RUM Todhunter Intl

Cruzan International, Inc. (AMEX:RUM), producer and distributor of the Cruzan line of rums from the Virgin Islands and a leading distiller of rum and brandy, and importer and marketer of premium branded spirits, today reported financial results for its fourth quarter and year ended September 30, 2005. Net sales for fiscal 2005's fourth quarter were $28,994,609, compared with $26,448,845 reported for fiscal 2004's fourth quarter. Gross profit was $8,845,935, compared to $5,776,106 in the same period last year, and fourth quarter net loss was $10,474,669, or $1.55 per diluted share, compared with a net loss of $2,653,705 or $0.42 per diluted share, one year ago. Net sales for fiscal 2005 were $106,490,680, compared with $96,415,699 reported for fiscal 2004. Gross profit for fiscal 2005 was $34,734,946, compared to $29,647,977 in fiscal 2004, and net loss for fiscal 2005 was $10,652,731, or $1.65 per diluted share, compared with a net loss of $908,397 or $0.16 per diluted share in fiscal 2004. The increase in the net loss for fiscal 2005 was primarily due to the recording as an expense the obligation of the former majority owner of the Company to make a payment of $9,000,000 to certain members of management of the Company. This payment is not an obligation of the Company and was negotiated between certain members of management and the former majority owner without the participation of or ratification by the Company's board of directors or any committee thereof and does not affect its balance sheet or cash flow statement. However, under Staff Accounting Bulletin 107 issued by the Securities and Exchange Commission relating to accounting for expenses or liabilities paid by principal stockholder(s), this expected payment is treated as an expense of the Company in the statement of operations, and as a contribution to additional paid-in capital on the balance sheet. Not including this non-cash expense, the net loss for 2005 was $1,474,669, or $0.22 per diluted share for the fourth quarter, and $1,652,731, or $0.26 per diluted share for the full fiscal year. Commenting on the results, Jay S. Maltby, Chief Executive Officer and President said, "In 2005 we had a change in majority ownership and are in the process of a merger transaction with affiliates of V&S Vin & Sprit AB (publ), the owners of Absolut Vodka." Mr. Maltby continued, "Sales of Cruzan Rums increased 21% over the previous year. However, our premium brands segment continued to sustain losses as we continue to spend heavily on brand promotion. Operating income in our bulk alcohol segment improved slightly from last year despite increases in raw material and energy costs, primarily due to increased sales. The vinegar and cooking wine segment had a slight sales decline and lower operating income than last year. The performance in our bottling segment improved as we reduced our losses by 21% from last year. We saw improved efficiencies resulting from the previously announced consolidation of our bottling plants and increased sales due to the acquisition of a large new bottling contract." The Company also reported that the Board of Directors of the Company has elected Ola Salmen to be the Chairman of the Board. Cruzan International, Inc. is a major supplier of rum, brandy and wine to the beverage alcohol industry. The Company also produces ultra-premium single-barrel aged rums and tropical rums, vinegar and other alcohol-related products. Statements contained in this press release, other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Cruzan intends that such forward-looking statements shall be subject to the safe harbors created thereby. These statements involve various risks and uncertainties, including without limitation those contained in the section entitled "Risks that May Affect Future Results" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Cruzan's Annual Report on Form 10-K for the fiscal year ended September 30, 2005. As a result, future results may differ materially from the expected results represented by the forward looking-statements contained in this press release. -0- *T CRUZAN INTERNATIONAL, INC. Statements of Operations Statement of Operations as a % of Net Three Months Sales -------------------------- -------------- Periods ended September 30, 2005 2004 2005 2004 ------------- ------------ ------- ------ Net sales $28,994,609 $26,448,845 100.0% 100.0% Cost of sales 20,148,674 20,672,739 69.5% 78.2% ------------- ------------ ------- ------ Gross profit 8,845,935 5,776,106 30.5% 21.8% ------------- ------------ ------- ------ Selling, general and administrative 11,270,790 10,117,649 38.9% 38.3% Payment to be made by principal stockholder 9,000,000 - 31.0% - ------------- ------------ ------- ------ 20,270,790 10,117,649 69.9% 38.3% ------------- ------------ ------- ------ Operating loss (11,424,855) (4,341,543) -39.4% -16.4% Interest expense (718,258) (267,660) -2.5% -1.0% Other income, net 73,566 (59,161) 0.3% -0.2% ------------- ------------ ------- ------ Loss before income taxes (12,069,547) (4,668,364) -41.6% -17.7% Income tax benefit 1,594,878 2,014,659 5.5% 7.6% ------------- ------------ ------- ------ Net loss ($10,474,669) ($2,653,705) -36.1% -10.0% ============= ============ ======= ====== Loss per common share: Basic ($1.55) ($0.42) ============= ============ Diluted ($1.55) ($0.42) ============= ============ Common shares and equivalents outstanding Basic 6,747,453 6,338,519 ============= ============ Diluted 6,747,453 6,338,519 ============= ============ Shares outstanding at end of period 6,748,056 6,338,519 ============= ============ *T -0- *T CRUZAN INTERNATIONAL, INC. Statements of Operations Statement of Operations as a % of Net Year Sales -------------------------- -------------- Periods ended September 30, 2005 2004 2005 2004 ------------- ------------ ------- ------ Net sales $106,490,680 $96,415,699 100.0% 100.0% Cost of sales 71,755,734 66,767,722 67.4% 69.2% ------------- ------------ ------- ------ Gross profit 34,734,946 29,647,977 32.6% 30.8% ------------- ------------ ------- ------ Selling, general and administrative 38,309,226 33,227,358 36.0% 34.5% Payment to be made by principal stockholder 9,000,000 - 8.5% - ------------- ------------ ------- ------ 47,309,226 33,227,358 44.4% 34.5% ------------- ------------ ------- ------ Operating loss (12,574,280) (3,579,381) -11.8% -3.7% Interest expense (2,728,475) (2,226,011) -2.6% -2.3% Other income, net 762,276 1,204,908 0.7% 1.2% ------------- ------------ ------- ------ Loss before income taxes (14,540,479) (4,600,484) -13.7% -4.8% Income tax benefit 3,887,748 3,692,087 3.7% 3.8% ------------- ------------ ------- ------ Net loss ($10,652,731) ($908,397) -10.0% -0.9% ============= ============ ======= ====== Loss per common share: Basic ($1.65) ($0.16) ============= ============ Diluted ($1.65) ($0.16) ============= ============ Common shares and equivalents outstanding Basic 6,451,672 5,800,931 ============= ============ Diluted 6,451,672 5,800,931 ============= ============ Shares outstanding at end of period 6,748,056 6,338,519 ============= ============ *T -0- *T CRUZAN INTERNATIONAL, INC. Condensed Consolidated Balance Sheets Balance Sheet as a % of Total Assets ------------------- September September September September 30, 2005 30, 2004 30, 2005 30, 2004 ------------- ------------- --------- --------- ASSETS CURRENT ASSETS Cash and short-term investments $3,785,276 $3,833,828 2.8% 3.0% Receivables 25,616,285 20,418,736 19.2% 16.0% Inventories 31,282,808 29,162,496 23.4% 22.8% Other current assets 4,885,161 7,736,190 3.7% 6.1% ------------- ------------- --------- --------- Total current assets 65,569,530 61,151,250 49.0% 47.8% ------------- ------------- --------- --------- PROPERTY AND EQUIPMENT, net 38,283,133 39,949,850 28.6% 31.3% OTHER ASSETS 29,896,465 26,731,526 22.4% 20.9% ------------- ------------- --------- --------- Total assets $133,749,128 $127,832,626 100.00% 100.0% ============= ============= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt - $4,000,000 - 3.1% Accounts payable 12,946,544 11,868,947 9.7% 9.3% Other accrued expenses 7,217,927 4,726,253 5.4% 3.7% ------------- ------------- --------- --------- Total current liabilities 20,164,471 20,595,200 15.1% 16.1% ------------- ------------- --------- --------- LONG-TERM DEBT, less current maturities 28,600,000 25,674,240 21.4% 20.1% DEFERRED INCOME TAXES - 648,000 - 0.5% OTHER LIABILITIES 1,332,379 1,091,248 1.0% 0.9% STOCKHOLDERS' EQUITY 83,652,278 79,823,938 62.5% 62.4% ------------- ------------- --------- --------- Total liabilities and stockholders' equity $133,749,128 $127,832,626 100.0% 100.0% ============= ============= ========= ========= *T