AIRPORT CITY, Israel, July 30, 2014 /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, 2014.
For the second quarter ended June 30, 2014:
- Revenue was $141.2 million compared to $132.4 million in the second quarter 2013
- EBITDA was $13.8 million compared to $18.0 million in the second quarter 2013
- Net income was $9.2 million compared to $12.9 million in the second quarter 2013
- Diluted earnings per share were $0.43, compared to $0.60 in the second quarter 2013
"The second quarter was highlighted by record gas refills including unit growth in all regions underscoring the global appeal and stickiness of our home carbonation system. Our total business in our Western Europe, Asia Pacific, and CEMEA regions all posted solid increases in the second quarter as our product and marketing strategies are leading to increased household penetration and user activity." said Daniel Birnbaum, Chief Executive Officer of SodaStream. "In the U.S., soda maker volumes remained under pressure as we struggled to drive consumer demand and retailers worked through excess inventory carried over from the holiday season. We are lowering our U.S. soda maker sales projections for the back half of the year while we reposition our brand behind health & wellness and refine our product line and marketing message to better promote this important consumer benefit. We are confident this strategy will have a positive long-term impact on our U.S. performance. Our revised plan for 2014 also includes operating expense reductions aimed at protecting profitability until growth trends improve."
Second Quarter 2014 Financial Review |
||||||||||
Geographical Revenue Breakdown |
||||||||||
Revenue |
Three Months Ended |
|||||||||
June 30, 2013 |
June 30, 2014 |
Increase |
Increase |
|||||||
In Millions USD |
% |
|||||||||
The Americas |
$ |
47.4 |
$ |
40.9 |
$ |
(6.5) |
(14%) |
|||
Western Europe |
68.1 |
77.7 |
9.6 |
14% |
||||||
Asia-Pacific |
10.8 |
12.2 |
1.4 |
13% |
||||||
Central & Eastern Europe, Middle East, Africa |
6.1 |
10.4 |
4.3 |
71% |
||||||
Total |
$ |
132.4 |
$ |
141.2 |
$ |
8.8 |
6.6% |
Product Segment Revenue Breakdown |
||||||||||
Revenue |
Three Months Ended |
|||||||||
June 30, 2013 |
June 30, 2014 |
Increase |
Increase |
|||||||
In millions USD |
% |
|||||||||
Soda Maker Starter Kits |
$ |
49.9 |
$ |
45.8 |
$ |
(4.1) |
(8%) |
|||
Consumables |
78.9 |
90.8 |
11.9 |
15% |
||||||
Other |
3.6 |
4.6 |
1.0 |
27% |
||||||
Total |
$ |
132.4 |
$ |
141.2 |
$ |
8.8 |
6.6% |
Product Segment Unit Breakdown |
|||||||
Three Months Ended |
|||||||
June 30, 2013 |
June 30, 2014 |
Increase |
Increase |
||||
In thousands |
% |
||||||
Soda Maker Starter Kits |
935 |
785 |
(150) |
(16%) |
|||
CO2 Refills |
5,542 |
6,507 |
965 |
17% |
|||
Flavors |
8,505 |
9,297 |
792 |
9% |
Gross margin for the second quarter 2014 was 50.5% compared to 54.3% for the same period in 2013. The decline was primarily due to unfavorable changes in foreign currency exchange rates, increased penetration of lower margin soda makers in the sales mix and inventory write offs, which were partially offset by a higher share of CO2 refills in product mix.
Sales and marketing expenses for the second quarter 2014 totaled $46.9 million, or 33.3% of revenue, compared to $43.6 million, or 33.0% of revenue for the comparable period in the prior year. The 30 basis point change in sales and marketing expenses as a percent of revenue was mainly attributable to an increasing in selling expense as a result of expenses related to the newly acquired Italian and Japanese distribution channels. This was partially offset by a decrease in advertising and promotion expense as a percent of revenue to 14.9% from 15.1% in the second quarter 2013.
General and administrative expenses for the second quarter 2014 were $13.1 million, or 9.3% of revenue, compared to $13.6 million, or 10.3% of revenue in the comparable period of last year. The decrease was partially due to lower share-based compensation expenses which were mostly offset by additional expenses related to our newly acquired Italian and Japanese distribution channels, as well as additional infrastructure (mainly information technology systems) to support future growth.
Operating income decreased to $11.2 million, or 8.0% of revenue, compared to $14.7 million, or 11.1% of revenue in the second quarter 2013.
Tax expense remained the same at $1.1 million with an increase in effective tax rate to 10.6%, from 7.9% in the second quarter 2013. The increase in the effective tax rate was primarily due to the geographical distribution of income before tax and the difference in local tax rates.
Balance Sheet Review
- Cash and cash equivalents and bank deposits at June 30, 2014 were $36.2 million compared to $40.9 million at December 31, 2013. The decrease is primarily due to the investment in our new production facility, the acquisition of our Japanese distributor and an increase in working capital.
- The Company had $38.6 million of bank debt at June 30, 2014 mainly for financing the investment in its new production facility, compared to $15.5 million of bank debt at December 31, 2013.
- Working capital at June 30, 2014 increased 15.4% to $179.4 million compared to $155.4 million at December 31, 2013, mainly due to a decrease in trade payables and an increase in inventory from our newly acquired Japanese distribution channel. Inventories at June 30, 2014 increased 2.8% to $144.7 million compared to $140.7 million at December 31, 2013.
Guidance
Based on second quarter results and current projections for the remainder of the year, the Company is revising its outlook:
- The Company now expects full year 2014 revenue to increase approximately 5% over 2013 revenue of $562.7 million.
- The Company now expects full year 2014 EBITDA to increase approximately 5% over 2013 EBITDA of $62.2 million. Excluding changes in foreign currency exchange rates compared to 2013, the Company expects 2014 EBITDA to increase approximately 17% over 2013.
- The Company now expects full year 2014 net income to decrease approximately 5% over 2013 net income of $42.0 million
Conference Call and Management Commentary
Detailed CFO commentary and a supplemental slide presentation have been filed with the Securities and Exchange Commission today under the cover of Form 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, July 30, 2014) 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
Beginning with this press release, the company will no longer provide certain non-IFRS measures that were provided in past quarterly press releases, including Adjusted Net Income, Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization ("Adjusted EBITDA") and Adjusted diluted earnings per share ("Adjusted diluted EPS").
The Company believes that these measures no longer provide material additional information that should be considered in evaluating the Company's operations.
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; our ability to maintain margins due to decline in product selling price and\or rising costs; 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. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
Brendon Frey
ICR
Phone: + 1 203-682-8200
[email protected]
Consolidated Statements of Operations |
|||||||||||
In thousands (other than per share amounts) |
|||||||||||
For the six months ended |
For the three months ended |
||||||||||
June 30, |
June 30, |
||||||||||
2013 |
2014 |
2013 |
2014 |
||||||||
(Unaudited) |
(Unaudited) |
||||||||||
Revenue |
$ |
250,029 |
$ |
259,343 |
$ |
132,390 |
$ |
141,171 |
|||
Cost of revenue |
114,006 |
126,240 |
60,452 |
69,914 |
|||||||
Gross profit |
136,023 |
133,103 |
71,938 |
71,257 |
|||||||
Operating expenses |
|||||||||||
Sales and marketing |
82,498 |
93,087 |
43,639 |
46,941 |
|||||||
General and administrative |
25,226 |
26,427 |
13,617 |
13,072 |
|||||||
Total operating expenses |
107,724 |
119,514 |
57,256 |
60,013 |
|||||||
Operating income |
28,299 |
13,589 |
14,682 |
11,244 |
|||||||
Interest expense, net |
154 |
333 |
129 |
286 |
|||||||
Other financial expense, net |
792 |
792 |
582 |
620 |
|||||||
Total financial expense, net |
946 |
1,125 |
711 |
906 |
|||||||
Income before income taxes |
27,353 |
12,464 |
13,971 |
10,338 |
|||||||
Income tax expense |
2,406 |
1,443 |
1,108 |
1,095 |
|||||||
Net income for the period |
$ |
24,947 |
$ |
11,021 |
$ |
12,863 |
$ |
9,243 |
|||
Net income per share |
|||||||||||
Basic |
$ |
1.20 |
$ |
0.53 |
$ |
0.62 |
$ |
0.44 |
|||
Diluted |
$ |
1.17 |
$ |
0.52 |
$ |
0.60 |
$ |
0.43 |
|||
Weighted average number of shares |
|||||||||||
Basic |
20,719 |
20,933 |
20,756 |
20,958 |
|||||||
Diluted |
21,318 |
21,274 |
21,416 |
21,271 |
Consolidated Balance Sheets as of |
|||||
December 31, |
June 30, |
||||
2013 |
2014 |
||||
(Audited) |
(Unaudited) |
||||
(In thousands) |
|||||
Assets |
|||||
Cash and cash equivalents |
$ |
40,885 |
$ |
36,244 |
|
Inventories |
140,709 |
144,711 |
|||
Trade receivables |
123,936 |
109,158 |
|||
Other receivables |
22,208 |
27,753 |
|||
Derivative financial instruments |
538 |
1,419 |
|||
Total current assets |
328,276 |
319,285 |
|||
Property, plant and equipment |
107,132 |
124,397 |
|||
Intangible assets |
48,104 |
49,121 |
|||
Deferred tax assets |
1,089 |
1,217 |
|||
Other receivables |
398 |
493 |
|||
Total non-current assets |
156,723 |
175,228 |
|||
Total assets |
484,999 |
494,513 |
|||
Liabilities |
|||||
Loans and borrowings |
15,452 |
38,619 |
|||
Derivative financial instruments |
103 |
- |
|||
Trade payables |
90,749 |
61,567 |
|||
Income tax payable |
9,869 |
9,033 |
|||
Provisions |
1,614 |
2,033 |
|||
Other current liabilities |
29,674 |
31,034 |
|||
Total current liabilities |
147,461 |
142,286 |
|||
Employee benefits |
2,221 |
2,232 |
|||
Provisions |
714 |
752 |
|||
Deferred tax liabilities |
2,997 |
2,093 |
|||
Total non-current liabilities |
5,932 |
5,077 |
|||
Total liabilities |
153,393 |
147,363 |
|||
Shareholders' equity |
|||||
Share capital |
3,378 |
3,397 |
|||
Share premium |
193,649 |
198,908 |
|||
Translation reserve |
3,394 |
2,639 |
|||
Retained earnings |
131,185 |
142,206 |
|||
Total shareholders' equity |
331,606 |
347,150 |
|||
Total liabilities and shareholders' equity |
$ |
484,999 |
$ |
494,513 |
|
Consolidated Statements of Cash Flows |
|||||||||||
For the six months ended |
For the three months ended |
||||||||||
June 30, |
June 30, |
||||||||||
2013 |
2014 |
2013 |
2014 |
||||||||
(Unaudited) |
(Unaudited) |
||||||||||
(In thousands) |
|||||||||||
Cash flows from operating activities |
|||||||||||
Net income for the period |
$ |
24,947 |
$ |
11,021 |
$ |
12,863 |
$ |
9,243 |
|||
Adjustments: |
|||||||||||
Amortization of intangible assets |
1,140 |
1,261 |
712 |
749 |
|||||||
Change in fair value of derivative financial instruments |
(537) |
264 |
(537) |
(144) |
|||||||
Depreciation of property, plant and equipment |
5,777 |
6,091 |
3,224 |
2,467 |
|||||||
Share based payment |
5,354 |
4,537 |
2,960 |
2,231 |
|||||||
Interest expense, net |
154 |
333 |
129 |
286 |
|||||||
Income tax expense |
2,406 |
1,443 |
1,108 |
1,095 |
|||||||
39,241 |
24,950 |
20,459 |
15,927 |
||||||||
Increase in inventories |
(24,784) |
(3,945) |
(14,982) |
(1,477) |
|||||||
Decrease (increase) in trade and other receivables |
(19,369) |
13,853 |
(30,558) |
(10,854) |
|||||||
Increase (decrease) in trade payables |
(13,232) |
(29,587) |
6,001 |
(5,515) |
|||||||
Increase (decrease) in employee benefits |
(1) |
19 |
(15) |
129 |
|||||||
Increase (decrease) in provisions and other current liabilities |
(5,238) |
1,766 |
6,860 |
5,631 |
|||||||
(23,383) |
7,056 |
(12,235) |
3,841 |
||||||||
Interest paid |
(179) |
(329) |
(125) |
(293) |
|||||||
Income tax received |
3,539 |
710 |
91 |
347 |
|||||||
Income tax paid |
(966) |
(3,939) |
(256) |
(3,257) |
|||||||
Net cash from (used in) operating activities |
(20,989) |
3,498 |
(12,525) |
638 |
|||||||
Cash flows from investing activities |
|||||||||||
Interest received |
94 |
27 |
36 |
22 |
|||||||
Investment in bank deposits |
(10,000) |
- |
(10,000) |
- |
|||||||
Proceeds from derivative financial instruments, net |
(543) |
(1,248) |
562 |
(588) |
|||||||
Acquisition of subsidiary, net of cash acquired |
(1,179) |
- |
(1,179) |
- |
|||||||
Acquisition of property, plant and equipment |
(19,328) |
(28,211) |
(8,724) |
(12,527) |
|||||||
Acquisition of intangible assets |
(2,489) |
(2,546) |
(1,380) |
(2,183) |
|||||||
Net cash used in investing activities |
(33,445) |
(31,978) |
(20,685) |
(15,276) |
|||||||
Cash flows from financing activities |
|||||||||||
Proceeds from exercise of employee share options |
1,832 |
741 |
681 |
288 |
|||||||
Change in short-term debt |
16,143 |
23,167 |
8,070 |
14,611 |
|||||||
Net cash from financing activities |
17,975 |
23,908 |
8,751 |
14,899 |
|||||||
Net increase (decrease) in cash and cash |
(36,459) |
(4,572) |
(24,459) |
261 |
|||||||
Cash and cash equivalents at the beginning of the period |
62,068 |
40,885 |
49,888 |
36,052 |
|||||||
Effect of exchange rates fluctuations on cash and cash equivalents |
(409) |
(69) |
(229) |
(69) |
|||||||
Cash and cash equivalents at the end of the |
$ |
25,200 |
$ |
36,244 |
$ |
25,200 |
$ |
36,244 |
Information about revenue in reportable segments |
|||||||||
The Americas |
Western |
Asia-Pacific |
Central & |
Total |
|||||
(In thousands) |
|||||||||
Six months ended: |
|||||||||
June 30, 2013 (Unaudited) |
$ |
95,712 |
121,385 |
20,151 |
12,781 |
$ |
250,029 |
||
June 30, 2014 (Unaudited) |
$ |
75,637 |
140,216 |
24,131 |
19,359 |
$ |
259,343 |
||
Three months ended: |
|||||||||
June 30, 2013 (Unaudited) |
$ |
47,373 |
68,087 |
10,832 |
6,098 |
$ |
132,390 |
||
June 30, 2014 (Unaudited) |
$ |
40,879 |
77,666 |
12,225 |
10,401 |
$ |
141,171 |
EBITDA |
|||||||||||
Six months ended |
Three months ended |
||||||||||
June 30, |
June 30, |
||||||||||
2013 |
2014 |
2013 |
2014 |
||||||||
(Unaudited) |
|||||||||||
(In thousands) |
|||||||||||
Reconciliation of Net Income to EBITDA |
|||||||||||
Net income |
$ |
24,947 |
$ |
11,021 |
$ |
12,863 |
$ |
9,243 |
|||
Interest expense, net |
154 |
333 |
129 |
286 |
|||||||
Income tax expense (tax benefit) |
2,406 |
1,443 |
1,108 |
1,095 |
|||||||
Depreciation and amortization |
6,917 |
7,352 |
3,936 |
3,216 |
|||||||
EBITDA |
$ |
34,424 |
$ |
20,149 |
$ |
18,036 |
$ |
13,840 |
The following tables present the Company's revenue, by |
|||||||||||
Six months ended |
Three months ended |
||||||||||
June 30, |
June 30, |
||||||||||
2013 |
2014 |
2013 |
2014 |
||||||||
(Unaudited) |
(Unaudited) |
||||||||||
Revenue |
|||||||||||
(in thousands) |
|||||||||||
Soda maker starter kits (including exchange cylinders) |
$ |
92,866 |
$ |
78,070 |
$ |
49,914 |
$ |
45,846 |
|||
Consumables |
150,893 |
173,623 |
78,831 |
90,699 |
|||||||
Other |
6,270 |
7,650 |
3,645 |
4,626 |
|||||||
Total |
$ |
250,029 |
$ |
259,343 |
$ |
132,390 |
$ |
141,171 |
Six months ended |
Three months ended |
||||||
June 30, |
June 30, |
||||||
2013 |
2014 |
2013 |
2014 |
||||
(Audited) |
(Unaudited) |
(Unaudited) |
|||||
As a percentage of revenue |
|||||||
Soda maker starter kits (including exchange cylinders) |
37.1% |
30.1% |
37.7% |
32.5% |
|||
Consumables |
60.4% |
66.9% |
59.5% |
64.2% |
|||
Other |
2.5% |
3.0% |
2.8% |
3.3% |
|||
Total |
100.0% |
100.0% |
100.0% |
100.0% |
Logo - http://photos.prnewswire.com/prnh/20121107/NY07412LOGO
SOURCE SodaStream International Ltd.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article