NEW YORK, Aug. 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 quarter ended June 30,
2016.
Operating highlights for the quarter ended June 30, 2016:
- Net sales increased 1.4% to $16.8
million for the first quarter of fiscal 2017, as compared to
$16.5 million in the comparable
prior-year period.
- Total gross profit increased 1.3% to $6.7 million for the first quarter of fiscal
2017, as compared to $6.6 million in
the comparable prior-year period.
- Jefferson's was named a "Hot
Prospect" brand by Impact, a prominent industry newsletter,
based on accelerated sales growth in recent years and was ranked by
IWSR as the number three selling super-premium American
whiskey.
- U.S. Goslings Rum revenues increased 7.6% from the prior-year
period.
- Goslings Stormy Ginger Beer
revenues increased 27.6% from the comparable prior-year
period.
"While sales for the first quarter of fiscal 2017, typically our
slowest period, were impacted by the timing of introductions of
various line extensions and wholesale shipments, we anticipate
accelerating sales growth over the balance of fiscal 2017. We are
planning several additional releases for Jefferson's, including Ocean Cask Strength and
other wine finishes, to build on the success of Jefferson's and Jefferson's Reserve. We expect sales of
Goslings Black Seal to accelerate both in the U.S. and
internationally and be augmented by the launch of Goslings Gold
Seal, while we continue to see increasing sales of Goslings Stormy
Ginger Beer," stated Richard J.
Lampen, President and Chief Executive Officer of Castle
Brands.
"Based on the growing strength of depletions (sales from our
wholesalers to retail outlets) during the quarter, we expect that
accelerating sales growth will produce increased revenue, gross
margin and EBITDA, as adjusted. Improved bottom line and
substantial unused debt capacity position us to continue to add to
our bourbon reserves to support Jefferson's as opportunities arise," Mr.
Lampen added.
"We are very pleased that Impact, a leading industry
newsletter, has named Jefferson's
a "Hot Prospect" brand based on accelerated sales growth in recent
years. In addition, Goslings' sponsorship of the 35th
America's Cup Challenge continues to expose Goslings Rum and the
"Dark 'n Stormy"® cocktail on a global scale, and should provide
for continued growth in the brand's core markets as well as the
opportunity to expand to new markets. With the addition of new
Goslings distributors in Canada
and the Caribbean and launches in
France, Sweden, Norway and Italy, we expect U.S. and international sales
to increase over the balance of the year," said John Glover, Chief Operating Officer of Castle
Brands.
In the first quarter of fiscal 2017, the Company had net sales
of $16.8 million, a 1.4% increase
from net sales of $16.5 million in
the comparable prior-year period. Net loss attributable to common
shareholders was ($0.8) million, or
($0.00) per basic and diluted share,
in the first quarter of fiscal 2017, as compared to a loss of
($1.1) million, or ($0.01) per basic and diluted share, in the
prior-year period.
EBITDA, as adjusted, for the first quarter of fiscal 2017 was
$0.5 million as compared to
$0.6 million for the comparable
prior-year period.
Non-GAAP Financial Measures
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 (gain) loss and net
income attributable to noncontrolling 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
SelectTM, Jefferson's
Reserve®, Jefferson's
Ocean Aged at Sea Bourbon, Jefferson's Wine Finish Collection and
Jefferson's Wood Experiments,
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 June 30,
(unaudited)
|
|
2016
|
2015
|
Sales,
net*
|
$
16,750,925
|
$
16,513,079
|
Cost of
sales*
|
10,034,810
|
9,885,765
|
|
|
|
Gross profit
|
6,716,115
|
6,627,314
|
|
|
|
Selling
expense
|
4,630,915
|
4,351,945
|
General and
administrative expense
|
1,990,235
|
2,066,091
|
Depreciation and
amortization
|
253,634
|
228,256
|
|
|
|
Loss from
operations
|
(158,669)
|
(18,978)
|
|
|
|
Other expense,
net
|
(306)
|
(821)
|
Income from equity
investment in non-consolidated affiliate
|
4,483
|
--
|
Foreign exchange gain
(loss)
|
79,863
|
(49,219)
|
Interest expense,
net
|
(310,261)
|
(257,164)
|
|
|
|
Loss before provision
for income taxes
|
(384,890)
|
(326,182)
|
Income tax expense,
net
|
(210,813)
|
(523,962)
|
|
|
|
Net loss
|
(595,703)
|
(850,144)
|
Net income attributable
to noncontrolling interests
|
(170,116)
|
(273,518)
|
|
|
|
Net loss attributable
to common shareholders
|
$
(765,819)
|
$
(1,123,662)
|
|
|
|
Net loss per common
share, basic and diluted, attributable to common
shareholders
|
(0.00)
|
(0.01)
|
|
|
|
Weighted average shares
used in computation, basic and diluted, attributable to common
shareholders
|
160,521,947
|
157,535,571
|
|
|
|
|
|
|
*Sales, net and Cost
of sales include excise taxes of $1,715,961 and $1,768,980 for the
three months ended June 30, 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
|
|
June
30,
|
|
2016
|
2015
|
Net loss attributable
to common shareholders
|
$
(765,819)
|
$
(1,123,662)
|
Adjustments:
|
|
|
Interest expense,
net
|
310,261
|
257,164
|
Income tax expense,
net
|
210,813
|
523,962
|
Depreciation and
amortization
|
253,634
|
228,256
|
EBITDA income
(loss)
|
8,889
|
(114,280)
|
Allowance for
doubtful accounts
|
11,550
|
34,000
|
Allowance for
obsolete inventory
|
50,000
|
100,000
|
Stock-based
compensation expense
|
352,400
|
239,940
|
Other expense,
net
|
306
|
821
|
Income from equity
investment in non-consolidated affiliate
|
(4,483)
|
--
|
Foreign exchange
(gain) loss
|
(79,863)
|
49,219
|
Net income
attributable to noncontrolling interests
|
170,116
|
273,518
|
EBITDA, as
adjusted
|
$
508,915
|
$
583,218
|
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-first-quarter-fiscal-2017-results-300311367.html
SOURCE Castle Brands Inc.