NEW YORK, June 14, 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 quarter and year ended March
31, 2016.
Operating highlights for the fiscal year ended March 31, 2016:
- Net sales increased 25.7% to $72.2
million for fiscal 2016, as compared to $57.5 million in the prior fiscal year.
- Total gross profit increased 32.4% to $28.6 million, as compared to $21.6 million for the prior fiscal year.
- EBITDA, as adjusted, improved by 215.3% to $3.6 million, as compared to $1.1 million in fiscal 2015.
- Whiskey revenues increased 35.8% from the prior year due to
continued strong performance of Jefferson's bourbons and Knappogue and
Clontarf Irish whiskeys.
- Goslings Rum revenue increased 10.9% from the prior year due to
strong sales in both the U.S. and international markets.
- Goslings Stormy Ginger Beer case
sales increased 55.9% to approximately 1,115,000 cases from
approximately 715,000 in the prior year.
- The Company increased its reserves of aged bourbon and entered
into two long-term new-fill agreements to augment its supplies of
aged bourbon for its Jefferson's brand.
- The Company introduced new, upgraded packaging for its Goslings
rums and Knappogue Castle Irish whiskeys.
"This was an outstanding year for Castle Brands. Continued
strong growth of our more profitable brands, such as Jefferson's Bourbon, Goslings Rum and our
Irish Whiskeys, resulted in substantial revenue growth and even
greater growth in gross profit. It also drove improved margins,
decreased G&A as a percent of revenue, significantly reduced
net loss and increased EBITDA, as adjusted. We expect that these
growth trends and improving financial performance will continue,"
stated Richard J. Lampen, President
and Chief Executive Officer of Castle
Brands.
"Jefferson's is now one of the
top five selling premium small batch bourbons, Goslings Black Seal
is now one of the top ten selling premium imported rums and
Goslings Stormy Ginger Beer is now the largest selling premium
ginger beer in the U.S.," Mr. Lampen added.
"We used our aged bourbon reserves to support increased sales of
Jefferson's and its brand
extensions, such as Jefferson's
Ocean Aged at Sea. We also continue to add innovative expressions
to increase sales and enhance the Jefferson's brand. Our whiskey
portfolio has also benefitted from additions to our Irish whiskey
offerings and the initiation of a barrel program for Knappogue
Castle Whiskey. We expect strong growth in whiskey sales to
continue. Goslings' sponsorship of the 35th
America's Cup Challenge continues to drive the visibility of
Goslings rum and ginger beer," said John
Glover, Chief Operating Officer of Castle Brands.
In the fourth quarter of fiscal 2016, the Company had net sales
of $20.0 million, a 23.6% increase
from net sales of $16.2 million in
the comparable prior-year period. Net income attributable to common
shareholders was $0.4 million, or
$0.00 per basic and diluted share, in
the fourth quarter of fiscal 2016, as compared to a loss of
($0.6) million, or ($0.00) per basic and diluted share, in the
prior-year period.
EBITDA, as adjusted, for the fourth quarter of fiscal 2016
improved to $1.4 million as compared
to $0.4 million for the comparable
prior-year period.
The Company had net sales of $72.2
million for fiscal 2016, an increase of 25.7% from net sales
of $57.5 million in fiscal 2015. This
sales growth was driven by the overall growth of Jefferson's and Jefferson's Reserve, Clontarf Irish whiskey
and Goslings Stormy Ginger Beer. Net loss attributable to common
shareholders was ($2.5) million, or
($0.02) per basic and diluted share,
in fiscal 2016. This compares to a net loss attributable to common
shareholders of ($3.8) million, or
($0.02) per basic and diluted share,
in fiscal 2015.
EBITDA, as adjusted, for fiscal 2016 improved to $3.6 million as compared to $1.1 million for the prior-year.
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, loss from equity investment in non-consolidated
affiliate, foreign exchange (gain) loss, net change in fair value
of warrant liability, net income attributable to noncontrolling
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:
Jefferson's®,
Jefferson's Presidential
Select™, Jefferson's
Reserve® and Ocean Aged at Sea Bourbon ,
Jefferson's Wine Finish Collection
and Jefferson's Wood Expiriments,
Goslings Rum®, 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," "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, 2016 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
|
|
|
|
|
Three Months Ended March 31,
(unaudited)
|
Twelve Months Ended March 31,
|
|
2016
|
2015
|
2016
|
2015
|
Sales,
net*
|
$ 19,963,408
|
$ 16,157,004
|
$ 72,220,368
|
$ 57,457,421
|
Cost of
sales*
|
11,795,649
|
10,009,402
|
43,666,798
|
35,884,632
|
|
|
|
|
|
Gross profit
|
8,167,759
|
6,147,602
|
28,553,570
|
21,572,789
|
|
|
|
|
|
Selling
expense
|
5,310,887
|
4,388,705
|
19,222,659
|
15,254,818
|
General and
administrative expense
|
1,877,059
|
1,944,023
|
7,385,851
|
6,488,336
|
Depreciation and
amortization
|
242,938
|
237,917
|
939,513
|
907,540
|
|
|
|
|
|
Income (loss) from
operations
|
736,875
|
(423,043)
|
1,005,547
|
(1,077,905)
|
|
|
|
|
|
Other (expense) income,
net
|
(445)
|
(196)
|
(666)
|
16,602
|
Income from equity
investment in non-consolidated affiliate
|
9,654
|
--
|
18,667
|
--
|
Foreign exchange (loss)
gain
|
(59,654)
|
203,015
|
(190,867)
|
(4,564)
|
Interest expense,
net
|
(302,062)
|
(284,731)
|
(1,088,539)
|
(1,129,047)
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
384,368
|
(504,955)
|
(255,858)
|
(2,194,914)
|
Income tax benefit
(expense), net
|
37,038
|
(597,113)
|
(1,450,848)
|
(1,278,999)
|
|
|
|
|
|
Net income
(loss)
|
421,406
|
(1,102,068)
|
(1,706,706)
|
(3,473,913)
|
Net (loss) income
attributable to noncontrolling interests
|
4,862
|
469,666
|
(809,662)
|
(325,829)
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders
|
$ 426,268
|
$ (632,402)
|
$ (2,516,368)
|
$ (3,799,742)
|
|
|
|
|
|
Net income (loss) per
common share, basic, common shareholders
|
0.00
|
(0.00)
|
(0.02)
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share, diluted, common shareholders
|
0.00
|
(0.00)
|
(0.02)
|
(0.02)
|
|
|
|
|
|
Weighted average shares
used in computation, basic, attributable to common
shareholders
|
160,167,121
|
156,882,587
|
159,380,223
|
155,456,341
|
|
|
|
|
|
Weighted average shares
used in computation, diluted, attributable to common
shareholders
|
167,331,808
|
156,882,587
|
159,380,223
|
155,456,341
|
|
|
*Sales, net and Cost
of sales include excise taxes of $7,451,569 and $6,754,453 for the
years ended March 31, 2016 and 2015, respectively.
|
CASTLE BRANDS INC.
AND SUBSIDIARIES
|
Reconciliation of
net loss attributable to common shareholders to EBITDA, as
adjusted
|
(Unaudited)
|
|
|
Three months ended
|
Twelve
months ended
|
|
March
31,
|
March
31,
|
|
2016
|
2015
|
2016
|
2015
|
Net income (loss)
attributable to common shareholders
|
$ 426,271
|
$ (632,402)
|
$(2,516,368)
|
$(3,799,742)
|
Adjustments:
|
|
|
|
|
Interest expense,
net
|
302,062
|
284,731
|
1,088,539
|
1,129,047
|
Income tax (benefit)
expense, net
|
(37,038)
|
597,113
|
1,450,848
|
1,278,999
|
Depreciation and
amortization
|
242,938
|
237,917
|
939,513
|
907,540
|
EBITDA income
(loss)
|
934,233
|
487,359
|
962,532
|
(484,156)
|
Allowance for
doubtful accounts
|
9,000
|
159,000
|
61,000
|
236,000
|
Allowance for
obsolete inventory
|
100,000
|
281,000
|
200,000
|
281,000
|
Stock-based
compensation expense
|
334,143
|
180,893
|
1,370,556
|
787,710
|
Other expense
(income), net
|
445
|
196
|
666
|
(16,602)
|
Income from equity
investment in non-consolidated affiliate
|
(9,654)
|
--
|
(18,667)
|
--
|
Foreign exchange loss
(gain)
|
59,650
|
(203,015)
|
190,867
|
4,564
|
Net (loss) income
attributable to noncontrolling interests
|
(4,862)
|
(469,666)
|
809,662
|
325,829
|
EBITDA, as
adjusted
|
$ 1,422,955
|
$ 435,767
|
$3,576,616
|
$1,134,345
|
Castle Brands Inc.
Investor Relations, 646-356-0200
info@castlebrandsinc.com
www.castlebrandsinc.com
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SOURCE Castle Brands Inc.