SOURCE: Drinks Americas Holdings, Ltd.

December 20, 2007 08:44 ET

Drinks Americas Announces Second Quarter Fiscal 2008 Financial Results

WILTON, CT--(Marketwire - December 20, 2007) - Drinks Americas Holdings, Ltd. (OTCBB: DKAM), an owner developer and marketer of premium beverages associated with renowned icons, today announced financial results for its second quarter and six months ended October 31, 2007.

J. Patrick Kenny, Drinks Chief Executive Officer, stated, "We invested in the second quarter to build on Trump Super Premium Vodka distribution by spending marketing funds supporting sampling and promoting in accounts already sold to, build repeat purchases and consumer loyalty. During the second quarter we continued to ship repeat orders to key markets like New York, New Jersey, Maryland, Florida, Illinois, Washington, Texas and California."

Kenny added, "We also invested in the balance of our portfolio in order to broaden the company's margin mix and revenue stream. Our bourbon business was up 60%, wine business was up 67% and Newman's Own Sparkling Fruit Juices grew at 1,000%. We continue to execute our strategy into this third quarter. We will have two significant Universal Interscope ventures enter our product stream in the first half of '08. Our goals are to expand our markets and number of Icon brands, to begin international distribution starting with Russia, on a large scale, put in place cost of goods savings that will improve gross margins in subsequent quarters, and grow the company."

Comparison of Three Months Ended October 31, 2007 to October 31, 2006

--  Net sales were $1.5 million for the second quarter 2008, compared to
    net sales of $2.2 million for the second quarter 2007. The company is
    cycling last years Trump Vodka pipeline fill and introduction.
    
--  Net sales for the second quarter 2008 were comprised 52  percent from
    Trump Vodka sales, 13 percent of Old Whiskey River Bourbon, 18 percent from
    our international wines, 4 percent from our other alcoholics and 13 percent
    from Newman's Own sparkling fruit beverages and sparkling waters.  Net
    sales for second quarter 2007 were comprised 84 percent Trump, 5 percent
    Old Whiskey River, 7 percent international wines, 3 percent from our other
    alcoholic products and 1 percent of Newman's Own products.
    
--  Second quarter net sales of Old Whiskey River increased 60% over the
    same period of the prior year ($190,000 compared to $119,000), net sales of
    our international wines increased 67% ($269,000 compared to $161,000) and
    Newman's Own products increased over 1,000% ($190,000 compared to $16,000).
    The Company continued national expansion of the Newman's Own product line
    in the third quarter of fiscal 2007.
    
--  Gross margin was 41% for the second quarter of this year, compared to
    44% for the same period last year. Gross margin was influenced by the
    increased volume of non alcoholic products, the weakening dollar for glass
    purchased in Europe, and our planned investment support for Trump Vodka.
    
--  Selling, General and Administrative Expenses were $2.0 million for the
    second quarter 2008, compared to $1.9 million for the same period last
    year. The second quarter 2008 SGA included incremental promotional support
    for Trump Vodka, increased overhead as part of the expanded sales force,
    fees related to a potential  acquisition  and recognition of $100,000 of
    directors' fees.
    
--  Interest expense was reduced by $221,000 based on long term debt
    elimination. Second quarter of 2008 interest expense was $64,000, compared
    to $287,000 for the same period of the prior year.
    
--  Net loss for the quarter was $1.5 million, or $0.02 per share,
    compared to a net loss of $1.2 million, or $0.02 per share, for the same
    period last year.
    

Comparison of Six Months Ended October 31, 2007 to October 31, 2006

--  Net Sales increased while cycling last years Trump introduction by 8%.
    Net sales were $2.8 million for the first half 2008, compared to net sales
    of $2.6 million for the first half of 2007.
    
--  Net sales for the first half  2008 were comprised 56 percent from
    Trump Vodka sales, 9 percent of Old Whiskey River Bourbon, 12  percent from
    our international wines, 5 percent from our other alcoholics and 18 percent
    from Newman's Own sparkling fruit beverages and sparkling waters. Net sales
    for first half  2007 were comprised 73 percent Trump, 7 percent Old Whiskey
    River, 9 percent international wines, 6 percent from our other alcoholic
    products and 5 percent of Newman's Own products.
    
--  First half net sales of Old Whiskey River increased 40 percent over
    the same period of the prior year ($258,000 compared to $185,000), net
    sales of our international wines increased 42 percent ($331,000 compared to
    $234,000) and Newman's Own products increased 270 percent ($502,000
    compared to $136,000).  Net sales of Trump Vodka were $1.6 million for the
    first half of this year compared to $1.9 million for the first half of
    2007. The prior year was influenced by the launch and pipeline fill of
    Trump Vodka.
    
--  Gross margin was 39% for the first half of this year, compared to 43%
    for the same period last year. The decline in gross margin was influenced
    by lower margin Newman's Own products, the weakening dollar related to
    European glass purchasing, and pricing support for Trump Vodka.
    
--  This year a full six months of selling and marketing expenses were
    recognized for Trump Vodka compared to one month for the first half of
    2007.
    
--  Selling, General and Administrative Expenses was $4.0 million for the
    second quarter 2008, compared to $2.8 million for the same period last
    year. The increase was also influenced by an expanding  permanent work
    force  as well as summer Newman's sale staff, and recognition of  $150,000
    of directors' fees which were not recognized in the same period of the
    prior year.
    
--  Interest expense savings were $260,000 verses over the same period of
    last year. Interest Expense was $116,000 for the  first six months of
    fiscal 2008 compared to $376,000 for the same period of the prior year.
    
--  Net loss for the half was $3.0 million, or $0.04 per share, compared
    to a net loss of $2.0 million, or $0.03 per share, for the same period last
    year.
    

Mr. Kenny commented, "We have established three nationally distributed Icon beverage franchises in a short period of time. Our cost of goods will continue to improve favorably impacting gross margins and our revenue is coming from a broader spectrum of our portfolio along with Trump Vodka. Our Universal Interscope relationship will result in several products entering into our brand mix and revenue stream in the first half of '08. Shipments to Russia have already started. As our spending per case on Trump Vodka normalizes, our Bourbon, Tequila, Rum and Wine products are increasing sales and dollar volume. We will also be moving to a more profitable package mix on Newman's products. Continued sales momentum in the US on each of our products, substantial savings on the production of our glass in China and sales in Russia will all positively impact our growth and route to profitability which is our focus."

Recent Business Highlights

--  Shipments to Russia commenced for Trump Super Premium Vodka, Trump 24
    Karat Gold Vodka and Trump Vodka Flavors. Drinks Russian partner Recolte
    estimates it will order 50,000 cases or $7,500,000 of profitable business.
--  Drinks Bourbon and Tequila brands are demonstrating significant year
    over year sales growth.
--  Trump Super Premium Vodka will launch a major promotional program at
    the Trump Casinos in Atlantic City.
--  Shift of glass production to China and various cost savings targeted
    on Trump brand as well as component part volume discounts are targeted to
    save up to $5 dollars a case savings on cost of goods.
--  Recently completed $3mil placement. Equity investment by three of our
    existing institutional investors at a premium to market as a preferred
    stock issuance with no "put" rights, no automatic ratchets, no dividends,
    no warrants, convertible well above the current market price with an
    effective six month lock up and no voting rights.
--  Ongoing product pipeline development with Interscope Universal with
    two pending product initiatives for first half of 2009.
    

More information on the Company's quarterly results can be found in its 10-Q filing with the SEC.

Conference Call Details

A company-hosted teleconference will be held on Thursday, December 20 at 10:00 AM ET. The dial-in number for the conference call is 1-800-593-9034, dial-in pass code "Drinks." To listen to the live Webcast, log on to the investor relations section of the Company's website at www.drinksamericas.com. The call will also be available for replay for seven days by dialing 1-877-656-8905, pin number 15709671.

About Drinks Americas

Drinks Americas develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned icon celebrities. Drinks Americas' portfolio of premium alcoholic beverages includes Trump Super Premium Vodka, Willie Nelson's Old Whiskey River Bourbon. The Company's non-alcoholic brands include the distribution of Paul Newman's Own Lightly Sparkling Fruit Juice Drinks and Flavored Waters.

Other products owned and distributed by Drinks Americas include award-winning Damiana Liqueur and Aguila Tequila from Mexico and Cohete Rum Guarana from Panama. Damiana, Old Whiskey River, Aguila Tequila and Cohete Rum are Gold and Silver Medal award winners respectively from the International Beverage Tasting Institute and the San Francisco International Wine and Spirits Competition. For further information, please visit our website at www.drinksamericas.com

Drinks Americas was founded in 2004 by J. Patrick Kenny, a leading expert in beverage sales and marketing. Mr. Kenny developed his industry expertise in a variety of management positions at the world's leading beverage companies, including Joseph E. Seagram and Sons and The Coca-Cola Company. He has also acted as advisor to several Fortune 500 beverage marketing companies, and has participated in several beverage industry transactions.

Safe Harbor

Except for the historical information contained herein, the matters set forth in this press release, including the description of the company and its product offerings, are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the historical volatility and low trading volume of our stock, the risk and uncertainties inherent in the early stages of growth companies, the company's need to raise substantial additional capital to proceed with its business, risks associated with competitors, and other risks detailed from time to time in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these forward-looking statements.

              DRINKS AMERICAS HOLDINGS, LTD., AND AFFILIATES
                  CONSOLIDATED BALANCE SHEETS (Unaudited)
                          AS OF October  31, 2007
                              (in thousands)

ASSETS
Current Assets:
   Cash and cash equivalents                       $    14
   Accounts receivable, net of allowance               919
   Inventories                                       2,380
   Other current assets                                501
                                                   -------

            Total current assets                     3,814

Property and Equipment, at cost less accumulated
 depreciation and amortization                         108

Investment in Equity Investees                          62

Intangible assets, net of accumulated amortization     824

Deferred loan costs, net                                33

Other                                                  738
                                                   -------

                                                   $ 5,578
                                                   =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
 Accounts payable                                  $ 2,402
 Notes and loans payable                             1,181
 Loans payable-related party                           475
 Accrued expenses                                    1,172
 Amounts received for shares to be issued               20
                                                   -------

          Total current liabilities                  5,250


Shareholders' equity:
 Preferred Stock, $0.001 par value; 1,000,000
  shares authorized; none issued                         -
Common Stock, $0.001 par value; 100,000,000 shares
 authorized:
 Issued and outstanding 79,823,881 shares               80
Additional paid-in capital                          29,547
Accumulated deficit                                (29,299)
                                                   -------
                                                       328
                                                   -------

                                                   $ 5,578
                                                   -------


              DRINKS AMERICAS HOLDINGS, LTD., AND AFFILIATES
            CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 (in thousands, except for share amounts)


                               Six months ended       Three months ended
                                 October  31,            October  31,
                            ----------------------  ----------------------
                               2007        2006        2007        2006
                            ----------  ----------  ----------  ----------


Net sales                   $    2,783  $    2,577  $    1,476  $    2,241

Cost of sales                    1,712       1,461         875       1,247
                            ----------  ----------  ----------  ----------

     Gross margin                1,071       1,116         601         994

Selling, general &
 administrative expenses         4,004       2,744       2,019       1,879
                            ----------  ----------  ----------  ----------

 Loss before other income
  (expense):                    (2,934)     (1,628)     (1,418)       (885)

Other income (expense):
 Interest                         (116)       (376)        (64)       (287)
 Other                               -           1           0          (1)
                            ----------  ----------  ----------  ----------
                                  (116)       (375)        (63)       (287)
                            ----------  ----------  ----------  ----------

      Net Loss              $   (3,050) $   (2,003) $   (1,482) $   (1,172)
                            ==========  ==========  ==========  ==========

Net loss per share
(Basic and Diluted)         $    (0.04) $    (0.03) $    (0.02) $    (0.02)
                            ==========  ==========  ==========  ==========


Weighted average number
 of common shares
 (basic and diluted)        79,594,956  63,081,504  79,610,909  63,423,611
                            ==========  ==========  ==========  ==========

Contact Information

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