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Aquapenn Spring Water Company Inc – ‘8-K’ for 12/2/98

As of: Wednesday, 12/2/98 · For: 12/2/98 · Accession #: 950115-98-1839 · File #: 1-13809

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/02/98  Aquapenn Spring Water Company Inc 8-K:7      12/02/98    1:50K                                    Global Fin’l Press/FA

Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                        23    105K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Financial Statements and Exhibits Independent Auditors' Report Notes to Consolidated Financial Statements
1	1st Page - Filing Submission
2	Item 7. Financial Statements and Exhibits
3	Independent Auditors' Report
9	Notes to Consolidated Financial Statements

8-K 1st Page of 23 TOC ↑Top Previous Next ↓Bottom Just 1st
 
Securities and Exchange Commission
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 2, 1998              

 AQUAPENN SPRING WATER COMPANY, INC.
 -----------------------------------
(Exact name of registrant as specified in its charter)

   Pennsylvania                001-0013809                   251541772
   ------------                -----------                   ---------
(State or other jurisdiction        (Commission                 (IRS Employer   
     of incorporation)              File Number)             Identification No.)

 AquaPenn Spring Water Company, Inc.
One AquaPenn Drive
P.O. Box 938
 Milesburg, Pennsylvania 16853
 (Address of principal executive offices) (Zip Code)

(814) 355-5556
(Registrant's telephone number, including area code)

Not Applicable
 (Former name or former address, if changed since last report)

8-K 2nd Page of 23 TOC 1st Previous Next ↓Bottom Just 2nd
General Explanation                                                             

  On November 6, 1998, AquaPenn Spring Water Company, Inc. (the "Company")
filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule  
14D-9"), which relates to the offer (the "Offer") by Zoneo Acquisition Corp.    
(the "Purchaser"), a Pennsylvania corporation and an indirect subsidiary of     
Groupe Danone, a French societe anonyme, to purchase all outstanding shares of  
common stock, no par value (the "Shares"), of the Company at a price of $13.00  
per Share, net to the seller in cash, upon the terms and subject to the         
conditions set forth in the Purchaser's Offer to Purchase, dated November 6,    
1998, and in the related Letter of Transmittal.                                 

    The Offer may expire prior to the Company's filing of its Annual Report on
Form 10-K for the year ended September 30, 1998. Accordingly, the Company is    
filing this Current Report on Form 8-K to make available its consolidated       
financial statements (audited) as of September 30, 1998, 1997 and 1996 before   
such expiration.                                                                

Item 7. Financial Statements and Exhibits.                                      

Financial Statements                                                  

AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES

 Table of Contents

 September 30, 1998 and 1997

         Independent Auditors' Report........................................F-1

Financial Statements:                                         

                  Consolidated Balance Sheets................................F-2

                  Consolidated Statements of Operations......................F-3

                  Consolidated Statements of Stockholders' Equity............F-4

                  Consolidated Statements of Cash Flows......................F-5

         Notes to Consolidated Financial Statements..........................F-7

8-K 3rd Page of 23 TOC 1st Previous Next ↓Bottom Just 3rd
Independent Auditors' Report

To the Board of Directors and Stockholders of                                   
AquaPenn Spring Water Company, Inc.:                                            

We have audited the accompanying consolidated balance sheets of AquaPenn Spring 
Water Company, Inc. and subsidiaries as of September 30, 1998 and 1997, and the 
related consolidated statements of operations, stockholders' equity, and cash   
flows for each of the years in the three-year period ended September 30, 1998.  
These consolidated financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these consolidated   
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of AquaPenn Spring     
Water Company, Inc. and subsidiaries as of September 30, 1998 and 1997, and the 
results of their operations and their cash flows for each of the years in the   
three-year period ended September 30, 1998, in conformity with generally        
accepted accounting principles.                                                 

/s/ KPMG Peat Marwick LLP                                                       

State College, PA                                                               
November 23, 1998                                                               

F-1 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            
Consolidated Balance Sheets                                                     
September 30, 1998 and 1997                                                     
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]


Assets                                                                         1998           1997    
------                                                                         ----           ----    
                                                                                                      
Current assets:                                                                                       
         Cash and cash equivalents                                        $  3,544,282   $    687,035 
         Accounts receivable, net                                           10,482,939      3,604,524 
         Inventories                                                         3,270,708      1,533,617 
         Prepaid expenses and other current assets                             597,836        425,279 
         Deferred income taxes                                                 641,800        243,400 
                                                                          ------------   ------------ 
Total current assets                                                        18,537,565      6,493,855 

Property, plant, and equipment, net                                         42,200,878     20,030,909 
Other, principally goodwill                                                  4,797,602         55,421 
                                                                          ------------   ------------ 
Total assets                                                              $ 65,536,045   $ 26,580,185 
                                                                          ============   ============ 
Liabilities and Stockholders' Equity                                                                  
------------------------------------                                                                  
Current liabilities:                                                                                  
         Current portion of notes payable                                 $  1,146,621   $    298,966 
         Accounts payable and accrued liabilities                           13,247,426      3,098,571 
                                                                          ------------   ------------ 
Total current liabilities                                                   14,394,047      3,397,537 

Notes payable                                                                1,529,073      4,518,501 
Deferred income taxes                                                        1,485,560        599,800 
                                                                          ------------   ------------ 
Total liabilities                                                           17,408,680      8,515,838 
                                                                          ------------   ------------ 
Stockholders' equity:                                                                                 
         Series A, non-voting convertible preferred stock, $1 par value;                              
              0 and 2,000,000 shares authorized, 0 and 1,713,750 shares                               
              issued, respectively                                                --        1,713,750 
         Common stock, no par value, 100,000,000 shares authorized;                                   
              7,973,328 and 4,423,712 shares issued, respectively                 --               -- 
         Additional paid-in capital                                         41,725,462     12,196,269 
         Retained earnings                                                   6,860,682      4,242,456 
         Less 0 and 11,250 shares of preferred stock in treasury,                                     
              at cost, respectively                                               --          (11,250)
         Less 66,478 and 3,004 shares of common stock in treasury,                                    
              at cost, respectively                                           (378,820)        (5,000)
         Less stock subscriptions receivable                                   (79,959)       (71,878)
                                                                          ------------   ------------ 
Total stockholders' equity                                                  48,127,365     18,064,347 
                                                                          ------------   ------------ 
Total liabilities and stockholders' equity                                $ 65,536,045   $ 26,580,185 
                                                                          ============   ============ 
See accompanying notes to consolidated financial statements.                                          


F-2 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            
Consolidated Statements of Operations                                           
For the years ended September 30, 1998, 1997 and 1996                           
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]


                                                    1998           1997          1996     
                                                    ----           ----          ----     
                                                                                          
Revenues:                                                                                 
         Product sales                         $ 58,702,341   $ 37,526,028   $ 27,931,308 
         Other                                      790,770        489,287        309,433 
                                               ------------   ------------   ------------ 
Net revenues                                     59,493,111     38,015,315     28,240,741 

Cost of goods sold                               44,731,636     28,316,938     21,271,313 
                                               ------------   ------------   ------------ 
Gross profit                                     14,761,475      9,698,377      6,969,428 
                                               ------------   ------------   ------------ 
Selling, advertising, and promotion               7,944,152      3,318,443      2,877,139 
General and administrative                        2,788,499      1,808,140      1,436,341 
                                               ------------   ------------   ------------ 
                                                 10,732,651      5,126,583      4,313,480 
                                               ------------   ------------   ------------ 
Income from operations                            4,028,824      4,571,794      2,655,948 

Other income (expense):                                                                   
         Other income                               507,320        328,180        116,484 
         Interest expense, net                     (128,356)      (208,467)      (297,204)
                                               ------------   ------------   ------------ 
                                                    378,964        119,713       (180,720)
                                               ------------   ------------   ------------ 
Income before income tax expense                  4,407,788      4,691,507      2,475,228 

Income tax expense                                1,789,562      1,904,752        990,000 
                                               ------------   ------------   ------------ 
Net income                                     $  2,618,226   $  2,786,755   $  1,485,228 
                                               ============   ============   ============ 
Income per common share:                                                                  
         Basic                                 $        .37   $        .64   $        .35 
         Diluted                               $        .34   $        .47   $        .26 
                                               ============   ============   ============ 
Weighted average shares used in computing                                                 
   income per common share:                                                               
         Basic                                    7,072,017      4,346,212      4,255,545 
         Diluted                                  7,710,813      5,951,844      5,620,740 
                                               ============   ============   ============ 

See accompanying notes to consolidated financial statements.                              


 F-3

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            
Consolidated Statements of Stockholders' Equity                                 
For the years ended September 30, 1998, 1997 and 1996                           
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]


                                                        Series A Convertible       Common                                           
                                                          Preferred Stock           Stock                                           
                                                     ---------------------------------------                                        
                                                                                               Additional      Retained             
                                                     Number of                     Number of     Paid-in       Earnings             
                                                      Shares       Par Value        Shares       Capital       (Deficit)            
------------------------------------------------------------------------------------------------------------------------            
                                                                                                                                    
Balance, September 30, 1995                          1,713,750    $ 1,713,750      4,208,060   $11,186,265   $   (29,527)           

Issuance of Common Stock for services                                                                                               
   rendered by the Board of Directors                     --             --           10,814        54,000          --              

Issuance of Common Stock                                                                                                            
   for private placement                                  --             --           64,886       320,569          --              

Interest accrued on subscriptions receivable              --             --             --            --            --              
Net income                                                --             --             --            --       1,485,228            
------------------------------------------------------------------------------------------------------------------------            
Balance, September 30, 1996                          1,713,750      1,713,750      4,283,760    11,560,834     1,455,701            

Issuance of Common Stock for services                                                                                               
    rendered by the Board of Directors                    --             --           10,814        70,200          --              

Issuance of Common Stock for                                                                                                        
    Employee Stock Purchase Plan                          --             --          105,256       445,985          --              

Issuance of Common Stock for Rabbi Trust                  --             --           23,882       119,250          --              

Interest accrued on subscriptions receivable              --             --             --            --            --              

Net income                                                --             --             --            --       2,786,755            
------------------------------------------------------------------------------------------------------------------------            
Balance, September 30, 1997                          1,713,750      1,713,750      4,423,712    12,196,269     4,242,456            

Issuance of Common Stock for                                                                                                        
   purchase of Castle Rock                                --             --          158,900     2,065,717          --              

Issuance of Common Stock and 57,076 options                                                                                         
   relating to spring water leases                        --             --            1,802       565,635          --              

Issuance of Common Stock for                                                                                                        
   conversion of warrants                                 --             --          135,180       675,000          --              

Issuance of Common Stock for                                                                                                        
   Employee Stock Purchase Plan                           --             --           77,812       427,612          --              

Conversion  and cancellation of                                                                                                     
   Preferred Stock                                  (1,713,750)    (1,713,750)     1,022,862     1,702,500          --              

Issuance of Common Stock for                                                                                                        
   offering, net of offering costs                        --             --        2,000,000    23,660,520          --              

Issuance of 30,268 options for services rendered                                                                                    
   by non-employee                                        --             --             --          85,994          --              

Treasury Stock held for Rabbi Trust                       --             --             --            --            --              

Purchase of Treasury Stock                                --             --             --            --            --              

Issuance of Common Stock for Option Plan                  --             --          153,060       346,215          --              

Issuance of  Common Stock for services                                                                                              
   rendered by the Board of Directors                     --             --             --            --            --              

Interest accrued on subscriptions                                                                                                   
   receivable                                             --             --             --            --            --              

Net income                                                --             --             --            --       2,618,226            
------------------------------------------------------------------------------------------------------------------------            
Balance, September 30, 1998                               --             --        7,973,328   $41,725,462   $ 6,860,682            
------------------------------------------------------------------------------------------------------------------------            

                                                   Treasury Stock                                                                   
                                                 Series A Convertible            Treasury Stock                                     
                                                     Preferred                       Common                                         
                                                --------------------------------------------------                                  
                                                Number of                     Number of                Subscriptions                
                                                  Shares        Cost            Shares        Cost       Receivable       Total     
-------------------------------------------------------------------------------------------------------------------------------     
                                                                                                                                    
Balance, September 30, 1995                       11,250   $    (11,250)         3,004   $     (5,000)  $    (58,069)  $ 12,796,169 

Issuance of Common Stock for services                                                                                               
   rendered by the Board of Directors               --             --             --             --             --           54,000 

Issuance of Common Stock                                                                                                            
   for private placement                            --             --             --             --             --          320,569 

Interest accrued on subscriptions receivable        --             --             --             --           (6,545)        (6,545)

Net income                                          --             --             --             --             --        1,485,228 
----------------------------------------------------------------------------------------------------------------------------------- 
Balance, September 30, 1996                       11,250        (11,250)         3,004         (5,000)       (64,614)    14,649,421 

Issuance of Common Stock for services                                                                                               
    rendered by the Board of Directors              --             --             --             --             --           70,200 

Issuance of Common Stock for                                                                                                        
   Employee Stock Purchase Plan                     --             --             --             --             --          445,985 

Issuance of Common Stock for Rabbi Trust            --             --             --             --             --          119,250 

Interest accrued on subscriptions receivable        --             --             --             --           (7,264)        (7,264)

Net income                                          --             --             --             --             --        2,786,755 
----------------------------------------------------------------------------------------------------------------------------------- 
Balance, September 30, 1997                       11,250        (11,250)         3,004         (5,000)       (71,878)    18,064,347 

Issuance of Common Stock for                                                                                                        
   purchase of Castle Rock                          --             --             --             --             --        2,065,717 

Issuance of Common Stock and 57,076 options                                                                                         
   relating to spring water leases                  --             --             --             --             --          565,635 

Issuance of Common Stock for                                                                                                        
   conversion of warrants                           --             --             --             --             --          675,000 

Issuance of Common Stock for                                                                                                        
   Employee Stock Purchase Plan                     --             --             --             --             --          427,612 

Conversion  and cancellation of                                                                                                     
   Preferred Stock                               (11,250)        11,250           --             --             --             --   

Issuance of Common Stock for                                                                                                        
   offering, net of offering costs                  --             --             --             --             --       23,660,520 

Issuance of 30,268 options for services                                                                                             
    rendered by non-employee                        --             --             --             --             --           85,994 

Treasury Stock held for Rabbi Trust                 --             --           31,383       (166,706)          --         (166,706)

Purchase of Treasury Stock                          --             --           41,550       (266,233)          --         (266,233)

Issuance of Common Stock for Option Plan            --             --             --             --             --          346,215 

Issuance of  Common Stock for services                                                                                              
   rendered by the Board of Directors               --             --           (9,459)        59,119           --           59,119 

Interest accrued on subscriptions                                                                                                   
   receivable                                       --             --             --             --           (8,081)        (8,081)

Net income                                          --             --             --             --             --        2,618,226 
----------------------------------------------------------------------------------------------------------------------------------- 
Balance, September 30, 1998                         --     $       --           66,478   $   (378,820)  $    (79,959)  $ 48,127,365 
----------------------------------------------------------------------------------------------------------------------------------- 


See accompanying notes to consolidated financial statements.                    

F-4 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            
Consolidated Statements of Cash Flows                                           
For the years ended September 30, 1998, 1997 and 1996                           
------------------------------------------------------------------------------- 

                                                        [Enlarge/Download Table]


                                                              1998           1997          1996     
                                                              ----           ----          ----     
                                                                                                    
Cash flows from operating activities:                                                               
     Net income                                          $  2,618,226   $  2,786,755   $  1,485,228 
     Adjustments to reconcile net income to net                                                     
        cash provided by operating activities:                                                      
         Depreciation and amortization                      3,190,328      2,385,212      1,831,626 
         Provision for doubtful accounts                         --             --           25,000 
         Provision for deferred income taxes, net             487,360        146,500        372,000 
         Issuance of common stock for services                 59,119         70,200         54,000 
         Issuance of options for services rendered                                                  
                 by non-employee                               85,994           --             --   
         Increase in accounts receivable                   (6,331,732)      (809,748)      (663,986)
         (Increase) decrease in inventories                (1,335,096)      (202,229)       373,407 
         Increase in prepaid expenses                                                               
              and other current assets                        (63,310)      (146,684)      (141,482)
         Increase in other assets                             (72,877)       (11,189)        (4,615)
         Increase in accounts payable                                                               
              and accrued liabilities                       8,560,961        576,901        232,674 
                                                         ------------   ------------   ------------ 
Net cash provided by operating activities                   7,198,973      4,795,718      3,563,852 
                                                         ------------   ------------   ------------ 
Cash flows from investing activities:                                                               
     Purchase of property, plant, and equipment           (22,162,936)    (7,861,192)    (2,949,010)
     Acquisition of Castle Rock Spring Water               (1,437,402)          --             --   
                                                         ------------   ------------   ------------ 
Net cash used in investing activities                     (23,600,338)    (7,861,192)    (2,949,010)
                                                         ------------   ------------   ------------ 
Cash flows from financing activities:                                                               
     Proceeds from notes payable                           44,071,658      7,301,460      4,913,536 
     Repayments of notes payable                          (49,481,373)    (4,292,457)    (5,935,944)
     Proceeds from exercise of stock options                                                        
          and conversion of warrants                        1,021,215           --             --   
     Proceeds from issuance of stock through employee                                               
          stock purchase plan                                 427,612           --             --   
     Proceeds from issuance of common stock                23,660,520        565,235           --   
     Proceeds from private stock offering, net                   --             --          320,569 
     Interest accrued on stock subscriptions receivable        (8,081)        (7,264)        (6,545)
     Repurchase of treasury shares and treasury stock                                               
          held for Rabbi Trust                               (432,939)          --             --   
                                                         ------------   ------------   ------------ 
Net cash provided by (used in) financing activities        19,258,612      3,566,974       (708,384)
                                                         ------------   ------------   ------------ 
Net increase (decrease) in cash and cash equivalents        2,857,247        501,500        (93,542)
Cash and cash equivalents at beginning of year                687,035        185,535        279,077 
                                                         ------------   ------------   ------------ 
Cash and cash equivalents at end of year                 $  3,544,282   $    687,035   $    185,535 
                                                         ============   ============   ============ 


                                                                     (Continued)
F-5 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Consolidated  Statements of Cash Flows, Continued                               

                                                        [Enlarge/Download Table]


                                                              1998         1997         1996   
                                                              ----         ----         ----   
Supplemental disclosure of cash flow information:                                              

                                                                                               
         Cash paid during the year for interest, net of                                        
              $349,526 in capitalized interest in 1998   $   124,389   $   192,299  $   307,720
         Cash paid during the period for income taxes      1,086,231     1,627,100      174,568
                                                         -----------   -----------  -----------
Supplemental disclosure of non-cash investing                                                  
     and financing activities:                                                                 

         Issuance of common stock and options                                                  
              for spring site lease agreements           $   565,635          --           --  

         Acquisition of Castle Rock                                                            
              Fair value of assets acquired              $ 8,166,429          --           --  
              Liabilities assumed                         (4,663,310)         --           --  
              Stock issued                                (2,065,717)         --           --  
                                                         -----------   -----------  -----------
              Cash paid                                  $ 1,437,402   $      --    $      --  
                                                         -----------   -----------  -----------


See accompanying notes to consolidated financial statements.                    

F-6 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      
September 30, 1998, 1997 and 1996                                               
------------------------------------------------------------------------------- 
(1)  Summary of Significant Accounting Policies                                 

Background of Business                                                

AquaPenn Spring Water Company, Inc., (the Company) was formed as a    
Pennsylvania corporation during November 1986. The Company bottles and
distributes non-sparkling natural spring water.                       

The Company's water products are sold to both regional and national   
  customers under retailers' and other customers' private labels and under
its proprietary brand labels.                                         

Principles of consolidation                                           

   The consolidated financial statements include the financial statements of
     the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.      

Cash and Cash Equivalents                                             

For purposes of reporting cash flows, the Company considers all highly
     liquid debt instruments purchased with an original maturity of three months
or less to be cash equivalents.                                       

Inventories                                                           

    Inventories are stated at the lower of cost or market with cost determined
using the first-in first-out (FIFO) method.                           

Property, Plant, and Equipment                                        

Property, plant, and equipment are recorded at cost. Depreciation and 
   amortization on property, plant, and equipment are provided utilizing the
     straight-line method over the estimated useful lives of the related assets.

Repairs and maintenance are charged to expense and betterments are    
capitalized; any gain or loss on dispositions is recognized currently.

Other Assets, Principally Goodwill                                    

  Other assets, including goodwill arising from the excess of the purchase
   price over the fair value of the net assets acquired with the purchase of
     Dunsmuir Bottling Company, is being amortized on a straight-line basis over
   40 years. Other assets also include the value of common stock and options
issued to third parties in connection with real estate transactions   
relating to the Company's spring water leases. These costs are being  
     amortized over 10 years. Amortization expense during fiscal 1998 associated
with goodwill and the spring water leases was $145,731.               

  The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
    Assets to be Disposed Of" (Statement 121) in the beginning of fiscal 1997.
  There was no impact on the consolidated statement of operations upon the
adoption of Statement 121.                                            

                                                                     (Continued)

F-7 

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      
------------------------------------------------------------------------------- 

(1)  Continued                                                                  

Under the provisions of this statement, the Company has evaluated its 
   long-lived assets for financial impairment, and will continue to evaluate
them as events or changes in circumstances indicate that the carrying 
amount of such assets may not be fully recoverable.                   

Accounting Changes                                                    

The Financial Accounting Standards Board (FASB) issued Statement of   
  Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
(Statement 130), which is effective for fiscal years beginning after  
   December 15, 1997. This Statement establishes standards for reporting and
     classifying components of comprehensive income in the financial statements.
   The FASB also issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" 
(Statement 131), which is effective for fiscal years beginning after  
December 15, 1997. This statement establishes standards for providing 
  disclosures related to products and services, geographic area, and major
   customers. In addition, the FASB issued Statement of Financial Accounting
Standards No. 132, "Employers' Disclosures about Pensions and Other   
 Postretirement Benefits" (Statement 132), which is effective for fiscal
  years beginning after December 15, 1997. This Statement standardizes the
   disclosure requirements for pensions and other postretirement benefits to
the extent practicable, requires additional information on benefit    
     obligations and plan assets, and suggests combined formats for presentation
of pension and other postretirement benefit disclosures. The Company  
 anticipates that adopting these statements in its fiscal year 1999 will
     increase disclosures only and will have no material effect on the Company's
consolidated financial statements.                                    

   The FASB also issued Statement of Financial Accounting Standards No. 133,
   "Accounting for Derivative Instruments and Hedging Activities" (Statement
  133), which is effective for fiscal years beginning after June 15, 1999.
This Statement establishes accounting and reporting standards for     
   derivative instruments, including certain derivative instruments embedded
 in other contracts, and for hedging activities. The Company anticipates
     adopting this statement in its fiscal year 2000 and anticipates no material
effect on the Company's consolidated financial statements.            

Revenue Recognition                                                   

Revenue is recognized when products are shipped.                      

Income Taxes                                                          

Income taxes are accounted for under the asset and liability method.  
Deferred tax assets and liabilities are recognized for the future tax 
  consequences attributable to differences between the financial statement
  carrying amounts of existing assets and liabilities and their respective
   tax bases. Deferred tax assets and liabilities are measured using enacted
   tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.        

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      
------------------------------------------------------------------------------- 

(1)  Continued                                                                  

    The effect on deferred tax assets and liabilities of a change in tax rates
 is recognized in income in the period that includes the enactment date.

Use of Estimates                                                      

     The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make  
  estimates and assumptions that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the recorded amounts of revenues and  
expenses during the reporting period. Actual results could differ from
these estimates.                                                      

Net Income Per Share                                                  

   Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(Statement 128), became effective for financial statements issued for 
    periods ending after December 15, 1997. During the first quarter of fiscal
    1998, the Company adopted this Statement and has restated prior periods as
     required. Implementation of Statement 128 did not have a material effect on
the Company's consolidated financial statements.                      

   Statement 128 replaces the previous standards for presentation of primary
  and fully diluted earnings per share with basic and diluted earnings per
share. Basic earnings per share excludes the dilutive impact of common
  stock equivalents and is computed by dividing income available to common
stockholders by the weighted average number of shares of common stock 
outstanding during the period. Diluted earnings per share includes the
     effect of potential dilution from the exercise of common stock equivalents.
    In addition, the dilutive effect of common stock equivalents is calculated
under the treasury stock method using the average market price for the
period.                                                               

    A reconciliation of weighted average common shares outstanding to weighted
average common shares outstanding assuming dilution is as follows:    

                                         September 30,
                                        ----------------------------------
                                        1998           1997           1996
                                        ----           ----           ----
Weighted average common shares                                                  
    outstanding                        7,072,017      4,346,212      4,255,545

Effect of dilutive securities:                                                  
    Options                              589,165        512,085        182,669
    Warrants                              49,631         70,685        159,664
    Preferred stock                         --        1,022,862      1,022,862
                                       ---------      ---------      ---------
Average common shares outstanding                                               
    assuming dilution                  7,710,813      5,951,844      5,620,740
                                       =========      =========      =========

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(1)  Continued                                                                  

Reclassification                                                      

   Certain prior year amounts have been reclassified to conform with current
year presentations.                                                   

(2)  Related Party Transactions                                                 

   The Company entered into the following transactions with related parties:

   The Company sold product to a former corporate investor in the Company at
     normal sales prices in the amount of approximately $738,000 and $696,000 in
fiscal 1997 and 1996, respectively.                                   

The Company recorded compensation expense to a director of $250,000,  
    $250,000 and $214,981 in fiscal 1998, 1997 and 1996, respectively, for his
services as an independent food broker. Accrued commissions to this   
director at September 30, 1998 and 1997 were $20,833 each year.       

   The Company had stock subscriptions receivable from a director of $79,959
and $71,878 at September 30, 1998 and 1997, respectively.             

(3)  Accounts Receivable                                                        

Accounts receivable consist of the following:                         

                                     September 30,
                                      --------------------------------
                                      1998                1997
                                      ----                ----
Accounts receivable - trade                $10,117,409          $ 3,676,555     
Other                                          500,530               27,969     
                                      -----------          -----------
                                       10,617,939            3,704,524
Less allowance for doubtful accounts           135,000              100,000     
                                      -----------          -----------
                                      $10,482,939          $ 3,604,524
                                      ===========          ===========

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(4)  Inventories                                                                

Inventories consist of the following:                                 

     September 30,
      --------------------------------
       1998                 1997
       ----                 ----
Raw materials              $2,613,123            $1,087,507                     
Finished goods                657,585               446,110                     
      ----------            ----------
      $3,270,708            $1,533,617
      ==========            ==========

(5)  Property, Plant, and Equipment                                             

Major classifications of these assets are summarized as follows:      

                                                        [Enlarge/Download Table]


                                                Estimated                              
                                                  useful           September 30,       
                                                 lives in      ---------------------   
                                                   years       1998             1997   
                                                ---------      ----             ----   
                                                                                       
Land                                                   --  $ 1,590,870      $ 1,190,850
Land improvements                                      20      141,017          154,121
Buildings                                              30   16,799,460        7,729,748
Machinery and equipment                              3-20   30,590,256       13,941,998
Transportation equipment                              3-5      673,486          497,943
Construction in progress                               --    1,811,767        2,877,630
                                                     ----  -----------      -----------
                                                            51,606,856       26,392,290

Less accumulated depreciation and amortization               9,405,978        6,361,381
                                                           -----------      -----------
                                                           $42,200,878      $20,030,909
                                                           ===========      ===========


   Property held for rental is classified as property, plant, and equipment.
 This property relates to the Company's former manufacturing facility in
 State College, Pennsylvania which has a net book value of approximately
$1,128,000, which is net of approximately $539,000 in accumulated     
depreciation at September 30, 1998.                                   

Interest costs for the construction and purchase of certain long-term 
assets were capitalized and will be amortized over the related assets'
     estimated useful lives. The Company capitalized interest costs of $349,526,
$0 and $0 in fiscal 1998, 1997 and 1996, respectively.                

  Total depreciation and amortization expense relating to property, plant,
 and equipment was $3,044,597, $2,385,212 and $1,831,626 in fiscal 1998,
1997 and 1996, respectively.                                          

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(6) Notes Payable                                                               

                                                        [Enlarge/Download Table]


                                                                            September 30,        
                                                                         ---------------------   
                                                                         1998             1997   
                                                                         ----             ----   
                                                                                                 
Unsecured note payable to a bank, $10,000,000 revolving credit                                   
         note, interest at London Interbank Offered Rate (LIBOR)                                 
         plus 1.15% (6.537% at September 30, 1998), requires interest                            
         only through February 1999 with principal and interest due                              
         monthly thereafter with maturity in 2004                      $   22,839      $2,900,000

Mortgage funding payable in monthly installments of principal                                    
         and interest to the Pennsylvania Industrial                                             
         Development authority at an interest rate of 5%,                                        
         due through May 2011                                           1,610,439       1,700,383

Note payable to a bank, $6,000,000 line of credit at LIBOR                                       
         plus 1.0% (6.344% at September 30, 1998), payable                                       
         on demand and requires a negative pledge of the                                         
         Company's accounts receivable and inventories                         --         200,000

Various installment loan obligations at interest rates between                                   
         9.0% and 11.9%, due through March 2001, payable to                                      
         various companies, and secured by machinery and                                         
         equipment                                                         29,933          15,624

Unsecured note payable to a bank, $6,000,000 line of credit,                                     
         interest at LIBOR plus .95% (6.337% at September 30,                                    
         1998), and is due February 1999                                1,012,483           1,460
                                                                       ----------      ----------
                                                                        2,675,694       4,817,467

Less portion due within one year                                        1,146,621         298,966
                                                                       ----------      ----------
                                                                       $1,529,073      $4,518,501
                                                                       ==========      ==========


During fiscal year 1998, the Company obtained a $10,000,000 revolving 
     credit note with a bank. Interest is calculated at LIBOR plus 1/2% adjusted
based on outstanding balance. The balance on the note was $0 as of    
September 30, 1998.                                                   

     During fiscal year 1998, the Company obtained a $6,000,000 revolving credit
    note with a bank. Interest is calculated at LIBOR plus 1/2% adjusted based
    on outstanding balance. The balance on the note was $0 as of September 30,
1998.                                                                 

     Interest expense, net of capitalized interest, was $128,356 in fiscal 1998.
Interest expense was $208,467 and $297,204 in fiscal 1997 and 1996,   
     respectively. Interest expense is recorded in other income (expense) in the
consolidated statements of operations.                                

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(6)  Continued                                                                  

 Based on current payment terms, the required principal reduction of the
above debt is as follows:                                             

Year ending                                                   
September 30,       Amount                                    
-------------       ------                                    
1999            $1,146,621                                    
2000               107,000                                    
2001               108,000                                    
2002               109,000                                    
2003               115,000                                    
Thereafter       1,090,073                                    
----------      ----------                                    
$2,675,694                    
===========      ==========                                     

(7)  Accounts Payable and Accrued Liabilities                                   

Accounts payable and accrued liabilities consist of the following:    

                     September 30,
                   ---------------------------
                   1998                   1997
                   ----                   ----
Accounts payable       $ 6,238,489            $ 1,021,471     
Accrued expenses         5,019,747                860,825     
Accrued payroll            423,415                142,224     
Income taxes payable     1,084,443                822,322     
Other                      481,332                251,729     
                  -----------            -----------
                  $13,247,426            $ 3,098,571
                  ===========            ===========

(8)  Employee Benefit Plan                                                      

Effective March 1, 1994, the Company adopted a deferred 401(k) Salary 
Savings Plan for the benefit of its employees and their beneficiaries.
     Generally, any employee who has completed six months of service and is over
21 years of age is eligible to participate in the Plan. Each eligible 
   employee may elect to contribute up to 15% of his or her compensation for
   services rendered in any year. The Company matches employee contributions
     in an amount equal to 100% of the first 1%, 75% of the second 1% and 50% of
   the third 1% of each participant's contributions. The Company contributed
   approximately $75,000, $52,000 and $24,000 in fiscal 1998, 1997 and 1996,
respectively, to this plan.                                           

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(9)  Sales to Major Customers                                                   

    During fiscal 1998, sales to two customers accounted for approximately 14%
and 12% of net revenues. During fiscal 1997, sales to two customers   
accounted for approximately 15% and 11% of net revenues. During fiscal
1996, sales to one customer accounted for approximately 23% of net    
revenues.                                                             

(10) Income Taxes                                                               

The provision for income taxes attributable to income from operations 
consists of the following:                                            

              1998            1997            1996
              ----            ----            ----
Currently payable:                                                              
Federal         $1,034,362      $1,452,000      $  483,900    
State              340,100         306,252         134,100    
            ----------      ----------      ----------
             1,374,462       1,758,252         618,000
            ----------      ----------      ----------

Deferred (benefit):                                                             
Federal            306,400         108,100         274,600    
State              108,700          38,400          97,400    
            ----------      ----------      ----------
               415,100         146,500         372,000
            ----------      ----------      ----------
            $1,789,562      $1,904,752      $  990,000
            ==========      ==========      ==========

  Total income tax expense was $1,789,562, $1,904,752 and $990,000 for the
   years ended September 30, 1998, 1997 and 1996, respectively, and differed
   from the amounts computed by applying the U.S. Federal income tax rate of
35% to pretax income as a result of the following:                    

                                                                [Download Table]


                                               1998          1997        1996    
                                               ----          ----        ----    
                                                                                 
Computed "expected" tax expense           $ 1,542,726   $ 1,642,027  $   866,330 
State income tax, net of federal benefit      291,720       224,024      150,475 
Change in valuation allowance                    --            --        (27,000)
Other, net                                    (44,884)       38,701          195 
                                          -----------   -----------  ----------- 
                                          $ 1,789,562   $ 1,904,752  $   990,000 
                                          ===========   ===========  =========== 


                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(9)  Continued                                                                  

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at   
September 30, 1998 and 1997 are presented below:                      

                                                    1998            1997
                                                    ----            ----
Deferred tax assets:                                                            
Accounts receivable, due to allowance                                 
       for doubtful accounts                      $   54,800      $   40,600
   Inventories                                       120,100          70,100
   Deferred compensation                              81,700          62,500
   Net operating loss carry-forwards                  77,200           5,300
   Accruals for financial reporting purposes         425,959         116,277
   Other                                              40,941          15,223
                                                  ----------      ----------
Total gross deferred tax assets                        800,700         310,000  

Less valuation allowance                                    --              --  
                                                  ----------      ----------
Net deferred tax assets                                800,700         310,000  
                                                  ----------      ----------
Deferred tax liabilities:                                                       
Plant and equipment, principally due to                                 
       differences in depreciation                 1,644,460         662,400
  Other                                                   --           4,000
                                                  ----------      ----------
Total gross deferred tax liabilities                 1,644,460         666,400  
                                                  ----------      ----------
Net deferred tax liability                          $  843,760      $  356,400  
                                                  ==========      ==========

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
   tax assets will not be realized. The ultimate realization of deferred tax
     assets is dependent upon the generation of future taxable income during the
    periods in which those temporary differences become deductible. Management
 considers the scheduled reversal of deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this     
assessment. Based on the weight of all available evidence, management 
   believes it is more likely than not the Company will realize the benefits
     of these deductible temporary differences and that a valuation allowance is
not necessary at September 30, 1998.                                  

At September 30, 1998, the Company has a Florida net operating loss   
 carry-forward for state income tax purposes of approximately $1,400,000
     which is available, subject to limitation, to offset future Florida taxable
income, if any, through the fiscal year ending September 30, 2013.    

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(10) Commitments                                                                

The Company rents certain land, office equipment and transportation   
 equipment under non-cancelable operating leases. Rent expense for these
     leases amounted to approximately $271,000, $138,000 and $152,000 for fiscal
1998, 1997 and 1996 respectively. The future minimum annual rent      
commitments under these leases are approximately as follows:          

Year Ending                                                       
September 30,             Amount                                  
-------------             ------                                  
1999                    $389,000                                  
2000                     180,000                                  
2001                      89,000                                  
2002                      90,000                                  
2003                      78,000                                  
Thereafter                    --                                  
----------              --------                                  
$826,000          
========          

The Company has made certain commitments for building improvements and
     equipment. As of September 30, 1998, the open commitments are approximately
$3,400,000.                                                           

(12) Year 2000                                                                  

   The Company is currently engaged in the ongoing process of evaluating its
information technology infrastructure for year 2000. In addition, the 
Company expects to correspond in the near future with its principal   
customers, suppliers, vendors and subcontractors to ascertain their   
readiness for the year 2000. While the total estimated cost of these  
efforts is difficult to predict with accuracy, based on a preliminary 
evaluation, the Company believes that there should not be a material  
  adverse impact on its operating results or financial condition. However,
year 2000 issues could have a significant impact on the Company's     
   operations and its financial results if modifications cannot be completed
on a timely basis, unforeseen needs or problems arise, or if there are
  unforeseen compliance problems with the systems operated by others. Upon
final completion of the evaluation of its information technology      
     infrastructure for year 2000, the Company will establish a contingency plan
detailing how the Company will handle unforeseen or unusual problems. 

(13) Stockholders' Equity                                                       

Common Stock                                                          

In January 1998, the Company completed the issuance of an additional  
2,000,000 common shares through a public offering, resulting in net   
proceeds (after deducting issuance costs) of $23,660,520. The         

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(13) Continued                                                                  

    proceeds of the offering were used to repay certain borrowings, to finance
  certain construction projects and acquire Dunsmuir Bottling Company (see
  note 15). All share and per share data gives effect to the occurrence of
     the 0.6008-for-one Board authorized reverse stock split of each outstanding
  share of common stock of the Company on the date of the public offering.

   In July 1998, the Board of Directors approved a stock repurchase program.
 Under this program, the Company has the authority to repurchase up to a
total of 500,000 shares of the Company's Common Stock as and when     
  determined to be reasonable as business conditions dictate. At September
30, 1998, 41,550 shares had been purchased under this program by the  
Company.                                                              

Stock Options                                                         

The Company maintains various stock option agreements and plans. Stock
     options have been granted at prices at or above the fair market value as of
   the date of grant. Options vest and expire according to terms established
at the grant date.                                                    

 In fiscal year 1997, the Company adopted the disclosure requirements of
Financial Accounting Standards No. 123, "Accounting for Stock-Based   
     Compensation" (Statement 123). As allowed by Statement 123, the Company has
     chosen to continue to account for stock based compensation using Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to      
     Employees," and related interpretations. Accordingly, compensation cost for
     stock options is measured as the excess, if any, of the quoted market price
   of the Company's stock at the grant date over the amount an employee must
pay to acquire the stock. Accordingly, no compensation cost has been  
   recognized. Had compensation cost for the Company's plans been determined
under Statement 123, the Company's net income and net income per share
would have been reduced to the pro forma amounts indicated below:     

                         September 30,
                           -----------------------------------------
                           1998              1997               1996
                           ----              ----               ----
Net income:                                                                     
       As reported       $   2,618,000      $   2,787,000      $   1,485,000
       Pro forma         $   2,401,000      $   2,247,000          1,104,000

Net income per share:                                                           
Basic                                                                 
       As reported       $         .37      $         .64      $         .35
       Pro forma         $         .34      $         .52      $         .26

Diluted                                                               
       As reported       $         .34      $         .47      $         .26
       Pro forma         $         .31      $         .38      $         .20

--------------------------------------------------------------------------------

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(13) Continued                                                                  

     The 1998 and 1997 pro forma amounts include the effect of the shares issued
     under the Stock Purchase Plan as if they were accounted for under Statement
123.                                                                  

    The per share weighted-average fair values of stock options granted during
    fiscal years 1998 and 1997 were $3.56 and $6.75, respectively, on the date
  of grant using the Black-Scholes option-pricing model with the following
    weighted-average assumptions: fiscal year 1998 expected dividend yield 0%,
risk-free interest rate of 5.428%, a volatility factor of the expected
     market price of the Company's common stock of .5226, and a weighted-average
     expected life of approximately 10 years; fiscal year 1997 expected dividend
 yield 0%, risk-free interest rate of 5.945%, a volatility factor of the
expected market price of the Company's common stock of .4166, and a   
weighted-average expected life of approximately 10 years.             

The fair value of stock options included in the pro forma amounts for 
    fiscal years 1998 and 1997 is not necessarily indicative of future effects
on net income and net income per share.                               

     A summary of the status of the Company's stock option plans as of September
   30, 1998, 1997 and 1996 and changes during the years ended on those dates
is presented below:                                                   

                                                        [Enlarge/Download Table]


 Fiscal years ended:       September 30, 1998     September 30, 1997     September 30, 1996  
                        ----------------------  ----------------------  ---------------------
                                      Weighted                Weighted               Weighted
                                       Average                 Average               Average 
                                      Exercise                Exercise               Exercise
                        Shares         Price    Shares          Price   Shares         Price 
                        ------        --------  ------        --------  ------       --------
                                                                                             
Outstanding at                                                                               
 beginning of year     832,108       $    3.87  696,928      $    2.45  570,760      $   1.89
Granted                244,520            7.37  135,180          11.17  126,168          4.99
Exercised             (153,060)           2.26       --             --       --            --
Cancelled              (90,120)          12.60       --             --       --            --
                       -------       ---------  -------      ---------  -------      --------
Outstanding at                                                                               
 end of year           833,448       $    4.24  832,108      $    3.87  696,928      $   2.45
                       =======       =========  =======      =========  =======      ========
Options exercisable                                                                          
 at year-end           833,448       $    4.24  832,108      $    3.87  696,928      $   2.45
                       =======       =========  =======      =========  =======      ========

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(13) Continued                                                                  

     The following table summarizes information about the Company's stock option
plans as of September 30, 1998:                                       

                                                        [Enlarge/Download Table]


                                                                   Options Exercisable          
                                    Weighted             ---------------------------------------
                                     Average   Weighted                                 Weighted
   Range of              Number    Remaining    Average              Number              Average
   Exercise         Outstanding  Contractual   Exercise         Outstanding             Exercise
      Price  September 30, 1998         Life      Price  September 30, 1998                Price
-----------  ------------------  -----------   --------  ------------------             --------

                                                                                                
$      4.99        17,988          3 years    $    4.99         17,988            $         4.99
      13.00        27,264          5 years        13.00         27,264                     13.00
  1.66-1.90       435,760          6 years         1.88        435,760                      1.88
  4.99-9.22       262,316          9 years         6.93        262,316                      6.93
       5.31        90,120         10 years         5.31         90,120                      5.31
-----------       -------         --------    ---------        -------            --------------
$1.66-13.00       833,448                                      833,448                          
===========       =======                                      =======                          


Series A Non-Voting Convertible Preferred Stock                       

  During fiscal 1998, all of the Company's series A non-voting convertible
preferred stock (the preferred stock) was converted into shares of the
    Company's common stock. The preferred stock was cancelled upon conversion.

(14) Stock Purchase Plan                                                        

  Under the terms of the Company's Stock Purchase Plan, eligible employees
   may purchase shares of the Company's common stock at 85% of the estimated
   fair market value at the offering date. At September 30, 1998, there were
 37,681 shares set aside for eligible employees under this plan of which
37,681 shares had been subscribed for at $8.50 per share. In addition,
  2,224 shares were purchased by employees during the year ended September
30, 1998.                                                             

Payment for the subscribed shares must be made by March 30, 1999.     

 Under the terms of the Company's Stock Purchase Plan, a total of 75,588
  shares of common stock were issued during fiscal 1998 at $5.41 per share
     for a total of $408,708. Of this amount, the Company is contingently liable
for $371,253 as a result of bank loans guaranteed by the Company.     

                                                                     (Continued)

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AQUAPENN SPRING WATER COMPANY, INC. AND SUBSIDIARIES                            

Notes to Consolidated Financial Statements                                      

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(15) Acquisition of Dunsmuir Bottling Company, Inc. (Unaudited)                 

On October 15, 1997, the Company entered into a merger agreement to   
   purchase all of the stock of Dunsmuir Bottling Company, Inc. ("Dunsmuir",
     also known as Castle Rock Spring Water). Under terms of this agreement, the
Company purchased Dunsmuir for approximately $1,437,000 in cash and   
     approximately $2,066,000 in shares of common stock at $13.00 per share plus
the assumption of $4,663,000 in Dunsmuir's liabilities.               

     The following unaudited pro forma, condensed, financial information assumes
  the acquisition occurred at the beginning of fiscal 1997. This financial
   information does not purport to be indicative of what would have occurred
  had the acquisition been made at the beginning of fiscal 1997, or of the
    results which may occur in the future. Pro forma results are not presented
for fiscal 1998 as pro forma results are not materially different from
actual results presented.                                             

                                           Pro
                                           forma
                                           -----
Sales                                         $ 45,819,000    

Gross profit                                    11,428,000    
Other costs and expenses                         9,109,000    
                                          ------------
Net income                                    $  2,319,000    
                                          ============
Earnings per share:                                           
 Basic                                    $        .51
 Diluted                                  $        .38

(16) Subsequent Event                                                           

On November 2, 1998, the Company entered into an agreement and plan of
     merger ("the Merger Agreement") with Groupe Danone ("the Parent") and Zoneo
    Acquisition Corp. ("the Purchaser"), an indirect subsidiary of the Parent.
   Under terms of the Merger Agreement, the Purchaser has commenced a tender
 offer to acquire all the issued and outstanding shares of the Company's
common stock for $13.00 per share in cash. If the Purchaser does not  
  acquire at least 80% of the then outstanding shares in its tender offer,
which is initially scheduled to expire on December 7, 1998, the Merger
Agreement and the Merger must be approved by the shareholders of the  
Company at a special meeting. The Company's Board of Directors has    
unanimously approved the Merger Agreement.                            

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 SIGNATURE

 Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf  
by the undersigned hereunto duly authorized.                                    

                 AQUAPENN SPRING WATER COMPANY, INC.

          By: /s/ Edward J. Lauth, III
                --------------------------
December 2, 1998                   Name: Edward J. Lauth, III                   
                                  Title: President and Chief Executive Officer

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘8-K’ Filing	Date	First	Last	Other Filings

	9/30/13	17
	6/15/99	10
	3/30/99	21
	12/7/98	22
Filed on / For Period End:	12/2/98	1	23
	11/23/98	3
	11/6/98	2		SC 13D, SC 14D1, SC 14D9
	11/2/98	22		8-K
	9/30/98	2	21
	12/15/97	10	11	S-1/A
	10/15/97	22
	9/30/97	2	20
	9/30/96	2	20
	3/1/94	15
				List all Filings

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Filing Submission 0000950115-98-001839 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Aquapenn Spring Water Company Inc – ‘8-K’ for 12/2/98

As of: Wednesday, 12/2/98 · For: 12/2/98 · Accession #: 950115-98-1839 · File #: 1-13809

Previous ‘8-K’: ‘8-K’ on / for 11/2/98 · Latest ‘8-K’: This Filing

Current Report — Form 8-KFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Current Report — Form 8-K
Filing Table of Contents