Central European Distribution Corp. (CEDC, Financial) filed Quarterly Report for the period ended 2010-03-31.
Central European Distribution Corp. has a market cap of $1.81 billion; its shares were traded at around $26.19 with a P/E ratio of 13.1 and P/S ratio of 0.82. Central European Distribution Corp. had an annual average earning growth of 33.8% over the past 10 years. GuruFocus rated Central European Distribution Corp. the business predictability rank of 2.5-star.CEDC is in the portfolios of David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Net sales represent total sales net of all customer rebates, excise tax on production and exclusive imports and value added tax. Total net sales increased by approximately 111.6%, or $79.0 million, from $70.8 million for the three months ended March 31, 2009 to $149.8 million for the three months ended March 31, 2010. The increase was driven primarily by the consolidation of the Russian Alcohol resulting in an increase of $80 million. Our business split by segment, which represents our primary geographic locations of operations, Poland, Russia and Hungary, is shown below:
Sales for Russia increased by $78.7 million from $16.7 million for the three months ending March 31, 2009 to $95.3 million for the three months ending March 31, 2010. This increase was driven a combination of the strengthening of the Russian ruble against the U.S. dollar which accounted for approximately $2.3 million of the increase and the consolidation of the Russian Alcohol which was completed in April 2009, which accounted for approximately $80.0 million of the increase. The remaining difference represents a decline in year on year sales of $3.6 million (which represents a 4% decline over prior year sales after including the Russian Alcohol first quarter 2009 sales in total sales for that period) which was driven by the overall economic slowdown that took place in Russia with consumers continuing to spend less and trade down to lower priced products. We estimate that the overall vodka market in Russia was also down by 7%-9% in volume terms.
2010. The 2009 cost base was increased by the consolidation of Russian Alcohol which increased the cost base by $31.5 million for the three months ended March 31, 2010 and the impact of foreign exchange which increased operating expenses by $3.2 million. This adjusted cost base of $55.2 was then reduced by year on year costs savings of approximately $6.3 million. The table below sets forth the items of operating expenses.
The operating income in Russia increased by $13 million, driven by the consolidation of Russian Alcohol which contributed $12.8 million for the three months ending March 31, 2010, cost savings of $3.2 million and the appreciation of the Russian Ruble of $0.4 million. These increases we partially offset by lower sales volume as described above.
Total interest expense increased by approximately 159.6%, or $15.8 million, from $9.9 million for the three months ended March 31, 2009 to $25.7 million for the three months ended March 31, 2010. This increase is mainly a result of the additional interest from Senior Secured Notes due 2016 of $19.8 million. The incremental borrowings were used primarily to finance the remaining buy out of the Russian Alcohol which was completed in January 2010.
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Central European Distribution Corp. has a market cap of $1.81 billion; its shares were traded at around $26.19 with a P/E ratio of 13.1 and P/S ratio of 0.82. Central European Distribution Corp. had an annual average earning growth of 33.8% over the past 10 years. GuruFocus rated Central European Distribution Corp. the business predictability rank of 2.5-star.CEDC is in the portfolios of David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
In connection with the completion of these investments the Company completed three capital raising initiatives comprised of two public equity offerings, with net proceeds of approximately $491 million, and a notes offering with net proceeds of approximately $930 million. The primary use of the equity proceeds was to fund the remaining buyout of Parliament and to partially fund the remaining buyout of Russian Alcohol. The proceeds from the notes offering were used to (i) fund a portion of the buyout of Russian Alcohol, (ii) to refinance approximately $390 million of the Companys outstanding Senior Secured Notes due in 2012, and (iii) to refinance approximately $264 million of debt in place in Russian Alcohol. As a result of the notes offering the Company has extended the maturities of a significant portion of its debt to 2016 and settled the majority of its payment obligations to Lion Capital for the purchase of Russian Alcohol.Net sales represent total sales net of all customer rebates, excise tax on production and exclusive imports and value added tax. Total net sales increased by approximately 111.6%, or $79.0 million, from $70.8 million for the three months ended March 31, 2009 to $149.8 million for the three months ended March 31, 2010. The increase was driven primarily by the consolidation of the Russian Alcohol resulting in an increase of $80 million. Our business split by segment, which represents our primary geographic locations of operations, Poland, Russia and Hungary, is shown below:
Sales for Russia increased by $78.7 million from $16.7 million for the three months ending March 31, 2009 to $95.3 million for the three months ending March 31, 2010. This increase was driven a combination of the strengthening of the Russian ruble against the U.S. dollar which accounted for approximately $2.3 million of the increase and the consolidation of the Russian Alcohol which was completed in April 2009, which accounted for approximately $80.0 million of the increase. The remaining difference represents a decline in year on year sales of $3.6 million (which represents a 4% decline over prior year sales after including the Russian Alcohol first quarter 2009 sales in total sales for that period) which was driven by the overall economic slowdown that took place in Russia with consumers continuing to spend less and trade down to lower priced products. We estimate that the overall vodka market in Russia was also down by 7%-9% in volume terms.
2010. The 2009 cost base was increased by the consolidation of Russian Alcohol which increased the cost base by $31.5 million for the three months ended March 31, 2010 and the impact of foreign exchange which increased operating expenses by $3.2 million. This adjusted cost base of $55.2 was then reduced by year on year costs savings of approximately $6.3 million. The table below sets forth the items of operating expenses.
The operating income in Russia increased by $13 million, driven by the consolidation of Russian Alcohol which contributed $12.8 million for the three months ending March 31, 2010, cost savings of $3.2 million and the appreciation of the Russian Ruble of $0.4 million. These increases we partially offset by lower sales volume as described above.
Total interest expense increased by approximately 159.6%, or $15.8 million, from $9.9 million for the three months ended March 31, 2009 to $25.7 million for the three months ended March 31, 2010. This increase is mainly a result of the additional interest from Senior Secured Notes due 2016 of $19.8 million. The incremental borrowings were used primarily to finance the remaining buy out of the Russian Alcohol which was completed in January 2010.
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