Castle Brands Inc (ROX) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

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Exhibit 99.1

 

Castle Brands Announces Fiscal 2019 Second Quarter Results

 

Net Sales Increased 11.6% and Gross Profit Increased 7.0% driven by

Continued Growth of Jefferson’s, Irish whiskies and Goslings Stormy Ginger Beer

 

NEW YORK – November 8, 2018 — Castle Brands Inc. (NYSE American: ROX), a developer and international marketer of premium and super-premium drinks brands, today reported financial results for the three and six months ended September 30, 2018.

 

Operating highlights for the three and six months ended September 30, 2018:

 

Net sales increased 11.2% to $46.4 million for the first six months of fiscal 2019, as compared to $41.7 million for the comparable prior-year period, with net sales increasing 11.6% to $23.3 million for the second quarter of fiscal 2019, as compared to $20.9 million for the comparable prior-year period.
   
Total gross profit increased 7.5% to $18.4 million for the first six months of fiscal 2019, as compared to $17.1 million for the comparable prior-year period, and increased 7.0% to $9.1 million for the second quarter of fiscal 2019, as compared to $8.5 million for the comparable prior-year period.
   
Income from operations increased to $1.7 million for the first six months of fiscal 2019 as compared to $1.2 million for the comparable prior-year period, with income from operations of $1.0 million for the second quarter of fiscal 2019, as compared to $1.2 million for the comparable prior-year period.
   
Continued strong growth of Jefferson’s bourbons and the Irish whiskies led to a 32.0% increase in whiskey revenues for the first six months of fiscal 2019 from the comparable prior-year period.
   
Goslings Stormy Ginger Beer case sales surpassed 1,850,000 cases sold on a rolling twelve-month basis, a 13.2% increase over the comparable prior twelve-month period.
   
Castle Brands expects to benefit from substantially lower federal excise taxes, which will lower Cost of Sales and increase Gross Profit in future periods, as a result of provisions in the newly enacted Craft Beverage Act.
   
In addition to continuing its new fill programs, the Company purchased an additional $7.5 million of bourbon in the six-month period to support the continued growth of Jefferson’s.

 

“We are again reporting strong sales growth of our lead brands, including Jefferson’s bourbons, our Irish whiskies and Goslings Stormy Ginger Beer. This resulted in solid growth in both revenue and gross profit, and a 42.8% increase in income from operations for the first six months of fiscal 2019 to a record level of $1.7 million and a 25.7% increase in EBITDA, as adjusted, for the first six months of fiscal 2019 to a record level of $3.4 million. We expect these trends of increasing sales and improving financial performance to continue over the balance of the fiscal year and beyond,” stated Richard J. Lampen, President and Chief Executive Officer of Castle Brands.

 

   
 

 

“The combination of our new fill whiskey program, coupled with opportunistic purchases of aged whiskies, enables us to build substantial reserves of aged bourbon to support continued strong growth of our Jefferson’s brand, such as Jefferson’s Ocean Aged at Sea and wine finishes. Our whiskey portfolio also benefitted from the continued growth of our Irish whiskies, especially Knappogue Castle Whiskey. We expect strong growth in whiskey sales to continue,” said John Glover, Executive Vice President and Chief Operating Officer of Castle Brands.

 

“The continued growing popularity of ginger beer cocktails, including Goslings’ trademarked “Dark ‘n Stormy”® cocktail, has been an important growth driver of Goslings “Stormy Ginger Beer.” Ginger beer sales for the 12 months ended September 30, 2018 exceeded 1.8 million cases, making “Stormy Ginger Beer” the best-selling premium ginger beer in America. We are very pleased with the success of our first six months of fiscal 2019, and look forward to continuing the overall growth of the brand in Walmart and other grocery chains,” Mr. Glover added.

 

For the Three and Six Months Ended September 30, 2018

 

In the second quarter of fiscal 2019, the Company had net sales of $23.3 million, an 11.6% increase from net sales of $20.9 million in the comparable prior-year period. This sales growth was primarily driven by the U.S. sales growth of Jefferson’s bourbons, Knappogue Castle Irish whiskey, Goslings Stormy Ginger Beer and certain of the Company’s liqueurs. Net loss was ($0.0) million in the second quarter of fiscal 2019 compared to net income of $0.3 million in the comparable prior-year period. Net loss attributable to common shareholders was ($0.2) million, or ($0.00) per basic and diluted share, in the second quarter of fiscal 2019, as compared to ($0.0) million, or ($0.00) per basic and diluted share, in the prior-year period.

 

EBITDA, as adjusted, for the second quarter of fiscal 2019 decreased to $1.8 million as compared to $1.9 million for the comparable prior-year period.

 

For the six months ended September 30, 2018, the Company had net sales of $46.4 million, an 11.2% increase from net sales of $41.7 million in the comparable prior-year period. Net loss was ($0.3) million for the six months ended September 30, 2018, as compared to a net loss of ($0.6) million in the comparable prior-year period. Net loss attributable to common shareholders was ($0.9) million, or ($0.01) per basic and diluted share, for the six months ended September 30, 2018, as compared to ($0.9) million, or ($0.01) per basic and diluted share, in the prior-year period.

 

EBITDA, as adjusted, for the six months ended September 30, 2018 improved to $3.4 million as compared to $2.7 million for the comparable 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 income (loss) from operations 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, stock-based compensation expense, other expense (income), net, income from equity investment in non-consolidated affiliate, foreign exchange loss (gain) and net income attributable to noncontrolling interests is a key metric the Company uses in evaluating its financial performance on a consistent basis across various periods. EBITDA, as adjusted, 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 operating investments and 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 allowance accounts, are due to changes in valuation, such as the effects of changes in foreign exchange, 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. A reconciliation of net loss attributable to common shareholders to EBITDA, as adjusted, is presented below.

 

About Castle Brands

 

Castle Brands is a developer and international marketer of premium and super-premium brands including: Jefferson’s®, Jefferson’s Presidential SelectTM, Jefferson’s Reserve®, Jefferson’s Ocean Aged at Sea Bourbon®, Jefferson’s Wine Finish Collection and Jefferson’s Wood Experiments, Goslings® Rums, Goslings® Stormy Ginger Beer, Knappogue Castle Whiskey®, Clontarf® Irish Whiskey, Pallini® Limoncello, Boru® Vodka, Brady’s® Irish Cream, The Arran Malt® Single Malt Scotch Whisky, The Robert Burns Scotch Whisky and Machrie Moor Scotch Whisky 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, relate 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,” “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, 2018, as amended, 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
September 30,
   Six months ended
September 30,
 
   2018   2017   2018   2017 
Sales, net*  $23,310,163   $20,894,150   $46,414,551   $41,746,437 
Cost of sales*   14,170,668    12,350,901    28,015,504    24,624,569 
                     
Gross profit   9,139,495    8,543,249    18,399,047    17,121,868 
                     
Selling expense   5,322,430    4,899,208    11,144,320    10,955,407 
General and administrative expense   2,564,246    2,298,882    5,081,512    4,561,879 
Depreciation and amortization   204,380    186,283    440,172    391,235 
                     
Income from operations   1,048,439    1,158,876    1,733,043    1,213,347 
                     
Other expense, net   (8,506)   (59)   (8,911)   (59)
Income from equity investment in non-consolidated affiliate   55,113    29,846    89,141    71,595 
Foreign exchange gain (loss)   2,918    18,853    47,382    (32,308)
Interest expense, net   (1,099,505)   (901,559)   (2,151,447)   (1,793,423)
                     
(Loss) income before provision for income taxes   (1,541)   305,957    (290,792)   (540,848)
Income tax benefit (expense), net   217    (25,335)   (17,898)   (43,748)
                     
Net (loss) income   (1,324)   280,622    (308,690)   (584,596)
Net income attributable to noncontrolling interests   (214,812)   (282,303)   (598,153)   (363,482)
                     
Net loss attributable to common shareholders  $(216,136)  $(1,681)  $(906,843)  $(948,078)
                     
Net loss per common share, basic and diluted, attributable to common shareholders  $(0.00)  $(0.00)  $(0.01)  $(0.01)
                     
Weighted average shares used in computation, basic and diluted, attributable to common shareholders   166,497,681    163,209,562    166,011,668    163,138,853 

 

 

* Sales, net and Cost of sales include excise taxes of $1,752,916 and $1,759,630 for the three months ended September 30, 2018 and 2017, respectively, and $3,587,170 and $3,399,385 for the six months ended September 30, 2018 and 2017, respectively.

 

   
 

 

CASTLE BRANDS INC. AND SUBSIDIARIES

Reconciliation of net loss attributable to common shareholders to EBITDA, as adjusted

(Unaudited)

 

   Three months ended   Six months ended 
   September 30,   September 30, 
   2018   2017   2018   2017 
Net loss attributable to common shareholders  $(216,136)  $(1,681)  $(906,843)  $(948,078)
Adjustments:                    
Interest expense, net   1,099,505    901,559    2,151,447    1,793,423 
Income tax expense, net   (217)   25,335    17,898    43,748 
Depreciation and amortization   204,380    186,283    440,172    391,235 
EBITDA income   1,087,532    1,111,496    1,702,674    1,280,328 
Allowance for doubtful accounts   14,559    16,712    29,118    30,812 
Allowance for obsolete inventory   80,000        160,000    50,000 
Stock-based compensation expense   497,219    504,490    987,704    979,816 
Other expense, net   8,506    59    8,911    59 
Income from equity investments in non-consolidated affiliate   (55,113)   (29,846)   (89,141)   (71,595)
Foreign exchange loss (gain)   (2,918)   (18,853)   (47,382)   32,308 
Net income attributable to noncontrolling interests   214,812    282,303    598,153    363,482 
EBITDA, as adjusted  $1,844,597   $1,866,361   $3,350,037   $2,665,210 

 

# # #

 

Castle Brands Inc.
Investor Relations, 646-356-0200
info@castlebrandsinc.com
www.castlebrandsinc.com

 

   
 

 


The following information was filed by Castle Brands Inc on Thursday, November 8, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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  • 17828551_195
    Financial - Debt
    The following may materially affect our liquidity over the near-to-mid term: ? continued cash losses from operations; ? our ability to obtain additional debt or equity financing should it be required; ? an increase in working capital requirements to finance higher levels of inventories and accounts receivable; ? our ability to maintain and improve our relationships with our distributors and our routes to market; ? our ability to procure raw materials at a favorable price to support our level of sales; ? potential acquisitions of additional brands; and ? expansion into new markets and within existing markets in the U.S. and internationally.
  • 17828551_207
    Financial - Debt
    If we are unable to restructure or refinance our debt, or are unable to raise equity on terms that are acceptable to us, it could have a significant effect on our financial position, could materially reduce our liquidity and could cause substantial fluctuations in our quarterly and yearly operating results.
  • 17828551_229
    Financial - Expense
    These uses of cash were partially offset by a $2.9 million increase in accounts payable and accrued expenses, a $0.7 million decrease in accounts receivable, stock based compensation expense of $1.0 million, a $0.3 million increase in due to related parties and depreciation and amortization expense of $0.4 million.
  • 17828551_203
    MA - Other
    Acquiring additional brands could have a significant effect on our financial position, could materially reduce our liquidity and could cause substantial fluctuations in our quarterly and yearly operating results.
  • 17828551_228
    Financial - Expense
    These uses of cash were partially offset by a $1.4 million increase in accounts payable and accrued expenses, a $0.3 million decrease in accounts receivable, stock based compensation expense of $1.0 million and depreciation and amortization expense of $0.4 million During the six months ended September 30, 2017, net cash used in operating activities was $0.03 million, consisting primarily of a $4.4 million increase in inventory, a net loss of $0.6 million and a $0.4 million increase in prepaid expenses.
  • 17828551_216
    Other - Other
    In general, these cash outlays for inventories are only partially offset by increases in our accounts payable to our suppliers.
  • 17828551_240
    Revenue - Geography
    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.
  • 17828551_35
    Other - Other
    Our presentation of EBITDA, as adjusted, should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items or by non-cash items, such as stock-based compensation, which is expected to remain a key element in our long-term incentive compensation program.
  • 17828551_42
    Revenue - Product
    The following table presents the increase in case sales of ginger beer products for the three months ended September 30, 2018 as compared to the three months ended September 30, 2017: Gross profit.
  • 17828551_81
    Revenue - Product
    The following table presents the increase in case sales of ginger beer products for the six months ended September 30, 2018 as compared to the six months ended September 30, 2017: Gross profit.
  • 17828551_7
    Financial - Earnings
    We focus on brands that have profitable growth potential and staying power, such as our rums, whiskeys and ginger beer, sales of which have grown substantially in recent years; ? build consumer awareness.
  • 17828551_5
    Revenue - Product
    We continue to focus our distribution efforts, sales expertise and targeted marketing activities on our more profitable brands and markets; ? grow organically.
  • 17828551_44
    Financial - Earnings
    The increase in gross profit was primarily due to increased aggregate revenue in the current period.
  • 17828551_83
    Financial - Earnings
    The increase in gross profit was primarily due to increased aggregate revenue in the current period.
  • 17828551_200
    Financial - Cash Flow
    While we are seeking solutions to our long-term whiskey supply needs, we are required to purchase and hold several years? worth of aged whiskey in inventory until such time as it is aged to our specific brand taste profiles, increasing our working capital requirements and negatively impacting cash flows.
  • 17828551_226
    Revenue - Product
    We expect to use the aged bourbon in the normal course of future sales, generating positive cash flows in future periods.
  • 17828551_53
    Financial - Expense
    General and administrative expense increased 11.5% to $2.6 million for the three months ended September 30, 2018 from $2.3 million for the comparable prior-year period, primarily due to a $0.3 million increase in employee costs.
  • 17828551_92
    Financial - Expense
    General and administrative expense increased 11.4% to $5.1 million for the six months ended September 30, 2018 from $4.6 million for the comparable prior-year period, primarily due to a $0.5 million increase in employee costs.
  • 17828551_180
    MA - Other
    We used a portion of the proceeds to finance the acquisition of additional bourbon inventory in support of the growth of our Jefferson?s bourbon brand.
  • 17828551_68
    Revenue - Geography
    Foreign exchange gain for the three months ended September 30, 2018 was de minimis as compared to a gain of $0.02 million for the comparable prior-year period due to the net effects of fluctuations of the U.S. dollar against the Euro and its impact on our Euro-denominated intercompany balances due to our foreign subsidiaries for inventory purchases.
  • 17828551_138
    Other - Other
    The participation agreement provides that ACF?s commitment to fund each advance of the Purchased Inventory Sublimit shall be limited to seventy percent (70%), up to an aggregate maximum principal amount for all advances equal to $4.9 million.
  • 17828551_20
    Revenue - Geography
    With respect to our consolidated financial statements, the translation from the applicable foreign currencies to U.S. Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period.
  • 17828551_6
    Financial - Earnings
    We believe that continued organic growth will enable us to achieve long-term profitability.
  • 17828551_141
    Other - Other
    However, we and CB-USA are party to a fee letter with the junior participants (including the related party junior participants) pursuant to which we and CB-USA were obligated to pay the junior participants a closing fee of $18,000 on the effective date of the amendment to the Loan Agreement and are obligated to pay a commitment fee of $18,000 on each anniversary of the effective date until the junior participants? obligations are terminated pursuant to the participation agreement.
  • 17828551_242
    Other - Other
    We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in, or implied by, these forward-looking statements, even if new information becomes available in the future.
  • 17828551_204
    Financial - Expense
    We continue to control expenses, seek improvements in routes to market and contain production costs to improve cash flows.
  • 17828551_71
    Financial - Expense
    Due to the expected borrowings under our credit facilities to finance additional purchases of aged whiskies in support of the growth of our Jefferson?s bourbons and other working capital needs, we expect interest expense, net to increase in the near term as compared to prior years.
  • 17828551_110
    Financial - Expense
    Due to the expected borrowings under our credit facilities to finance additional purchases of aged whiskies in support of the growth of our Jefferson?s bourbons and other working capital needs, we expect interest expense, net to increase in the near term as compared to prior years.
  • 17828551_16
    Other - Other
    Among other changes, the Fifth Amendment increased the maximum amount of the Credit Facility from $23,000,000 to $25,000,000, and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory.
  • 17828551_18
    Other - Other
    Among other changes, the Sixth Amendment extended the termination date for the facility to July 31, 2020 and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory.
  • 17828551_122
    Other - Other
    Among other changes, the Fifth Amendment increased the maximum amount of the Facility from $23.0 million to $25.0 million and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory.
  • 17828551_126
    Other - Other
    Among other changes, the Fourth Amendment increased the maximum amount of the Facility from $21.0 million to $23.0 million and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory.
  • 17828551_89
    Financial - Expense
    Selling expense increased 1.1% to $11.1 million for the six months ended September 30, 2018 from $11.0 million for the comparable prior-year period, primarily due to an $0.8 million increase in employee costs and a $0.3 million increase in shipping costs from increased sales volume, partially offset by a $1.0 million decrease in advertising, marketing and promotion expense related to the timing of certain sales and marketing programs, including Goslings? sponsorship of the 35th America?s Cup, in the prior fiscal year.
  • 17828551_137
    Financial - Shares / Equity
    ACF required as a condition to entering into an amendment to the Loan Agreement in August 2015 that ACF enter into a participation agreement with certain related parties of ours, including Frost Gamma Investments Trust, an entity affiliated with Phillip Frost, M.D., a director of ours and a principal shareholder of ours ($150,000), Mark E. Andrews, III, a director of ours and our Chairman ($50,000), Richard J. Lampen, a director of ours and our President and Chief Executive Officer ($100,000), Brian L. Heller, our General Counsel and Assistant Secretary ($42,500), and Alfred J. Small, our Senior Vice President, Chief Financial Officer, Treasurer & Secretary ($15,000), to allow for the sale of participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof.
  • 17828551_135
    Other - Other
    Pursuant to the Loan Agreement, we and CB-USA may borrow up to the lesser of (x) $25.0 million and (y) the sum of the borrowing base calculated in accordance with the Loan Agreement and the Purchased Inventory Sublimit.
  • 17828551_196
    Revenue - Product
    We continue to implement sales and marketing initiatives that we expect will generate cash flows from operations in the next few years.
  • 17828551_120
    Financial - Debt
    We believe we can continue to meet our operating needs through additional mechanisms including additional or expanded debt financings, potential equity offerings and limiting or adjusting the timing of additional inventory purchases based on available resources.
  • 17828551_211
    Financial - Debt
    We believe we can continue to meet our operating needs through additional mechanisms including additional or expanded debt financings, potential equity offerings and limiting or adjusting the timing of additional inventory purchases based on available resources.
  • 17828551_62
    Financial - Income
    The Company?s provision for income taxes consists principally of state and local taxes in amounts necessary to align the Company?s year-to-date tax provision with the effective rate that it expects to achieve for the full year.
  • 17828551_101
    Financial - Income
    The Company?s provision for income taxes consists principally of state and local taxes in amounts necessary to align the Company?s year-to-date tax provision with the effective rate that it expects to achieve for the full year.
  • 17828551_107
    Revenue - Geography
    Foreign exchange gain for the six months ended September 30, 2018 was $0.05 million as compared to a loss of ($0.03) million for the comparable prior-year period due to the net effects of fluctuations of the U.S. dollar against the Euro and its impact on our Euro-denominated intercompany balances due to our foreign subsidiaries for inventory purchases.
  • 17828551_227
    Other - Other
    During the six months ended September 30, 2018, net cash used in operating activities was $4.0 million, consisting primarily of a $6.2 million increase in inventory, a $1.0 million decrease in due to related parties and a net loss of $0.3 million.
  • 17828551_150
    Financial - Expense
    The unpaid principal balance of the Credit Facility, all accrued and unpaid interest thereon, and all fees, costs and expenses payable in connection with the Credit Facility, are due and payable in full on the Maturity Date.
  • 17828551_185
    Financial - Shares / Equity
    The Convertible Note purchasers included certain related parties of ours, including an affiliate of Dr. Phillip Frost ($500,000), Mark E. Andrews, III ($50,000), an affiliate of Richard J. Lampen ($50,000) and Vector Group Ltd., a more than 5% shareholder of ours, of which Richard Lampen is an executive officer, Henry Beinstein, a director of ours, is a director and Phillip Frost, M.D. is a principal shareholder ($200,000), all of whom converted the outstanding principal and interest balances of their Convertible Notes into shares of our common stock in the year ended March 31, 2018.
  • 17828551_174
    Other - Other
    This note matures on April 1, 2020, is payable at maturity, subject to certain acceleration events, and calls for annual interest of 5%, to be accrued and paid at maturity.
  • 17828551_84
    Financial - Earnings
    We expect gross margin in the near term will be impacted negatively as we use higher cost bourbon to meet our sales needs, but positively impacted by the Craft Beverage Modernization and Tax Reform Act of 2017.
  • 17828551_119
    Financial - Earnings
    We believe our current cash and working capital and the availability under the Credit Facility (as defined below) will enable us to fund our losses until we achieve profitability, ensure continuity of supply of our brands, and support new brand initiatives and marketing programs through at least November 2019.
  • 17828551_210
    Financial - Earnings
    We believe our current cash and working capital and the availability under the Credit Facility will enable us to fund our losses until we achieve profitability, ensure continuity of supply of our brands, and support new brand initiatives and marketing programs through at least November 2019.
  • 17828551_64
    Other - Other
    The effective tax rate for the three months ended September 30, 2018 was 80.34%.
  • 17828551_103
    Other - Other
    The effective tax rate for the six months ended September 30, 2018 was 80.34%.
  • 17828551_231
    MA - Other
    Net cash used in investing activities was $0.1 million for the six months ended September 30, 2018, representing $0.1 million used in the acquisition of fixed and intangible assets.
  • 17828551_232
    MA - Other
    Net cash used in investing activities was $0.3 million for the six months ended September 30, 2017, representing a $0.2 million investment in non-consolidated affiliate and $0.1 million used in the acquisition of fixed and intangible assets.
  • 17828551_67
    Revenue - Geography
    Foreign exchange gain (loss).
  • 17828551_106
    Revenue - Geography
    Foreign exchange gain (loss).
  • 17828551_13
    MA - Other
    We continue to explore strategic relationships, joint ventures and acquisitions to selectively expand our premium spirits portfolio.
  • 17828551_39
    Revenue - Product
    Net sales increased 11.6% to $23.3 million for the three months ended September 30, 2018, as compared to $20.9 million for the comparable prior-year period, primarily due to U.S. sales growth of Jefferson?s bourbons, Knappogue Castle Irish whiskey, Goslings Stormy Ginger Beer and certain of our liqueurs, partially offset by decreases in Clontarf sales and certain of our liqueurs.
  • 17828551_32
    Other - Other
    Due to the significance of non-cash and non-recurring items, EBITDA, as adjusted, enables our Board of Directors and management to monitor and evaluate the business on a consistent basis.
  • 17828551_217
    Revenue - Product
    On average, the production cycle for our owned brands is up to three months from the time we obtain the distilled spirits and other materials needed to bottle and package our products to the time we receive products available for sale, in part due to the international nature of our business.

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Exhibit 4.3 - INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES

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Exhibit 31.1 - RULE 13A-14(A)/15D-14(A) CERTIFICATION

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Exhibit 31.2 - RULE 13A-14(A)/15D-14(A) CERTIFICATION

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Exhibit 32.1 - SECTION 1350 CERTIFICATION

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  • Form Type: Quarterly
  • Number of times amended: 0
  • Accession Number: 0001493152-18-015502
  • Submitted to the SEC: Thursday, November 8, 2018 5:31:27 PM EST
  • Accepted by the SEC: Thursday, November 8, 2018
  • Period ending: September 2018
  • Industry: Beverages
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