SodaStream Reports Record Second Quarter Results

Second Quarter Revenue Increased to $103.0 Million

Second Quarter Net Income Increased to $9.5 Million

Second Quarter Diluted Earnings Per Share Increased to $0.45

Second Quarter Adjusted Diluted Earnings Per Share Increased to $0.52

Aug 08, 2012, 07:30 ET from SodaStream International Ltd.

AIRPORT CITY, Israel, Aug. 8, 2012 /PRNewswire/ -- SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems announced today its results for the three and six month periods ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20100903/NY58941LOGO-b)

Beginning with the quarter ended March 31, 2012, the Company changed its reporting currency to the U.S. dollar (USD). Previously, the Company presented its annual and quarterly consolidated balance sheets and related consolidated statements of operations and cash flows in Euro (EUR). In accordance with IFRS, the financial statements for comparative periods were translated into the new reporting currency using the EUR to USD exchange rate at January 1, 2012 of EUR 1.00 = USD 1.2973.

For the second quarter ended June 30, 2012:

  • Total revenue increased 49.1% to $103.0 million from $69.1 million in the second quarter of 2011.
  • Net income increased 43.9% to $9.5 million compared to $6.6 million a year ago, and Adjusted net income was $10.9 million compared to $7.9 million last year.
  • Diluted earnings per share increased 40.6% to $0.45, compared to $0.32 in the second quarter of 2011 and Adjusted diluted earnings per share were $0.52 compared to $0.38 a year ago.

"We are very pleased to have generated our first $100 million revenue quarter ever," said Daniel Birnbaum, Chief Executive Officer of SodaStream. "The contributions to our top-line performance were broad-based in terms of product segments and geographies with the U.S. exhibiting particular strength. It's clear that our strategy of expanded distribution and increased marketing is leading to growing demand for our products in the U.S. and other newer markets. At the same time, many of our more established markets continued to post solid revenue gains. The successful execution of our growth strategy, combined with a strong pipeline of product innovation, gives us confidence in our ability to capture a greater share of the global beverage industry in the years ahead."

 

Second Quarter 2012 Financial Review

Geographical Revenue Breakdown

Revenue

Three Months Ended

June 30, 2012

June 30, 2011

 Increase

 Increase

In Millions USD

%

Western Europe

$

54.0

$

43.2

$

10.8

25%

The Americas

30.7

14.7

16.0

109%

Central & Eastern Europe, Middle East, Africa

8.4

8.2

0.2

2%

Asia-Pacific

9.9

3.0

6.9

234%

Total

$

103.0

$

69.1

$

33.9

49%

 

Product Segment Revenue Breakdown

Revenue

Three Months Ended

June 30, 2012

June 30, 2011

 Increase

 Increase

In millions USD

%

Soda Maker Starter Kits

$

39.8

$

26.7

$

13.1

49%

Consumables

61.6

41.3

20.3

49%

Other

1.6

1.1

0.5

45%

Total

$

103.0

$

69.1

$

33.9

49%

Product Segment Unit Breakdown

Three Months Ended

June 30, 2012

June 30, 2011

 Increase

 Increase

In thousands

%

Soda Maker Starter Kits

764

634

130

20%

CO2 Refills

4,230

3,391

839

25%

Flavors

7,200

6,060

1,140

19%

*As discussed on the Company's fourth quarter 2011 earnings call, the Czech Republic distributor purchased a disproportionate amount of soda makers during the second quarter of 2011.  Excluding sales to the Czech Republic from the second quarter of 2011 and 2012, soda maker starter kit unit sales increased 35% year over year. 

Gross margin for the second quarter of 2012 was 54.4%, compared to 53.0% for the same period in 2011. This increase was primarily due to the increase in direct distribution that accounted for 75% of total revenue in the quarter vs. 58% in the second quarter of 2011, which is mainly due to growing share of U.S. revenue and the shift to self-distribution in the Nordics.

Sales and marketing expenses for the second quarter of 2012 totaled $37.1 million, or 36.0% of revenue compared to $22.5 million, or 32.5% of revenue for the comparable period last year. The increase is primarily due to higher advertising and promotion expense in the U.S., and the addition of the Nordics expenses. 

General and administrative expenses for the second quarter of 2012 were $9.2 million, or 9.0% of revenue, compared to $7.3 million, or 10.5% of revenue in the comparable period of last year. This includes the additional expenses associated with the acquisition of CEM Industries in the fourth quarter of 2011 and the acquisition of the distribution activity in the Nordics in the first quarter of 2012.

Operating income increased to $9.7 million, or 9.5% of revenue as compared to $6.9 million, or 10.0% of revenue in the second quarter of 2011.

Tax expense was $134,000 compared to a tax expense of $1.2 million in the second quarter of 2011. The decrease in the effective tax rate to 1.4% from 15.9% is primarily attributable to the geographical taxable income distribution, the utilization of taxable losses and progress in some of the group-companies discussions with tax authorities that enabled partial release of past-years' tax provisions.

Balance Sheet Review

  • Cash and cash equivalents and bank deposits at June 30, 2012 were $56.6 million compared to $74.3 million on December 31, 2011. The decrease is primarily attributable to the acquisition of the Nordics distribution activity, debt repayment and an increase in working capital.
  • The Company had no outstanding loans and borrowings at June 30, 2012 compared to $4.0 million on December 31, 2011.
  • Working capital at June 30, 2012 increased 8.2% to $84.7 million compared to $78.3 million on December 31, 2011.
  • Inventories at June 30, 2012 increased 21.2% to $92.9 million compared to $76.6 million on December 31, 2011, primarily reflecting the additional inventory associated with the acquisition of the Nordics distribution activity. 

Guidance

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

  • The Company now expects 2012 revenue to increase approximately 40% over 2011 revenue of $289.0 million, up from its previous guidance of 33%.
  • The Company now expects 2012 net income to increase approximately 55% over 2011 net income of $27.5 million, up from its previous guidance of 50%. This guidance includes a share-based expense of approximately $5.6 million.

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 Daylight Time (U.S. time) today (Wednesday, August 8, 2012) 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 55,000 retail stores in 43 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 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 excludes the Share-Based Compensation Expense, should be considered in evaluating the Company's operations since they provide a clearer indication of the Company's operating results going forward.

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 Executive Director, Corporate Development and Communication 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 (net income per share amounts in units)

For the six months ended

For the three months ended

June 30,

June 30,

2011

2012

2011

2012

(Unaudited)

(Unaudited)

Revenue

$

127,610

$

190,887

$

69,104

$

103,019

Cost of revenue

59,706

86,521

32,491

47,016

Gross profit

67,904

104,366

36,613

56,003

Operating expenses

Sales and marketing

39,608

64,351

22,469

37,083

General and administrative

14,803

18,866

7,290

9,225

Other income, net

(81)

(80)

(39)

(41)

Total operating expenses

54,330

83,137

29,720

46,267

Operating income

13,574

21,229

6,893

9,736

Interest expense (income), net

(697)

5

(515)

128

Other financial expense (income), net

(35)

154

(399)

24

Total financial expense (income), net

(732)

159

(914)

152

Income before income taxes

14,306

21,070

7,807

9,584

Income taxes

2,251

1,509

1,239

134

Net income for the period

$

12,055

$

19,561

$

6,568

$

9,450

Net income per share

Basic

$

0.63

$

0.97

$

0.33

$

0.47

Diluted

$

0.60

$

0.94

$

0.32

$

0.45

Weighted average  number of shares

Basic

19,055

20,217

19,647

20,289

Diluted

20,122

20,913

20,772

20,932

 

Consolidated Balance Sheets as of

December 31,

June 30,

2011

2012

(Audited)

(Unaudited)

(In thousands)

Assets

Cash and cash equivalents

$

34,769

$

46,593

Bank deposits

39,485

10,003

Inventories

76,625

92,862

Trade receivables

58,452

70,110

Other receivables

20,064

18,098

Derivative financial instruments

322

415

Assets classified as available-for-sale

837

810

Total current assets

230,554

238,891

Property, plant and equipment

46,434

63,843

Intangible assets

25,358

35,879

Deferred tax assets

1,168

1,101

Other receivables

224

213

Total non-current assets

73,184

101,036

Total assets

303,738

339,927

Liabilities

Loans and borrowings

4,006

-

Derivative financial instruments

-

43

Trade payables

47,383

59,968

Income tax payable

9,171

9,045

Provisions

397

1,139

Other current liabilities

21,071

27,397

Total current liabilities

82,028

97,592

Employee benefits

1,497

1,454

Provisions

514

525

Deferred tax liabilities

717

1,034

Total non-current liabilities

2,728

3,013

Total liabilities

84,756

100,605

Shareholders' equity

Share capital

3,238

3,286

Share premium

168,601

172,662

Translation reserve

1,471

(1,859)

Retained earnings

45,672

65,233

Total shareholders' equity

218,982

239,322

Total liabilities and shareholders' equity

$

303,738

$

339,927

 

Consolidated Statements of Cash Flows

For the six months ended

For the three months ended

June 30,

June 30,

2011

2012

2011

2012

(Unaudited)

(Unaudited)

(In thousands)

Cash flows from operating  activities

Net income for the period

$

12,055

$

19,561

$

6,568

$

9,450

Adjustments:

Amortization of intangible assets

396

687

348

344

Change in fair value of  derivative financial instruments

545

504

119

(774)

Exchange rate differences on bank deposits

-

-

-

1,094

Depreciation of property, plant  and equipment

2,155

3,818

1,089

2,167

Share based payment

2,692

2,835

1,321

1,424

Interest expense (income), net

(697)

5

(515)

128

Income tax expense

2,251

1,509

1,239

134

19,397

28,919

10,169

13,967

Increase in inventories

(10,334)

(12,541)

(5,595)

(2,639)

Increase in trade and other receivables

(8,170)

(21,798)

(11,616)

(4,635)

Increase in trade payables

493

12,464

7,164

11,921

Increase (decrease) in employee benefits

(8)

(13)

1

(33)

Increase (decrease) in provisions and other current liabilities

(148)

4,459

3,049

2,668

1,230

11,490

3,172

21,249

Interest paid

(193)

(237)

(81)

(123)

Income tax received

-

1,486

-

143

Income tax paid

(1,653)

(2,291)

(1,032)

(1,098)

Net cash from (used in) operating activities

(616)

10,448

2,059

20,171

Cash flows from investing  activities

Interest received

782

1,079

489

949

Investment in bank deposits

-

(10,000)

-

(10,000)

Proceeds from bank deposits

-

38,919

-

38,919

Payments for derivative financial  instruments, net

(19)

(554)

(66)

(760)

Acquisition of subsidiary, net of cash acquired

-

(9,758)

-

-

Acquisition of property, plant  and equipment

(6,297)

(14,506)

(3,780)

(10,379)

Acquisition of intangible assets

(252)

(963)

(94)

(723)

Net cash from (used in) investing  activities

(5,786)

4,217

(3,451)

18,006

Cash flows from financing  activities

Share issuance

42,929

-

42,929

-

Proceeds from exercise of employee share options

817

1,274

781

686

Change in short-term debt

(8,807)

(3,873)

(428)

(2,951)

Net cash from (used in) financing activities

34,939

(2,599)

43,282

(2,265)

Net increase in cash and cash equivalents

28,537

12,066

41,890

35,912

Cash and cash equivalents at the beginning of the period

68,627

34,769

55,172

11,090

Effect of exchange rates  fluctuations on cash and cash equivalents

(184)

(242)

(82)

(409)

Cash and cash equivalents  at the end of the period

$

96,980

$

46,593

$

96,980

$

46,593

 

Information about revenue in reportable segments

Western Europe

The Americas

Central and

Eastern

Europe, Middle

East, Africa

Asia-Pacific

Total

(In thousands)

Six months ended:

June 30, 2012 (Unaudited)

$

99,725

56,283

15,011

19,868

$

190,887

June 30, 2011 (Unaudited)

$

73,774

27,911

18,210

7,715

$

127,610

Three months ended:

June 30, 2012 (Unaudited)

$

54,074

30,650

8,368

9,927

$

103,019

June 30, 2011 (Unaudited)

$

43,261

14,653

8,217

2,973

$

69,104

 

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

Six months ended June 30,

2011

2012

Reported

Share based

Reported

Share based

(Unadjusted)

payment

Adjusted

(Unadjusted)

payment

Adjusted

(Unaudited)

In thousands (net income per share amounts in units)

Revenue

$

127,610

$

-

$

127,610

$

190,887

$

-

$

190,887

Cost of revenue

59,706

-

59,706

86,521

-

86,521

Gross profit

67,904

-

67,904

104,366

-

104,366

Operating expenses

Sales and marketing

39,608

-

39,608

64,351

-

64,351

General and administrative

14,803

(2,692)

12,111

18,866

(2,835)

16,031

Other income, net

(81)

-

(81)

(80)

-

(80)

Total operating expenses

54,330

(2,692)

51,638

83,137

(2,835)

80,302

Operating income

13,574

2,692

16,266

21,229

2,835

24,064

Interest expense (income), net

(697)

-

(697)

5

-

5

Other financial expense (income), net

(35)

-

(35)

154

-

154

Total financial expense (income), net

(732)

-

(732)

159

-

159

Income before income taxes

14,306

2,692

16,998

21,070

2,835

23,905

Income taxes

2,251

-

2,251

1,509

-

1,509

Net income for the period

$

12,055

$

2,692

$

14,747

$

19,561

$

2,835

$

22,396

Net income per share

Basic

$

0.63

$

0.77

$

0.97

$

1.11

Diluted

$

0.60

$

0.73

$

0.94

$

1.07

Weighted average  number of shares

Basic

19,055

19,055

20,217

20,217

Diluted

20,122

20,122

20,913

20,913

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

Three months ended June 30,

2011

2012

Reported

Share based

Reported

Share based

(Unadjusted)

payment

Adjusted

(Unadjusted)

payment

Adjusted

(Unaudited)

In thousands (net income per share amounts in units)

Revenue

$

69,104

$

-

$

69,104

$

103,019

$

-

$

103,019

Cost of revenue

32,491

-

32,491

47,016

-

47,016

Gross profit

36,613

-

36,613

56,003

-

56,003

Operating expenses

Sales and marketing

22,469

-

22,469

37,083

-

37,083

General and administrative

7,290

(1,321)

5,969

9,225

(1,424)

7,801

Other income, net

(39)

-

(39)

(41)

-

(41)

Total operating expenses

29,720

(1,321)

28,399

46,267

(1,424)

44,843

Operating income

6,893

1,321

8,214

9,736

1,424

11,160

Interest expense (income), net

(515)

-

(515)

128

-

128

Other financial expense (income), net

(399)

-

(399)

24

-

24

Total financial expense (income), net

(914)

-

(914)

152

-

152

Income before income taxes

7,807

1,321

9,128

9,584

1,424

11,008

Income taxes

1,239

-

1,239

134

-

134

Net income for the period

$

6,568

$

1,321

$

7,889

$

9,450

$

1,424

$

10,874

Net income per share

Basic

$

0.33

$

0.40

$

0.47

$

0.54

Diluted

$

0.32

$

0.38

$

0.45

$

0.52

Weighted average  number of shares

Basic

19,647

19,647

20,289

20,289

Diluted

20,772

20,772

20,932

20,932

 

EBITDA and Adjusted EBITDA

Six months ended

Three months ended

June 30,

June 30,

2011

2012

2011

2012

(Unaudited)

(In thousands)

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

Net income

$

12,055

$

19,561

$

6,568

$

9,450

Interest expense (income), net

(697)

5

(515)

128

Income taxes

2,251

1,509

1,239

134

Depreciation and amortization

2,551

4,505

1,437

2,511

EBITDA

16,160

25,580

8,729

12,223

Share based payment

2,692

2,835

1,321

1,424

Adjusted EBITDA

$

18,852

$

28,415

$

10,050

$

13,647

 

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  (*):

Six months ended

Three months ended

June 30,

June 30,

2011

2012

2011

2012

(Unaudited)

Revenue

(in thousands)

Soda maker starter kits (including exchange cylinders)

$

51,044

$

73,314

$

26,683

$

39,830

Consumables

73,974

114,050

41,344

61,631

Other

2,592

3,523

1,077

1,558

Total

$

127,610

$

190,887

$

69,104

$

103,019

 

Six months ended

Three months ended

June 30,

June 30,

2011

2012

2011

2012

(Unaudited)

As a percentage of revenue

Soda maker starter kits (including exchange cylinders)

40.0%

38.4%

38.6%

38.7%

Consumables

58.0%

59.8%

59.8%

59.8%

Other

2.0%

1.8%

1.6%

1.5%

Total

100.0%

100.0%

100.0%

100.0%

(*)The Company reclassified prior periods' data such that revenue from spare cylinders, formerly presented under the "soda maker starter kits" category, are presented under the "consumables" category, as the purchase of a spare cylinder more closely resembles the purchase of other consumables than it does the initial purchase of a soda maker. The effect was an increase in revenue from consumables by $5,973 thousand and $ 2,726 thousands for six months and three months ended June 30, 2011, respectively  (increase in 470 basis points and 400 basis points of total revenue of these periods, respectively), and the same decrease in revenue from soda maker starter kits for the respective periods (and the same decrease in basis points of total revenue of those periods, respectively)  

 

SOURCE SodaStream International Ltd.



RELATED LINKS

http://www.sodastream.com