Bala Cynwyd, Pa., April 30 - Central European Distribution Corporation today announced its results for the first quarter of 2008. Net sales for the three months ended March 31, 2008 increased by 37% to $313.6 million from the $228.2 million reported for the same period in 2007. Operating income increased by 35% to $25.5 million from $18.9 million for the same period in 2007.
On a comparable basis, CEDC announced net income of $12.7 million, or $0.31 per fully diluted share, for the first quarter of 2008, as compared to $7.8 million, or $0.20 per fully diluted share, for the same period in 2007. Net income, on a U.S. GAAP basis (as hereinafter defined) for the quarter was $18.5 million or $0.45 per fully diluted share, as compared to a net loss of $5.2 million or $0.13 per fully diluted share, for the same period in 2007. The major difference between the U.S. GAAP net income and comparable non-GAAP net income reflects unrealized foreign exchange movements relating to our Senior Secured Notes. For a reconciliation of comparable net income to net income reported under United States Generally Accepted Accounting Principles ("GAAP"), please see the section "Unaudited Reconciliation of Non-GAAP Measures". The weighted average number of shares used for calculating diluted earnings per share for the first quarter of 2008 was 41.5 million.
Some of the Company's key financial highlights for the first quarter of 2008 as compared to the first quarter of 2007 include the following:
-- Sales up 37%
-- Gross margin up 43%
-- Operating income up 35%
-- Comparable net income up 63%
-- Imports up 44%
-- Cash Flow from Operations of $49.3 million ($1.19 per share)
William Carey, President and CEO commented, "The Company has continued to see positive developments in our operating leverage as evidence by the strong top to bottom line performance in the first quarter. Cash flow of $49.3 million from operations for the first quarter was a record for our Company. The continued expansion of higher-margin branded sales coupled with strong economic growth in our markets has led to positive sales mix within our core business model."
Mr. Carey continued, "Two areas of our business that have been positively impacted by the appreciating Polish Zloty have been declining raw spirit costs in the first quarter and growing margins in our import portfolio. The Company feels it is well-positioned with Poland's leading premium portfolio to take advantage of the growing premiumization trends in the spirit market."
Mr. Carey concluded, "The Company is extremely excited about the continuing development of the Parliament business which was acquired in March 2008, where we have seen the brand continue to outperform the market in the first three months of this year. We also will continue to work with the Whitehall group to finalize our investment there, that we anticipate will close before the end of the second quarter of 2008. The Russian market continues to be an attractive marketplace for investment and we are well-positioned to be one of the leaders of the ongoing consolidation of the Russian spirit market."
The Company is raising its full year 2008 net sales guidance from $1.42-$1.52 billion to $1.47-$1.57 billion and its full year comparable fully diluted earnings per share guidance from $2.25-$2.40 to $2.30-$2.45. The Company also is providing 2009 net sales guidance of $1.70 billion to $1.80 billion and comparable fully diluted earnings per share guidance of $3.00 to $3.20. The above guidance does not include the impact of the potential Whitehall acquisition or any other potential acquisitions.