SOURCE: Drinks Americas Holdings, Ltd.

March 14, 2007 08:00 ET

Drinks Americas Reports $2.7 Million Revenue, an 875% Increase in Fiscal 2007 Third Quarter

Sales Reflect Growing Demand and Success of Trump Super Premium Vodka; Strengthened Balance Sheet With $6.6 Million in Cash and No Long-Term Debt; Net Worth Increased $9.1 Million Fiscal Year to Date

WILTON, CT -- (MARKET WIRE) -- March 14, 2007 -- Drinks Americas Holdings, Ltd. (OTCBB: DKAM), a developer and marketer of premium beverages associated with renowned icons, reported results for the third quarter ended January 31, 2007. It is the Company's first full quarter that includes sales from Trump Super Premium Vodka, which was launched in the last two weeks of October 2006. The product will be available to consumers nationwide within the next several weeks.

Revenue for the fiscal 2007 third quarter was $2.7 million, an increase of $2.4 million, or 875%, compared with $0.3 million for the third quarter of last year. The primary contributor to the increase was sales of Trump Super Premium Vodka. The product is now available to consumers in 28 states as well as duty free shops in Canada. On a sequential basis, revenue increased 20% or $0.5 million from $2.2 million in the second fiscal quarter 2007.

J. Patrick Kenny, President & Chief Executive Officer of Drinks Americas, stated, "We have accomplished a great deal over the past few months. Trump Super Premium Vodka has been available for roughly three and-a-half months, and during that time period we have already shipped 40,000 cases, totaling $4.3 million in sales. We continue to build momentum with thousands of cases of additional orders in the pipeline."

Mr. Kenny continued, "In addition to expanding our market coverage of Trump Super Premium Vodka, we are also seeing exciting levels of reorders from our existing customers across all our markets. Additionally, as a result of our $8 million raise and conversion of $3.4 million debt to equity, we significantly strengthened our balance sheet to provide us with a solid platform for future growth."

Gross margin in the third quarter 2007 was 45.8% compared with 20.4% in the third quarter of 2006. The improvement is attributed to a change in the sales mix, as Trump Super Premium Vodka is sold at significantly higher margins compared with the Company's other brands. SG&A in the third quarter 2007 was $4.8 million compared with $0.9 million in the third quarter of 2006. The increase is mainly due to one-time expenses of $1.4 million related to promotional events and other expenses related to the launch of Trump Super Premium Vodka in major markets, as well as $1.25 million in one-time non-cash charges as the result of satisfying certain fees and expenses by issuing shares of common stock which better utilized the Company's cash resources.

Net loss for the third fiscal quarter was $5.6 million, or $0.08 per basic and diluted share, compared with a net loss of $1.5 million, or $0.06 per basic and diluted share for the third quarter of 2006. A significant amount, 30% of this year's third quarter recorded loss, was due to the extinguishment of debt, a non-cash charge of $1.65 million, or $0.02 per share. The charge is a one-time, non-cash charge related to the conversion of past due liabilities, including non-convertible debt into equity.

Excluding all non-cash charges, which include $1.65 million charge for the extinguishment of debt and $1.45 million in selling and administrative expenses, net loss for the third quarter was $2.5 million, or $0.04 per share.

As of January 31, 2007, cash and cash equivalents were $6.5 million. The Company had $3.0 million of working capital and no long-term debt. Shareholders' equity increased $9.1 million from the start of the fiscal year to $4.3 million.

Third quarter business highlights include:

--  Completed $8 million private placement to accelerate marketing of
    product lines, corporate working capital needs, and the anticipated re-
    launch of Rheingold Beer.
--  Trump Super Premium Vodka rolled out in 16 states, including Colorado,
    Florida, Georgia, Illinois, Indiana, Maine, Missouri, Nebraska, Nevada, New
    Hampshire, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont
    and Wisconsin.
--  Kendall Jackson, a billion dollar winery known for its world class
    wines, commenced distribution of Trump Super Premium Vodka in California,
    Illinois, Colorado and Nevada.
--  Expanded Trump Super Premium Vodka internationally in duty free shops
    in Ontario and Quebec, Canada, through its distributor Haleybrooke
    International, marketer of Drinks Americas' duty free sales channels
--  Expanded fine wine collection and launched Casa BoMargo line of fine
    Italian wines with nationally known radio and television personality, Bo
--  Launched operation of joint distribution venture with Beyer
    Farms/Tuscan Dairy, New York's largest dairy distributor, for Drinks
    Americas' non-alcoholic beverage products in the New York metropolitan
Early fourth quarter highlights include:
--  Reached agreement with prominent Hollywood producers for cross-
    marketing and product placement of Drinks Americas' beverages in movie and
    television productions.
--  Announced the start of the company media and promotional plan for
    Trump Super Premium Vodka to drive sales with consumer pull-through
--  Added Trump 24K Super Premium Vodka bottle with 24 karat gold label
    and pre-sold 1,000 cases to distributors for premium clubs and key luxury
--  Elected new board member, Hubert Millet, who brings extensive global
    branding expertise from Seagram's to maximize the Drinks Americas'
    international growth opportunities.
--  Added and commenced shipping of 50 ml 'mini' bottle of Trump Super
    Premium Vodka.
Mr. Kenny concluded, "Trump Super Premium Vodka will be available in an additional 14 control states over the next several weeks. The success of Trump Super Premium Vodka is driving sales in our other spirit products, including Willie Nelson's Old River Bourbon and Damiana Liqueur. We are also rapidly expanding Newman's Own Lightly Sparkling Fruit Juice Drinks in major retailer chains across the country. With Newman's we are adding a cherry flavor and three sparkling waters and changing the formulation to pure cane sugar which opens up additional accounts that we can sell in."

Mr. Kenny added, "Looking ahead, we are in the process of rebuilding some of our inventories and increasing our marketing across all our brands to further drive revenue growth. We partner with some of the most valuable and recognized icons in the world. With our seasoned management team and powerful distribution network, we are also exploring opportunities to expand internationally."

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

About Drinks Americas

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

Other products owned and distributed by Drinks include Damiana, the Mexican liqueur, Aguila Tequila; Drinks' award-winning Cohete Rum Guarana from Panama, Swiss T and Rheingold Beer. 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

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.

            Consolidated Statements of Operations (Unaudited)

                         Three Months Ended          Nine Months Ended
                             January, 31                January, 31
                         2007           2006         2007         2006
                                     (Restated)                 (Restated)
Net sales            $ 2,681,273  $    274,880   $ 5,258,723   $ 1,105,700
Costs of sales         1,451,303       218,677     2,912,527       823,469
                     -----------  ------------   -----------   -----------
Gross margin           1,229,969        56,203     2,346,196       282,231

Operating Expenses:

  Selling, general
   and administrative
   expenses            4,777,322       907,911     7,521,649     3,110,174
                     ===========  ============   ===========   ===========
                                             -                           -
  Loss before other
   income (expense)   (3,547,353)     (851,708)   (5,175,453)   (2,827,943)

Other income
  Interest              (333,046)     (634,297)     (708,978)     (773,144)
  Loss on
   of debt            (1,651,757)            -    (1,651,757)            -
  Other                  (20,377)            -       (19,515)      190,000
                     ===========  ============   ===========   ===========
                      (2,005,180)     (634,297)   (2,380,250)     (583,144)
                     ===========  ============   ===========   ===========
Net loss             $(5,552,533) $ (1,486,005)  $(7,555,703)  $(3,411,087)
                     ===========  ============   ===========   ===========
Net loss per share,
 basic and diluted   $     (0.08) $      (0.03)  $     (0.12)  $     (0.06)
                     ===========  ============   ===========   ===========

                   Consolidated Balance Sheet

                                                         January 31,
ASSETS                                                   (unaudited)

Current assets:
  Cash and cash equivalents                            $    6,567,458
  Accounts receivable, net                                  1,802,982
  Inventory                                                 1,912,349
    Other current assets                                      528,193
    Total current assets                                   10,810,982

Property and Equipment                                        137,591
Investment in Equity Investees                                 66,442
Intangible Assets                                             943,075
Deferred loan costs                                            30,123
Other                                                         130,688
                                                       $   12,118,901

Current liabilities:
    Accounts payable                                   $    2,236,690
    Notes and loans payable                                 2,772,944
    Accrued Expenses                                        2,762,711
    Advances on shares to be issued                            25,000
    Total current liabilities                               7,797,345

Stockholders' equity                                   $    4,321,555

Contact Information

  • Contact for more information:

    Michael Smith
    Rubenstein Public Relations

    Investor Relations Contacts:
    Stanley Altschuler
    Ryan Daniels
    Strategic Growth International
    150 East 52nd Street, 22nd Fl.
    New York, NY 10022
    (212) 838-1444