AIRPORT CITY, Israel,
May 14, 2014 /PRNewswire/
-- SodaStream International Ltd. (NASDAQ: SODA), a leading
manufacturer of home beverage carbonation systems, announced today
its results for the three month period ended March 31, 2014.
For the first quarter ended March 31,
2014:
- Revenue was $118.2 million
compared to $117.6 million in the
first quarter 2013
- EBITDA was $6.3 million compared
to $16.4 million in the first quarter
2013
- Net income was $1.8 million
compared to $12.1 million in the
first quarter 2013.
- Diluted earnings per share were $0.08, compared to $0.57 in the first quarter 2013.
"Our first quarter results were generally in-line with our
expectations and reflect strong growth outside the U.S. offset by
the negative impact on soda maker sell-in in the U.S. from the
challenging holiday season," said Daniel
Birnbaum, Chief Executive Officer of SodaStream. "Our global
base of SodaStream users inclusive of the U.S. remains very active
evidenced by strong consumable sales growth, giving us added
conviction in the attractiveness of our home carbonation system. We
are in the process of adjusting our marketing and selling
strategies in order to reaccelerate soda maker demand and further
increase household penetration. We are confident that our long
history leading the evolution of home carbonation continues to
provide us with strong competitive advantages and compelling
growth opportunities across the globe."
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First Quarter 2014
Financial Review
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Geographical
Revenue Breakdown
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Revenue
|
Three Months
Ended
|
|
|
|
|
|
March
31, 2013
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|
March
31, 2014
|
|
Increase
(decrease)
|
|
Increase
(decrease)
|
|
In Millions
USD
|
|
%
|
The
Americas
|
$
|
48.3
|
|
$
|
34.8
|
|
$
|
(13.5)
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|
(28%)
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Western
Europe
|
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53.3
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|
|
62.5
|
|
|
9.2
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17%
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Asia-Pacific
|
|
9.3
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|
|
11.9
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|
|
2.6
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28%
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Central & Eastern
Europe, Middle East, Africa
|
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6.7
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|
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9.0
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2.3
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34%
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Total
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$
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117.6
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$
|
118.2
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$
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0.6
|
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0.5%
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|
Product Segment
Revenue Breakdown
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Revenue
|
Three Months
Ended
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|
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March
31, 2013
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March
31, 2014
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Increase
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Increase
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In millions
USD
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%
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Soda Maker Starter
Kits
|
$
|
43.0
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|
$
|
32.2
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|
$
|
(10.8)
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|
(25%)
|
Consumables
|
|
72.0
|
|
|
83.0
|
|
|
11.0
|
|
15%
|
Other
|
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2.6
|
|
|
3.0
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|
|
0.4
|
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15%
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Total
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$
|
117.6
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|
$
|
118.2
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$
|
0.6
|
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0.5%
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Product Segment
Unit Breakdown
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|
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Three Months
Ended
|
|
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March
31, 2013
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|
March
31, 2014
|
|
Increase
|
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Increase
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In
thousands
|
|
%
|
Soda Maker Starter
Kits
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|
776
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|
|
604
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(172)
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(22%)
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CO2
Refills
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4,756
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5,820
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1,064
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22%
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Flavors
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7,735
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8,405
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670
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9%
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Gross margin for the first quarter 2014 was 52.3% compared
to 54.5% for the same period in 2013. The decline was primarily due
to unfavorable changes in foreign currency exchange rates and
increased share of higher-cost soda makers in the sales mix, which
was partially offset by a higher share of CO2 refills in product
mix.
Sales and marketing expenses for the first quarter 2014 totaled
$46.1 million, or 39.0% of revenue,
compared to $38.9 million, or 33.0%
of revenue for the comparable period in the prior year. The
600 basis point change in sales and marketing expenses as a
percent of revenue was mainly attributable to an increase in
advertising and promotion expense as a percent of revenue to 18.1%
from 13.5% in the first quarter 2013. This resulted primarily
from the first quarter's marketing campaign in the U.S. and to
a lesser extent from marketing campaigns in Europe that did not take place in the first
quarter of 2013.
General and administrative expenses for the first quarter 2014
were $13.4 million, or 11.3% of
revenue, compared to $11.6 million,
or 9.9% of revenue in the comparable period of last year. The
increase was mainly due to additional expenses related to our newly
acquired Italian distributer as well as additional infrastructure
(mainly information technology systems) to support future
growth.
Operating income decreased 82.8% to $2.3
million, or 2.0% of revenue, compared to $13.6 million, or 11.6% of revenue, in the first
quarter 2013.
Tax expense was $348,000
million with effective tax rate of 16.4%, compared to
$1.3 million with effective tax rate
of 9.7% in the first quarter 2013. The increase in the effective
tax rate was primarily due to the geographical income before tax
distribution and the difference in local tax rates.
Balance Sheet Review
- Cash and cash equivalents and bank deposits at March 31, 2014 were $36.1
million compared to $40.9
million at December 31, 2013.
The decrease is primarily attributable to the investment in our new
production facility and an increase in working capital.
- The Company had $24.0 million of
bank debt at March 31, 2014 mainly
for financing the investment in its new production facility,
compared to $15.5 million of bank
debt at December 31, 2013.
- Working capital at March 31, 2014
increased 3.2% to $160.4 million
compared to $155.4 million at
December 31, 2013. Inventories at
March 31, 2014 increased 1.7% to
$143.1 million compared to
$140.7 million at December 31, 2013.
Guidance
Based on first quarter results and current projections for the
remainder of the year, the Company is maintaining its outlook:
- The Company still expects full year 2014 revenue to increase
approximately 15% over 2013 revenue of $562.7 million.
- The Company still expects full year 2014 EBITDA to increase
approximately 11% over 2013 EBITDA of $62.2
million. Excluding changes in foreign currency exchange
rates compared to 2013, the Company expects 2014 EBITDA to increase
approximately 25% over 2013.
- The Company still expects full year 2014 net income to increase
approximately 3% over 2013 net income of $42.0 million
Conference Call and Management Commentary
Detailed CFO commentary and a supplemental slide presentation
have been filed as part of today's 6-K and will be posted on the
Company's website, http://sodastream.investorroom.com.
The Company has scheduled a conference call for 8:30 AM Eastern Daylight Time (U.S. time) today
(Wednesday, May 14, 2014) to review
the Company's financial results. The conference call will be
broadcast over the Internet as a "live" listen only Webcast. To
listen, please go to: http://sodastream.investorroom.com.
Listeners are urged to login approximately 20 minutes before the
conference call is scheduled to begin in order to register, as well
as download and install any necessary audio software. An
archive of the Webcast will be available for 30 days after the
call.
About SodaStream International
SodaStream manufactures beverage carbonation systems which
enable consumers to easily transform ordinary tap water instantly
into carbonated soft drinks and sparkling water. Soda makers offer
a highly differentiated and innovative solution to consumers of
bottled and canned carbonated soft drinks and sparkling water. Our
products are environmentally friendly, cost effective, promote
health and wellness, and are customizable and fun to use. In
addition, our products offer convenience by eliminating the need to
carry bottles home from the supermarket, to store bottles at home
or to regularly dispose of empty bottles. Our products are
available at more than 60,000 retail stores in 45 countries around
the world. For more information on SodaStream, please visit
the Company's website: www.sodastream.com.
To download SodaStream's investor relations app, which offers
access to SEC documents, press releases, videos, audiocasts and
more, please visit
http://itunes.apple.com/us/app/soda-ir/id524423001?mt=8 for your
iPhone/iPad, or
https://play.google.com/store/apps/details?id=com.theirapp.soda for
your Android mobile device.
Non-IFRS Financial Measures
Beginning this press release the company will no longer provide
certain non-IFRS measures that were provided in past quarterly
press releases, including Adjusted Net Income, Adjusted Earnings
Before Interest, Income Tax, Depreciation and Amortization
("Adjusted EBITDA"), and Adjusted diluted earnings per share
("Adjusted diluted EPS").
The Company believes that these measures no longer provide
material additional information that should be considered in
evaluating the Company's operations.
Forward Looking Statements
This release contains forward-looking statements, which express
the current beliefs and expectations of management. Such statements
are based on management's current beliefs and expectations and
involve a number of known and unknown risks and uncertainties that
could cause our future results, performance or achievements to
differ significantly from the results, performance or achievements
expressed or implied by such forward-looking statements. Important
factors that could cause or contribute to such differences include
risks relating to: our ability to expand into our target markets,
including the United States; our
ability to continue to develop or maintain our presence in retail
networks; our ability to develop and implement production and
operating infrastructure to effectively support our growth; the
success of our marketing campaigns and media spending in terms of
increased sales or increased product and brand name awareness; our
ability to maintain our customer base in markets where we have an
established presence; the risks associated with our reliance on
exclusive arrangements for the distribution of our beverage
carbonation systems and consumables in each of the markets in which
we use third-party distributors; our ability to compete effectively
with other companies which currently offer, or may offer in the
future, competing products; our ability to maintain margins due to
decline in product selling price andor rising costs; potential
product liability claims if any component of our beverage
carbonation systems is misused; our ability to protect our
intellectual property rights; our being found to have a dominant
position in certain markets which may place limits on our ability
to operate; risks associated with our being a multinational
corporation, including fluctuations in currency exchange rates; our
potential exposure to greater than anticipated tax liabilities; our
products being subject to extensive governmental regulation in the
markets in which we operate; adverse conditions in the global
economy which could negatively impact our customers' demand for our
products; and other factors detailed in documents we file from time
to time with the United States Securities and Exchange
Commission. Forward-looking statements in this release are
made pursuant to the safe harbor provisions contained in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are made only as of the date hereof, and
the company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
Company Contact:
Yonah Lloyd
Chief Corporate Development and Communications Officer
SodaStream International Ltd.
Phone: +972-3-976-2462
yonahl@sodastream.com
Investor Contacts (US):
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com
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|
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Consolidated
Statements of Operations
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|
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In thousands (other
than per share amounts)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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For the three
months ended
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|
|
March
31,
|
|
|
|
|
|
2013
|
|
2014
|
|
|
|
(Unaudited)
|
Revenue
|
|
|
|
|
|
|
$
|
117,639
|
|
$
|
118,172
|
Cost of
revenue
|
|
|
|
|
|
|
|
53,554
|
|
|
56,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
64,085
|
|
|
61,846
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
|
|
|
|
|
38,859
|
|
|
46,146
|
General and
administrative
|
|
|
|
|
|
|
|
11,609
|
|
|
13,355
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
|
|
|
|
|
50,468
|
|
|
59,501
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
|
|
|
13,617
|
|
|
2,345
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
25
|
|
|
47
|
Other financial
expense, net
|
|
|
|
|
|
|
|
210
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial
expense, net
|
|
|
|
|
|
|
|
235
|
|
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
|
|
|
|
|
|
13,382
|
|
|
2,126
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
1,298
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period
|
|
|
|
|
|
|
$
|
12,084
|
|
$
|
1,778
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
$
|
0.58
|
|
$
|
0.09
|
Diluted
|
|
|
|
|
|
|
$
|
0.57
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
20,682
|
|
|
20,908
|
Diluted
|
|
|
|
|
|
|
|
21,211
|
|
|
21,289
|
Consolidated
Balance Sheets as of
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
March
31,
|
|
2013
|
|
2014
|
|
(Audited)
|
|
(Unaudited)
|
|
(In
thousands)
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
40,885
|
|
$
|
36,052
|
Inventories
|
|
140,709
|
|
|
143,089
|
Trade
receivables
|
|
123,936
|
|
|
98,851
|
Other
receivables
|
|
22,208
|
|
|
22,674
|
Derivative financial
instruments
|
|
538
|
|
|
755
|
Total current
assets
|
|
328,276
|
|
|
301,421
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
107,132
|
|
|
119,358
|
Intangible
assets
|
|
48,104
|
|
|
48,022
|
Deferred tax
assets
|
|
1,089
|
|
|
1,561
|
Other
receivables
|
|
398
|
|
|
443
|
Total non-current
assets
|
|
156,723
|
|
|
169,384
|
|
|
|
|
|
|
Total
assets
|
|
484,999
|
|
|
470,805
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Loans and
borrowings
|
|
15,452
|
|
|
24,008
|
Derivative financial
instruments
|
|
103
|
|
|
68
|
Trade
payables
|
|
90,749
|
|
|
66,858
|
Income tax
payable
|
|
9,869
|
|
|
10,549
|
Provisions
|
|
1,614
|
|
|
1,511
|
Other current
liabilities
|
|
29,674
|
|
|
26,012
|
Total current
liabilities
|
|
147,461
|
|
|
129,006
|
|
|
|
|
|
|
Employee
benefits
|
|
2,221
|
|
|
2,113
|
Provisions
|
|
714
|
|
|
704
|
Deferred tax
liabilities
|
|
2,997
|
|
|
2,906
|
Total non-current
liabilities
|
|
5,932
|
|
|
5,723
|
|
|
|
|
|
|
Total
liabilities
|
|
153,393
|
|
|
134,729
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Share
capital
|
|
3,378
|
|
|
3,382
|
Share
premium
|
|
193,649
|
|
|
196,404
|
Translation
reserve
|
|
3,394
|
|
|
3,327
|
Retained
earnings
|
|
131,185
|
|
|
132,963
|
Total
shareholders' equity
|
|
331,606
|
|
|
336,076
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
484,999
|
|
$
|
470,805
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended
|
|
|
|
March
31,
|
|
|
|
|
|
2013
|
|
2014
|
|
|
|
(Unaudited)
|
|
|
|
(In
thousands)
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period
|
|
|
|
|
|
|
$
|
12,084
|
|
$
|
1,778
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
|
|
|
|
|
|
|
428
|
|
|
512
|
Change in fair value
of derivative financial instruments
|
|
|
|
|
|
|
|
-
|
|
|
408
|
Depreciation of
property, plant and equipment
|
|
|
|
|
|
|
|
2,553
|
|
|
3,624
|
Share based
payment
|
|
|
|
|
|
|
|
2,394
|
|
|
2,306
|
Interest expense,
net
|
|
|
|
|
|
|
|
25
|
|
|
47
|
Income tax
expense
|
|
|
|
|
|
|
|
1,298
|
|
|
348
|
|
|
|
|
|
|
|
|
18,782
|
|
|
9,023
|
Increase in
inventories
|
|
|
|
|
|
|
|
(9,802)
|
|
|
(2,468)
|
Decrease in trade and
other receivables
|
|
|
|
|
|
|
|
11,189
|
|
|
24,707
|
Decrease in trade
payables
|
|
|
|
|
|
|
|
(19,233)
|
|
|
(24,072)
|
Increase (decrease)
in employee benefits
|
|
|
|
|
|
|
|
14
|
|
|
(110)
|
Decrease in
provisions and other current liabilities
|
|
|
|
|
|
|
|
(12,098)
|
|
|
(3,865)
|
|
|
|
|
|
|
|
|
(11,148)
|
|
|
3,215
|
Interest
paid
|
|
|
|
|
|
|
|
(54)
|
|
|
(36)
|
Income tax
received
|
|
|
|
|
|
|
|
3,448
|
|
|
363
|
Income tax
paid
|
|
|
|
|
|
|
|
(710)
|
|
|
(682)
|
Net cash from
operating activities
|
|
|
|
|
|
|
|
(8,464)
|
|
|
2,860
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Interest
received
|
|
|
|
|
|
|
|
58
|
|
|
5
|
Proceeds from
derivative financial instruments, net
|
|
|
|
|
|
|
|
(1,105)
|
|
|
(660)
|
Acquisition of
property, plant and equipment
|
|
|
|
|
|
|
|
(10,604)
|
|
|
(15,684)
|
Acquisition of
intangible assets
|
|
|
|
|
|
|
|
(1,109)
|
|
|
(363)
|
Net cash from
(used in) investing activities
|
|
|
|
|
|
|
|
(12,760)
|
|
|
(16,702)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
exercise of employee share options
|
|
|
|
|
|
|
|
1,151
|
|
|
453
|
Change in short-term
debt
|
|
|
|
|
|
|
|
8,073
|
|
|
8,556
|
Net cash from
(used in) financing activities
|
|
|
|
|
|
|
|
9,224
|
|
|
9,009
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
|
|
|
|
|
(12,000)
|
|
|
(4,833)
|
Cash and cash
equivalents at the beginning of the period
|
|
|
|
|
|
|
|
62,068
|
|
|
40,885
|
Effect of exchange
rates fluctuations on cash and cash equivalents
|
|
|
|
|
|
|
|
(180)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
|
|
|
|
|
$
|
49,888
|
|
$
|
36,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information about
revenue in reportable segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Americas
|
|
Western
Europe
|
Asia-Pacific
|
Central
&
Eastern
Europe,
Middle
East,
Africa
|
|
Total
|
|
(In
thousands)
|
Three months
ended:
|
|
|
|
|
|
|
|
|
|
March 31, 2013
(Unaudited)
|
$
|
48,339
|
|
53,298
|
9,319
|
6,683
|
|
$
|
117,639
|
March 31, 2014
(Unaudited)
|
$
|
34,758
|
|
62,550
|
11,906
|
8,958
|
|
$
|
118,172
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2013
|
|
2014
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to EBITDA
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
$
|
12,084
|
|
$
|
1,778
|
Interest expense,
net
|
|
|
|
|
|
|
25
|
|
|
47
|
Income tax expense
(tax benefit)
|
|
|
|
|
|
|
1,298
|
|
|
348
|
Depreciation and
amortization
|
|
|
|
|
|
|
2,981
|
|
|
4,136
|
EBITDA
|
|
|
|
|
|
|
16,388
|
|
|
6,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
tables present the Company's revenue, by product type for the
periods presented, as well as such revenue by product type as a
percentage of total revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2013
|
|
2014
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Soda maker starter
kits (including
exchange
cylinders)
|
|
|
|
|
|
$
|
42,952
|
|
$
|
32,224
|
Consumables
|
|
|
|
|
|
|
72,062
|
|
|
82,924
|
Other
|
|
|
|
|
|
|
2,625
|
|
|
3,024
|
Total
|
|
|
|
|
|
$
|
117,639
|
|
$
|
118,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2013
|
|
2014
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
As a percentage of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
Soda maker starter
kits (including
exchange
cylinders)
|
|
|
|
|
|
|
36.5%
|
|
|
27.3%
|
Consumables
|
|
|
|
|
|
|
61.3%
|
|
|
70.2%
|
Other
|
|
|
|
|
|
|
2.2%
|
|
|
2.5%
|
Total
|
|
|
|
|
|
|
100.0%
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Logo -
http://photos.prnewswire.com/prnh/20121107/NY07412LOGO
SOURCE SodaStream International Ltd.