Castle Brands Inc. (NYSE MKT: ROX), a developer and international marketer of premium and super-premium branded spirits and wine, today announced that the Company sent the following annual letter to its shareholders from the Chairman of the Board, Mark E. Andrews, III, and the Company’s President and Chief Executive Officer, Richard J. Lampen:
Dear Fellow Shareholder,
We are pleased to announce that our fiscal year ended March 31, 2012 was very positive for Castle Brands. During the year, we continued to grow our most profitable brands, contained our SG&A expenses and significantly improved our financial flexibility.
For fiscal 2012, we reported total case sales (excluding ginger beer) of 333,529, a 9% increase in total case sales compared to the previous year. Because this growth came primarily from our higher value and higher margin brands such as Gosling’s Rum, Jefferson's Bourbons and our Irish whiskeys, revenue increased 11% to $35.5 million and gross margin increased over 12% to $12.5 million.
While sales increased 11% for the year, our total SG&A expenses actually decreased 1%. We have a strong sales force and management team, which should allow us to continue to increase sales substantially without corresponding increases to costs. This ability to scale our business led to significantly stronger bottom line performance, with a 40% improvement in our EBITDA, as adjusted. We believe these trends will allow us to become solidly profitable and build substantial shareholder value.
Sales of Jefferson’s Bourbons increased dramatically during the year. We also introduced Jefferson’s Rye. We believe Jefferson’s growth is still in its early stages, with significant untapped market opportunities. During the year, we completely renegotiated our supply agreements for our Irish whiskey brands, Knappogue Castle and Clontarf. Irish whiskey is a rapidly growing category with relatively less competition than other spirits categories, because there are currently only three distilleries in Ireland producing whiskey. We feel that we now have the supply in place to meet our aggressive growth targets over the years ahead for these profitable brands. We also launched an exciting extension to our Gosling Rum brand, a ready-to-drink “Dark ‘n Stormy” cocktail, which we believe will add to that brand’s growth.