Exhibit 99.1
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FOR IMMEDIATE RELEASE |
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Castle Brands Inc.
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570 Lexington Avenue |
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New York, NY 10022 |
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646-356-0200 |
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www.castlebrandsinc.com |
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Investor Relations Contact:
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ICR |
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Kathleen Heaney/Idalia Rodriguez |
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(203) 803-3585/(203) 803-7402 |
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FINAL
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ir@castlebrandsinc.com |
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Castle Brands Announces Fiscal 2009 First Quarter Results
Operating Loss Narrows
NEW YORK, NY, August 14, 2008. Castle Brands Inc. (AMEX:ROX), an emerging international importer
and marketer of premium spirits, today reported financial results for its fiscal 2009 first quarter
ended June 30, 2008.
Fiscal 2009 First Quarter Highlights
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Operating loss reduced by $0.7 million |
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Average revenue per case increased 15.4%; |
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Total U.S. case sales up 9%; |
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Total revenue increased 5% to $5.9 million |
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Case volume sales of 67,309 |
As a result of focused efforts on the Company’s more profitable brands and markets, as well as
continued cost control measures, the loss from operations improved 16% or $0.7 million to ($3.8)
million for the three-months ended June 30, 2008 from ($4.5) million in the comparable prior year
period.
U.S. case sales increased 9% to 48,937 nine liter cases in the first quarter of fiscal 2009,
primarily reflecting strong sales of Gosling’s Rum and Pallini Limoncello. U.S. case sales
accounted for 73% of total case sales, up from 60% in fiscal first quarter 2008. International
case sales declined 38% in the quarter to 18,732 cases as a result of a transition to a new
distributor in the Republic of Ireland. Reflecting the decrease in international case sales,
global case sales in the first quarter were down 9% to 67,309 nine liter cases.
Donald L. Marsh, Castle Brands’ President and Chief Operating Officer, commented, “Our first
quarter results are in line with our plan to focus our sales and marketing efforts on our most
profitable brands. We continue to aggressively cut and control costs and expect to continue to
promote efficiency in the company as we concentrate on our goal of achieving profitability. The
narrowing of the Company’s net loss in the quarter indicates we are making progress towards the
goal of becoming profitable.” Mr. Marsh added, “Our brands continue to perform well in the U.S.
market and last year’s restructuring of our international operations should begin to have a
positive impact on volume in the coming quarters. We are confident that changes we have implemented
will continue to have a positive effect on the financial performance of the Company.”
Review of the Quarter
For the first quarter, Castle Brands reported net sales of $5.9 million, representing a 5% increase
over the prior year quarter. Gross profit for the first quarter declined 9% to $1.9 million from
$2.1 million in the prior year quarter. The gross margin in the quarter was 32.9%, down from 37.7%
in the same period of the prior year, primarily reflecting higher cost of sales due to increased
raw material costs and the effects of a weakening U.S. dollar against the euro.
Selling expense for the quarter decreased 19% to $3.4 million from $4.2 million in the prior year
quarter, primarily due to restructuring efforts implemented during the past nine months and a
decrease in advertising, marketing and promotional expenses. Selling expenses as a percentage of
revenue were 58% in the first quarter, down from 75% in the comparable period in the prior year.
General and administrative (G&A) expenses were flat in the first quarter at $2.1 million. As a
percentage of revenue G&A expenses decreased to 35% in the quarter, compared to 37% for the
comparable period in the prior year.
Balance Sheet
Cash and equivalents, together with short-term investments, totaled $2.8 million at
June 30, 2008.
More about Castle Brands Inc.
Castle Brands is an emerging developer and international marketer of premium branded spirits within
five growing categories of the spirits industry: vodka, rum, tequila, whiskey and
liqueurs/cordials. Castle Brands’ portfolio includes, Gosling’s Rum®,
Pallini® Limoncello™, Raspicello™ and Peachcello™, Tierras Tequila, Knappogue Castle
Whiskey®, Clontarf® Irish Whiskey, Jefferson’s™ and Jefferson’s
Reserve® Bourbon, Sam Houston® Bourbon, Boru® Vodka, Celtic
Crossing® Liqueur, Sea Wynde® Rum and Brady’s® Irish Cream.
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, 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. We have used words such 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,
in this press release to identify forward looking statements. 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.
As previously disclosed in the Castle Brands Report on Form 10-K filed June 30, 2008 and the Castle
Brands’ audit report on its financial statements for the fiscal quarter ended June 30, 2008,
contain a going concern qualification from its Independent Registered Public Accounting Firm,
Eisner LLP. Further information regarding the going concern qualification can be found in Castle
Brands’ quarterly report on Form 10-Q filed with the Securities and Exchange Commission as of
today. 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, 2008, as
amended, filed 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 documents incorporated by reference. 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. ROX-E