NEW YORK, Feb. 17, 2015 /PRNewswire/ -- Castle Brands
Inc. (NYSE MKT: ROX), a developer and international marketer of
premium and super-premium branded spirits, today reported financial
results for the three and nine month periods ended December 31, 2014.
Operating highlights for the quarter ended December 31, 2014:
- Net sales increased 17% to $15.9
million as compared to $13.6
million for the prior-year period.
- Total gross profit increased 24% to $6.0
million as compared to $4.8
million for the prior-year period.
- Income from operations improved to $0.2
million as compared to a loss of ($0.1) million in the prior-year period.
- Whiskey revenues increased 43% from the prior-year period due
to continued strong performance of Jefferson's bourbons and Knappogue and
Clontarf Irish whiskeys.
- Gosling's Stormy Ginger Beer
case sales increased 65% to approximately 163,000 cases from
approximately 99,000 in the prior-year period.
- EBITDA, as adjusted, improved by 276% to approximately
$0.6 million as compared to
approximately $0.2 million in the
prior-year period.
"During the quarter, we continued to drive sales of our more
profitable brands. This resulted in strong revenue growth, improved
margins, decreased G&A as a percent of revenue, significantly
reduced net loss and increased EBITDA, as adjusted. We expect these
trends and improving financial performance to continue," stated
Richard J. Lampen, President and
Chief Executive Officer of Castle Brands.
"We used our aged bourbon reserves to support increased sales of
Jefferson's and Jefferson's Reserve, grow our Jefferson's barrel program, and expand our
Jefferson's Ocean Aged at Sea
program. Our whiskey portfolio has also benefitted from additions
to our Irish whiskey offerings. We have initiated a Knappogue
barrel program and plan to add additional expressions under our
Knappogue and Clontarf labels. These initiatives should drive
additional whiskey sales growth," said John
Glover, Chief Operating Officer of Castle Brands.
"Sales of Gosling's Stormy Ginger
Beer increased 65% to 163,000 cases in the third quarter of
fiscal 2015, an indication of the growing prominence of the
Gosling's brand. Growth of the overall brand recognition should
stimulate demand in core markets and provide opportunities for
expansion to new markets," Mr. Glover added.
In the third quarter of fiscal 2015, the Company had net sales
of $15.9 million, a 17.4% increase
from net sales of $13.6 million in
the comparable prior-year period. Net loss attributable to
controlling interests was ($0.6)
million in the third quarter of fiscal 2015 compared to
($2.4) million in the comparable
prior-year period. Net loss attributable to common shareholders was
($0.6) million, or ($0.00) per basic and diluted share, in the third
quarter of fiscal 2015, as compared to ($2.6) million, or ($0.02) per basic and diluted share, in the
prior-year period.
EBITDA, as adjusted, for the third quarter of fiscal 2015
improved to $0.6 million as compared
to $0.2 million for the comparable
prior-year period.
For the nine months ended December 31,
2014, the Company had net sales of $41.3 million, a 15.8% increase from net sales of
$35.7 million in the comparable
prior-year period. Net loss attributable to controlling interests
was ($3.2) million for the nine
months ended December 31, 2014, as
compared to ($8.1) million in the
comparable prior-year period. Net loss attributable to common
shareholders was ($3.2) million, or
($0.02) per basic and diluted share,
for the nine months ended December 31,
2014, as compared to ($8.7)
million, or ($0.08) per basic
and diluted share, in the prior-year period.
EBITDA, as adjusted, for the nine months ended December 31, 2014 improved to $0.7 million as compared to $0.2 million for the comparable prior-year
period.
Non-GAAP Financial Measures
Within the information above, Castle Brands provides information
regarding EBITDA, as adjusted, which is not a recognized term under
GAAP (Generally Accepted Accounting Principles) and does not
purport to be an alternative to income (loss) from operations or
net income (loss) as a measure of operating performance. Earnings
before interest, taxes, depreciation and amortization, or EBITDA,
adjusted for allowance for doubtful accounts, stock-based
compensation expense, other (income) expense, net, loss from
equity investment in non-consolidated affiliate, foreign exchange
(gain) loss, net change in fair value of warrant liability, net
income attributable to non-controlling interests and dividend to
preferred shareholders is a key metric the Company uses in
evaluating its financial performance on a consistent basis across
various periods. EBITDA, as adjusted, is considered a non-GAAP
financial measure as defined by Regulation G promulgated by the SEC
under the Securities Act of 1933, as amended. Due to the
significance of non-cash and non-recurring items, EBITDA, as
adjusted, enables the Company's Board of Directors and management
to monitor and evaluate the business on a consistent basis. The
Company uses EBITDA, as adjusted, as a primary measure, among
others, to analyze and evaluate financial and strategic planning
decisions regarding future operating investments and allocation of
capital resources. The Company believes that EBITDA, as adjusted,
eliminates items that are not indicative of its core operating
performance or are based on management's estimates, such as
allowance accounts, are due to changes in valuation, such as the
effects of changes in foreign exchange or fair value of warrant
liability, or do not involve a cash outlay, such as stock-based
compensation expense. EBITDA, as adjusted, should be considered in
addition to, rather than as a substitute for, income from
operations, net income and cash flows from operating activities. A
reconciliation of net loss attributable to common shareholders to
EBITDA, as adjusted, is presented below.
About Castle Brands
Castle Brands is a developer and international marketer of
premium and super-premium beverage alcohol brands including:
Gosling's Rum®, Jefferson's®, Jefferson's Presidential Select™,
Jefferson's Reserve®
and Ocean Aged at Sea Bourbon, Jefferson's® Rye Whiskey, Knappogue
Castle Whiskey®, Clontarf® Irish Whiskey,
Pallini® Limoncello, Boru® Vodka and
Brady's® Irish Cream. Additional information concerning
the Company is available on the Company's website,
www.castlebrandsinc.com.
Forward Looking Statements
This press release includes statements of our expectations,
intentions, plans and beliefs that constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and
are intended to come within the safe harbor protection provided by
those sections. These statements, which involve risks and
uncertainties, relate to the discussion of our business strategies
and our expectations concerning future operations, margins, sales,
new products and brands, potential joint ventures, potential
acquisitions, expenses, profitability, liquidity and capital
resources and to analyses and other information that are based on
forecasts of future results and estimates of amounts not yet
determinable. You can identify these and other forward-looking
statements by the use of such words as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "thinks,"
"estimates," "seeks," "expects," "predicts," "could," "projects,"
"potential" and other similar terms and phrases, including
references to assumptions. These forward looking statements are
made based on expectations and beliefs concerning future events
affecting us and are subject to uncertainties, risks and factors
relating to our operations and business environments, all of which
are difficult to predict and many of which are beyond our control,
that could cause our actual results to differ materially from those
matters expressed or implied by these forward looking statements.
These risks include our history of losses and expectation of
further losses, our ability to expand our operations in both new
and existing markets, our ability to develop or acquire new brands,
our relationships with distributors, the success of our marketing
activities, the effect of competition in our industry and economic
and political conditions generally, including the current economic
environment and markets. More information about these and other
factors are described under the caption "Risk Factors" in Castle
Brands' Annual Report on Form 10-K for the year ended March 31, 2014 and other reports we file with the
Securities and Exchange Commission. When considering these
forward looking statements, you should keep in mind the cautionary
statements in this press release and the reports we file with the
Securities and Exchange Commission. New risks and uncertainties
arise from time to time, and we cannot predict those events or how
they may affect us. We assume no obligation to update any forward
looking statements after the date of this press release as a result
of new information, future events or developments, except as
required by the federal securities laws.
CASTLE BRANDS INC.
AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
Three months ended December
31,
|
Nine months ended December
31,
|
|
2014
|
2013
|
2014
|
2013
|
Sales, net*
|
$15,936,514
|
$13,579,289
|
$41,300,417
|
$35,657,613
|
Cost of
sales*
|
9,941,654
|
8,731,204
|
25,875,230
|
22,706,709
|
|
|
|
|
|
Gross profit
|
5,994,860
|
4,848,085
|
15,425,187
|
12,950,904
|
|
|
|
|
|
Selling
expense
|
4,034,964
|
3,368,324
|
10,866,113
|
9,196,857
|
General and
administrative expense
|
1,565,380
|
1,373,157
|
4,544,313
|
3,883,221
|
Depreciation and
amortization
|
237,652
|
217,002
|
669,623
|
644,764
|
|
|
|
|
|
Income (loss) from
operations
|
156,864
|
(110,398)
|
(654,862)
|
(773,938)
|
|
|
|
|
|
Other (expense) income,
net
|
(208)
|
(480)
|
16,798
|
(654)
|
Loss from equity
investment in non-
consolidated affiliate
|
—
|
(428,598)
|
—
|
(452,675)
|
Foreign exchange gain
(loss)
|
57,879
|
50,709
|
(207,579)
|
(60,814)
|
Interest expense,
net
|
(267,459)
|
(281,732)
|
(844,316)
|
(779,031)
|
Net change in fair
value of warrant liability
|
—
|
(1,426,179)
|
—
|
(5,392,594)
|
Income tax (expense)
benefit, net
|
(258,962)
|
37,038
|
(681,886)
|
111,114
|
|
|
|
|
|
Net loss
|
(311,886)
|
(2,159,640)
|
(2,371,845)
|
(7,348,592)
|
Net income attributable
to noncontrolling interests
|
(279,110)
|
(210,833)
|
(795,495)
|
(741,249)
|
|
|
|
|
|
Net loss attributable
to controlling interests
|
(590,996)
|
(2,370,473)
|
(3,167,340)
|
(8,089,841)
|
|
|
|
|
|
Dividend to preferred
shareholders
|
—
|
(192,678)
|
—
|
(570,588)
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
$(590,996)
|
$(2,563,151)
|
$(3,167,340)
|
$(8,660,429)
|
|
|
|
|
|
Net loss per common
share, basic and diluted, attributable to common
shareholders
|
$(0.00)
|
$(0.02)
|
$(0.02)
|
$(0.08)
|
|
|
|
|
|
Weighted average shares
used in computation, basic and diluted, attributable to common
shareholders
|
155,838,146
|
112,150,634
|
154,989,569
|
110,682,714
|
* Sales, net and Cost of sales include excise taxes of
$1,677,886 and $1,664,018 for the three months ended
December 31, 2014 and 2013,
respectively, and $4,736,838 and
$4,677,198 for the nine months ended
December 31, 2014 and 2013,
respectively.
CASTLE BRANDS INC.
AND SUBSIDIARIES
Reconciliation of
net loss attributable to common shareholders to EBITDA, as
adjusted
(Unaudited)
|
|
|
|
Three months ended
|
Nine months ended
|
|
|
December 31,
|
December
31,
|
|
|
2014
|
2013
|
2014
|
2013
|
|
Net loss attributable
to common shareholders
|
$(590,996)
|
$(2,563,151)
|
$(3,167,340)
|
$(8,660,429)
|
|
Adjustments:
|
|
|
|
|
|
Interest expense,
net
|
267,459
|
281,732
|
844,316
|
779,031
|
|
Income tax expense
(benefit), net
|
258,962
|
(37,038)
|
681,886
|
(111,114)
|
|
Depreciation and
amortization
|
237,652
|
217,002
|
669,623
|
644,764
|
|
EBITDA income
(loss)
|
173,077
|
(2,101,455)
|
(971,515)
|
(7,347,748)
|
|
Allowance for doubtful
accounts
|
9,000
|
10,500
|
77,000
|
36,312
|
|
Stock-based
compensation expense
|
206,553
|
103,636
|
606,817
|
281,385
|
|
Other (income)
expense, net
|
208
|
480
|
(16,798)
|
654
|
|
Loss from equity
investment in non-consolidated affiliate
|
—
|
428,598
|
—
|
452,675
|
|
Foreign exchange
(gain) loss
|
(57,879)
|
(50,709)
|
207,579
|
60,814
|
|
Net change in fair
value of warrant liability
|
—
|
1,426,179
|
—
|
5,392,594
|
|
Net income
attributable to noncontrolling interests
|
279,110
|
210,833
|
795,495
|
741,249
|
|
Dividend to preferred
shareholders
|
—
|
192,678
|
—
|
570,588
|
|
EBITDA, as
adjusted
|
$610,069
|
$220,740
|
$698,578
|
$188,523
|
|
|
|
|
|
|
|
|
Castle Brands Inc.
Investor Relations, 646-356-0200
info@castlebrandsinc.com
www.castlebrandsinc.com
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visit:http://www.prnewswire.com/news-releases/castle-brands-announces-fiscal-2015-third-quarter-results-300036212.html
SOURCE Castle Brands Inc.