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SodaStream Reports Record First Quarter Results

First Quarter Revenue Increased 34% to $117.6 Million

First Quarter Net Income Increased 20% to $12.1 Million

First Quarter Diluted Earnings Per Share Increased 19% to $0.57

First Quarter Adjusted Diluted Earnings Per Share Increased 24% to $0.68

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AIRPORT CITY, Israel, May 8, 2013 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems, announced today its results for the three month period ended March 31, 2013.

For the first quarter ended March 31, 2013:

  • Total revenue increased 33.9% to $117.6 million from $87.9 million in the first quarter 2012. 
  • EBITDA increased 22.7% to $16.4 million from $13.4 million, and Adjusted EBITDA increased 27.2% to $18.8 million from $14.8 million in the first quarter 2012.
  • Net income increased 19.5% to $12.1 million compared to $10.1 million in the first quarter 2012, and Adjusted net income was $14.5 million compared to $11.5 million in the first quarter 2012. 
  • Diluted earnings per share increased 18.8% to $0.57, compared to $0.48 in the first quarter 2012 and Adjusted diluted earnings per share were $0.68 compared to $0.55 in the first quarter 2012.

Daniel Birnbaum, Chief Executive Officer of SodaStream, commented, "Our first quarter performance was highlighted by record consumable sales driven by strong gains in several of our largest markets.  Growth was led by the U.S., where household penetration and consumer usage continue to expand as evidenced by soda maker, gas refill and syrup unit growth of 78%, 101% and 119%, respectively, versus the same period a year ago.  As we head into the summer selling season, we will continue to dedicate resources to support further growth in the U.S. and other key markets.  We continue to successfully build our business for the long term through strategic investments in product innovation, demand creation and manufacturing capacity.  We believe that this strategy will drive sales and earnings growth and deliver increased shareholder value."


First Quarter 2013 Financial Review


Geographical Revenue Breakdown

Revenue

Three Months Ended






March 31, 2012


March 31, 2013


 Increase

(decrease)


 Increase

(decrease)


In Millions USD


%

The Americas

$

25.6


$

48.3


$

22.7


89%

Western Europe


45.7



53.3



7.6


17%

Asia-Pacific


9.9



9.3



(0.6)


(6%)

Central & Eastern Europe, Middle East, Africa


6.7



6.7



-


1%

Total

$

87.9


$

117.6


$

29.7


34%

 

Product Segment Revenue Breakdown

Revenue

Three Months Ended






March 31, 2012


March 31, 2013


 Increase


Increase


In millions USD


%

Soda Maker Starter Kits

$

33.5


$

43.0


$

9.5


28%

Consumables


52.4



72.0



19.6


37%

Other


2.0



2.6



0.6


34%

Total

$

87.9


$

117.6


$

29.7


34%

 

Product Segment Unit Breakdown


Three Months Ended






March 31, 2012


March 31, 2013


 Increase


 Increase


In thousands


%

Soda Maker Starter Kits

683


776


93


14%

CO2 Refills

3,668


4,756


1,088


30%

Flavors

5,790


7,735


1,945


34%

 

Gross margin for the first quarter 2013 decreased slightly to 54.5% compared to 55.0% for the same period in 2012, primarily due to higher dependence on manufacturing subcontractors, partially offset by an increase in direct distribution that accounted for 81% of total revenue in the quarter compared to 72% in the first quarter 2012. The increase in direct distribution is mainly due to growth in U.S. revenue and to a lesser extent, lower sales to certain distributors.

Sales and marketing expenses for the first quarter 2013 totaled $38.9 million, or 33.0% of revenue, compared to $27.3 million, or 31.0% of revenue for the comparable period in the prior year. This is mainly attributable to an increase in advertising and promotion expense as a percent of revenue to 13.5% compared to 11.3% in the first quarter 2012, primarily due to an increase in advertising expenses following the Super Bowl campaign in the U.S.

General and administrative expenses for the first quarter 2013 were $11.6 million, or 9.9% of revenue, compared to $9.6 million, or 11.0% of revenue in the comparable period of last year. The 110 basis point improvement was driven by leveraging fixed expenses on higher revenue.

Operating income increased to $13.6 million, or 11.6% of revenue, compared to $11.5 million, or 13.1% of revenue in the first quarter 2012.

Tax expense was $1.3 million representing a 9.7% effective tax rate compared to $1.4 million or a 12.0% effective tax rate in the first quarter 2012. This reduction in effective tax rate is primarily attributable to utilization of taxable losses.

Balance Sheet Review

  • Cash and cash equivalents and bank deposits at March 31, 2013 were $49.9 million compared to $62.1 million at December 31, 2012. The decrease is primarily attributable to an increase in working capital.
  • The Company had $8.1 million in outstanding loans and borrowings at March 31, 2013 to partially finance the acquisition of property, plant and equipment, mainly the initial investments in the new main production site, compared to no bank debt at December 31, 2012.
  • Working capital at March 31, 2013 increased 24.1% to $118.1 million compared to $95.1 million at December 31, 2012, mainly due to a decrease in accounts payable and other current liabilities following the 2012 holiday advertising payment and earlier raw material purchasing in the first quarter 2013 versus the same period last year.
  • Inventories at March 31, 2013 increased 4.9% to $118.2 million compared to $112.7 million at December 31, 2012, ahead of the spring/summer selling season.

Guidance

Based on first quarter results and current projections for the remainder of the year, the Company is raising its outlook.

  • The Company now expects full year 2013 revenue to increase approximately 27% over 2012 revenue of $436.3 million, up from its previous guidance of 25%.
  • The Company now expects full year 2013 Adjusted EBITDA to increase approximately 36% over 2012 Adjusted EBITDA of $61.1 million, up from its previous guidance of 34%.
  • The Company now expects full year 2013 net income on an Adjusted basis, which excludes share-based compensation expense, to increase approximately 27% over the Adjusted net income of $50.0 million reported in 2012, up from its previous guidance of 25%.
  • The Company expects full year 2013 net income to increase approximately 20% as compared with its net income of $43.9 million in 2012, up from its previous guidance of 18%.

Conference Call and Management Commentary

Detailed CFO commentary and a supplemental slide presentation have been filed as part of today's 6-K and will be posted on the Company's website, http://sodastream.investorroom.com.

The Company has scheduled a conference call for 8:30 AM Eastern Standard Time (U.S. time) today (Wednesday, May 8, 2013) to review the Company's financial results. The conference call will be broadcast over the Internet as a "live" listen only Webcast. To listen, please go to: http://sodastream.investorroom.com.  Listeners are urged to login approximately 20 minutes before the conference call is scheduled to begin in order to register, as well as download and install any necessary audio software.  An archive of the Webcast will be available for 30 days after the call.

About SodaStream International

SodaStream manufactures beverage carbonation systems which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water. Soda makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks and sparkling water. Our products are environmentally friendly, cost effective, promote health and wellness, and are customizable and fun to use. In addition, our products offer convenience by eliminating the need to carry bottles home from the supermarket, to store bottles at home or to regularly dispose of empty bottles. Our products are available at more than 60,000 retail stores in 45 countries around the world.  For more information on SodaStream, please visit the Company's website: www.sodastream.com.

To download SodaStream's investor relations app, which offers access to SEC documents, press releases, videos, audiocasts and more, please visit http://itunes.apple.com/us/app/soda-ir/id524423001?mt=8 for your iPhone/iPad, or https://play.google.com/store/apps/details?id=com.theirapp.soda for your Android mobile device.

Non-IFRS Financial Measures

This press release contains certain non-IFRS measures, including Adjusted net income, Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization ("Adjusted EBITDA"), and Adjusted diluted earnings per share ("Adjusted diluted EPS").

Adjusted net income represents net income calculated in accordance with IFRS as adjusted for the impact of the share-based compensation expense. Adjusted EBITDA represents earnings before interest, income tax, depreciation and amortization, and further eliminates the effect of the share-based compensation expense. Adjusted diluted EPS represents earnings per share calculated in accordance with IFRS as adjusted for the impact of the share-based compensation expense.

The Company believes that the Adjusted net income, Adjusted EBITDA and Adjusted diluted EPS, which exclude share-based compensation expense, should be considered in evaluating the Company's operations. Adjusted net income and Adjusted diluted EPS exclude share-based compensation because it is a non-cash expense that does not reflect the performance of the Company's underlying business and operations.  Adjusted EBITDA facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting interest expenses, net), tax positions (such as the impact on periods or companies of changes in effective tax rates) and the age and book depreciation and amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively).

These measures should be considered in addition to results prepared in accordance with IFRS, but should not be considered a substitute for the IFRS results. The non-IFRS measures included in this press release have been reconciled to the IFRS results in the tables below.

Forward Looking Statements

This release contains forward-looking statements, which express the current beliefs and expectations of management. Such statements are based on management's current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to expand into our target markets, including the United States; our ability to continue to develop or maintain our presence in retail networks; our ability to develop and implement production and operating infrastructure to effectively support our growth; the success of our marketing campaigns and media spending in terms of increased sales or increased product and brand name awareness; our ability to maintain our customer base in markets where we have an established presence; the risks associated with our reliance on exclusive arrangements for the distribution of our beverage carbonation systems and consumables in each of the markets in which we use third-party distributors; our ability to compete effectively with other companies which currently offer, or may offer in the future, competing products; potential product liability claims if any component of our beverage carbonation systems is misused; our ability to protect our intellectual property rights; our being found to have a dominant position in certain markets which may place limits on our ability to operate; risks associated with our being a multinational corporation, including fluctuations in currency exchange rates; our potential exposure to greater than anticipated tax liabilities; our products being subject to extensive governmental regulation in the markets in which we operate; adverse conditions in the global economy which could negatively impact our customers' demand for our products; and other factors detailed in documents we file from time to time with the United States Securities and Exchange Commission.  Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Company Contact:
Yonah Lloyd
Chief Corporate Development and Communications Officer
SodaStream International Ltd.
Phone: +972-3-976-2462
yonahl@sodastream.com

Investor Contacts (US):
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com



Consolidated Statements of Operations

In thousands (other than per share amounts)








For the three months ended


March 31,


2012


2013


(Unaudited)

Revenue

$

87,868


$

117,639

Cost of revenue


39,505



53,554







Gross profit


48,363



64,085







Operating expenses






Sales and marketing


27,268



38,859

General and administrative


9,641



11,609

Other income, net


(39)



-







Total operating expenses


36,870



50,468







Operating income


11,493



13,617







Interest expense (income), net


(122)



25

Other financial expense, net


129



210







Total financial expense, net


7



235







Income before income taxes


11,486



13,382







Income tax expense


1,375



1,298







Net income for the period

$

10,111


$

12,084







Net income per share






Basic

$

0.50


$

0.58

Diluted

$

0.48


$

0.57







Weighted average  number of shares






Basic


20,144



20,682

Diluted


20,955



21,211







 


Consolidated Balance Sheets as of













December 31,


March 31,


2012


2013


(Audited)


(Unaudited)


(In thousands)

Assets






Cash and cash equivalents

$

62,068


$

49,888

Inventories


112,679



118,151

Trade receivables


86,650



79,867

Other receivables


28,021



18,819

Derivative financial instruments


803



1,647

Assets classified as available-for-sale


868



899

Total current assets


291,089



269,271







Property, plant and equipment


76,906



87,108

Intangible assets


41,978



42,351

Deferred tax assets


2,133



1,971

Other receivables


271



276

Total non-current assets


121,288



131,706







Total assets


412,377



400,977







Liabilities






Loans and borrowings


-



8,073

Derivative financial instruments


261



-

Trade payables


86,431



66,421

Income tax payable


8,866



9,330

Provisions


1,304



1,311

Other current liabilities


37,022



24,232

Total current liabilities


133,884



109,367







Employee benefits


1,939



1,889

Provisions


537



537

Deferred tax liabilities


1,527



1,791

Total non-current liabilities


4,003



4,217







Total liabilities


137,887



113,584







Shareholders' equity






Share capital


3,330



3,348

Share premium


178,338



181,949

Translation reserve


3,628



818

Retained earnings


89,194



101,278

Total shareholders' equity


274,490



287,393







Total liabilities and shareholders' equity

$

412,377


$

400,977







 


Consolidated Statements of Cash Flows








For the three months ended


March 31,


2012


2013


(Unaudited)



(In thousands)

Cash flows from operating  activities






Net income for the period

$

10,111


$

12,084







Adjustments:






Amortization of intangible assets


343



428

Change in fair value of  derivative financial instruments


1,278



-

Exchange rate differences on bank deposits


(1,094)



-

Depreciation of property, plant  and equipment


1,651



2,553

Share based payment


1,411



2,394

Interest expense (income), net


(122)



25

Income tax expense


1,375



1,298



14,953



18,782

Increase in inventories


(9,902)



(9,802)

Decrease (increase) in trade and other receivables


(17,163)



11,189

Increase (decrease) in trade payables


543



(19,233)

Increase in employee benefits


20



14

Increase (decrease) in provisions and other current liabilities


1,791



(12,098)



(9,758)



(11,148)

Interest paid


(115)



(54)

Income tax received


1,343



3,448

Income tax paid


(1,193)



(710)

Net cash used in operating activities


(9,723)



(8,464)







Cash flows from investing  activities






Interest received


130



58

Proceeds from (payments for) derivative financial  instruments, net


206



(1,105)

Acquisition of subsidiary, net of cash acquired


(9,758)



-

Acquisition of property, plant  and equipment


(4,127)



(10,604)

Acquisition of intangible assets


(240)



(1,109)

Net cash used in investing  activities


(13,789)



(12,760)







Cash flows from financing  activities






Proceeds from exercise of employee share options


588



1,151

Change in short-term debt


(922)



8,073

Net cash from (used in) financing activities


(334)



9,224







Net decrease in cash and cash equivalents


(23,846)



(12,000)

Cash and cash equivalents at the beginning of the period


34,769



62,068

Effect of exchange rates  fluctuations on cash and cash equivalents


167



(180)







Cash and cash equivalents  at the end of the period

$

11,090


$

49,888

 


Information about revenue in reportable segments












The Americas


Western

Europe

Asia-Pacific

Central and

Eastern

Europe,

Middle

East, Africa


Total


(In thousands)

Three months ended:










March 31, 2012 (Unaudited)

$

25,633


45,651

9,941

6,643


$

87,868

March 31, 2013 (Unaudited)

$

48,339


53,298

9,319

6,683


$

117,639











 


Reported (IFRS) to Adjusted (non-IFRS) Reconciliation of Consolidated Statements of Operations




















Three months ended March 31,


2012


2013


Reported


Share based




Reported


Share based




(Unadjusted)


payment


Adjusted


(Unadjusted)


payment


Adjusted


(Unaudited)


In thousands (other than per share amounts)

Revenue

$

87,868


$

-


$

87,868


$

117,639


$

-


$

117,639

Cost of revenue


39,505



-



39,505



53,554



-



53,554



















Gross profit


48,363



-



48,363



64,085



-



64,085



















Operating expenses


















Sales and marketing


27,268



-



27,268



38,859



-



38,859

General and administrative


9,641



(1,411)



8,230



11,609



(2,394)



9,215

Other income, net


(39)



-



(39)



-



-



-



















Total operating expenses


36,870



(1,411)



35,459



50,468



(2,394)



48,074



















Operating income


11,493



1,411



12,904



13,617



2,394



16,011



















Interest expense (income), net


(122)



-



(122)



25



-



25

Other financial expense, net


129



-



129



210



-



210



















Total financial expense, net


7



-



7



235



-



235



















Income before income taxes


11,486



1,411



12,897



13,382



2,394



15,776



















Income tax expense


1,375



-



1,375



1,298



-



1,298



















Net income for the period

$

10,111


$

1,411


$

11,522


$

12,084


$

2,394


$

14,478



















Net income per share


















Basic

$

0.50





$

0.57


$

0.58





$

0.70

Diluted

$

0.48





$

0.55


$

0.57





$

0.68



















Weighted average  number of shares


















Basic


20,144






20,144



20,682






20,682

Diluted


20,955






20,955



21,211






21,211

 


EBITDA and Adjusted EBITDA







Three months ended


March 31,


2012


2013


(Unaudited)


(In thousands)







Reconciliation of Net Income to EBITDA and Adjusted EBITDA






Net income

$

10,111


$

12,084

Interest expense (income), net


(122)



25

Income tax expense


1,375



1,298

Depreciation and amortization


1,994



2,981

EBITDA


13,358



16,388







Share based payment


1,411



2,394

Adjusted EBITDA

$

14,769


$

18,782

 


The following tables present the Company's revenue, by product type for the periods presented, as well as such revenue by product type as a percentage of total revenue:

 


Three months ended


March 31,


2012


2013


(Unaudited)


Revenue


(in thousands)







Soda maker starter kits (including exchange cylinders)

$

33,484


$

42,952

Consumables


52,419



72,062

Other


1,965



2,625

Total

$

87,868


$

117,639

 






Three months ended


March 31,


2012


2013


(Unaudited)


As a percentage of revenue





Soda maker starter kits (including exchange cylinders)

38.1%


36.5%

Consumables

59.7%


61.3%

Other

2.2%


2.2%

Total

100.0%


100.0%









 

 

SOURCE SodaStream International Ltd.



RELATED LINKS
http://www.sodastream.com

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