SodaStream reports Q3 net earnings of US$16.4M on revenue of US$144.6M, compared with year-ago earnings of US$16.8M on revenue of US$112.5M
AIRPORT CITY, Israel
October 30, 2013
– Third Quarter Revenue Increased 29% to $144.6 Million
Third Quarter Diluted Earnings Per Share were $0.76
Third Quarter Adjusted Diluted Earnings Per Share were $0.90
SodaStream International Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation systems, announced today its results for the three and nine month periods ended September 30, 2013.
For the third quarter ended September 30, 2013:
Revenue increased 28.5% to $144.6 million from $112.5 million in the third quarter 2012
EBITDA increased 18.0% to $21.9 million from $18.6 million, and Adjusted EBITDA increased 23.8% to $24.8 million from $20.0 million in the third quarter 2012
Net income was $16.4 million compared to $16.8 million in the third quarter 2012, and Adjusted net income was $19.3 million compared to $18.2 million in the third quarter 2012
Diluted earnings per share were $0.76, compared to $0.80 in the third quarter 2012 and Adjusted diluted earnings per share were $0.90 compared to $0.87 in the third quarter 2012
"We continued to execute against our primary objective of expanding our user base in our fastest growing markets during the third quarter," said Daniel Birnbaum, Chief Executive Officer of SodaStream, "Our progress is being fueled by positive consumer response to our demand creation efforts and innovative products. With unmatched leadership and capabilities in home carbonation, we believe we are on track to continue acquiring new users and deliver strong annual sales and earnings growth in the coming years."
Gross margin for the third quarter 2013 was 54.1% compared to 54.2% for the same period in 2012. The slight decline was primarily attributable to higher percentage of subcontracted manufacturing and the strengthening of the Israeli Shekel, partially offset by a higher portion of direct distribution.
Sales and marketing expenses for the third quarter 2013 totaled $47.5 million, or 32.9% of revenue, compared to $35.8 million, or 31.8% of revenue for the comparable period in the prior year. The 110 basis point change in sales and marketing expenses as a percent of revenue was mainly attributable to a planned increase in advertising and promotion expense as a percent of revenue to 15.5% from 14.1% in the third quarter 2012.
General and administrative expenses for the third quarter 2013 were $12.7 million, or 8.8% of revenue, compared to $8.7 million, or 7.8% of revenue in the comparable period of last year. The increase was mainly due to higher share-based compensation expense of $2.9 million in the quarter, compared to $1.5 million in the third quarter 2012, additional expenses related to our newly acquired Canadian and Italian distributors as well as additional infrastructure to support growth.
Operating income increased 9.6% to $18.0 million, or 12.5% of revenue, compared to $16.4 million, or 14.6% of revenue in the third quarter 2012.
Tax expense was $1.9 million representing a 10.5% effective tax rate compared to an income tax benefit of $850,000 in the third quarter 2012. The increase in effective tax rate was primarily due to the release of past-years' tax provisions in the third quarter 2012 not recurring in the current period.
Balance Sheet Review
Cash and cash equivalents and bank deposits at September 30, 2013 were $39.2 million compared to $62.1 million at December 31, 2012. The decrease is primarily attributable to the investment in our new production facility, an increase in working capital and the purchase of our Italian distributor's business.
The Company had $20.0 million of bank debt at September 30, 2013 mainly for financing the investment in its new production facility, compared to no bank debt at December 31, 2012.
Working capital at September 30, 2013 increased 75.6% to $167.0 million compared to $95.1 million at December 31, 2012. Inventories at September 30, 2013 increased 40.3% to $158.0 million compared to $112.7 million at December 31, 2012, mainly due to additional inventory from the acquisition of our Italian distributor's business and the overall growth of our business.
Based on third quarter results and current projections for the remainder of the year, the Company is maintaining its outlook.
The Company now expects full year 2013 revenue to increase approximately 30% over 2012 revenue of $436.3 million.
The Company now expects full year 2013 Adjusted EBITDA to increase approximately 38% over 2012 Adjusted EBITDA of $61.1 million.
The Company now expects full year 2013 Adjusted net income, which excludes share-based compensation expense, to increase approximately 30% over Adjusted net income of $50.0 million reported in 2012.
The Company expects full year 2013 net income to increase approximately 23% over 2012 net income of $43.9 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,
The Company has scheduled a conference call for 8:30 AM Eastern Standard Time (U.S. time) today (Wednesday, October 30, 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.