Bala Cynwyd, Pa., July 31 - Central European Distribution Corporation today announced its results for fiscal second quarter 2007. Net sales for the second quarter 2007 increased by 21% to $269 million from $222 million reported for the same period in 2006. Comparable net income increased by 42% to $13.7 million from $9.6 million for the same period in 2006.
On a comparable basis, CEDC announced net income of $13.7 million, or $0.34 per fully diluted share for the second quarter 2007, as compared to $9.6 million or $0.27 per fully diluted share for the same period in 2006. On a U.S. GAAP basis (as hereinafter defined), CEDC announced net income of $20.0 million or $0.49 per fully diluted share for the second quarter of 2007, as compared to net income of $109,000, or $0.00 per fully diluted share, for the same period in 2006. The major differences between the U.S. GAAP net income and comparable non-GAAP net income reflects unrealized foreign exchange movements relating to our Senior Secured Notes and other non recurring charges. For a reconciliation of comparable non-GAAP net income to the net income reported under United States Generally Accepted Accounting Principles ("GAAP"), please see the section "Unaudited Reconciliation of Non-GAAP Measures" below. The weighted average number of shares used for calculating diluted earnings per share for second quarter 2007 was 40.6 million compared to 36.0 million for the second quarter 2006.
Some of the Company's key financial highlights for the second quarter 2007 compared to the same quarter last year include the following:
-- Net sales up 21%
-- Organic sales growth of 17%
-- Gross profit margins up from 20.6% to 20.7%
-- Operating income up 14%
-- Comparable net income up 42%
-- Exclusive import portfolio growth of 42%
-- Export sales increased by 51%
Mr. William Carey, CEO and President, said, "The continued strong growth of the Polish economy of 6.4% in the second quarter of 2007 has continued to drive strong demand for our branded beverages. Our record organic growth of 17% and the double digit volume growth of our core vodka brands has led to the strong top to bottom line performance in the second quarter. Our import portfolio continues to outperform the market with second quarter growth of over 42%."
Mr. Carey continued, "With our recent signing of new distribution agreements in Poland, we look forward to continue to execute on our core business model for the second half of the year. With our rectification facility expected to come on line in the fall of this year, coupled with the continued decline in spirit pricing in Poland, we look forward to continued margin improvement in our overall business."
Mr. Carey concluded, "Overall, we are extremely satisfied with our continued development of our core business, which was recently confirmed in our raising of earnings guidance for 2007 and 2008."
CEDC has reported net income and diluted net income per share in accordance with GAAP and on a non-GAAP basis, referred to in this release as comparable non-GAAP net income. CEDC's management believes that the non-GAAP reporting giving effect to the adjustments shown in the attached reconciliation provides meaningful information and an alternative presentation useful to investors' understanding of CEDC's core operating results and trends. CEDC discusses results on a comparable basis in order to give investors better insight into underlying business trends from continuing operations. CEDC's calculation of these measures may not be the same as similarly named measures presented by other companies. This measure is not presented as an alternative to net income computed in accordance with GAAP as a performance measure, and you should not place undue reliance on such measures. A reconciliation of GAAP to non-GAAP measures can be found in the section "Unaudited Reconciliation of Non-GAAP Measures" at the end of this press release.