NEW YORK, June 14, 2017 /PRNewswire/ -- Castle Brands
Inc. (NYSE MKT: ROX), a developer and international marketer of
premium and super-premium drinks brands, today reported financial
results for the quarter and fiscal year ended March 31, 2017.
Operating highlights for the fiscal year ended March 31, 2017:
- Net sales increased 7.0% to a record $77.3 million for fiscal 2017, as compared to
$72.2 million in the prior fiscal
year.
- Total gross profit increased 11.0% to $31.7 million, as compared to $28.6 million for the prior fiscal year.
- Net income increased $2.2 million
to $0.5 million, as compared to a net
loss of ($1.7) million for the prior
fiscal year.
- EBITDA, as adjusted, improved by 46.0% to $5.2 million, as compared to $3.6 million in fiscal 2016.
- U.S. depletions of Jefferson's
bourbons were up 18.7% to 65,000 cases, as compared to 54,800 cases
in the prior fiscal year.
- Sales of Goslings Stormy Ginger Beer increased 23.3% to
$20.0 million from $16.2 in the prior year due to strong sales in
the U.S. and international markets. In March, Goslings Stormy
Ginger Beer was added to the mixer section in approximately 4,500
Walmart stores in the U.S.
- The Company increased its ownership in its subsidiary,
Gosling-Castle Partners, to 80.1%.
- The Company extended the terms of its export and distribution
agreements for Goslings Rums and Goslings Stormy Ginger Beer
through 2030, with 10-year extensions thereafter.
- During the fiscal year, the Company purchased approximately
3,600 barrels of aged bourbon and laid down approximately 6,400
barrels of new fill.
"This was an outstanding year for Castle Brands. Continued
growth of our more profitable brands, such as Jefferson's, Goslings and our Irish whiskeys,
resulted in strong revenue growth and even greater growth in gross
profit. We reported positive net income for the fiscal year for the
first time in the Company's history and had a record level of
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.
"The acquisition of an additional 20.1% stake in our
Gosling-Castle Partners (GCP) subsidiary was a very important
milestone for Castle Brands. GCP holds the exclusive long-term
export and distribution rights for Goslings Rums and Goslings
Stormy Ginger Beer for all countries other than Bermuda. The transaction increased Castle
Brands' ownership of GCP to 80.1% and enabled consolidation for tax
purposes. In addition, GCP's exclusive export agreement with
Gosling's Export (Bermuda) Limited
and exclusive distribution agreement with Castle Brands have been
extended through March 31, 2030, with
10-year renewal terms thereafter. We are very glad to have
increased our ownership in Goslings and further solidified our
relationship with the Gosling family," 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. Jefferson's is now one of the top five selling
premium small batch bourbons and the only leading small batch brand
not owned by a major spirits company. We are glad to see the strong
depletion growth in the last fiscal year and are pleased to have
bought aged bourbon and new fill to support future growth," said
John Glover, Chief Operating Officer
of Castle Brands.
"Our whiskey portfolio 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 Stormy Ginger Beer also continues
to grow rapidly. It is now available in approximately 4,500 Walmart
stores in the U.S. Goslings' sponsorship of the 35th
America's Cup should continue to drive the visibility of Goslings
rum and ginger beer," Mr. Glover added.
In the fourth quarter of fiscal 2017, the Company had net sales
of $22.6 million, a 13.1% increase
from net sales of $20.0 million in
the comparable prior-year period. Net income attributable to common
shareholders was $0.2 million, or
$0.00 per basic and diluted share, in
the fourth quarter of fiscal 2017, as compared to net income of
$0.4 million, or $0.00 per basic and diluted share, in the
prior-year period.
EBITDA, as adjusted, for the fourth quarter of fiscal 2017
improved to $2.1 million as compared
to $1.4 million for the comparable
prior-year period.
The Company had net sales of $77.3
million for fiscal 2017, an increase of 7.0% from net sales
of $72.2 million in fiscal 2016. This
sales growth was driven by U.S. sales growth of Jefferson's bourbons and Goslings Stormy
Ginger Beer. Net loss attributable to common shareholders was
($0.9) million, or ($0.01) per basic and diluted share in fiscal
2017, as compared to net loss of ($2.5)
million, or ($0.02) per basic
and diluted share, in the prior-year.
EBITDA, as adjusted, for fiscal 2017 improved to $5.2 million as compared to $3.6 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, transaction fees,
other expense (income), net, income from equity investment in
non-consolidated affiliate, foreign exchange and net income (loss)
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 brands including: Jefferson's®, Jefferson's Presidential Select™,
Jefferson's Reserve®,
Jefferson's Ocean Aged at Sea
Bourbon, Jefferson's Wine Finish
Collection and Jefferson's Wood
Experiments, Goslings® Rums, Goslings®
Stormy Ginger Beer, 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, 2017 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,
|
|
2017
|
2016
|
2017
|
2016
|
Sales,
net*
|
$
22,580,876
|
$
19,963,408
|
$
77,269,131
|
$
72,220,368
|
Cost of
sales*
|
12,994,134
|
11,795,649
|
45,568,774
|
43,666,798
|
|
|
|
|
|
Gross profit
|
9,586,742
|
8,167,759
|
31,700,357
|
28,553,570
|
|
|
|
|
|
Selling
expense
|
5,817,559
|
5,310,887
|
20,122,490
|
19,222,659
|
General and
administrative expense
|
2,589,206
|
1,877,059
|
8,642,775
|
7,385,851
|
Depreciation and
amortization
|
271,586
|
242,938
|
1,030,093
|
939,513
|
|
|
|
|
|
Income from
operations
|
908,391
|
736,875
|
1,904,999
|
1,005,547
|
|
|
|
|
|
Other expense,
net
|
(10,257)
|
(445)
|
(10,660)
|
(666)
|
Income from equity
investment in non-consolidated affiliate
|
1,748
|
9,654
|
51,430
|
18,667
|
Foreign exchange (loss)
gain
|
(61,502)
|
(59,654)
|
83,706
|
(190,867)
|
Interest expense,
net
|
(365,947)
|
(302,062)
|
(1,335,241)
|
(1,088,539)
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
472,433
|
384,368
|
694,234
|
(255,858)
|
Income tax benefit
(expense), net
|
227,292
|
37,038
|
(187,702)
|
(1,450,848)
|
|
|
|
|
|
Net income
(loss)
|
699,725
|
421,406
|
506,532
|
(1,706,706)
|
Net (income) loss
attributable to noncontrolling interests
|
(508,375)
|
4,862
|
(1,359,145)
|
(809,662)
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders
|
$
191,350
|
$
426,268
|
$
(852,613)
|
$
(2,516,368)
|
|
|
|
|
|
Net income (loss) per
common share, basic, common shareholders
|
0.00
|
0.00
|
(0.01)
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share, diluted, common shareholders
|
0.00
|
0.00
|
(0.01)
|
(0.02)
|
|
|
|
|
|
Weighted average shares
used in computation, basic, attributable to common
shareholders
|
161,065,685
|
160,167,121
|
160,811,957
|
159,380,223
|
|
|
|
|
|
Weighted average shares
used in computation, diluted, attributable to common
shareholders
|
165,878,218
|
167,331,808
|
160,811,957
|
159,380,223
|
|
*Sales, net and Cost
of sales include excise taxes of $7,645,789 and $7,451,569 for the
years ended March 31, 2017 and 2016, 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,
|
|
2017
|
2016
|
2017
|
2016
|
Net income (loss)
attributable to common shareholders
|
$
191,350
|
$
426,271
|
$(852,613)
|
$(2,516,368)
|
Adjustments:
|
|
|
|
|
Interest expense,
net
|
365,947
|
302,062
|
1,335,241
|
1,088,539
|
Income tax expense
(benefit), net
|
(227,292)
|
(37,038)
|
187,702
|
1,450,848
|
Depreciation and
amortization
|
271,586
|
242,938
|
1,030,093
|
939,513
|
EBITDA
income
|
601,591
|
934,233
|
1,700,423
|
962,532
|
Allowance for
doubtful accounts
|
88,550
|
9,000
|
123,200
|
61,000
|
Allowance for
obsolete inventory
|
90,000
|
100,000
|
240,000
|
200,000
|
Stock-based
compensation expense
|
405,986
|
334,143
|
1,577,994
|
1,370,556
|
Transaction
fees
|
346,704
|
--
|
346,704
|
--
|
Other expense,
net
|
10,257
|
445
|
10,660
|
666
|
Income from equity
investment in non-consolidated affiliate
|
(1,748)
|
(9,654)
|
(51,430)
|
(18,667)
|
Foreign exchange
(income) loss
|
61,502
|
59,650
|
(83,707)
|
190,867
|
Net income (loss)
attributable to noncontrolling interests
|
508,375
|
(4,862)
|
1,359,145
|
809,662
|
EBITDA, as
adjusted
|
2,111,217
|
$
1,422,955
|
$5,222,989
|
$3,576,616
|
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-fourth-quarter-and-fiscal-2017-results-300474229.html
SOURCE Castle Brands Inc.