Castle Brands reports net income of $5.66 million, or 5 cents a share, or 3 cents a share, in fiscal 2019, ended March 31, reversing a loss of $818.93 million a year earlier. Net sales rose to $95.84 million from $89.89 million a year earlier.
It’s the first time in the company’s history that Castle Brands has reported positive net income per share.
Jefferson’s Bourbons volume rose 20.6% and case sales of Goslings Stormy Ginger Beer topped 2 million cases, a 6.4% increase from the prior fiscal year.
Richard J. Lampen, President/CEO, said continued growth of Castle’s more profitable brands, such as Jefferson’s, Goslings and Knappogue Irish whiskey, resulted in continued growth in revenue and gross profit.
Lampen noted the company has about $49.5 million in available net loss carryforwards. “In the past, accounting practices did not ascribe any value to these NOLs because it was not clear that they would be used. Increasing profitability of our 80.1%-owned Gosling Castle Partners subsidiary and revised forecasts for the Company’s overall financial performance caused the NOLs to be valued at approximately $9.6 million, which resulted in a commensurate increase in net income.
“We expect the strong growth in Jefferson’s to continue to drive our long-term trends of increasing sales and improving financial performance,” Lampen said.
“Jefferson’s is a key brand for us and we are very excited about our current bourbon inventories. The combination of our new fill programs and opportunistic purchases of aged whiskey resulted in our having over 30,000 barrels at the end of the fiscal year, enough to make approximately 750,000 cases (9L) of Jefferson’s.
“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, which itself is now selling 20,000 cases per year at super-premium pricing. Strength of our higher-end expressions continues to make Jefferson’s the only leading bourbon brand to command an average shelf price greater than $50 per bottle,” Lampen continued.
John Glover, EVP and Chief Operating Officer, said:
“A very positive development for Jefferson’s will begin to unfold in our current fiscal year and beyond. As our new fill continues to mature, it will become usable in more and more of the Jefferson’s expressions and we expect significant reductions in cost of goods sold, which benefits our operating results.”
“Also, we recognized our first $1 million in rebates on excise taxes as a result of the Craft Beverage Modernization and Tax Reform Act of 2017 in fiscal 2019, and we expect fiscal 2020 results to benefit in a similar fashion,” Mr. Glover continued.
“The growing popularity of ginger beer cocktails, including Goslings’ trademarked “Dark ‘n Stormy” cocktail, has been an important growth driver of both Goslings Stormy Ginger Beer and Goslings Black Seal Rum,” he said.
Ginger beer sales for the 12 months ended Dec. 31, 2018, exceeded 2 million cases, making “Stormy Ginger Beer” the best-selling premium ginger beer in America. The continued success of Goslings Stormy Ginger Beer gives us the opportunity to expand the line and add flavor extensions and other mixers, and to expand distribution and placements on retail shelves.
“Goslings Stormy Ginger Beer is now entering its third year in the mixer section of all of the approximately 4,500 Walmart stores in the United States and is a leader in that section. To build on that success and further expand sales of Goslings Stormy Ginger Beer, we recently hired a very experienced VP of Non-Alcohol Sales,” Glover added.