Castle Brands Inc (ROX, Financial) filed Quarterly Report for the period ended 2009-12-31.
Castle Brands Inc has a market cap of $28.58 million; its shares were traded at around $0.2647 with and P/S ratio of 1.09.
Net sales. Net sales increased 8.4% to $7.5 million for the three months ended December 31, 2009 when compared to $6.9 million for the three months ended December 31, 2008. Our U.S. case sales as a percentage of total case sales increased to 71.3% during the three months ended December 31, 2009 as compared to 66.8% during the comparable prior-year period. U.S. net sales increased to $6.1 million for the three months ended December 31, 2009 from $5.2 million for the comparable prior-year period, including $0.1 million in revenue from sales of our Tierras tequila (launched in February 2009), $0.2 million in revenue from sales of our Jeffersons Presidential Select bourbon (launched in August 2009) and $0.2 million in revenue from the sales of our Betts & Scholl wines (acquired in September 2009). The growth in U.S. sales reflects the momentum of most of our portfolio in the U.S.
Gross profit. Gross profit increased 18.9% to $2.6 million during the three months ended December 31, 2009 from $2.2 million during the comparable prior-year period, while our gross margin increased to 34.3% during the three months ended December 31, 2009 compared to 31.2% for the comparable prior-year period. During each of the three months ended December 31, 2009 and 2008, we recorded reversals of our allowance for obsolete and slow moving inventory of $0.1 million. We recorded these reversals as we were able to sell certain goods included in the allowance recorded during previous fiscal years. We recorded the reversals as a decrease in cost of sales. Absent the reversal of the allowance, our gross profit was $2.1 million and $2.0 million during the three months ended December 31, 2009 and 2008, respectively, and our gross margin was 33.1% and 29.2% during the three months ended December 31, 2009 and 2008, respectively.
Selling expense. Selling expense decreased 44.1% to $2.2 million for the three months ended December 31, 2009 from $4.0 million for the comparable prior-year period. This decrease in selling expense was attributable to our continued cost containment efforts, including a decrease in advertising, marketing and promotion expense of $0.8 million for the three months ended December 31, 2009 compared to the comparable prior-year period. We also reduced sales and marketing staff in both our domestic and international operations, resulting in a decrease of employee expense, including salaries, related benefits and travel and entertainment, of $1.0 million for the three months ended December 31, 2009 against the comparable prior-year period, which prior-year period included $0.2 million in severance charges and $0.5 million in stock-based compensation expense. As a result of our continued cost containment efforts, selling expense as a percentage of net sales decreased to 29.6% for the three months ended December 31, 2009 as compared to 57.3% for the comparable prior-year period.
General and administrative expense. General and administrative expense decreased 55.7% to $1.6 million for the three months ended December 31, 2009 when compared to $3.0 million for the comparable prior-year period. General and administrative staff reductions resulted in a decrease of employee expense, including salaries, related benefits and travel and entertainment, of $1.5 million in the current period against the comparable prior-year period, which prior-year period included $0.6 million in severance charges and $0.7 million in stock-based compensation expense. Decreases of $0.1 million in occupancy and insurance expense, respectively, were due to our ongoing cost containment efforts. As a result, general and administrative expense as a percentage of net sales decreased to 17.5% for the three months ended December 31, 2009 as compared to 42.7% for comparable prior-year period.
Interest income (expense), net. We had interest income, net of $0.01 million during the three-month period ended December 31, 2009 compared to interest expense, net of ($0.5) million during the comparable prior-year period. We eliminated this expense by converting and exchanging all of our senior notes and convertible subordinated notes for equity. In December 2009, we entered into a $2.5 million revolving credit agreement as described below in Liquidity and Capital Resources. We anticipate that from time to time
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Castle Brands Inc has a market cap of $28.58 million; its shares were traded at around $0.2647 with and P/S ratio of 1.09.
Highlight of Business Operations:
with the applicable financial statement. In all other instances, unless otherwise indicated, the conversions have been made using the exchange rates as of December 31, 2009, each as calculated from the Interbank exchange rates as reported by Oanda.com. On December 31, 2009, the exchange rate of the Euro and the British Pound in exchange for U.S. Dollars were 1.00 = U.S. $1.43322 (equivalent to U.S. $1.00 = 0.69768) for Euros and £1.00 = U.S. $1.59257 (equivalent to U.S. $1.00 = £0.62783) for British Pounds.Net sales. Net sales increased 8.4% to $7.5 million for the three months ended December 31, 2009 when compared to $6.9 million for the three months ended December 31, 2008. Our U.S. case sales as a percentage of total case sales increased to 71.3% during the three months ended December 31, 2009 as compared to 66.8% during the comparable prior-year period. U.S. net sales increased to $6.1 million for the three months ended December 31, 2009 from $5.2 million for the comparable prior-year period, including $0.1 million in revenue from sales of our Tierras tequila (launched in February 2009), $0.2 million in revenue from sales of our Jeffersons Presidential Select bourbon (launched in August 2009) and $0.2 million in revenue from the sales of our Betts & Scholl wines (acquired in September 2009). The growth in U.S. sales reflects the momentum of most of our portfolio in the U.S.
Gross profit. Gross profit increased 18.9% to $2.6 million during the three months ended December 31, 2009 from $2.2 million during the comparable prior-year period, while our gross margin increased to 34.3% during the three months ended December 31, 2009 compared to 31.2% for the comparable prior-year period. During each of the three months ended December 31, 2009 and 2008, we recorded reversals of our allowance for obsolete and slow moving inventory of $0.1 million. We recorded these reversals as we were able to sell certain goods included in the allowance recorded during previous fiscal years. We recorded the reversals as a decrease in cost of sales. Absent the reversal of the allowance, our gross profit was $2.1 million and $2.0 million during the three months ended December 31, 2009 and 2008, respectively, and our gross margin was 33.1% and 29.2% during the three months ended December 31, 2009 and 2008, respectively.
Selling expense. Selling expense decreased 44.1% to $2.2 million for the three months ended December 31, 2009 from $4.0 million for the comparable prior-year period. This decrease in selling expense was attributable to our continued cost containment efforts, including a decrease in advertising, marketing and promotion expense of $0.8 million for the three months ended December 31, 2009 compared to the comparable prior-year period. We also reduced sales and marketing staff in both our domestic and international operations, resulting in a decrease of employee expense, including salaries, related benefits and travel and entertainment, of $1.0 million for the three months ended December 31, 2009 against the comparable prior-year period, which prior-year period included $0.2 million in severance charges and $0.5 million in stock-based compensation expense. As a result of our continued cost containment efforts, selling expense as a percentage of net sales decreased to 29.6% for the three months ended December 31, 2009 as compared to 57.3% for the comparable prior-year period.
General and administrative expense. General and administrative expense decreased 55.7% to $1.6 million for the three months ended December 31, 2009 when compared to $3.0 million for the comparable prior-year period. General and administrative staff reductions resulted in a decrease of employee expense, including salaries, related benefits and travel and entertainment, of $1.5 million in the current period against the comparable prior-year period, which prior-year period included $0.6 million in severance charges and $0.7 million in stock-based compensation expense. Decreases of $0.1 million in occupancy and insurance expense, respectively, were due to our ongoing cost containment efforts. As a result, general and administrative expense as a percentage of net sales decreased to 17.5% for the three months ended December 31, 2009 as compared to 42.7% for comparable prior-year period.
Interest income (expense), net. We had interest income, net of $0.01 million during the three-month period ended December 31, 2009 compared to interest expense, net of ($0.5) million during the comparable prior-year period. We eliminated this expense by converting and exchanging all of our senior notes and convertible subordinated notes for equity. In December 2009, we entered into a $2.5 million revolving credit agreement as described below in Liquidity and Capital Resources. We anticipate that from time to time
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