SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(D) of
     the Securities Exchange Act of 1934

     for the Quarterly Period Ended: April 03, 2005

[ ]  Transition Report Pursuant to Section 13 or 15(D) of the
     Securities Exchange Act of 1934

     For the transition period from_______________to_________________


                         Commission File Number: 1-11012
                                                 -------

                          GLACIER WATER SERVICES, INC.
             (Exact Name of Registrant as Specified in Its Charter)



            Delaware                                  33-0493559
----------------------------------        ------------------------------------
 (State or Other Jurisdiction of          (I.r.s. Employer Identification No.)
  Incorporation or Organization)


1385 Park Center Drive, Vista, California                      92081
-------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)


                                 (760) 560-1111
              (Registrant's telephone number, including area code)

N/A (Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [ ] NO [X]

         Indicate the number of shares  outstanding of each of issuer's class of
common  stock as of the  latest  practicable  date:  2,195,408  shares of common
stock, $.01 par value, outstanding at April 25, 2004.



<PAGE>



                         PART 1 - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS
                          GLACIER WATER SERVICES, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                             April 3,    January 2,
                                                                               2005        2005 *
                                                                             ---------   ----------
                                        ASSETS                              (unaudited)
                                        ------
Current assets:
<S>                                                                          <C>          <C>
   Cash and cash equivalents .............................................   $   4,416    $   2,256
   Accounts receivable, net of allowance for doubtful accounts of $206 and
      $201 as of April 3, 2005 and January 2, 2005, respectively .........       2,257        2,476
   Repair parts ..........................................................       2,290        2,403
   Prepaid expenses and other ............................................         962          950
                                                                             ---------    ---------
      Total current assets ...............................................       9,925        8,085

Property and equipment, net ..............................................      56,363       52,370
Goodwill .................................................................       6,868        6,868
Intangible assets, net of accumulated amortization of $739 and $681 as of
     April 3, 2005 and January 2, 2005, respectively .....................         417          475
Investment in Glacier Water Trust I Common Securities ....................       2,629        2,629
Investment in Glacier Water Trust I Preferred Securities .................       3,357        3,357
Other assets .............................................................       5,597        5,716
                                                                             ---------    ---------
Total assets .............................................................   $  85,156    $  79,500
                                                                             =========    =========
                        LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Accounts payable ......................................................   $   2,876    $   2,759
   Accrued commissions ...................................................       1,901        1,989
   Accrued liabilities ...................................................       2,594        2,215
   Current portion of deferred rent ......................................          18         --
   Current portion of obligations under capital lease ....................         266          262
   Current portion of long-term notes payable ............................         460          460
                                                                             ---------    ---------
      Total current liabilities ..........................................       8,115        7,685

Long-term debt ...........................................................      87,629       87,629
Long-term notes payable ..................................................      17,000       10,040
Long-term portion of deferred rent .......................................         162          112
Long-term portion of obligations under capital lease .....................         592          661
                                                                             ---------    ---------
Total liabilities ........................................................     113,498      106,127

Stockholders' deficit:
  Common stock, $.01 par value;
     10,000,000 shares  authorized,
     2,173,943 and 2,160,218  shares
     issued and outstanding as of
     April 3, 2005 and January 2, 2005,
     respectively ........................................................          38           38
   Additional paid-in capital ............................................      19,206       18,948
   Retained deficit ......................................................     (15,024)     (13,051)
  Treasury stock, at cost, 1,587,606 shares as of April 3, 2005 and
     January 2, 2005 .....................................................     (32,562)     (32,562)
                                                                             ---------    ---------
      Total stockholders' deficit ........................................     (28,342)     (26,627)
                                                                             ---------    ---------
Total liabilities and stockholders' deficit ..............................   $  85,156    $  79,500
                                                                             =========    =========
</TABLE>


*Amounts derived from audited information

The accompanying notes are an integral part of these consolidated financial
statements.


                                       2
<PAGE>



                          GLACIER WATER SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                         --------------------------
                                                           April 3,      March 28,
                                                            2005           2004
                                                         -----------    -----------
<S>                                                      <C>            <C>
Revenues .............................................   $    17,543    $    17,546
Operating costs and expenses:
     Operating expenses ..............................        11,434         11,676
     Depreciation and amortization ...................         3,302          2,510
                                                         -----------    -----------
          Cost of goods sold .........................        14,736         14,186
     Selling, general and administrative expenses ....         2,700          2,631
                                                         -----------    -----------
          Total operating costs and expenses .........        17,436         16,817
                                                         -----------    -----------
Income from operations ...............................           107            729
Other expenses:
     Interest expense ................................         2,080          1,930
                                                         -----------    -----------
Loss before income taxes .............................        (1,973)        (1,201)
Income tax benefit ...................................          --             --
                                                         -----------    -----------
Net loss .............................................        (1,973)        (1,201)
Basic and diluted loss per common share:
     Net loss applicable to common stockholders ......   $     (0.91)   $     (0.57)
                                                         ===========    ===========
           Weighted average shares used in calculation     2,172,055      2,119,483

</TABLE>



                          GLACIER WATER SERVICES, INC.
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                               --------------------
                                                               April 3,   March 28,
                                                                2005       2004
                                                               --------   -------
<S>                                                            <C>        <C>
Net loss ...................................................   $(1,973)   $(1,201)
                                                               -------    -------
Unrealized gain on securities:
  Unrealized holding gain arising during the period ........      --         --
  Less:  reclassification adjustment for net realized losses
        included in net loss ...............................      --         --
                                                               -------    -------
Net unrealized gain ........................................      --         --
                                                               -------    -------
Comprehensive loss .........................................   $(1,973)   $(1,201)
                                                               =======    =======
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                       3
<PAGE>




                          GLACIER WATER SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                           ------------------
                                                                           April 3,  March 28,
                                                                             2005      2004
                                                                           --------   -------
Cash flow from operating activities:
<S>                                                                        <C>        <C>
   Net loss ............................................................   $(1,973)   $(1,201)
   Adjustments to reconcile net loss to net cash provided by
     operating activities:
       Depreciation and amortization ...................................     3,302      2,510
       Loss on disposal of assets ......................................        15         15
   Change in operating assets and liabilities:
       Accounts receivable .............................................       219       (120)
       Repair parts ....................................................       113         22
       Prepaid expenses and other ......................................       (11)        67
       Other assets ....................................................      (293)        72
       Accounts payable, accrued commissions and accrued liabilities ...       408        209
                                                                           -------    -------
                    Net cash provided by operating activities ..........     1,780      1,574
                                                                           -------    -------
Cash flows from investing activities:
   Investment in property and equipment ................................    (6,841)    (1,474)
                                                                           -------    -------
                    Net cash used in investing activities ..............    (6,841)    (1,474)
                                                                           -------    -------
Cash flows from financing activities:
   Principal payments on line of credit and long-term notes payable ....       (40)      (540)
   Proceeds from long-term notes payable ...............................     7,000        617
   Principal payments under capital lease obligations ..................       (64)       (59)
   Proceeds from issuance of stock .....................................       258         10
   Increase in deferred rent ...........................................        67       --
                                                                           -------    -------
                     Net cash provided by (used in) financing activities     7,221         28
                                                                           -------    -------
Net increase (decrease) in cash and cash equivalent ....................     2,160        128
Cash and cash equivalents, beginning of period .........................     2,256      1,924
                                                                           -------    -------
Cash and cash equivalents, end of period ...............................   $ 4,416    $ 2,052
                                                                           =======    =======
</TABLE>


<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                    ------------------
                                                    April 3, March 28,
                                                     2005     2004
                                                    ------   ------
Supplemental disclosure of cash flow information:
<S>                                                 <C>      <C>
   Cash paid for interest .......................   $2,035   $1,881
                                                    ======   ======
   Cash paid for income taxes ...................   $   14   $    3
                                                    ======   ======
</TABLE>




The accompanying notes are an integral part of these consolidated financial
statements.

                                       4

<PAGE>



                          GLACIER WATER SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  APRIL 3, 2005
                                   (UNAUDITED)

1. BASIS OF PRESENTATION

         Glacier  Water  Services,  Inc., a Delaware  corporation  ("Glacier" or
"Company"),  is  primarily  engaged in the  operation  of  self-service  vending
machines  that  dispense  drinking  water to  consumers.  In the  opinion of the
Company's management, the accompanying consolidated financial statements reflect
all adjustments necessary for a fair presentation of the consolidated  financial
position of the Company and its  subsidiaries  and the  consolidated  results of
their operations and their cash flows for the three month periods ended April 3,
2005 and March 28, 2004.  Although the Company  believes that the disclosures in
these financial  statements are adequate to make the  information  presented not
misleading,  certain  information,   including  footnote  information,  normally
included in  financial  statements  prepared in  accordance  with United  States
generally accepted accounting  principles has been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission.  Results
of operations for the three-month period ended April 3, 2005 are not necessarily
indicative of results to be expected for the full year. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended January 2, 2005.

2. STOCK OPTION PLANS

         In December  2002,  the FASB issued  Statement of Financial  Accounting
Standards (SFAS) No. 148,  Accounting for Stock-Based  Compensation - Transition
and  Disclosure.  SFAS No. 148 amends SFAS No. 123,  Accounting for  Stock-Based
Compensation,  to provide  alternative  methods of  transition  for a  voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results.

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued STATEMENT OF FINANCIAL  ACCOUNTING STANDARDS (SFAS) No. 123R (SFAS 123R),
"Share-Based Payment",  which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation" and supercedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees." SFAS 123R requires compensation costs related to share-based payment
transactions  to  be  recognized  in  the  financial  statements.  With  limited
exception,  the amount of compensation  cost is measured based on the grant date
fair value of the  equity or  liability  instruments  used.  SFAS 123R  requires
liability for awards to be re-measured  each reporting  period and  compensation
costs to be  recognized  over the period  that an employee  provides  service in
exchange  for the  award.  SFAS123R  is  effective  beginning  the first  annual
reporting period that begins after June 15, 2005. The Company plans to adopt the
provisions of SFAS 123R prospectively  effective fiscal year 2006. The Company's
Stock  Compensation  Program  expired in March 2004 and no options  were granted
during the year ended  January 2, 2005 or the quarter  ended April 3, 2005.  The
Company  is  currently  determining  the  effect of SFAS  123R on the  Company's
consolidated financial statements.

         The Company has options  outstanding under the 1994 Stock  Compensation
Program.   The  Company  accounts  for  this  plan  under  the  recognition  and
measurement  principles  of APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  under  which no  compensation  cost has been  recognized,  since the
exercise  prices of the options  granted were not less than the market prices of
the stock on the date of grant.


                                       5
<PAGE>





         The  following  unaudited  pro  forma  disclosures  represent  what the
Company's  net income  (loss) and income (loss) per common share would have been
had the Company recorded  compensation cost for this plan in accordance with the
provisions of SFAS No. 123:


<TABLE>
<CAPTION>
                                                        Three Months Ended
                                                      --------------------
                                                       April 3,   March 28,
                                                        2005        2004
                                                       -------    --------
                                               (in thousands, except per share data)
<S>                                                    <C>        <C>
Net loss applicable to common stockholders,
as reported ........................................   $(1,973)   $(1,201)
                                                       -------    -------
Deduct:  Total stock-based employee compensation
expense determined under the fair value method for
all awards .........................................        23        175
                                                       -------    -------
Pro forma net loss applicable to common stockholders   $(1,996)   $(1,376)
                                                       =======    =======
Basic and Diluted loss per common share:
As reported ........................................   $ (0.91)   $ (0.57)
                                                       =======    =======
Pro forma ..........................................   $ (0.92)   $ (0.65)
                                                       =======    =======
</TABLE>



3. EARNINGS PER SHARE

         Basic  earnings  per common  share is  computed  based on the  weighted
average number of common shares outstanding during the period.  Diluted earnings
per common  share is computed  based on the  weighted  average  number of common
shares  outstanding  during the period increased by the effect of dilutive stock
options and warrants,  using the treasury  stock method.  The  computations  for
basic and diluted earnings per share are as follows:


<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                  ---------------------------
                                                                    April 3,       March 28,
                                                                      2005           2004
                                                                  -----------    -----------
                                                             (in thousands, except per sharedata )
<S>                                                               <C>            <C>
Numerator for basic earnings per share - net loss applicable to
common shareholders ...........................................   $    (1,973)   $    (1,201)
                                                                  -----------    -----------
Denominator - shares:
     Weighted average common shares for basic
       earnings per share .....................................     2,172,055      2,119,483
     Effect of dilutive securities ............................          --
                                                                                 -----------
                                                                                 -----------
Dilutive potential shares for diluted earnings per share ......     2,172,055      2,119,483
                                                                  ===========    ===========
Loss per share:
     Basic and dilutive loss applicable to
     common shareholders ......................................   $     (0.91)   $     (0.57)
                                                                  ===========    ===========
Potentially dilutive securities not included above since
they are antidilutive .........................................       435,048        225,543
                                                                  ===========    ===========
</TABLE>

4. LONG-TERM DEBT AND LINE OF CREDIT

         COMPANY OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES

         On January  27,  1998,  Glacier  Water Trust I (the  "Trust"),  a newly
created  Delaware  business trust and a wholly-owned  subsidiary of the Company,
issued 105,154 common  securities to the Company and completed a public offering
of 3,400,000 of 9.0625% Cumulative Trust Preferred Securities with a liquidation
amount of $25.00 per security  (the "Trust  Preferred  Securities"  and together
with the common  securities  the "Trust  Securities").  The Trust exists for the
sole purpose of issuing Trust Securities and purchasing Subordinated Debentures.
Concurrent with the issuance of such securities, the Trust invested the proceeds
therefrom in an aggregate  principal  amount of  $85,000,000  of 9.0625%  Junior
Subordinated Debentures (the "Subordinated Debentures") issued by the Company.

                                       6

<PAGE>

         The Subordinated Debentures are unsecured obligations of the Company to
the  trust  and are  subordinate  and  junior  in  right  of  payment  to  other
indebtedness  of the Company.  The Trust relies on payments on the  Subordinated
Debentures   to  make   distributions   on  the  Trust   Preferred   Securities.
Distributions  on the Trust Preferred  Securities are payable monthly in arrears
by the  Trust.  The  Company  may  cause  the  Trust to  defer  the  payment  of
distributions for a period not to exceed 60 consecutive months.  During any such
deferral  period,  distributions  will accrue and  compound  quarterly,  and the
Company may not declare or pay distributions on its common or preferred stock or
debt securities  that rank equal or junior to the  Subordinated  Debentures.  To
date,  the  Company  is  current  on  all  distributions.  The  Trust  Preferred
Securities  are  subject  to  mandatory  redemption  upon the  repayment  of the
Subordinated   Debentures  at  the  redemption  price  equal  to  the  aggregate
liquidation   amount  of  the  Securities   plus  any   accumulated  and  unpaid
distributions.  The Subordinated  Debentures mature on January 31, 2028, but may
be redeemed at the option of the Company at any time since January 31, 2003. The
Company effectively  provides a full and unconditional  guarantee of the Trust's
obligations under the Trust Securities.

         The  Company's  Board of  Directors  authorized  the  purchase of up to
1,250,000 of the Trust  Preferred  Securities.  As of April 3, 2005, the Company
had repurchased 921,400 of the Trust Preferred  Securities at an average cost of
$16.40 per share.  The Company did not repurchase any shares of Trust  Preferred
Securities  during the  periods  ended April 3, 2005 and March 28,  2004.  As of
April  3,  2005,  the  Company  had  used  $15,118,000  in  cash  to  repurchase
$23,035,000  face value of the Trust  Preferred  Securities  less  $1,098,000 of
deferred  financing  costs. The Company may continue to make such purchases from
time to time in open market transactions or block trades.

         Pursuant to an Exchange Offer, which commenced on February 26, 2003 and
expired on April 11, 2003,  holders of a total of 983,880 shares of Common Stock
exchanged  those shares for a total of 787,105 Trust  Preferred  Securities then
held by the Company at a ratio of one share of Common Stock for  eight-tenths of
a Trust  Preferred  Security.  The Exchange  Offer  increased  long-term debt by
approximately  $19,678,000,  which represents the total liquidation value of the
787,105 Trust Preferred Securities.

         The Trust is considered a variable interest entity under FIN 46R. Prior
to FIN  46R,  variable  interest  entities  were  generally  consolidated  by an
enterprise  when the enterprise  had a controlling  financial  interest  through
ownership of a majority voting interest in the entity. Under FIN 46R, a variable
interest entity should be consolidated by its primary  beneficiary.  Because the
Company is not the primary beneficiary of the Trust, the financial statements of
the Trust are no longer included in the consolidated financial statements of the
Company.  FIN 46R  may be  adopted  either  by  recording  a  cumulative  effect
adjustment as of the date of the adoption,  or restating prior period  financial
statements. The Company opted to restate prior period financial statements. As a
result of the  de-consolidation,  the  Company has  recorded  its  ownership  of
105,154 Common Trust Securities of the Trust and its ownership of 134,295 shares
of Trust  Preferred  Securities as long-term  assets and has recorded the Junior
Subordinated  Debentures as long-term  debt at a face value of  $87,629,000.  At
April  3,  2005 and  March  28,  2004,  there  were  3,265,705  Trust  Preferred
Securities outstanding (other than the 134,295 held by the Company).

                                       7

<PAGE>

LINE OF CREDIT AND NOTES PAYABLE

         On October 7, 2003, the Company  restructured  its credit facility with
City National Bank in connection with the  acquisition of Water Island.  The two
existing  revolving  notes,  under which no borrowings  were  outstanding,  were
replaced with a new $12,000,000 revolving credit facility,  which had a maturity
date of February 1, 2009. The credit  availability  on the new revolving  credit
facility was reduced by $400,000 every three months  beginning  February 7, 2004
until its  maturity in  February  2009.  The credit  facility  required  monthly
interest  payments at the City  National  Bank's prime rate plus 1.00%.  The new
credit facility required a quarterly unused facility fee of 0.50% per annum, and
contained certain customary  financial  covenants which restricted  indebtedness
and capital expenditures.  On March 26, 2004, the City National Bank reduced the
interest rate of the  revolving  credit  facility to City National  Bank's prime
rate. All other terms on the credit facility remained the same.
<PAGE>

         On December 1, 2004,  City National Bank increased the  availability on
the credit facility to $25,000,000. The revised credit facility requires monthly
interest  payments at the City  National  Bank's  prime rate (5.75% per annum at
April 3, 2005).  The  revolving  credit  facility  requires a  quarterly  unused
facility  fee of 0.50% per annum and  continues  to  contain  certain  customary
financial covenants,  which restrict indebtedness and capital expenditures.  The
Company  pledged certain assets such as repair parts and equipment as collateral
for its obligations  under the credit facility.  The credit  availability on the
revised  revolving  credit facility is reduced by $1,500,000  every three months
beginning  January 1, 2006 until its maturity in February  2009. The Company was
in  compliance  at April 3, 2005 with all such  covenants.  As of April 3, 2005,
there was $17,000,000  outstanding on the credit facility,  which is included in
long-term notes payable.  Availability  under the $25,000,000  revolving  credit
facility was $8,000,000 as of April 3, 2005.

         As of April 3, 2005, there is $460,000  outstanding under notes payable
associated with the Pure Fill and Water Island acquisitions.  The Pure Fill note
was payable  over 4 years in equal  quarterly  payments and as of April 3, 2005,
had an  outstanding  balance of  $160,000.  As of April 3, 2005 the Water Island
note had a balance of $300,000 and is payable in October 2005. Amounts due after
April 3, 2006 under the Company's credit facility and notes payable are included
in  long-term  notes  payable.  Both the Pure  Fill and the Water  Island  notes
payable  accrue  interest at the prime rate published in the Wall Street Journal
(5.75% and 4.0% per annum at April 3, 2005 and March 28, 2004, respectively).


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


         THIS REPORT  CONTAINS  "FORWARD-LOOKING"  INFORMATION,  AS THAT TERM IS
DEFINED BY THE FEDERAL SECURITIES LAWS, ABOUT OUR FINANCIAL  CONDITION,  RESULTS
OF OPERATIONS AND BUSINESS. YOU CAN FIND MANY OF THESE STATEMENTS BY LOOKING FOR
WORDS SUCH AS "MAY", "WILL", "EXPECT", "ANTICIPATE",  "BELIEVE", "ESTIMATE", AND
SIMILAR WORDS USED IN THIS REPORT. THE FORWARD-LOOKING STATEMENTS IN THIS REPORT
ARE INTENDED TO BE SUBJECT TO THE SAFE HARBOR PROTECTION PROVIDED BY THE FEDERAL
SECURITIES LAWS.

         THESE  FORWARD-LOOKING  STATEMENTS ARE SUBJECT TO NUMEROUS ASSUMPTIONS,
RISKS AND  UNCERTAINTIES  (INCLUDING TRADE RELATIONS AND  COMPETITION)  THAT MAY
CAUSE OUR ACTUAL  RESULTS TO BE  MATERIALLY  DIFFERENT  FROM ANY FUTURE  RESULTS
EXPRESSED OR IMPLIED IN THOSE STATEMENTS.

         BECAUSE THE STATEMENTS ARE SUBJECT TO RISKS AND  UNCERTAINTIES,  ACTUAL
RESULTS  MAY  DIFFER   MATERIALLY   FROM  THOSE  EXPRESSED  OR  IMPLIED  BY  THE
FORWARD-LOOKING  STATEMENTS.  WE CAUTION  READERS NOT TO PLACE UNDUE RELIANCE ON
THESE STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS REPORT.

         THE  CAUTIONARY  STATEMENTS  SET FORTH ABOVE  SHOULD BE  CONSIDERED  IN
CONNECTION WITH ANY SUBSEQUENT WRITTEN OR ORAL  FORWARD-LOOKING  STATEMENTS THAT
WE OR PERSONS ACTING ON OUR BEHALF MAY ISSUE. WE DO NOT UNDERTAKE ANY OBLIGATION
TO REVIEW OR CONFIRM ANALYSTS'  EXPECTATIONS OR ESTIMATES OR TO RELEASE PUBLICLY
ANY  REVISIONS  TO  ANY   FORWARD-LOOKING   STATEMENTS  TO  REFLECT   EVENTS  OR
CIRCUMSTANCES  AFTER THE DATE OF THIS  REPORT OR TO REFLECT  THE  OCCURRENCE  OF
UNANTICIPATED EVENTS.


                                        8
<PAGE>

RESULTS OF OPERATIONS

OVERVIEW

         Since its  inception  in 1983,  the Company  has  created an  extensive
network of water vending  machines  located  throughout the United  States.  The
Company's  water  vending  machines,  which  include  both  outdoor  and  indoor
machines, are placed at supermarkets and other retail locations in order to take
advantage of the regular customer traffic at such locations.

         Currently  operating in 39 states,  the Company  continually  looks for
opportunities  to  expand  its  presence  in  existing  markets  as  well as new
high-potential  markets.  The  Company  also looks for ways to reduce  operating
costs in all areas. The Company explores  opportunities to implement  technology
to improve  efficiency of servicing the vending  machines to lower its operating
costs.  The Company  continues to monitor  selling,  general and  administrative
expenses and reduce costs where possible.

         The Company looks for  acquisition  opportunities  that will strengthen
the  Company and improve its  operating  results.  On February 8, 2002,  Glacier
acquired  substantially  all of the assets of Pure Fill.  Immediately  after the
acquisition,   Glacier   integrated  the  Pure  Fill  assets  into  the  Glacier
operations. On October 7, 2003, Glacier acquired Water Island, Inc., a privately
held water vending company headquartered in Indianapolis,  Indiana.  Immediately
after  the  acquisition,  Glacier  integrated  Water  Island  into  the  Glacier
operations.

         During  the  three-month  period  ended  April  3,  2005,  the  Company
continued with a major initiative to upgrade its outside water vending machines.
The  upgrade  results  in a new  generation  machine  ("G-2")  with a new modern
appearance  and  increased   functionality   such  as  dollar  bill  validators,
multi-vend   capability,   a  replaceable   stainless  steel  vend  chamber  and
replaceable  Lexan  panels.  The  Company  plans  to  complete  the  upgrade  of
approximately  11,000 outside machines by the end of fiscal 2005. As of April 3,
2005, the Company has upgraded  approximately  7,500 machines at a total cost of
approximately  $15,000,000.  The Company  expects that it will expend a total of
approximately $22,000,000 in connection with this major upgrade initiative.  The
initiative  is such that the Company has the ability to time these  expenditures
with the availability of its cash flows from operations and  availability  under
its credit facility.

REVENUES

         Revenues  for the  quarter  ended  April 3,  2005  remained  relatively
constant at $17,543,000  compared to $17,546,000  for the same period last year.
As of April 3, 2005, the Company had approximately 15,100 machines in operation,
compared to 15,300 machines as of March 28, 2004.

COSTS AND EXPENSES

         Operating expenses,  excluding  depreciation and amortization,  for the
quarter ended April 3, 2005 decreased 2.1% to $11,434,000, or 65.2% of revenues,
compared to  $11,676,000,  or 66.5% of revenues,  for the same period last year.
The decrease in operating  expenses  for the  three-month  period ended April 3,
2005  was due  primarily  to the  reduction  in  repair  and  maintenance  costs
associated  with  maintaining  the  Company's  vending  machines.  The Company's
operating  costs are not  completely  linear or  variable  to sales and as such,
significant  fluctuations  in  revenues  can  impact  the  operating  costs as a
percentage of revenues.

         Depreciation  and  amortization  expense was $3,302,000 for the quarter
ended  April 3, 2005,  compared  to  $2,510,000  for the same  period last year.
Depreciation  and  amortization  expense includes the amortization of intangible
assets and prepaid  contract rights of  approximately  $470,000 and $253,000 for
the  three-month  periods ended April 3, 2005 and March 28, 2004,  respectively.
The increase in depreciation and  amortization  expense was due primarily to new
capital  expenditures added since last year,  primarily  associated with the G-2
upgrade of the  Company's  outside  machines,  offset  partially  by some assets
becoming fully  depreciated or amortized.  The Company  currently has sufficient
machines in storage available for deployment in fiscal 2005.  Machines that have
been previously installed and are in storage awaiting  redeployment  continue to
be depreciated.
                                       9

<PAGE>

         SG&A expenses for the quarter ended April 3, 2005 increased slightly to
$2,700,000, or 15.4% of revenues,  compared to $2,631,000, or 15.0% of revenues,
for the same period last year.

         Interest expense for the quarter ended April 3, 2005 increased $150,000
to  $2,080,000,  compared  to  $1,930,000  for the same  period  last year.  The
increase in interest expense was primarily due to additional interest associated
with higher outstanding  borrowing on the credit facility in connection with the
G-2 project as compared to last year.

         The Company had no  investment  income for the quarters  ended April 3,
2005, and March 28, 2004.

         As a result of the foregoing,  the Company had a net loss applicable to
common  stockholders  of $1,973,000  for the  three-month  period ended April 3,
2005, compared to a loss of $1,201,000 for the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's  primary  sources of liquidity and capital  resources are
cash and cash equivalents,  cash flows from operations and funds available under
the Company's credit facility.  On October 7, 2003, the Company restructured its
credit  facility with City National Bank. The new $12,000,000  revolving  credit
facility had a maturity  date of February 1, 2009.  The credit  availability  of
this facility was reduced by $400,000 every three months  beginning  February 7,
2004 until its maturity in February 2009. The revolving credit facility required
monthly interest  payments at the City National Bank's prime rate plus 1.00%. On
March  26,  2004,  the City  National  Bank  revised  the  interest  rate of the
revolving credit facility to City National Bank's prime rate (5.75% per annum at
April 3, 2005).  The  revolving  credit  facility  requires a  quarterly  unused
facility  fee of 0.50% per annum.  On  December  1,  2004,  City  National  Bank
increased the  availability on the credit  facility to $25,000,000.  The revised
credit facility  requires monthly interest  payments at the City National Bank's
prime rate (5.75% per annum at April 3, 2005).  The  revolving  credit  facility
requires a quarterly  unused  facility  fee of 0.50% per annum and  continues to
contain certain customary financial covenants,  which restrict  indebtedness and
capital  expenditures.  The Company  pledged certain assets such as repair parts
and equipment as collateral for its obligations  under the credit facility.  The
credit  availability  on the  revised  revolving  credit  facility is reduced by
$1,500,000  every three months  beginning  January 1, 2006 until its maturity in
February  2009.  The  Company was in  compliance  at April 3, 2005 with all such
covenants.  As of April 3, 2005, there was $17,000,000 outstanding on the credit
facility,  which is included in long-term notes payable.  Availability under the
$25,000,000 revolving credit facility was $8,000,000 as of April 3, 2005.

         For the  three  months  ended  April  3,  2005,  net cash  provided  by
operations was approximately $1,780,000. The Company made capital investments in
vending  machines  and other  equipment  of  approximately  $6,841,000,  up from
$1,474,000  in the first  quarter of the  previous  year,  which was  associated
primarily  with the upgrade of the outside coin  machines.  Net cash provided by
financing  activities  was  approximately  $7,221,000,  primarily as a result of
additional  borrowings  under the  credit  facility.  As of April 3,  2005,  the
Company had working  capital of  $1,810,000.  Because the Company  does not have
significant  product  inventories,  working  capital will vary from time to time
depending on the timing of payables, other accrued liabilities,  and payments of
prepaid contract rights. The Company's stockholders' deficit as of April 3, 2005
was  $28,342,000,  which  amount  continues  to  be  below  the  American  Stock
Exchange's listing  guidelines.  Although no actions have been taken to date, it
is possible that the American Stock Exchange could delist the Company's stock.

         The Company believes that its cash and cash equivalents, cash flow from
operations and the availability  under its credit facility will be sufficient to
meet its  anticipated  amounts  due under its  credit  facility,  operating  and
capital  requirements,  as well as distributions  related to the Trust Preferred
Securities, for at least the next twelve months.

                                       10
<PAGE>


RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2003, FASB issued Interpretation No. 46R,  CONSOLIDATION OF
VARIABLE INTEREST ENTITIES ("FIN 46R"),  which supercedes FIN46. The application
of the  revised  Interpretation  is  required  in the  financial  statements  of
companies  that have  interests in special  purpose  entities for periods  after
December 15, 2003. FIN 46R required the Company to de-consolidate its investment
in Glacier Water Trust I. The application of this interpretation resulted in the
Company  reflecting  its ownership of Trust  Securities as long-term  assets and
increasing  long-term debt by the same amount of $5,986,000  (see "Note 4"). The
Company chose to restate prior year's  consolidated  balance sheet to conform to
the current year presentation,  in accordance with the transition  provisions of
FIN 46R.

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued STATEMENT OF FINANCIAL  ACCOUNTING STANDARDS (SFAS) No. 123R (SFAS 123R),
"Share-Based Payment",  which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation" and supercedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees." SFAS 123R requires compensation costs related to share-based payment
transactions  to  be  recognized  in  the  financial  statements.  With  limited
exception,  the amount of compensation  cost is measured based on the grant date
fair value of the  equity or  liability  instruments  used.  SFAS 123R  requires
liability awards to be re-measured each reporting period and compensation  costs
to be recognized over the period that an employee  provides  service in exchange
for the award. SFAS123R is effective beginning the first annual reporting period
that begins after June 15, 2005.  The Company  plans to adopt the  provisions of
SFAS  123R  prospectively  effective  fiscal  year  2006.  The  Company's  Stock
Compensation  Program  expired in March 2004 and no options were granted  during
the year ended January 2, 2005 or the quarter  ended April 3, 2005.  The Company
is currently  determining the effect of SFAS 123R on the Company's  consolidated
financial statements.

         In November  2004,  the FASB issued FASB  Statement No. 151,  INVENTORY
COSTS:  AN  AMENDMENT  OF ARB  NO.  43,  which  establishes  standards  for  the
accounting  for  unexpected  production  defects  and  waste  and the  impact on
capitalized  inventory costs. FASB No. 151 is effective for financial statements
for fiscal years beginning after June 15, 2005. The Company does not expect that
the  adoption  of FASB 151  will  have a  material  impact  on the  consolidated
financial statements.

         In November 2004,  the FASB issued FASB  Statement No. 152,  ACCOUNTING
FOR REAL ESTATE TIME-SHARING  TRANSACTIONS - AN AMENDMENT OF FASB STATEMENTS NO.
66 AND NO. 67. The Statement  amends FASB No. 66,  ACCOUNTING  FOR SALES OF REAL
Estate,  to reference the financial  accounting and reporting  guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS. This Statement
also amends  FASB  Statement  No. 67,  ACCOUNTING  FOR COSTS AND INITIAL  RENTAL
OPERATIONS  OF  REAL  ESTATE  PROJECTS,  to  state  that  the  guidance  for (a)
incidental  operations and (b) costs incurred to sell real estate  projects does
not apply to real estate  time-sharing  transactions.  FASB No. 152 is effective
for financial  statements  for fiscal years  beginning  after June 15, 2005. The
Company  does not  expect  that the  adoption  of FASB 152 will have a  material
impact on the consolidated financial statements.


                                       11
<PAGE>

         In November 2004, the FASB issued FASB Statement No. 153,  EXCHANGES OF
NONMONETARY  ASSETS - AN  AMENDMENT  OF APB OPINION NO. 29. The  guidance in APB
Opinion  No.  29,  ACCOUNTING  FOR  NONMONETARY  TRANSACTIONS,  is  based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair value of the assets  exchanged.  The  guidance  in that  Opinion,  however,
included certain exceptions to that principle.  This Statement amends Opinion 29
to eliminate  the  exception  for  nonmonetary  exchanges of similar  productive
assets  that do not  have  commercial  substance.  A  nonmonetary  exchange  has
commercial  substance  if the future  cash flows of the entity are  expected  to
change significantly as a result of the exchange.  FASB No. 153 is effective for
financial  statements  for fiscal  periods  beginning  after June 15, 2005.  The
Company  does not  expect  that the  adoption  of FASB 153 will have a  material
impact on the consolidated financial statements.

ITEM 3 - QUANTITATIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK

         The Company's  primary  market risk exposure is interest rate risk. The
principal  objectives  of  our  asset/liability  management  activities  are  to
minimize debt and maximize net investment income,  while maintaining  acceptable
levels of  interest  rate  risk and  facilitating  our  funding  needs.  Our net
investment  income and interest expense are subject to the risk of interest rate
fluctuations.  The Company's  outstanding  bank debt is tied to the bank's prime
lending  rate and as such,  the  Company is at risk due to  increases  in market
rates.  A 10% change in the bank's  lending  rate  would have the  potential  of
increasing the annual  interest on the  outstanding  borrowings of the bank debt
and impacting the future earnings of the Company by less than $100,000 annually.
The  Company's  exposure to interest  rate risk also relates to the  opportunity
cost of fixed-rate  obligations  associated with the Trust Preferred Securities.
The  Company  believes  that the fixed  rate of the Trust  Preferred  Securities
approximates  the  Company's  long-term  market rate.  As of April 3, 2005,  the
Company held no marketable securities available-for-sale.

ITEM 4 - CONTROLS AND PROCEDURES

         Since April 3, 2005, the Company  carried out an evaluation,  under the
supervision and with the  participation of our Chief Executive Officer and Chief
Financial  Officer,   of  the  effectiveness  of  our  disclosure  controls  and
procedures,  as such term is defined  in Rule  13a-15(e)  promulgated  under the
Securities and Exchange Act of 1934, as amended.  Based on that evaluation,  the
Chief  Executive  Officer and the Chief  Financial  Officer  concluded  that the
disclosure  controls and procedures were effective as of April 3, 2005 to ensure
that information required to be disclosed in reports that are filed or submitted
under the Securities and Exchange Act of 1934 is recorded, processed, summarized
and  reported  within the time  periods  specified  in  Securities  and Exchange
Commission  rules and forms.  There has been no change in our internal  controls
over  financial  reporting  during the latest fiscal quarter that has materially
affected,  or is reasonably likely to materially  affect,  our internal controls
over financial reporting.


                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         From time to time,  claims are made against the Company in the ordinary
course of business.  With the assistance from legal counsel,  estimated  amounts
for such claims that are probable and can  reasonably  be estimated are recorded
as liabilities in the consolidated  balance sheets. The likelihood of a material
change in these  estimated  accruals  would be  dependent  on new claims as they
arise and the favorable or unfavorable outcome of the particular litigation.  As
of April 3, 2005,  the Company was not a party to any legal  proceeding  that is
likely to  reasonably  have a  material  impact on the  results  of  operations,
financial condition or liquidity of the Company.

                                       12

<PAGE>



ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECUITY HOLDERS

         There  were no  matters  submitted  to a vote of the  security  holders
during the quarter ended April 3, 2005.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

a.       EXHIBITS
31.1     Certification of Brian H. McInerney, Chief Executive Officer,
         under SEC Rule 13a-14(a).
31.2     Certification of W. David Walters, Chief Financial Officer,
         under SEC Rule 13a-14(a).
32.1     Certification of Brian H. McInerney, Chief Executive Officer,
         under SEC Rule 13a-14(b).
32.2     Certification of W. David Walters, Chief Financial Officer,
         under SEC Rule 13a-14(b).

         b. REPORTS ON FORM 8-K

There were no reports on form 8-K filed during the period ended April 3, 2005.




                                   SIGNATURES

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


                                GLACIER WATER SERVICES, INC.

Date:  April 29, 2005           By: /S/  BRIAN H. MCINERNEY
                                    -------------------------------------------
                                      Brian H. McInerney
                                      President and Chief Executive Officer


Date:  April 29, 2005           By: /S/  W. DAVID WALTERS
                                    -------------------------------------------
                                      W. David Walters
                                      Senior Vice President and
                                      Chief Financial Officer


                                       13