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Castle Brands Achieves Breakeven in Q4 Earnings; Sales Top

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Castle Brands Inc. ROX, the premium branded spirits company, broke even in the fourth-quarter of fiscal results, in line with the Zacks Consensus Estimate. However, revenues surpassed the consensus mark driven by strong performance of the core brands.

Quarterly Discussion

Castle Brands’ bottom line reached the breakeven point in the fourth quarter of fiscal 2016, flat year over year. Higher revenues were offset by currency headwinds and  and income tax expense.

CASTLE BRANDS Price, Consensus and EPS Surprise

CASTLE BRANDS Price, Consensus and EPS Surprise | CASTLE BRANDS Quote

The company’s quarterly revenues of $19.96 million exceeded the Zacks Consensus Estimate of $17.45 million by 14%. Revenues also reflected a solid 23.6% year-over-year surge driven by strong performance of its core brands including Jefferson's and Jefferson's Reserve, Clontarf Irish whiskey and Goslings Stormy Ginger Beer.

Adjusted EBITDA of $1.4 million in the fourth quarter of fiscal 2016, improved from $0.4 million in the prior-year quarter on the back of solid revenues.

Fiscal 2016

Castle Brands reported loss of 2 cents per share in fiscal 2016, which was wider than the Zacks Consensus Estimate of a loss of 1 cent per share and flat year over year.

The company’s fiscal 2016 revenues of $72.2 million exceeded the Zacks Consensus Estimate of $70 million by 3.1%. Revenues also reflected a solid 25.7% year-over-year surge driven by strong performance of its core brands,.

Adjusted EBITDA of $3.6 million in fiscal 2016 improved from $1.1 million in the prior-year on the back of solid revenues.

During fiscal 2016, Whiskey revenues increased 35.8% year over year, driven by strong sales of highly profitable brands like Jefferson's bourbons, Knappogue and Clontarf Irish whiskeys. Meanwhile, Gosling's Stormy Ginger Beer case sales increased 55.9% owing to increasing demand. Goslings Rum sales rose 10.9% year over year driven by strong sales in both the U.S and the international markets.

Other Updates

Castle Brands expects the sales of Jefferson's bourbons, Gosling's Rum and Irish whiskeys to gain further momentum in the upcoming quarters.

Castle Brands has increased its inventory of aged bourbon. Moreover, the company signed two long-term new fill agreements to increase its supply of aged bourbon for Jefferson's brand. The company also launched an upgraded packaging for Goslings Rum and Knappogue Castle Irish whiskeys.  

Castle Brands has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the beverage sector include, Molson Coors Brewing Company (TAP - Free Report) , Ambev S.A. ABEV and Compania Cervecerias Unidas S.A. CCU. Molson Coors sports a Zacks Rank #1 (Strong Buy), whereas Ambev and Compania Cervecerias Unidas hold a Zacks Rank #2 (Buy).

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