered
NYSE MKT
|
|
|
Table of Contents
|
|
Page
|
Part I
|
|
|
|
|
Item 1.
|
Business
|
|
4
|
|
Item 1A.
|
Risk Factors
|
12
|
||
Item 1B.
|
Unresolved Staff Comments
|
17
|
||
Item 2.
|
|
Properties
|
|
18
|
Item 3.
|
|
Legal Proceedings
|
|
18
|
Item 4.
|
|
Mine Safety Disclosures
|
|
18
|
Part II
|
|
|||
Item 5.
|
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
19
|
Item 7.
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
20
|
Item 8.
|
|
Financial Statements and Supplementary Data
|
|
27
|
Item 9.
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
|
27
|
Item 9A.
|
|
Controls and Procedures
|
|
27
|
Item 9B.
|
Other Information
|
29
|
||
Part III
|
|
|||
Item 10.
|
|
Directors, Executive Officers and Corporate Governance
|
30
|
|
Item 11.
|
|
Executive Compensation
|
|
30
|
Item 12.
|
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
30
|
Item 13.
|
|
Certain Relationships and Related Transactions, and Director Independence
|
|
31
|
Item 14.
|
|
Principal Accountant Fees and Services
|
|
31
|
Part IV
|
||||
Item 15.
|
Exhibits and Financial Statement Schedules
|
32
|
||
|
|
Signatures
|
|
ITEM 1. |
BUSINESS.
|
ITEM 1A. |
RISK FACTORS.
|
ITEM 1B. |
UNRESOLVED STAFF COMMENTS.
|
ITEM 2. |
PROPERTIES.
|
ITEM 3. |
LEGAL PROCEEDINGS.
|
ITEM 4. |
MINE SAFETY DISCLOSURES.
|
ITEM 5. |
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
High
|
Low
|
|||||||
First Quarter
|
$
|
.88
|
$
|
.49
|
||||
Second Quarter
|
$
|
.92
|
$
|
.70
|
||||
Third Quarter
|
$
|
.79
|
$
|
.67
|
||||
Fourth Quarter
|
$
|
.91
|
$
|
.75
|
High
|
Low
|
|||||||
First Quarter
|
$
|
.85
|
$
|
.70
|
||||
Second Quarter
|
$
|
.79
|
$
|
.68
|
||||
Third Quarter
|
$
|
.87
|
$
|
.63
|
||||
Fourth Quarter
|
$
|
.86
|
$
|
.51
|
ITEM 7. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
§
|
Business Overview
—
a brief description of fiscal year 2016.
|
§
|
Results of Operations
— an analysis of our consolidated results of operations for the two years presented in our consolidated financial statements.
|
§
|
Liquidity and Capital Resources
— an analysis of cash flows, sources and uses of cash, and contractual obligations and a discussion of factors affecting our future cash flow.
|
§
|
Critical Accounting Policies
— a discussion of accounting policies that require critical judgments and estimates. Our significant accounting policies, including the critical accounting policies discussed in this section, are summarized in the notes to the accompanying consolidated financial statements.
|
Product Line
|
2016
(in 000's $)
|
2015
(in 000's $)
|
Difference
(in 000's $)
|
% Diff.
|
||||||||||||
Water
|
$
|
27,964
|
$
|
27,180
|
$
|
784
|
3
|
%
|
||||||||
Coffee
|
11,121
|
13,249
|
(2,128
|
)
|
(16
|
%)
|
||||||||||
Refreshment
|
10,041
|
11,073
|
(1,032
|
)
|
(9
|
%)
|
||||||||||
Equipment Rental
|
7,055
|
7,444
|
(389
|
)
|
(5
|
%)
|
||||||||||
Office Products
|
7,211
|
13,151
|
(5,940
|
)
|
(45
|
%)
|
||||||||||
Other
|
1,950
|
1,804
|
146
|
8
|
%
|
|||||||||||
Total
|
$
|
65,342
|
$
|
73,901
|
$
|
(8,559
|
)
|
(12
|
%)
|
·
|
Route sales costs decreased 6%, or $900,000, to $13,257,000 in fiscal year 2016 from $14,157,000 in fiscal year 2015. The reduction in costs are primarily related to direct distribution operating costs as a result of lower sales and fuel prices. Included as a component of route sales costs are direct distribution related costs which decreased $840,000, or 6%, to $12,550,000 in fiscal year 2016 from $13,390,000 in fiscal year 2015, primarily as a result of lower fuel and vehicle lease costs;
|
·
|
Other selling, general and administrative costs decreased 12% or $2,017,000, to $15,109,000 in fiscal year 2016 from $17,126,000 in fiscal year 2015. The decrease was attributable to lower labor and professional costs.
|
Payment due by Period (2)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
2017
|
2018-2019
|
2020-2021
|
After 2021
|
|||||||||||||||
Debt
|
$
|
18,733,000
|
$
|
1,600,000
|
$
|
3,200,000
|
$
|
13,933,000
|
$
|
-
|
||||||||||
Interest on Debt (1)
|
5,339,000
|
1,356,000
|
2,549,000
|
1,434,000
|
-
|
|||||||||||||||
Operating Leases
|
9,670,000
|
2,831,000
|
4,313,000
|
2,409,000
|
117,000
|
|||||||||||||||
Total
|
$
|
33,742,000
|
$
|
5,787,000
|
$
|
10,062,000
|
$
|
17,776,000
|
$
|
117,000
|
(1)
|
Interest based on 50% of outstanding senior debt at the hedged interest rate discussed above, 50% of outstanding senior debt at a variable rate of 3.03%. Subordinated debt at a rate of 12%.
|
(2)
|
Customer deposits have been excluded from the table. Deposit balances vary from period to period with water sales but future increases and decreases in the balances are not accurately predictable. Deposits are excluded because, net of periodic additions and reductions, it is probable that a customer deposit balance will always be outstanding as long as the business operates.
|
ITEM 8 | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
ITEM 9B. |
OTHER INFORMATION.
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11. |
EXECUTIVE COMPENSATION.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
(a)
|
(b)
|
(c)
|
|
Plan Category
|
Number of Securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)).
|
Equity compensation plans approved by security holders
|
-0-
|
-
|
500,000
|
Equity compensation plans not approved by security holders
|
-0-
|
-
|
-0-
|
Total
|
-0-
|
-
|
500,000
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
a)
|
The following documents are filed as part of this report:
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated Balance Sheets as of October 31, 2016 and 2015 |
F-2
|
Consolidated Statements of Operations for the years
ended October 31, 2016 and 2015
|
F-3
|
Consolidated Statements of Comprehensive Income (Loss)
for the years ended October 31, 2016 and 2015
|
F-4
|
Consolidated Statements of Changes in Stockholders' Equity
for the years ended October 31, 2016 and 2015 |
F-5
|
Consolidated Statements of Cash Flows for the years ended
October 31, 2016 and 2015 |
F-6
|
Notes to the Consolidated Financial Statements
|
F-7 - F-26
|
Exhibit No. | Description | Filed with this Form 10-K | Form |
Incorporated by Reference
Filing Date
|
Exhibit No. | |
3.1
|
Certificate of Incorporation
|
S-4
|
September 6, 2000
|
Exhibit B to Appendix A
|
||
3.2
|
Certificate of Amendment to Certificate of Incorporation
|
8-K
|
October 19, 2000
|
4.2
|
||
3.3
|
Amended and Restated By-Laws as adopted March 29, 2010
|
8-K
|
April 2, 2010
|
3.2
|
||
3.4
|
Certificate of Ownership and Merger of Crystal Rock Holdings, Inc. with and into Vermont Pure Holdings, Ltd.
|
8-K
|
April 30, 2010
|
3.1
|
||
4.1
|
Registration Rights Agreement with Peter K. Baker, Henry E. Baker, John B. Baker and Ross Rapaport
|
8-K
|
October 19, 2000
|
4.6
|
||
10.1*
|
1998 Incentive and Non-Statutory Stock Option Plan, as amended
|
14A
|
February 28, 2003
|
A
|
||
10.2*
|
2004 Stock Incentive Plan
|
14A
|
March 1, 2004
|
B
|
||
10.3*
|
Employment Agreement dated May 2, 2007 with Peter K. Baker
|
8-K
|
May 2, 2007
|
10.1
|
||
10.4*
|
Employment Agreement dated May 2, 2007 with Bruce S. MacDonald
|
8-K
|
May 2, 2007
|
10.3
|
||
10.5*
|
Employment Agreement dated May 2, 2007 with John B. Baker
|
8-K
|
May 2, 2007
|
10.2
|
10.6
|
Lease of Buildings and Grounds in Watertown, Connecticut from the Baker's Grandchildren Trust
|
S-4
|
September 6, 2000
|
10.22
|
|
10.7
|
First Amendment to the Lease of Buildings and Grounds in Watertown, Connecticut from the Baker's Grandchildren Trust
|
10-Q
|
September 14, 2007
|
10.4
|
|
10.8
|
Amended and Restated Credit Agreement dated April 5, 2010 with Bank of America.
|
8-K
|
April 9, 2010
|
10.1
|
|
10.9
|
Form of Amended and Restated Term Note dated April 5, 2010 to Bank of America.
|
8-K
|
April 9, 2010
|
10.2
|
|
10.10
|
Form of Amended and Restated Subordination and Pledge Agreement dated April 5, 2010 between Henry E. Baker and Bank of America.
|
8-K
|
April 9, 2010
|
10.3
|
|
10.11
|
Form of Amended and Restated Subordination and Pledge Agreement dated April 5, 2010 between John B. Baker and Peter K. Baker and Bank of America.
|
8-K
|
April 9, 2010
|
10.4
|
|
10.12
|
Form of Amended and Restated Promissory Note dated April 5, 2010 issued to Henry E. Baker, John B. Baker and Peter K. Baker
|
8-K
|
April 9, 2010
|
10.5
|
|
10.13
|
Form of Indemnification Agreement dated November 2, 2005 with each of Henry E. Baker, John B. Baker, Peter K. Baker, Phillip Davidowitz, David Jurasek, Bruce S. MacDonald and Ross S. Rapaport
|
10-K
|
January 30, 2006
|
10.21
|
|
10.14
|
Form of Indemnification Agreement dated November 2, 2005 with each of John M. Lapides and Martin A. Dytrych and dated February 15, 2012 for Lori J. Schafer
|
10-K
|
January 30, 2006
|
10.22
|
|
10.15
|
Financial Assistance Agreement with Connecticut Innovations dated August 20, 2007
|
10-K
|
January 29, 2008
|
10.30
|
|
10.16*
|
Amendment No. 1 to Employment Agreement with Peter K. Baker dated September 10, 2009.
|
10-Q
|
September 14, 2009
|
10.1
|
|
10.17*
|
Amendment No. 1 to Employment Agreement with John B. Baker dated September 10, 2009.
|
10-Q
|
September 14, 2009
|
10.2
|
|
10.18
|
Letter of Waiver and Consent dated September 15, 2010 signed by Martin Dytrych, Henry Baker, Peter Baker, and John Baker.
|
8-K
|
October 1, 2010
|
10.1
|
|
10.19
|
First Amendment to the Credit Agreement dated September 28, 2010 with Bank of America.
|
8-K
|
October 1, 2010
|
10.2
|
|
10.20
|
Letter from Henry E., Peter K., and John B. Baker and Ross S. Rapaport, as trustee, to Bank America, as agreed to, to amend Subordination Agreements.
|
8-K
|
October 1, 2010
|
10.3
|
|
10.21
|
Lease of Building and Land in Stamford, Connecticut from Henry E. Baker dated September 30, 2010.
|
8-K
|
October 1, 2010
|
10.4
|
|
10.22*
|
Amendment No. 2 to Employment Agreement with Peter K. Baker dated October 19, 2011.
|
10-K
|
January 27, 2012
|
10.24
|
10.23*
|
Amendment No. 2 to Employment Agreement with John B. Baker dated October 19, 2011.
|
10-K
|
January 27, 2012
|
10.25
|
|
10.24
|
Second Amendment to the Credit Agreement with Bank of America dated May 14, 2012.
|
10-Q
|
June 14, 2012
|
10.1
|
|
10.25
|
Third Amendment to the Credit Agreement with Bank of America dated March 13, 2013
|
10-Q
|
March 18, 2013
|
10.1
|
|
10.26
|
Amendment of Second Amended and Restated Subordinated Note and Subordinated Note to Henry Baker dated March 13, 2013
|
10-Q
|
March 18, 2013
|
10.2
|
|
10.27
|
Amendment of Subordinated Note to Peter and John Baker dated March 13, 2013
|
10-Q
|
March 18, 2013
|
10.3
|
|
10.28
|
Second Amended and Restated Term Note to Bank of America dated March 13, 2013
|
10-Q
|
March 18, 2013
|
10.4
|
|
10.29
|
Letter of Waiver and Consent dated December 21, 2012 signed by Martin Dytrych, Henry Baker, Peter Baker, and John Baker
|
8-K
|
December 28, 2012
|
10.1
|
|
10.30
|
Letter of Waiver and Consent From Bank of America dated December 21, 2012 signed by Donald Bates and Bruce MacDonald
|
8-K
|
December 28, 2012
|
10.2
|
|
10.32*
|
Crystal Rock Holdings, Inc. 2014 Stock Incentive Plan
|
14A
|
February 28, 2014
|
A
|
|
10.33
|
Fourth Amendment to the Credit Agreement with Bank of America dated September 30, 2013
|
10-K
|
January 27, 2015
|
10.33
|
|
10.34
|
Fifth Amendment to the Credit Agreement with Bank of America dated January 14, 2015
|
10-K
|
January 27, 2015
|
10.34
|
|
10.35
|
Second Amended and Restated Credit Agreement with Bank of America dated May 20, 2015
|
10-Q
|
June 15, 2015
|
10.1
|
|
10.36
|
Third Amended and Restated Term Note with Bank of America dated May 20, 2015
|
10-Q
|
June 15, 2015
|
10.2
|
|
10.37
|
Second Amended and Restated Revolving Credit Note Dated May 20, 2015
|
10-Q
|
June 15, 2015
|
10.3
|
|
10.38
|
Amendments to Subordinated Notes dated May 20, 2015
|
10-Q
|
June 15, 2015
|
10.4
|
|
10.39
|
First Amendment Agreement with Bank of America dated September 16, 2015
|
10-Q
|
September 18, 2015
|
10.1
|
|
10.40
|
Amendments to Subordinated Notes dated September 16, 2015
|
10-Q
|
September 18, 2015
|
10.2
|
|
10.41*
|
Employment Agreement dated April 20, 2007 with David Jurasek
|
10-K
|
January 29, 2016
|
10.41
|
|
10.42
|
Second Amendment Agreement with Bank of America dated September 12, 2016
|
10-Q
|
September 14, 2016
|
10.1
|
|
10.43
|
First Amendment dated October 11, 2016 to Lease of Building and Land 313 Long Ridge Road, Stamford, Connecticut between Henry E. Baker and Crystal Rock LLC, a Delaware Limited Liability Company dated September 30, 2010
|
8-K
|
October 17, 2016
|
10.1
|
|
10.44
|
Third Amendment dated October 11, 2016 to Lease of 1050 Buckingham Street, Watertown, CT between Henry E. Baker for the Baker Grandchildren Trust U/T/A dated May 5, 2000 and Crystal Rock Spring Water Company dated May 5, 2000
|
8-K
|
October 17, 2016
|
10.2
|
10.45*
|
Employment Agreement with Peter Baker dated November 1, 2016
|
8-K
|
November 2, 2016
|
10.1
|
|
10.46*
|
Employment Agreement with John Baker dated November 1, 2016
|
8-K
|
November 2, 2016
|
10.2
|
|
10.47*
|
Employment Agreement with David Jurasek dated November 1, 2016
|
8-K
|
November 2, 2016
|
10.3
|
|
Subsidiary
|
X
|
||||
|
Consent of Wolf & Company, P.C.
|
X
|
|||
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
X
|
|||
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
X
|
|||
101
|
Interactive Data Files regarding (a) our Consolidated Balance Sheets as of October 31, 2016 and October 31, 2015, (b) our Consolidated Statements of Operations for the years ended October 31, 2016 and 2015, (c) Consolidated Statements of Comprehensive Income (Loss) for the years ended October 31, 2016 and 2015 (d) Consolidated Statements of Changes in Stockholders' Equity for the years ended October 31, 2016 and 2015, (e) our Consolidated Statements of Cash Flows for the years ended October 31, 2016 and 2015, and (f) the Notes to such Consolidated Financial Statements.
|
X
|
CRYSTAL ROCK HOLDINGS, INC.
|
||
By: /s/ Peter K. Baker | ||
Dated: January 26, 2017 | Peter K. Baker, Chief Executive Officer |
Name
|
Title
|
Date
|
/s/ Ross S. Rapaport
Ross S. Rapaport
|
Chairman of the Board of Directors
|
January 26, 2017
|
/s/ John B. Baker
John B. Baker
|
Executive Vice President and Director
|
January 26, 2017
|
/s/ Peter K. Baker
Peter K. Baker
|
Chief Executive Officer and Director (principal executive officer)
|
January 26, 2017
|
/s/ Martin A. Dytrych
Martin A. Dytrych
|
Director
|
January 26, 2017
|
/s/ John M. Lapides
John M. Lapides
|
Director
|
January 26, 2017
|
/s/ Lori J. Schafer
Lori J. Schafer
|
Director
|
January 26, 2017
|
/s/ Bruce S. MacDonald
Bruce S. MacDonald
|
Secretary and Director
|
January 26, 2017
|
/s/ David Jurasek
David Jurasek
|
Chief Financial Officer, Chief Accounting Officer and Treasurer
|
January 26, 2017
|
Exhibit
Number |
Description
|
Subsidiary
|
Consent of Wolf & Company, P.C.
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
PAGE |
Report of Independent Registered Public Accounting Firm
|
F-1 |
Financial Statements: Consolidated Balance Sheets as of October 31, 2016 and 2015
|
F-2 |
Consolidated Statements of Operations for the years ended October 31, 2016 and 2015
|
F-3 |
Consolidated Statements of Comprehensive Income (Loss) for the years ended October 31, 2016 and 2015
|
F-4 |
Consolidated Statements of Changes in Stockholders' Equity for the years ended October 31, 2016 and 2015
|
F-5 |
Consolidated Statements of Cash Flows for the years ended October 31, 2016 and 2015
|
F-6 |
Notes to the Consolidated Financial Statements
|
F-7 - F-26 |
1.
|
BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
3.
|
MERGERS AND ACQUISITIONS
|
|
Old Mill
|
||||
Fiscal Year 2015 | Pond Springs | ||||
Month Acquired
|
March
|
||||
Cash
|
$
|
66,196
|
|||
Accounts Receivable
|
1,304
|
||||
Debt
|
7,500
|
||||
Purchase Price
|
$
|
75,000
|
2015
|
||||
Property and Equipment, net
|
$
|
11,512
|
||
Accounts receivable
|
1,304
|
|||
Other Intangible Assets
|
62,184
|
|||
Purchase Price
|
$
|
75,000
|
2015
|
||||
Net Sales
|
$
|
73,970,099
|
||
Net Income (Loss)
|
$
|
(588,673
|
)
|
|
Net Income (Loss) Per Share-Diluted
|
$
|
(.03
|
)
|
|
Weighted Average Common Shares Outstanding-Diluted
|
21,358,411
|
4.
|
ACCOUNTS RECEIVABLE
|
2016
|
2015
|
|||||||
Balance, beginning of year
|
$
|
306,140
|
$
|
273,346
|
||||
Provision
|
273,822
|
270,421
|
||||||
Write-offs
|
(311,251
|
)
|
(237,627
|
)
|
||||
Balance, end of year
|
$
|
268,711
|
$
|
306,140
|
5.
|
INVENTORIES
|
October 31, | October 31, | |||||||
2016
|
2015
|
|||||||
Finished Goods
|
$
|
2,117,241
|
$
|
2,453,974
|
||||
Raw Materials
|
178,134
|
157,707
|
||||||
Inventory reserve
|
(233,662
|
)
|
-
|
|||||
Total Inventories
|
$
|
2,061,713
|
$
|
2,611,681
|
6.
|
OTHER CURRENT ASSETS
|
2016
|
2015
|
|||||||
Notes Receivable – Current
|
$
|
83,339
|
$
|
59,811
|
||||
Prepaid Insurance
|
282,952
|
306,812
|
||||||
Prepaid Software
|
74,121
|
18,780
|
||||||
Prepaid Property Taxes
|
170,522
|
190,721
|
||||||
Prepaid Fees
|
46,100
|
46,100
|
||||||
Security Deposits
|
165,428
|
170,097
|
||||||
Miscellaneous
|
78,912
|
144,636
|
||||||
Total Other Current Assets
|
$
|
901,374
|
$
|
936,957
|
7.
|
PROPERTY AND EQUIPMENT, NET
|
|
Useful Life |
2016
|
2015
|
||||||
Leasehold improvements
|
Shorter of useful life
|
$
|
2,062,643
|
$
|
2,062,643
|
||||
of asset or lease term | |||||||||
Machinery and equipment
|
3 - 10 yrs.
|
23,666,239
|
22,841,505
|
||||||
Bottles, racks and vehicles
|
3 - 7 yrs.
|
5,419,346
|
5,262,900
|
||||||
Furniture, fixtures and office equipment
|
3 - 7 yrs.
|
3,202,424
|
3,142,355
|
||||||
Construction in progress
|
338,373
|
-
|
|||||||
Property and equipment before accumulated depreciation
|
34,689,025
|
33,309,403
|
|||||||
Less accumulated depreciation
|
27,920,840
|
26,439,417
|
|||||||
Property and equipment, net of accumulated depreciation
|
$
|
6,768,185
|
$
|
6,869,986
|
8.
|
EQUIPMENT RENTAL
|
2016
|
2015
|
|||||||
Original Cost
|
$
|
3,739,467
|
$
|
3,308,958
|
||||
Accumulated Depreciation
|
2,974,412
|
2,599,679
|
||||||
Carrying Cost
|
$
|
765,055
|
$
|
709,279
|
9.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
October 31, 2016
|
October 31, 2015
|
|||||||||||||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Wgt.
Avg.
Amort.
Years
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Wgt.
Avg.
Amort.
Years
|
|||||||||||||||||||
Amortized Intangible Assets:
|
||||||||||||||||||||||||
Covenants Not to Compete
|
$
|
2,536,488
|
$
|
2,444,293
|
1.80
|
$
|
2,536,488
|
$
|
2,382,570
|
2.54
|
||||||||||||||
Customer Lists
|
10,313,819
|
9,217,143
|
2.02
|
10,313,819
|
8,639,685
|
2.95
|
||||||||||||||||||
Other Identifiable Intangibles
|
608,393
|
303,570
|
23.04
|
608,393
|
271,211
|
24.00
|
||||||||||||||||||
Total
|
$
|
13,458,700
|
$
|
11,965,006
|
$
|
13,458,700
|
$
|
11,293,466
|
Fiscal Year Ending October 31,
|
||||
2017
|
$
|
660,000
|
||
2018
|
518,000
|
|||
2019
|
75,000
|
|||
2020
|
18,000
|
|||
2021
|
12,000
|
10.
|
OTHER ASSETS
|
2016
|
2015
|
|||||||
Non-current portion of notes receivable
|
$
|
239,633
|
$
|
167,916
|
||||
Equity in ownership interests
|
39,000
|
39,000
|
||||||
Total
|
$
|
278,633
|
$
|
206,916
|
11.
|
ACCRUED EXPENSES
|
2016
|
2015
|
|||||||
Payroll and Vacation
|
$
|
1,935,030
|
$
|
1,363,393
|
||||
Interest
|
304,675
|
298,728
|
||||||
Health Insurance
|
257,271
|
252,097
|
||||||
Accounting and Legal
|
193,000
|
303,508
|
||||||
Income Taxes
|
249,633
|
49,993
|
||||||
Miscellaneous
|
147,957
|
223,033
|
||||||
Total
|
$
|
3,087,566
|
$
|
2,490,752
|
12.
|
DEBT
|
Senior
|
Subordinated
|
Total
|
||||||||||
Fiscal year ending October 31,
|
||||||||||||
2017
|
$
|
1,600,000
|
$
|
-
|
$
|
1,600,000
|
||||||
2018
|
1,600,000
|
-
|
1,600,000
|
|||||||||
2019
|
1,600,000
|
-
|
1,600,000
|
|||||||||
2020
|
4,933,000
|
-
|
4,933,000
|
|||||||||
2021
|
-
|
9,000,000
|
9,000,000
|
|||||||||
Total Debt
|
$
|
9,733,000
|
$
|
9,000,000
|
$
|
18,733,000
|
13.
|
ON-BALANCE SHEET DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
Instrument
|
Notional Amount
|
Pay Rate
|
Receive Rate
|
|||||||||
Interest rate swap
|
$
|
4,866,668
|
1.25
|
%
|
0.53
|
%
|
Tax Benefit
|
||||||||||||
Before-Tax
|
(Expense) |
Net-of-Tax
|
||||||||||
Fiscal Year Ended October 31, 2015
|
||||||||||||
Loss on interest rate swap
|
$
|
(9,556
|
)
|
$
|
3,823
|
$
|
(5,733
|
)
|
||||
Reclassification adjustment for loss in income
|
29,160
|
(11,665
|
)
|
17,495
|
||||||||
Net unrealized gain
|
$
|
19,604
|
$
|
(7,842
|
)
|
$
|
11,762
|
|||||
Fiscal Year Ended October 31, 2016
|
||||||||||||
Loss on interest rate swap
|
$
|
(56,203
|
)
|
$
|
22,481
|
$
|
(33,722
|
)
|
||||
Reclassification adjustment for loss in income
|
32,662
|
(13,065
|
)
|
19,597
|
||||||||
Net unrealized loss
|
$
|
(23,541
|
)
|
$
|
9,416
|
$
|
(14,125
|
)
|
14.
|
FAIR VALUES OF ASSETS AND LIABILITIES
|
Level 1
|
Level 2
|
Level 3
|
||||||||||
Liabilities:
|
||||||||||||
October 31, 2016
|
||||||||||||
Unrealized loss on derivative
|
$
|
-
|
$
|
32,453
|
$
|
-
|
||||||
October 31, 2015
|
||||||||||||
Unrealized loss on derivative
|
$
|
-
|
$
|
8,912
|
$
|
-
|
§
|
In the "float" model, the rate reflects where the market expects LIBOR to be for the respective period and is based on the Eurodollar futures market.
|
§
|
The discount factor is a function of the volatility of LIBOR.
|
15.
|
COMMITMENTS AND CONTINGENCIES
|
Fiscal Year Ending October 31,
|
||||
2017
|
$
|
2,831,000
|
||
2018
|
2,349,000
|
|||
2019
|
1,964,000
|
|||
2020
|
1,415,000
|
|||
2021
|
994,000
|
|||
Thereafter
|
117,000
|
|||
Total
|
$
|
9,670,000
|
16.
|
STOCK BASED COMPENSATION
|
Outstanding Options
(Shares)
|
Weighted Average
Exercise Price
|
|||||
Balance at October 31, 2014
|
247,750
|
2.07
|
||||
Expired
|
(201,500
|
)
|
2.33
|
|||
Forfeited
|
(36,250
|
)
|
.90
|
|||
Balance at October 31, 2015
|
10,000
|
.90
|
||||
Forfeited
|
(10,000
|
)
|
.90
|
|||
Balance at October 31, 2016
|
-
|
17.
|
REPURCHASE OF COMMON STOCK
|
18.
|
INCOME TAXES
|
2016
|
2015
|
|||||||
Current:
|
||||||||
Federal
|
$
|
374,551
|
$
|
(79,333
|
)
|
|||
State
|
84,270
|
138
|
||||||
Total current
|
$
|
458,821
|
$
|
(79,195
|
)
|
|||
Deferred:
|
||||||||
Federal
|
$
|
216,202
|
$
|
(5,411
|
)
|
|||
State
|
29,095
|
(174,270
|
)
|
|||||
Total deferred
|
245,297
|
(179,681
|
)
|
|||||
Total income tax expense (benefit)
|
$
|
704,118
|
$
|
(258,876
|
)
|
2016
|
2015
|
|||||||
Deferred tax assets:
|
||||||||
Allowance for doubtful accounts
|
$
|
102,110
|
$
|
116,333
|
||||
Accrued compensation
|
217,064
|
212,284
|
||||||
Accruals and reserves
|
269,868
|
126,192
|
||||||
Charitable contributions
|
14,064
|
79,903
|
||||||
Interest rate swaps
|
12,981
|
3,565
|
||||||
Subpart F Income
|
9,595
|
-
|
||||||
State credits and NOLs
|
66,691
|
68,383
|
||||||
Total deferred tax assets
|
692,373
|
606,660
|
||||||
Deferred tax liabilities:
|
||||||||
Depreciation
|
(1,711,018
|
)
|
(1,715,035
|
)
|
||||
Amortization
|
(2,761,082
|
)
|
(2,435,471
|
)
|
||||
Total deferred tax liabilities
|
(4,472,100
|
)
|
(4,150,506
|
)
|
||||
Net deferred tax liability
|
$
|
(3,779,727
|
)
|
$
|
(3,543,846
|
)
|
2016
|
2015
|
|||||||
Income tax (benefit) expense computed at the statutory rate
|
648,022
|
$
|
(300,028
|
)
|
||||
State income taxes (benefit) expense, net of federal benefit
|
70,354
|
(29,615
|
)
|
|||||
Subpart F income
|
-
|
85,975
|
||||||
Meals and entertainment
|
28,592
|
33,738
|
||||||
Other differences
|
(42,850
|
)
|
(48,946
|
)
|
||||
Income tax expense (benefit)
|
$
|
704,118
|
$
|
(258,876
|
)
|
19.
|
NET INCOME PER SHARE AND WEIGHTED AVERAGE SHARES
|
2016
|
2015
|
|||||||
Net Income (Loss)
|
$
|
1,201,830
|
$
|
(601,090
|
)
|
|||
Denominator:
|
||||||||
Basic Weighted Average Shares Outstanding
|
21,358,411
|
21,358,411
|
||||||
Effect of Stock Options
|
-
|
-
|
||||||
Diluted Weighted Average Shares Outstanding
|
21,358,411
|
21,358,411
|
||||||
Basic Net Income (Loss) Per Share
|
$
|
0.06
|
$
|
(.03
|
)
|
|||
Diluted Net Income (Loss) Per Share
|
$
|
0.06
|
$
|
(.03
|
)
|
20.
|
RETIREMENT PLAN
|
21.
|
RELATED PARTY TRANSACTIONS
|
Fiscal year ending October 31,
|
Stamford
|
Watertown
|
Total
|
|||||||||
2017
|
$
|
256,668
|
$
|
470,521
|
$
|
727,189
|
||||||
2018
|
256,668
|
470,521
|
727,189
|
|||||||||
2019
|
256,668
|
470,521
|
727,189
|
|||||||||
2020
|
235,279
|
470,521
|
705,800
|
|||||||||
2021
|
-
|
470,521
|
470,521
|
|||||||||
Totals
|
$
|
1,005,283
|
$
|
2,352,605
|
$
|
3,357,888
|
22.
|
CONCENTRATION OF CREDIT RISK
|
23.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
24.
|
SUBSEQUENT EVENT
|
1 Year Crystal Rock Holdings Class A Chart |
1 Month Crystal Rock Holdings Class A Chart |
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