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Drinks Americas Reports Profitability For 3rd Quarter And Increases Revenue 687%

WILTON, Conn., March 15, 2012 /PRNewswire/ -- Drinks Americas Holdings, Ltd., ("Drinks") (OTCBB: DKAM), a leading developer and marketer of beverage products, announces its results for the third quarter for the three months ended January 31, 2012.  The Company increased revenue 687% to $1,117,000 for the quarter and achieved earnings of $182,999, compared to a loss of $531,824 for the same period last year on $142,000 of revenue.

Shareholder equity increased to $2,349,641, which is up from a deficit of $4,463,368 since the beginning of the Company's fiscal year.

Management Comment:

For the Three Months Ended January 31, 2012 Compared to Three Months Ended January 31, 2011 net sales were approximately $1,117,000 compared to net sales of approximately $142,000 for the same period last year, an increase of 687%.  The increase was attributable to the Company's sales of products from the Worldwide Beverage Imports (WBI) Transaction, ongoing Rheingold Beer sales, and the Company's access to production credit from the WBI deal whereby the Company is no longer impeded from production limitations due to access to capital.

Gross Margins increased 265% to $232,341, or 20.8% of net sales for the three months ended January 31, 2012, compared to gross margin of $8,086, or 5.7% of net sales for the three months ended January 31, 2011. 

Selling, general and administrative expenses totaled approximately $345,000 for the three months ended January 31, 2012, compared to $662,000 for the three months ended January 31, 2011, a decrease of approximately $317,000, or 47.9%.  The Company attributes this decrease to reduced overhead costs.

Interest income (expense) for the three months ended January 31, 2012 was approximately $11,000, compared to $(265,000) for the same period last year, a net decrease of $276,000, or 104%.  This decrease is predominantly due to the Company's access to production capacity through the WBI transaction and a reduction in the cost of financing outstanding liabilities as compared to prior year.

For the Nine Months Ended January 31, 2012 Compared to Nine Months Ended January 31, 2010 net sales were approximately $2,536,000 compared to net sales of approximately $388,000 for the same period last year, an increase of 554%.   

Gross margin increased 101% to $550,016, or 21.7% of net sales for the nine months ended January 31, 2012, compared to gross margin of $42,031, or 10.8% of net sales for the nine months ended January 31, 2011. This increase in gross margin is attributable to a higher premium product mix in the current period as compared to the same period last year.

Selling, general and administrative expenses totaled approximately $1,591,000 for the nine months ended January 31, 2012, compared to $1,988,000 for the nine months ended January 31, 2011, a decrease of approximately $397,000, or 20.0%.  The decrease is attributable to the Company's cost containment initiatives and production synergies with the WBI transaction.

Interest expense for the nine months ended January 31, 2012 was approximately $157,000, compared to $734,000 for the same period last year, a net decrease of $577,000, or 79%.  This decrease is predominantly due to a reduction in the cost of financing outstanding liabilities as compared to prior year.

About Drinks Americas

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