Welcome!

News Feed Item

Castle Brands Announces Fiscal 2015 First Quarter Results

Net Sales Increase 15.0% Driven by Strong Growth of Whiskeys and Gosling's Stormy Ginger Beer

NEW YORK, Aug. 14, 2014 /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, 2014.

Operating highlights for the quarter ended June 30, 2014:

  • Net sales increased 15% to $12.0 million as compared to $10.4 million for the comparable prior-year period.
  • Continued strong growth of Jefferson's bourbons and Irish whiskeys led to a 31% increase in whiskey revenues from the comparable prior-year period.
  • Gosling's Stormy Ginger Beer case sales increased 56% to approximately 162,000 cases from approximately 104,000 in the comparable prior-year period.
  • EBITDA, as adjusted, improved to a loss of ($53,000), compared to a loss of ($160,000) in the comparable prior-year period.
  • Purchased $4.2 million of aged bourbon to support the continued growth of Jefferson's brand in April 2014.

"Our core brands continue to show very strong growth. We are pleased with sales for the first quarter of fiscal 2015, particularly since it is typically our slowest period. Organic growth drove the increased revenues resulting in our improved EBITDA, as adjusted. We expect these growth trends and improving financial performance to continue," stated Richard J. Lampen, President and Chief Executive Officer of Castle Brands.     

"We also simplified our capital structure in the first quarter when all of our outstanding warrants issued in connection with our preferred stock were exercised. The warrant exercises and proceeds from our at-the-market offering generated $1.8 million of new equity capital," Mr. Lampen added.

"In the first quarter, we purchased $4.2 million of aged bourbon and secured additional rye inventory. These increases to our whiskey reserves will support continued rapid growth of the Jefferson's bourbon brand, including Jefferson's Reserve, our Jefferson's barrel program, Jefferson's Ocean Aged at Sea and Jefferson's Chef's Collaboration. Just as we continue to expand the Jefferson's umbrella, we plan to add additional offerings under our Knappogue and Clontarf Irish whiskey labels. This should provide additional growth opportunities for our whiskey sales," said John Glover, Chief Operating Officer of Castle Brands.

"Sales of Gosling's Stormy Ginger Beer increased 56% to 162,000 cases in the first quarter of fiscal 2015, a strong indication of the success of the Dark 'n Stormy® cocktail, an important driver of Gosling's rum sales. Trailing twelve month sales of Stormy Ginger Beer approached 500,000 cases, which equates to 12 million cans each prominently displaying the Gosling's logo. These ginger beer sales are very important as we continue to build Gosling's visibility and prominence as a brand," Mr. Glover added.

In the first quarter of fiscal 2015, the Company had net sales of $12.0 million, a 15.0% increase from net sales of $10.4 million in the comparable prior-year period. Loss from operations was ($0.5) million in the first quarter of both fiscal 2015 and 2014. Net loss attributable to common shareholders was ($1.5) million, or $(0.01) per basic and diluted share, in the each of the first quarters of fiscal 2015 and 2014.

EBITDA, as adjusted, for the first quarter of fiscal 2015 improved to a loss of ($53,000), compared to a loss of ($160,000) for the 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 operating income (loss) 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, other income, net, non-cash compensation expense, loss from equity investment in non-consolidated affiliate, foreign exchange, 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 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 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 allowances for doubtful accounts and obsolete inventory, 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. Reconciliation of net loss to EBITDA, as adjusted, is presented below.

About Castle Brands

Castle Brands is a developer and international marketer of premium beverage alcohol brands including: Gosling's Rum®, Jefferson's®, Jefferson's Presidential Select and Jefferson's Reserve® Bourbon, Jefferson's® Rye Whiskey, Knappogue Castle Whiskey®, Clontarf® Irish Whiskey, Pallini® Limoncello, Boru® Vodka and Brady's® Irish Cream, Celtic Honey® Liqueur and Castello Mio® Sambuca. 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, related 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," "expects," "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, 2014 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

(Unaudited)




Three months ended June 30,




2014



2013


Sales, net*


$

11,982,199



$

10,418,617


Cost of sales*



7,435,545




6,500,153











Gross profit



4,546,654




3,918,464











Selling expense



3,239,326




2,895,383


General and administrative expense



1,610,616




1,265,605


Depreciation and amortization



216,098




213,124











Loss from operations



(519,386)




(455,648)











Other income, net



16,942




--


Loss from equity investment in non-consolidated affiliate



--




(6,121)


Foreign exchange (loss) gain



(236,447)




60,340


Interest expense, net



(288,642)




(228,819)


Net change in fair value of warrant liability



--




(447,251)


Income tax (expense) benefit, net



(162,962)




37,038











Net loss



(1,190,495)




(1,040,461)


Net income attributable to noncontrolling interests



(305,336)




(252,372)











Net loss attributable to controlling interests



(1,495,831)




(1,292,833)











Dividend to preferred shareholders



--




(189,932)











Net loss attributable to common shareholders


$

(1,495,831)



$

(1,482,765)











Net loss per common share, basic and diluted, attributable to common shareholders


$

(0.01)



$

(0.01)











Weighted average shares used in computation, basic and diluted, attributable to common shareholders



153,929,182




109,424,026



* Sales, net and Cost of sales include excise taxes of $1,485,515 and $1,424,220 for the three months ended June 30, 2014 and 2013, respectively.

 

 

CASTLE BRANDS INC. AND SUBSIDIARIES

Reconciliation of Net Loss to EBITDA, as adjusted

(Unaudited)




Three months ended
June 30,




2014



2013


Net loss attributable to common shareholders


$

(1,495,831)



$

(1,482,765)


Adjustments:









Interest expense, net



288,642




228,819


Income tax expense (benefit), net



162,962




(37,038)


Depreciation and amortization



216,098




213,124


EBITDA (loss)



(828,129)




(1,077,860)


Allowance for doubtful accounts



59,000




10,500


Stock-based compensation expense



191,456




72,533


Other income, net



(16,942)




--


Loss from equity investment in non-consolidated affiliate



--




6,121


Foreign exchange loss (gain)



236,447




(60,340)


Net change in fair value of warrant liability



--




447,251


Net income attributable to noncontrolling interests



305,336




252,372


Dividend to preferred shareholders



--




189,932


EBITDA, as adjusted



(52,832)




(159,491)


 

 

Castle Brands Inc.
Investor Relations, 646-356-0200
[email protected]
www.castlebrandsinc.com

SOURCE Castle Brands Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
"Splunk basically takes machine data and we make it usable, valuable and accessible for everyone. The way that plays in DevOps is - we need to make data-driven decisions to delivering applications," explained Andi Mann, Chief Technology Advocate at Splunk and @DevOpsSummit Conference Chair, in this SYS-CON.tv interview at @DevOpsSummit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"Logz.io is a log analytics platform. We offer the ELK stack, which is the most common log analytics platform in the world. We offer it as a cloud service," explained Tomer Levy, co-founder and CEO of Logz.io, in this SYS-CON.tv interview at DevOps Summit, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captur...
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of D...
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Dave McCarthy, Director of Products at Bsquare Corporation; Alan Williamson, Principal ...
DevOps and microservices are permeating software engineering teams broadly, whether these teams are in pure software shops but happen to run a business, such Uber and Airbnb, or in companies that rely heavily on software to run more traditional business, such as financial firms or high-end manufacturers. Microservices and DevOps have created software development and therefore business speed and agility benefits, but they have also created problems; specifically, they have created software securi...