NEW YORK, Feb. 9, 2016 /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, 2015.
Operating highlights for the quarter and nine months ended
December 31, 2015:
- Goslings Rum revenue increased 40.5% to $4.6 million for the third quarter of fiscal
2016, as compared to $3.3 million for
the comparable prior-year period on volume growth of 32.2%.
- Goslings Stormy Ginger Beer
revenue increased 53.1% to $3.4
million for the third quarter of fiscal 2016, as compared to
2.3 million for the comparable prior-year period on volume growth
of 45.7%.
- Net sales increased 8.0% to $17.2
million for the third quarter of fiscal 2016, as compared to
$15.9 million for the comparable
prior-year period.
- Net sales increased 26.5% to $52.3
million for the nine month period ended December 31, 2015, as compared to $41.3 million for the comparable prior-year
period.
- Shipments of Jefferson's
Bourbon increased 54.1% to 43,000 cases in the nine month period
ended December 31, 2015, as compared
to 27,900 in the comparable prior-year period.
- The Company continued to increase its bourbon reserves for its
Jefferson's brand by purchasing and aging over 4,000 new fill
barrels in the third quarter at the Company's newly completed
warehouse at Kentucky Artisan Distillers.
- EBITDA, as adjusted increased 11.3% to $0.7 million in the third quarter of fiscal 2016,
as compared to $0.6 million in the
comparable prior-year period.
- The Company extended its exclusive distribution agreement with
I.L.A.R. S.p.A to import Pallini Limoncello and other brand
extensions.
"This was another strong quarter for Castle Brands. Substantial
growth of Goslings Rums and Goslings Stormy Ginger Beer drove
continued revenue growth and even greater growth in gross profit.
This allowed us to 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.
"We are particularly pleased to see the strong growth in
Goslings this quarter. We attribute this growth in part to our
sponsorship of the 35th America's Cup and to Goslings'
new packaging, which incorporates the America's Cup logo. The
America's Cup has become an extreme sport and millions of viewers
are following this very high-profile series of events. Upcoming
races in New York City in May and
Chicago in June will bring strong
brand exposure. The America's Cup will culminate with the
Challenger Playoffs and Finals in Bermuda in 2017. Goslings is gaining far more
visibility and global reach than ever before with an enormous
audience that goes well beyond the demographics of the sailing
world," said John Glover, Chief
Operating Officer of Castle Brands.
"By laying down over 4,000 barrels of new fill, we are
complementing our substantial reserves of aged bourbon to support
continued strong growth of our Jefferson's brand. Our Jefferson's Ocean Aged at Sea® Bourbon and
various expressions of Jefferson's
utilizing special finishes are adding to the already high interest
in Jefferson's Bourbon. While we
did not release any of these special expressions in the third
quarter, we have two special releases planned for the fourth
quarter. In addition, we completed the new packaging for our
Knappogue Castle Whiskey and are expanding the Knappogue Castle
barrel program. Whiskey sales for the first nine months of fiscal
2016 increased 38% over the same period in 2015. We expect that
these initiatives will continue to drive strong sales increases for
our whiskey portfolio," Mr. Glover added.
For the Three and Nine Months Ended December 31, 2015
In the third quarter of fiscal 2016, the Company had net sales
of $17.2 million, an 8.0% increase
from net sales of $15.9 million in
the comparable prior-year period. This sales growth was driven
primarily by the growth of Goslings Rums and Stormy Ginger Beer. Net loss was ($0.6) million in the third quarter of fiscal
2016 compared to a net loss of ($0.3)
million in the comparable prior-year period. Net loss
attributable to common shareholders was ($0.8) million, or ($0.01) per basic and diluted share, in the third
quarter of fiscal 2016, as compared to ($0.6) million, or ($0.00) per basic and diluted share, in the
comparable prior-year period.
EBITDA, as adjusted, for the third quarter of fiscal 2016 was
$0.7 million as compared to
$0.6 million for the comparable
prior-year period.
For the nine months ended December 31,
2015, the Company had net sales of $52.3 million, a 26.5% increase from net sales of
$41.3 million in the comparable
prior-year period. Net loss was ($2.1)
million for the nine months ended December 31, 2015, as compared to a net loss of
($2.4) million in the comparable
prior-year period. Net loss attributable to common shareholders was
($2.9) million, or ($0.02) per basic and diluted share, for the nine
months ended December 31, 2015, as
compared to ($3.2) million, or
($0.02) per basic and diluted share,
in the comparable prior-year period.
EBITDA, as adjusted, for the first nine months of fiscal 2016
improved to $2.2 million as compared
to $0.7 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
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
|
Six months ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Sales,
net*
|
|
$
|
17,207,372
|
|
|
$
|
15,936,514
|
|
|
$
|
52,256,960
|
|
|
$
|
41,300,417
|
|
Cost of
sales*
|
|
|
10,505,277
|
|
|
|
9,941,654
|
|
|
|
31,871,149
|
|
|
|
25,875,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
6,702,095
|
|
|
|
5,994,860
|
|
|
|
20,385,811
|
|
|
|
15,425,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
|
4,618,614
|
|
|
|
4,034,964
|
|
|
|
13,911,772
|
|
|
|
10,866,113
|
|
General and
administrative expense
|
|
|
1,751,369
|
|
|
|
1,565,380
|
|
|
|
5,508,792
|
|
|
|
4,544,313
|
|
Depreciation and
amortization
|
|
|
235,250
|
|
|
|
237,652
|
|
|
|
696,575
|
|
|
|
669,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
96,862
|
|
|
|
156,864
|
|
|
|
268,672
|
|
|
|
(654,862)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income, net
|
|
|
--
|
|
|
|
(208)
|
|
|
|
(221)
|
|
|
|
16,798
|
|
Foreign exchange
(loss) gain
|
|
|
(41,634)
|
|
|
|
57,879
|
|
|
|
(131,213)
|
|
|
|
(207,579)
|
|
Interest expense,
net
|
|
|
(271,677)
|
|
|
|
(267,459)
|
|
|
|
(786,477)
|
|
|
|
(844,316)
|
|
Income from equity
investment
in non-consolidated affiliate
|
|
|
4,500
|
|
|
|
--
|
|
|
|
9,013
|
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
|
(211,949)
|
|
|
|
(52,924)
|
|
|
|
(640,226)
|
|
|
|
(1,689,959)
|
|
Income tax expense,
net
|
|
|
(383,962)
|
|
|
|
(258,962)
|
|
|
|
(1,487,886)
|
|
|
|
(681,886)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(595,911)
|
|
|
|
(311,886)
|
|
|
|
(2,128,112)
|
|
|
|
(2,371,845)
|
|
Net income
attributable to noncontrolling interests
|
|
|
(211,792)
|
|
|
|
(279,110)
|
|
|
|
(814,524)
|
|
|
|
(795,495)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
|
$
|
(807,703)
|
|
|
$
|
(590,996)
|
|
|
$
|
(2,942,636)
|
|
|
$
|
(3,167,340)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share, basic and diluted, attributable to common
shareholders
|
|
$
|
(0.01)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computation, basic and diluted, attributable to
common shareholders
|
|
|
160,031,891
|
|
|
|
155,831,146
|
|
|
|
159,119,831
|
|
|
|
154,989,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Sales, net and Cost
of sales include excise taxes of $1,542,619 and $1,677,886 for the
three months ended December 31, 2015 and 2014, respectively, and
$5,230,618 and $4,736,838 for the nine months ended December 31,
2015 and 2014, 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,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net loss attributable
to common shareholders
|
|
$
|
(807,703)
|
|
|
$
|
(590,996)
|
|
|
$
|
(2,942,636)
|
|
|
$
|
(3,167,340)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
271,677
|
|
|
|
267,459
|
|
|
|
786,477
|
|
|
|
844,316
|
|
Income tax expense,
net
|
|
|
383,962
|
|
|
|
258,962
|
|
|
|
1,487,886
|
|
|
|
681,886
|
|
Depreciation and
amortization
|
|
|
235,250
|
|
|
|
237,652
|
|
|
|
696,575
|
|
|
|
669,623
|
|
EBITDA (loss)
income
|
|
|
83,186
|
|
|
|
173,077
|
|
|
|
28,302
|
|
|
|
(971,515)
|
|
Allowance for doubtful
accounts
|
|
|
9,000
|
|
|
|
9,000
|
|
|
|
52,000
|
|
|
|
77,000
|
|
Allowance for obsolete
inventory
|
|
|
--
|
|
|
|
--
|
|
|
|
100,000
|
|
|
|
--
|
|
Stock-based
compensation expense
|
|
|
338,023
|
|
|
|
206,553
|
|
|
|
1,036,412
|
|
|
|
606,817
|
|
Other (income)
expense, net
|
|
|
--
|
|
|
|
208
|
|
|
|
221
|
|
|
|
(16,798)
|
|
Income from equity
investments in non-consolidated affiliate
|
|
|
(4,500)
|
|
|
|
--
|
|
|
|
(9,013)
|
|
|
|
--
|
|
Foreign exchange loss
(gain)
|
|
|
41,634
|
|
|
|
(57,879)
|
|
|
|
131,213
|
|
|
|
207,579
|
|
Net income
attributable to noncontrolling interests
|
|
|
211,792
|
|
|
|
279,110
|
|
|
|
814,524
|
|
|
|
795,495
|
|
EBITDA, as
adjusted
|
|
|
679,135
|
|
|
|
610,069
|
|
|
|
2,153,659
|
|
|
|
698,578
|
|
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-third-quarter-results-300217624.html
SOURCE Castle Brands Inc.