04.08.2008 16:30:00
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Drinks Americas Announces Fiscal Fourth Quarter and Year-End 2008 Financial Results
Drinks Americas Holdings, Ltd. (OTC BB: DKAM) (the "Company”),
a leading owner, developer and marketer of premium beverages, today
announced financial results for its year ended April 30, 2008.
In fiscal 2008, the Company achieved net sales of wine and spirits of
$3.8 million on 39,635 cases and net sales of non-alcoholic beverages of
$0.7 million on 75,141 cases, for aggregate net sales of $4.5 million.
The Company has grown $2.9 million in revenue since 2006. That increase
is 181% in the aggregate or 68% on an annual basis. This growth has been
driven by the higher margin component of the Company’s
sales of wine and spirits which have increased over $2.7 million in
revenue from 2006. This increase is 250% in the aggregate, or 88% growth
on an annual basis.
The Company’s growth increase is due
predominantly to the launch of Trump Super Premium Vodka in October 2006
and Trump Vodka Flavors in February 2008, these products continuing the
Company’s strategy, beginning with Willie
Nelson’s Old Whiskey River Bourbon and Paul
Newman’s Newman’s
Own Sparkling Fruit Drinks, of creating branded beverages in partnership
with iconic figures. The Company’s other
brands and its fine wine business has also contributed to its annual
growth.
Sales of Newman’s Own All Natural Lightly
Sparkling Fruit Drinks and Waters have increased $0.2 million from
fiscal 2006 (33% aggregate or 15% annual growth). The Company has
expanded distribution of Newman’s Own across
the country, and volume is increasing. The Newman’s
business continues to provide an expansion platform for the Company’s
planned addition of non-alcoholic beverage brands to be distributed
nationally.
The Company has completed the development, formulation, packaging and
branding for the first spirits products arising out of its joint venture
with Universal’s Interscope Geffen A&M
Records. It is anticipated that the first of these products, a premium
cognac through the Company’s venture with
music icon Dr. Dre and his Aftermath Beverage Company, will be
introduced to the market within the next sixty days.
With respect to the production and supply of the Aftermath Cognac, the
Company has entered into a letter of intent for the production, supply
and European distribution of the cognac with Abecassis Cognac, a
producer of premium cognacs. Completion of this agreement will not only
give the Company access to a superior and necessary inventory of fine
cognac, but calls for the Aftermath Beverage Company brands to be
distributed by Abecassis in the European countries in which it is now
doing business.
Following the introduction of the Aftermath Cognac, the Company’s
joint venture with Interscope/Dre/Aftermath will introduce a unique new
line of 80-proof flavored and unflavored sparkling vodkas. The Company,
having completed any necessary formulations, bottle and label design,
marketing plans, and regulatory approvals, expects that this new line of
products will begin to be shipped to distributors within the next sixty
days. These products are to be introduced in coordination with the
launch of Dr. Dre’s long-awaited "Detox”
album, and will be supported by a fully integrated marketing program
with the performer and his record company.
The Company has taken note of apparent customer anticipation for the
Company’s Aftermath line of alcoholic
beverages as evidenced by over one million "Google”
mentions in advance of any actual product availability in the
marketplace.
The Company continues to focus substantial efforts to expand the
distribution of its iconic beverages on an international basis.
Distribution and marketing ventures are currently being negotiated with
significant distributors in China, India and Europe.
J. Patrick Kenny, CEO of the Company, stated, "Drinks
Americas has continued to deliver consistent organic growth, creating
valuable iconic trademarks with sales volume up 108% on a quarterly
basis. Our marketing resources are more robust with our current and
imminent product offerings and sales, and our continued reductions in
costs. Our management team has continued to streamline costs while
maintaining margins. Our strategy of creating premium branded beverages
in partnership with icons continues to prove its foresight and long term
viability, with great brand value creation enhanced by reduced capital
requirements and favorable production and supply contracts. We have
demonstrated that we can place quality brands in the market quicker and
more cost effectively, with instant brand recognition, on a domestic and
international basis, leading to accelerated sales. This, in conjunction
with great product and beautiful packaging, will assure our future.” Comparison of Year Ended April 30,
2008 to April 30, 2007
Net sales for the fourth quarter fiscal 2008 aggregated $1.2 million
compared to $0.8 million for the fourth quarter of fiscal 2007, an
increase of over 40%, and an increase of 108 % over our third quarter
ending January 31, 2008 . Net sales were $4.5 million for the fiscal
year ended April 30, 2008 compared to net sales of $6.1 million for
the year ended April 30, 2007. The launch of Trump Flavored Vodka and
Trump Vodka international sales, both in February 2008, enhanced our
growth in the fourth quarter. The launch and national pipeline fill-in
of Trump Super Premium Vodka in October 2006 accounted for the
accentuation of sales of the product in the prior year.
Net sales of Trump Vodka for the fourth quarter fiscal ‘08
rose 244% versus the prior quarter fiscal 08, and 101% versus the
fourth quarter of the prior year fiscal ‘07.
Sales of Trump Vodka were $2.7 million for this year. The prior year
volume was influenced by the sell in, launch and pipeline fill of
distributor inventory of Trump Vodka.
Net Dollar sales for the fiscal year ended April 30, 2008 were
comprised 59 percent from Trump Vodka sales (including sales of Trump
Flavored Vodkas), 10 percent from Old Whiskey River Bourbon, 3 percent
from Aquila Tequila, 4 percent from Damiana Liqueur, 9 percent from
our international wines, and 15 percent from Newman’s
Own Sparkling Fruit Drinks and Sparkling Waters. Net sales for the
fiscal year ended April 30, 2007 were comprised 76 percent from Trump
Vodka, 6 percent from Old Whiskey River, 3 percent from Damiana
Liqueur, 6 percent from international wines, and 9 percent from Newman’s
Own products.
For the year ended April 30, 2008, net sales of Old Whiskey River
increased 32 percent over the prior year ($452,000 compared to
$342,000); net sales of our international wines increased 5 percent
($392,000 compared to $373,000); net sales of our Damiana Liqueur
increased 12 percent ($197,000 compared to $175,000); Aguila Tequila
increased 520 percent ($133,000 compared to $21,000); and Newman’s
Own products increased 33 percent ($667,000 compared to $500,000).
Gross margin for our wine and spirits business remained within our
target of 40.7 percent for this fiscal year compared to 42.6 percent
for the prior year. Gross margin for our non-alcoholic business was
21.8 percent for this fiscal year compared to 24.0 percent for the
prior fiscal year. The Company successfully mitigated the impact of
(i) the weakness of the dollar versus the Euro, (ii) the increase in
glass cost of goods, (iii) and the occurrence of rising fuel costs, by
(a) its aggressive moves in transferring spirits product glass
production to China, (b) modifying bottle formats on our Newman’s
business, and (c) executing strategic price increases and reducing
price supports. These factors, combined with volume discounts and
further manufacturing and sourcing improvements, will enable the
Company to achieve continuously improving profit margins for all its
brands.
Selling, General and Administrative Expenses totals declined 20% to
$8.0 million for the year ended April 30, 2008 compared to $10.0
million for the year ended April 30, 2007.
Costs are expected to continue to decrease further in fiscal 2009 as
we reach "normalized”
selling and marketing spending levels. The marketing leverage the
Company has with Dr. Dre and Universal/Interscope and its additional
favorable strategic production partners will further drive costs per
case downward.
Interest expenses were reduced $604,000 versus last year. Interest
expense was $164,000 for fiscal 2008 compared to $771,000 for last
fiscal year.
Net loss for the fiscal year was $6.3 million, or $0.08 per share,
compared to a net loss of $9.4 million, or $0.14 per share, for last
fiscal year.
Mr. Kenny concluded, "Utilizing our iconic
branding strategy, Drinks Americas continues to create valuable global
trademarks in the beverage category with far more efficient and targeted
investment than would normally be required. This, coupled with the right
strategic partners, prudent domestic and international expansion, and
continued improvement of our financial performance, makes us a unique
and exciting industry player.”
More information on the Company's annual results can be found in its
10-KSB filing with the SEC.
About Drinks Americas
Drinks Americas develops, owns, markets, and nationally distributes
alcoholic and non-alcoholic premium beverages associated with renowned
icon celebrities. Drinks Americas' portfolio of premium alcoholic
beverages includes Trump Super Premium Vodka and Willie Nelson's Old
Whiskey River Bourbon. The Company’s
non-alcoholic brands include the distribution of Paul Newman's Own
Lightly Sparkling Fruit Juice Drinks and Flavored Waters. The company
also has a venture with Universal Music’s
Interscope, Geffen, A&M Records to jointly develop Iconic beverage
products for the market.
Other products owned and distributed by Drinks Americas include
award-winning Damiana Liqueur and Aguila Tequila from Mexico and Cohete
Rum Guarana from Panama. Damiana, Old Whiskey River, Aguila Tequila and
Cohete Rum are Gold and Silver Medal award winners respectively from the
International Beverage Tasting Institute and the San Francisco
International Wine and Spirits Competition. For further information,
please visit our website at www.drinksamericas.com
Drinks Americas was founded in 2004 by J. Patrick Kenny, a leading
expert in beverage sales and marketing. Mr. Kenny developed his industry
expertise in a variety of management positions at the world's leading
beverage companies, including Joseph E. Seagram and Sons and The
Coca-Cola Company. He has also acted as advisor to several Fortune 500
beverage marketing companies, and has participated in several beverage
industry transactions.
Safe Harbor
Except for the historical information contained herein, the matters set
forth in this press release, including the description of the company
and its product offerings, are forward-looking statements within the
meaning of the "safe harbor" provision of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including the historical volatility and low trading
volume of our stock, the risk and uncertainties inherent in the early
stages of growth companies, the company's need to raise substantial
additional capital to proceed with its business, risks associated with
competitors, and other risks detailed from time to time in the company's
most recent filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date hereof. The company
disclaims any intent or obligation to update these forward-looking
statements.
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