Bala Cynwyd, Pa., March 7 - Central European Distribution Corporation today released an overview of assumptions used in preparing its 2007 guidance of $1.50 to $1.66 per fully diluted share.
This previously issued guidance takes into account the impact of the following points:
- Revenue projection of $1.05 billion to $1.10 billion, an increase of approximately 15% as compared to 2006.
- Organic sales growth of 12% (organic growth of 7% excluding forecasted currency impact)
- Continued double digit growth of imports and exports
- 7% volume growth of our of core vodka brands
- Launch of new flavored vodka in 2nd quarter 2006
- Growth of new import brands (Campari/Cinzano)
- Expansion of gross margins to 21.5%, including net costs of approximately $4 million ($0.10 per fully diluted share), resulting from increased spirit prices and savings on new rectification facilities.
- Increase in the percentage ownership of Polmos Bialystok and related financing costs.
- Reduction in SG&A as a percentage of sales by approximately 0.25%.
- Continued strong cash flow generation with improved liquidity ratios.
William V. Carey, CEO states, "Our continued commitment to grow sales of our own higher margin products (produced and imported), coupled with the rapidly expanding Central European GDP (2007 growth estimated at 4%-5%) are the key drivers of our projected strong organic sales growth.
"We are continuing to look at different distributors in Poland to acquire and are projecting acquisitions of distributors with net annualized revenue of approximately $100-$120 million in 2007. These distributors will continue to strengthen our presence in selected geographical areas within Poland."
William Carey continued, "Although our projected 2007 earnings are impacted by higher spirit pricing as compared to 2006, we are continuing to look for ways to improve our raw spirit pricing with the first step being taken in mid 2007 to rectify our own spirit. Our aim is to be the leader in the Polish market with the lowest cost of goods by 2009."
"We are continuing to show solid cash flow generation through the synergies in our business which gives us the opportunity to be selective in our approach in expanding our business model in Poland and continued international expansion."
The above 2007 guidance does not factor in the impact of any new acquisitions (in Poland and outside) or exchange rate movements related to the Company's Senior Secured Notes, but does include the impact of expensing of stock options. The number of shares used to calculate the fully diluted earnings per share is 40.1 million.