NEW YORK (

TheStreet

)

-- Crystal Rock Holdings

(AMEX:

CRVP

) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally weak debt management.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Beverages industry. The net income has significantly decreased by 65.2% when compared to the same quarter one year ago, falling from $2.92 million to $1.02 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Beverages industry and the overall market, CRYSTAL ROCK HOLDINGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $2.51 million or 57.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio of 1.17 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, CRVP has managed to keep a strong quick ratio of 1.50, which demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CRYSTAL ROCK HOLDINGS INC is rather high; currently it is at 58.20%. Regardless of CRVP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRVP's net profit margin of 5.60% is significantly lower than the same period one year prior.

Crystal Rock Holdings, Inc. engages in the production, marketing, and distribution of bottled water, and distribution of coffee, ancillary products, and other office refreshment products in New England, New York, and New Jersey. The company has a P/E ratio of 3.7, equal to the average wholesale industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Crystal Rock has a market cap of $15 million and is part of the

services

sector and

wholesale

industry. Shares are up 3.1% year to date as of the close of trading on Thursday.

You can view the full

Crystal Rock Ratings Report

or get investment ideas from our

investment research center

.

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