NEW YORK, Nov. 9, 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 six month periods ended September 30, 2015.
Operating highlights for the quarter ended September 30, 2015:
- Net sales increased 38.5% to $18.5
million for the second quarter of fiscal 2016, as compared
to $13.4 million for the comparable
prior-year period.
- Total gross profit increased 44.5% to $7.1 million, as compared to $4.9 million for the comparable prior-year
period.
- EBITDA, as adjusted, improved to $0.9
million, as compared to $0.1
million for the comparable prior-year period.
- Continued strong growth of Jefferson's bourbons and the Irish whiskies
led to a 73.4% increase in whiskey revenues from the comparable
prior-year period.
- Goslings Stormy Ginger Beer case
sales increased 69.2% to approximately 325,000 cases from
approximately 192,000 in the comparable prior-year period.
- Goslings Rum case sales increased 7.3% to 47,000 cases from
43,700 cases in the comparable prior-year period.
- Loss before provision for income taxes improved to ($0.1) million as compared to ($0.6) million in the comparable prior-year
period.
- The Company's revolving credit facility capacity was increased
from $12 million to $19 million to permit the Company to acquire
additional aged whiskey inventory.
- The Company increased its reserves of aged bourbon and entered
into two long-term new fill agreements to augment these supplies of
aged bourbon for its Jefferson's brand.
"This was another outstanding quarter for Castle Brands.
Continued strong growth of our more profitable brands, such as
Jefferson's, Goslings and our
Irish whiskeys resulted in substantial revenue growth and even
greater growth in gross profit. This allowed us to decrease G&A
as a percent of revenue, reduce net loss and increase EBITDA, as
adjusted. We expect these trends of increasing sales and improving
financial performance to continue over the balance of the fiscal
year and beyond." stated Richard J.
Lampen, President and Chief Executive Officer of Castle
Brands.
"In the quarter, additional purchases of aged bourbon reserves
coupled with initiation of two long-term new fill programs put us
in a solid position to support increased sales of our Jefferson's bourbon portfolio. We believe that
Jefferson's is now the fastest
growing premium small-batch bourbon in America. We also increased
our Irish whiskey offerings and expanded our barrel program for
Knappogue Castle Whiskey. In addition, we continued to build on our
successful relationship with Pallini liqueurs by extending our
exclusive distribution agreement for an additional five-year
period," said John Glover, Chief
Operating Officer of Castle Brands.
"The growing popularity of the trademarked "Dark 'n
Stormy"® cocktail has been an important driver of Goslings
growth. Recognizing that, we have focused on increasing sales of
Goslings "Stormy Ginger
Beer". Ginger beer sales for the 12 months ended
September 30, 2015 exceeded 900,000
cases, making "Stormy Ginger
Beer" the best-selling premium ginger beer in America.
We are also increasing the prominence of the Goslings brand through
our sponsorship of the 35th America's Cup. The America's
Cup has become an extreme sport and millions of viewers will be
following this very high-profile event over a three-year period.
Races will take place in Europe
and the United States in 2015 and
2016 culminating with the Challenger Playoffs and Finals in
Bermuda in 2017. Goslings will
have far more visibility and global reach than ever before with an
enormous audience that goes well beyond the demographics of the
sailing world," Mr. Glover added.
For the Three and Six Months Ended September 30, 2015
In the second quarter of fiscal 2016, the Company had net sales
of $18.5 million, a 38.5% increase
from net sales of $13.4 million in
the comparable prior-year period. This sales growth was driven by
the overall growth of Goslings Rums and Stormy Ginger Beer, Jefferson's and Jefferson's Reserve bourbons, Clontarf Irish
whiskey and Pallini liqueurs. Net loss was ($0.7) million in the second quarter of fiscal
2016 compared to a net loss of ($0.9)
million in the comparable prior-year period. Net loss
attributable to common shareholders was ($1.0) million, or ($0.01) per basic and diluted share, in the
second quarter of fiscal 2016, as compared to ($1.1) million, or ($0.01) per basic and diluted share, in the
prior-year period.
EBITDA, as adjusted, for the second quarter of fiscal 2016
improved to $0.9 million as compared
to $0.1 million for the comparable
prior-year period.
For the six months ended September 30,
2015, the Company had net sales of $35.0 million, a 38.2% increase from net sales of
$25.4 million in the comparable
prior-year period. Net loss was ($1.5)
million for the six months ended September 30, 2015, as compared to a net loss of
($2.1) million in the comparable
prior-year period. Net loss attributable to common shareholders was
($2.1) million, or ($0.01) per basic and diluted share, for the six
months ended September 30, 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 first six months of fiscal 2016
improved to $1.5 million as compared
to $0.1 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 allowances for doubtful accounts and obsolete
inventory, stock-based compensation expense, other (income)
expense, net, income from equity investment in
non-consolidated affiliate, foreign exchange loss and net income
attributable to noncontrolling interests 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 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 branded spirits including: Goslings
Rum®, Jefferson's®, Jefferson's Presidential Select™,
Jefferson's Reserve®
and Jefferson's Ocean Aged at
Sea® Bourbon, Jefferson's Chef's Collaboration and
Jefferson's The Manhattan: Barrel Finished Cocktail,
Jefferson's® Rye
Whiskey, Knappogue Castle Whiskey®, Knappogue Twin Wood,
Knappogue Castle 1951, 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," "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, 2015, as amended, 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 September 30,
|
|
|
Six months ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Sales,
net*
|
|
$
|
18,536,509
|
|
|
$
|
13,381,704
|
|
|
$
|
35,049,588
|
|
|
$
|
25,363,903
|
|
Cost of
sales*
|
|
|
11,480,107
|
|
|
|
8,498,031
|
|
|
|
21,365,872
|
|
|
|
15,933,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
7,056,402
|
|
|
|
4,883,673
|
|
|
|
13,683,716
|
|
|
|
9,430,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
|
4,941,213
|
|
|
|
3,591,823
|
|
|
|
9,293,158
|
|
|
|
6,831,149
|
|
General and
administrative expense
|
|
|
1,691,332
|
|
|
|
1,368,317
|
|
|
|
3,757,423
|
|
|
|
2,978,933
|
|
Depreciation and
amortization
|
|
|
233,069
|
|
|
|
215,873
|
|
|
|
461,325
|
|
|
|
431,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
190,788
|
|
|
|
(292,340)
|
|
|
|
171,810
|
|
|
|
(811,726)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
|
|
600
|
|
|
|
64
|
|
|
|
(221)
|
|
|
|
17,006
|
|
Foreign exchange
loss
|
|
|
(40,360)
|
|
|
|
(29,011)
|
|
|
|
(89,579)
|
|
|
|
(265,458)
|
|
Interest expense,
net
|
|
|
(257,636)
|
|
|
|
(288,215)
|
|
|
|
(514,800)
|
|
|
|
(576,857)
|
|
Income from equity
investment in non-
consolidated affiliate
|
|
|
4,513
|
|
|
|
--
|
|
|
|
4,513
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
|
(102,095)
|
|
|
|
(609,502)
|
|
|
|
(428,277)
|
|
|
|
(1,637,035)
|
|
Income tax expense,
net
|
|
|
(579,962)
|
|
|
|
(259,962)
|
|
|
|
(1,103,924)
|
|
|
|
(422,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(652,057)
|
|
|
|
(869,464)
|
|
|
|
(1,502,201)
|
|
|
|
(2,059,959)
|
|
Net income
attributable to
noncontrolling
interests
|
|
|
(329,214)
|
|
|
|
(211,049)
|
|
|
|
(602,732)
|
|
|
|
(516,385)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common
shareholders
|
|
$
|
(1,011,271)
|
|
|
$
|
(1,080,513)
|
|
|
$
|
(2,134,933)
|
|
|
$
|
(2,576,344)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share, basic and
diluted, attributable to common
shareholders
|
|
$
|
(0.01)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in
computation, basic and diluted,
attributable to common shareholders
|
|
|
159,774,811
|
|
|
|
155,189,679
|
|
|
|
158,661,309
|
|
|
|
154,562,875
|
|
|
|
* Sales, net and Cost
of sales include excise taxes of $1,919,019 and $1,574,437 for the
three months ended September 30, 2015 and 2014, respectively, and
$3,687,999 and $3,058,951 for the six months ended September 30,
2015 and 2014, respectively.
|
CASTLE BRANDS INC.
AND SUBSIDIARIES
|
Reconciliation of
net loss to EBITDA, as adjusted
|
(Unaudited)
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net loss attributable
to common shareholders
|
|
$
|
(1,011,271)
|
|
|
$
|
(1,080,513)
|
|
|
$
|
(2,134,933)
|
|
|
$
|
(2,576,344)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
257,636
|
|
|
|
288,215
|
|
|
|
514,800
|
|
|
|
576,857
|
|
Income tax expense,
net
|
|
|
579,962
|
|
|
|
259,962
|
|
|
|
1,103,924
|
|
|
|
422,924
|
|
Depreciation and
amortization
|
|
|
233,069
|
|
|
|
215,873
|
|
|
|
461,325
|
|
|
|
431,971
|
|
EBITDA
(loss)
|
|
|
59,396
|
|
|
|
(316,463)
|
|
|
|
(54,884)
|
|
|
|
(1,144,592)
|
|
Allowance for doubtful
accounts
|
|
|
9,000
|
|
|
|
9,000
|
|
|
|
43,000
|
|
|
|
68,000
|
|
Allowance for obsolete
inventory
|
|
|
--
|
|
|
|
--
|
|
|
|
100,000
|
|
|
|
--
|
|
Stock-based
compensation expense
|
|
|
458,450
|
|
|
|
208,808
|
|
|
|
698,390
|
|
|
|
400,264
|
|
Other (income)
expense, net
|
|
|
(600)
|
|
|
|
(64)
|
|
|
|
221
|
|
|
|
(17,006)
|
|
Income from equity
investments in non-consolidated affiliate
|
|
|
(4,513)
|
|
|
|
--
|
|
|
|
(4,513)
|
|
|
|
--
|
|
Foreign exchange
loss
|
|
|
40,360
|
|
|
|
29,011
|
|
|
|
89,579
|
|
|
|
265,458
|
|
Net income
attributable to noncontrolling interests
|
|
|
329,214
|
|
|
|
211,049
|
|
|
|
602,732
|
|
|
|
516,385
|
|
EBITDA, as
adjusted
|
|
|
891,307
|
|
|
|
141,341
|
|
|
|
1,474,525
|
|
|
|
88,509
|
|
Castle Brands Inc.
Investor Relations, 646-356-0200
info@castlebrandsinc.com
www.castlebrandsinc.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/castle-brands-announces-fiscal-2016-second-quarter-results-300174227.html
SOURCE Castle Brands Inc.