Castle Brands Board (ROX)

[FUNMAN]

Hello Blind, We certainly cannot forecast ROX's 2020 holiday Q, but I expect it to be fantastic. I also expect the full year revenues to range between $105 - $110 million.

The holiday Q has been ROX's historical highest revenue Q's with the exception of 2015 and 2016 and 2019.

During 2015 and 2016, when they first bought into KAD and began laying down inventory, they pushed out of storage, inventory ready for sale and front loaded the revenues in the 2nd fiscal Q. They made room in their first warehouse for new barrels of freshly distilled "juice" as Trey calls it.

In 2019 it was recently well documented as to what happened.

They moved aged product out to sea, nearly tripling the amount to age for Ocean. The hiccup was in product rotation. Presidential will also return during the 2020 holiday Q. These points were cited in several interviews with Trey. Also noted below is the fact that they have more than 8 years (at present sales volumes) of supply of aging barrels for when it is ready to be first tapped. They are also laying down barrels at the rate of $10 million+ (value/worth) per year. ROX has jumped all over the tax credit by accelerating the quantity being distilled.

http://investor.castlebrandsinc.com/news-releases/news-release-details/castle-brands-announces-fiscal-2019-third-quarter-results


"Our third quarter, and as a result our nine months, were adversely affected by two atypical factors. First, while the overall case sales of Jefferson's rose 20.7% in the nine months, the case mix in the third quarter was skewed toward our lower price and lower margin expression, Jefferson's Small Batch. In contrast, our prior-year third quarter included $2.5 million in sales of our limited-release, high-margin Jefferson's Presidential Select. We expect this situation to reverse in the fourth quarter as several Jefferson's expressions with significantly higher prices and margins, such as Jefferson's Pichon Baron and Jefferson's Ocean Cask Strength, become available. Second, our third quarter results were also negatively impacted by a one-time $1.0 million increase in professional fees," stated Richard J. Lampen, President and Chief Executive Officer of Castle Brands.

"Setting aside the case mix in the third quarter, we expect the strong growth in Jefferson's to continue to drive our long-term trends of increasing sales and improving financial performance," Mr. Lampen continued.

"Jefferson's is a key brand for us and we are very excited about our current bourbon inventories. The combination of our new fill programs and opportunistic purchases of aged whiskey resulted in our having just over 30,000 barrels at the end of the third quarter. At approximately 25 cases (9L) per barrel, this would equate to approximately 750,000 cases of finished products. Furthermore, as our new fill continues to age and begins to be included in our finished goods, we will see significant reductions in COGS, which will result in substantial bottom-line improvements," said John Glover, Executive Vice President and Chief Operating Officer of Castle Brands.