Castle Brands Sales Up 24.5%, But Net Loss Expands

Castle Brands reports net sales increased 24.5% to $20.9 million for the first quarter of fiscal year 2018, ended June 30, from $16.8 million a year earlier.  But the company’s net loss grew almost 24%, to a net loss of $946,395 from a year-earlier loss of $765,819.

“Continued strong growth of our more profitable brands, such as Jefferson’s and our Irish whiskeys, coupled with significantly increased sales of ginger beer, resulted in record first quarter revenues. Strong revenue growth, and even greater growth in gross profit, led to EBITDA, as adjusted, improving by 57.0% to $0.8 million. We expect that these growth trends and improving financial performance will continue,” said Richard J. Lampen, President and Chief Executive Officer.

Here’s how Castles brands and product lines did, according to the company:

  • Sales of Jefferson’s bourbons were up 18.3% to 15,600 cases, as compared to 13,200 cases in the comparable prior-year period.
  • Sales of Goslings Stormy Ginger Beer increased 51.8% to 457,000 cases from 301,000 cases in the comparable prior-year period.
  • Beginning in March 2017, Goslings Stormy Ginger Beer was added to the mixer section in approximately 4,500 Walmart stores in the U.S.
  • Sales of Irish whiskey were up 32.3% to 10,500 cases, as compared to 7,900 cases in the comparable prior-year period.
  • During the first quarter, Castle continued its new fill bourbon programs to support future growth of the Jefferson’s brands.

“The acquisition of an additional 20.1% stake in our Gosling-Castle Partners (GCP) subsidiary on March 29, 2017 was a very important milestone for Castle Brands. This transaction increased Castle Brands’ ownership of GCP to 80.1%, which enables it to be consolidated for tax purposes. This is allowing us to use our substantial NOLs to offset GCP’s growing net income,” Lampen added.

“We used our aged bourbon reserves to support increased sales of Jefferson’s and its more expensive brand extensions, such as Jefferson’s Ocean Aged at Sea and wine finishes. 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,” said John Glover, Chief Operating Officer.

“Our whiskey portfolio also benefitted from additions to our Irish whiskey offerings, the launch of the Arran Scotch Whiskies and the barrel program for Knappogue Castle Whiskey. We expect strong growth in whiskey sales to continue. We were pleased that we began a new fill program to supplement our overall Irish whiskey supply agreements to support future growth. Goslings Stormy Ginger Beer also continues to grow rapidly, benefitting from distribution in approximately 4,500 Walmart stores and many other off-premise and on-premise locations,” Mr. Glover added.

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