NEW YORK, Feb. 9, 2017 /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 months ended December 31, 2016.
Operating highlights for the quarter ended December 31, 2016:
- Net sales increased 6.4% to $18.3
million for the third quarter of fiscal 2017, as compared to
$17.2 million for the comparable
prior-year period.
- Total gross profit increased 14.4% to $7.7 million, as compared to $6.7 million for the comparable prior-year
period.
- Net income attributable to common shareholders of $0.4 million versus a loss of ($0.8) million for the comparable prior-year
period.
- EBITDA, as adjusted, improved by 132.1% to $1.6 million, as compared to $0.7 million in fiscal 2016.
- Continued strong growth of Jefferson's bourbons and the Irish whiskies
led to a 14.5% increase in whiskey revenues from the comparable
prior-year period.
- Goslings Stormy Ginger Beer case
sales increased 42.9% to approximately 339,000 cases from
approximately 237,000 in the comparable prior-year period.
- In addition to continuing its new fill programs, the Company
purchased an additional 1,000 barrels of aged bourbon to support
the continued growth of Jefferson's.
- The Company entered into five-year exclusive distribution
agreement for The Arran Malt Single Malt Scotch Whisky and Robert
Burns Single Malt Whisky and Blended Scotch Whisky in the US
market.
"Continued strong growth of our more profitable brands, such as
Jefferson's and our Irish
whiskeys, resulted in solid revenue growth and even greater growth
in gross profit. This allowed us to increase income from
operations, report net income 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.
"The combination of our new fill whiskey program, coupled with
opportunistic purchases of aged whiskies, enables us to build our
substantial reserves of aged bourbon to support continued strong
growth of our Jefferson's brand. The third quarter saw the launch
of the Ninth Voyage of our Jefferson's Ocean Aged at Sea® Bourbon, as
well as the introduction of Jefferson's Reserve Old Rum Cask Finish and
Jefferson's Reserve Pritchard
Hill® Cabernet Cask Finish. We plan to expand our wine finishes
program and introduce several other new Jefferson's expressions in the coming
quarters. We also increased our Irish whiskey offerings and
expanded our barrel program for Knappogue Castle Whiskey. We see
the Isle of Arran Distillers' award-winning, premium brands as a
good complement to our existing whiskies portfolio. We expect to
continue to drive strong sales increases for our whiskey
portfolio," stated John Glover,
Chief Operating Officer of Castle Brands.
Goslings Stormy Ginger Beer sales for the 12 months ended
December 31, 2016 exceeded 1.2
million cases, making Goslings Stormy Ginger Beer the best-selling
premium ginger beer in America. The growing popularity of ginger
beer cocktails, including Goslings' trademarked "Dark 'n
Stormy"® cocktail, has been an important growth driver for the
brand. 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
are following this very high-profile event. Europe and the
United States hosted races in 2015 and 2016 and AC35 will
culminate 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 Nine Months Ended December 31, 2016
For the three months ended December 31,
2016, the Company had net sales of $18.3 million, a 6.4% increase from net sales of
$17.2 million in the comparable
prior-year period. This sales growth was primarily driven by the
U.S. sales growth of Jefferson's
bourbons and Goslings Stormy Ginger Beer. Net income was
$0.9 million for the three months
ended December 31, 2016as compared to
a net loss of ($0.6) 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,
million for the three months ended December
31, 2016, as compared to ($0.8)
million, or ($0.01) per basic
and diluted share, in the prior-year period.
EBITDA, as adjusted, for the for the three months ended
December 31, 2016 improved to
$1.6 million as compared to
$0.7 million for the comparable
prior-year period.
For the nine months ended December 31,
2016, the Company had net sales of $54.7 million, a 4.7% increase from net sales of
$52.3 million in the comparable
prior-year period. Net loss was ($0.2)
million for the nine months ended December 31, 2016, as compared to a net loss of
($2.1) 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, for the nine
months ended December 31, 2016, as
compared to ($2.9) million, or
($0.02) per basic and diluted share,
in the prior-year period.
EBITDA, as adjusted, for the nine months ended December 31, 2016 was $3.1
million and $2.2 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 expense
(income), net, income from equity investment in
non-consolidated affiliate, foreign exchange 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 income (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® Rums, Knappogue Castle Whiskey®,
Clontarf® Irish Whiskey, Pallini® Limoncello,
Boru® Vodka, Brady's® Irish Cream, The Arran
Malt® Single Malt Scotch Whisky, The Robert Burns Scotch
Whisky and Machrie Moor Scotch Whisky. 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, 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 December 31,
|
|
|
Nine months ended December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Sales,
net*
|
|
$
|
18,309,539
|
|
|
$
|
17,207,372
|
|
|
$
|
54,688,255
|
|
|
$
|
52,256,960
|
|
Cost of
sales*
|
|
|
10,639,299
|
|
|
|
10,505,277
|
|
|
|
32,574,640
|
|
|
|
31,871,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
7,670,240
|
|
|
|
6,702,095
|
|
|
|
22,113,615
|
|
|
|
20,385,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expense
|
|
|
4,642,419
|
|
|
|
4,618,614
|
|
|
|
14,304,931
|
|
|
|
13,911,772
|
|
General and
administrative
expense
|
|
|
1,922,675
|
|
|
|
1,751,369
|
|
|
|
6,053,569
|
|
|
|
5,508,792
|
|
Depreciation
and
amortization
|
|
|
251,410
|
|
|
|
235,250
|
|
|
|
758,507
|
|
|
|
696,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
853,736
|
|
|
|
96,862
|
|
|
|
996,608
|
|
|
|
268,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net
|
|
|
(70)
|
|
|
|
—
|
|
|
|
(403)
|
|
|
|
(221)
|
|
Income from equity
investment
in non-consolidated
affiliate
|
|
|
26,362
|
|
|
|
4,500
|
|
|
|
49,682
|
|
|
|
9,013
|
|
Foreign exchange gain
(loss)
|
|
|
68,720
|
|
|
|
(41,634)
|
|
|
|
145,208
|
|
|
|
(131,213)
|
|
Interest expense,
net
|
|
|
(330,165
|
|
|
|
(271,677)
|
|
|
|
(969,294)
|
|
|
|
(786,477)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
provision
for income taxes
|
|
|
618,583
|
|
|
|
(211,949)
|
|
|
|
221,801
|
|
|
|
(640,226)
|
|
Income tax benefit
(expense), net
|
|
|
273,781
|
|
|
|
(383,962)
|
|
|
|
(414,994)
|
|
|
|
(1,487,886)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
892,364
|
|
|
|
(595,911)
|
|
|
|
(193,193)
|
|
|
|
(2,128,112)
|
|
Net income
attributable to
noncontrolling interests
|
|
|
(469,798)
|
|
|
|
(211,792)
|
|
|
|
(850,770)
|
|
|
|
(814,524)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable
to common shareholders
|
|
$
|
422,566
|
|
|
$
|
(807,703)
|
|
|
$
|
(1,043,963)
|
|
|
$
|
(2,942,636)
|
|
|
Net income (loss) per
common
share, basic, attributable
to
common shareholders
|
|
$
|
0.00
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used
in computation, basic,
attributable
to common shareholders
|
|
|
160,963,862
|
|
|
|
160,031,891
|
|
|
|
160,728,918
|
|
|
|
159,119,831
|
|
|
Net income (loss) per
common share,
diluted, attributable to
common
shareholders
|
|
$
|
0.00
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in
computation, diluted,
attributable
to common shareholders
|
|
|
165,245,935
|
|
|
|
160,031,891
|
|
|
|
160,728,918
|
|
|
|
159,119,831
|
|
|
|
* Sales, net and Cost
of sales include excise taxes of $1,646,486 and $1,542,619 for the
three months ended December 31, 2016 and 2015, respectively, and
$5,275,187 and $5,230,618 for the nine months ended December 31,
2016 and 2015, respectively.
|
CASTLE BRANDS INC.
AND SUBSIDIARIES
Reconciliation of
net income (loss) attributable to common shareholders to EBITDA, as
adjusted
(Unaudited)
|
|
|
|
Three months ended
|
|
|
Nine months ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
422,566
|
|
|
$
|
(807,703)
|
|
|
$
|
(1,043,963)
|
|
|
$
|
(2,942,636)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
330,165
|
|
|
|
271,677
|
|
|
|
969,294
|
|
|
|
786,477
|
|
Income tax (benefit)
expense, net
|
|
|
(273,781)
|
|
|
|
383,962
|
|
|
|
414,994
|
|
|
|
1,487,886
|
|
Depreciation and
amortization
|
|
|
251,410
|
|
|
|
235,250
|
|
|
|
758,507
|
|
|
|
696,575
|
|
EBITDA
income
|
|
|
730,360
|
|
|
|
83,186
|
|
|
|
1,098,833
|
|
|
|
28,302
|
|
Allowance for doubtful
accounts
|
|
|
11,550
|
|
|
|
9,000
|
|
|
|
34,650
|
|
|
|
52,000
|
|
Allowance for obsolete
inventory
|
|
|
50,000
|
|
|
|
--
|
|
|
|
150,000
|
|
|
|
100,000
|
|
Stock-based
compensation expense
|
|
|
409,511
|
|
|
|
338,023
|
|
|
|
1,172,008
|
|
|
|
1,036,412
|
|
Other expense,
net
|
|
|
70
|
|
|
|
--
|
|
|
|
403
|
|
|
|
221
|
|
Income from equity
investments in non-consolidated affiliate
|
|
|
(26,362)
|
|
|
|
(4,500)
|
|
|
|
(49,682)
|
|
|
|
(9,013)
|
|
Foreign exchange loss
(gain)
|
|
|
(68,720)
|
|
|
|
41,634
|
|
|
|
(145,209)
|
|
|
|
131,213
|
|
Net income
attributable to noncontrolling interests
|
|
|
469,798
|
|
|
|
211,792
|
|
|
|
850,770
|
|
|
|
814,524
|
|
EBITDA, as
adjusted
|
|
$
|
1,576,207
|
|
|
$
|
679,135
|
|
|
$
|
3,111,773
|
|
|
$
|
2,153,659
|
|
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-2017-third-quarter-results-300405381.html
SOURCE Castle Brands Inc.