SodaStream Reports First Quarter Results

                   SodaStream Reports First Quarter Results

PR Newswire

AIRPORT CITY, Israel, May 14, 2014

AIRPORT CITY, Israel, May 14, 2014 /PRNewswire/ --SodaStream International
Ltd. (NASDAQ: SODA), a leading manufacturer of home beverage carbonation
systems, announced today its results for thethree month period ended March
31, 2014.

SodaStream Logo

For the first quarter ended March 31, 2014:

  oRevenue was $118.2 million compared to $117.6 million in the first quarter
    2013
  oEBITDA was $6.3 million compared to $16.4 million in the first quarter
    2013
  oNet income was $1.8 million compared to $12.1 million in the first quarter
    2013.
  oDiluted earnings per share were $0.08, compared to $0.57 in the first
    quarter 2013.

"Our first quarter results were generally in-line with our expectations and
reflect strong growth outside the U.S. offset by the negative impact on soda
maker sell-in in the U.S. from the challenging holiday season," said Daniel
Birnbaum, Chief Executive Officer of SodaStream. "Our global base of
SodaStream users inclusive of the U.S. remains very active evidenced by strong
consumable sales growth, giving us added conviction in the attractiveness of
our home carbonation system. We are in the process of adjusting our marketing
and selling strategies in order to reaccelerate soda maker demand and further
increase household penetration. We are confident that our long history leading
the evolution of home carbonation continues to provide uswith strong
competitive advantages and compelling growth opportunities across the globe."

First Quarter 2014 Financial Review
Geographical Revenue Breakdown
Revenue                 Three Months Ended
                                                        Increase   Increase
                        March 31, 2013  March 31, 2014
                                                        (decrease)  (decrease)
                        In Millions USD                             %
The Americas            $     48.3      $     34.8      $  (13.5)   (28%)
Western Europe                53.3            62.5         9.2      17%
Asia-Pacific                  9.3             11.9         2.6      28%
Central & Eastern
Europe, Middle East,          6.7             9.0          2.3      34%
Africa
Total                   $     117.6     $     118.2     $  0.6      0.5%
Product Segment Revenue Breakdown
Revenue                 Three Months Ended
                        March 31, 2013  March 31, 2014  Increase   Increase
                        In millions USD                             %
Soda Maker Starter Kits $     43.0      $     32.2      $  (10.8)   (25%)
Consumables                   72.0            83.0         11.0     15%
Other                         2.6             3.0          0.4      15%
Total                   $     117.6     $     118.2     $  0.6      0.5%
Product Segment Unit
Breakdown
                        Three Months Ended
                        March 31, 2013  March 31, 2014  Increase   Increase
                        In thousands                                %
Soda Maker Starter Kits       776             604          (172)    (22%)
CO2 Refills                   4,756           5,820        1,064    22%
Flavors                       7,735           8,405        670      9%

Gross margin for the first quarter 2014 was 52.3% compared to 54.5% for the
same period in 2013. The decline was primarily due to unfavorable changes in
foreign currency exchange rates and increased share of higher-cost soda makers
in the sales mix, which was partially offset by a higher share of CO2 refills
in product mix.

Sales and marketing expenses for the first quarter 2014 totaled $46.1 million,
or 39.0% of revenue, compared to $38.9 million, or 33.0% of revenue for the
comparable period in the prior year. The 600 basis point change in sales and
marketing expenses as a percent of revenue was mainly attributable to an
increase in advertising and promotion expense as a percent of revenue to 18.1%
from 13.5% in the first quarter 2013. This resulted primarily fromthe first
quarter's marketing campaign in the U.S. and to a lesser extentfrom marketing
campaigns in Europe that did not take place in the first quarter of2013.

General and administrative expenses for the first quarter 2014 were $13.4
million, or 11.3% of revenue, compared to $11.6 million, or 9.9% of revenue in
the comparable period of last year. The increase was mainly due to additional
expenses related to our newly acquired Italian distributer as well as
additional infrastructure (mainly information technology systems) to support
future growth.

Operating income decreased 82.8% to $2.3 million, or 2.0% of revenue, compared
to $13.6 million, or 11.6% of revenue, in the first quarter 2013.

Tax expensewas $348,000 million with effective tax rate of 16.4%, compared to
$1.3 million with effective tax rate of 9.7% in the first quarter 2013. The
increase in the effective tax rate was primarily due to the geographical
income before tax distribution and the difference in local tax rates.

Balance Sheet Review

  oCash and cash equivalents and bank deposits at March 31, 2014 were $36.1
    million compared to $40.9 million at December 31, 2013. The decrease is
    primarily attributable to the investment in our new production facility
    and anincrease in working capital.
  oThe Company had $24.0 million of bank debt at March 31, 2014 mainly for
    financing the investment in its new production facility, compared to $15.5
    million of bank debt at December 31, 2013.
  oWorking capital at March 31, 2014 increased 3.2% to $160.4 million
    compared to $155.4 million at December 31, 2013. Inventories at March 31,
    2014 increased 1.7% to $143.1 million compared to $140.7 million at
    December 31, 2013.

Guidance

Based on first quarter results and current projections for the remainder of
the year, the Company is maintaining its outlook:

  oThe Company still expects full year 2014 revenue to increase approximately
    15% over 2013 revenue of $562.7 million.
  oThe Company still expects full year 2014 EBITDA to increase approximately
    11% over 2013 EBITDA of $62.2 million. Excluding changes in foreign
    currency exchange rates compared to 2013, the Company expects 2014 EBITDA
    to increase approximately 25% over 2013.
  oThe Company still expects full year 2014 net income to increase
    approximately 3% over 2013 net income of $42.0 million

Conference Call and Management Commentary

Detailed CFO commentary and a supplemental slide presentation have been filed
as part of today's 6-K and will be posted on the Company's website,
http://sodastream.investorroom.com.

The Company has scheduled a conference call for 8:30 AM Eastern Daylight Time
(U.S. time) today (Wednesday, May 14, 2014) to review the Company's financial
results. The conference call will be broadcast over the Internet as a "live"
listen only Webcast. To listen, please go to:
http://sodastream.investorroom.com. Listeners are urged to login
approximately 20 minutes before the conference call is scheduled to begin in
order to register, as well as download and install any necessary audio
software. An archive of the Webcast will be available for 30 days after the
call.

About SodaStream International

SodaStream manufactures beverage carbonation systems which enable consumers to
easily transform ordinary tap water instantly into carbonated soft drinks and
sparkling water. Soda makers offer a highly differentiated and innovative
solution to consumers of bottled and canned carbonated soft drinks and
sparkling water. Our products are environmentally friendly, cost effective,
promote health and wellness, and are customizable and fun to use. In addition,
our products offer convenience by eliminating the need to carry bottles home
from the supermarket, to store bottles at home or to regularly dispose of
empty bottles. Our products are available at more than 60,000 retail stores in
45 countries around the world. For more information on SodaStream, please
visit the Company's website: www.sodastream.com.

To download SodaStream's investor relations app, which offers access to SEC
documents, press releases, videos, audiocasts and more, please visit
http://itunes.apple.com/us/app/soda-ir/id524423001?mt=8 for your iPhone/iPad,
or https://play.google.com/store/apps/details?id=com.theirapp.soda for your
Android mobile device.

Non-IFRS Financial Measures

Beginning this press release the company will no longer provide certain
non-IFRS measures that were provided in past quarterly press releases,
including Adjusted Net Income, Adjusted Earnings Before Interest, Income Tax,
Depreciation and Amortization ("Adjusted EBITDA"), and Adjusted diluted
earnings per share ("Adjusted diluted EPS").

The Company believes that these measures no longer provide material additional
information that should be considered in evaluating the Company's operations.

Forward Looking Statements

This release contains forward-looking statements, which express the current
beliefs and expectations of management. Such statements are based on
management's current beliefs and expectations and involve a number of known
and unknown risks and uncertainties that could cause our future results,
performance or achievements to differ significantly from the results,
performance or achievements expressed or implied by such forward-looking
statements. Important factors that could cause or contribute to such
differences include risks relating to: our ability to expand into our target
markets, including the United States; our ability to continue to develop or
maintain our presence in retail networks; our ability to develop and implement
production and operating infrastructure to effectively support our growth; the
success of our marketing campaigns and media spending in terms of increased
sales or increased product and brand name awareness; our ability to maintain
our customer base in markets where we have an established presence; the risks
associated with our reliance on exclusive arrangements for the distribution of
our beverage carbonation systems and consumables in each of the markets in
which we use third-party distributors; our ability to compete effectively with
other companies which currently offer, or may offer in the future, competing
products; our ability to maintain margins due to decline in product selling
price and\or rising costs;potential product liability claims if any component
of our beverage carbonation systems is misused; our ability to protect our
intellectual property rights; our being found to have a dominant position in
certain markets which may place limits on our ability to operate; risks
associated with our being a multinational corporation, including fluctuations
in currency exchange rates; our potential exposure to greater than anticipated
tax liabilities; our products being subject to extensive governmental
regulation in the markets in which we operate; adverse conditions in the
global economy which could negatively impact our customers' demand for our
products; and other factors detailed in documents we file from time to time
with the United States Securities and Exchange Commission. Forward-looking
statements in this release are made pursuant to the safe harbor provisions
contained in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are made only as of the date hereof, and the
company undertakes no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise.

Company Contact:
Yonah Lloyd
Chief Corporate Development and Communications Officer
SodaStream International Ltd.
Phone: +972-3-976-2462
yonahl@sodastream.com

Investor Contacts (US):
Brendon Frey
ICR
Phone: + 1 203-682-8200
brendon.frey@icrinc.com



Consolidated Statements of Operations
In thousands (other than per share amounts)
                                             For the three months ended
                                             March 31,
                                             2013           2014
                                             (Unaudited)
Revenue                                      $   117,639    $  118,172
Cost of revenue                                  53,554        56,326
Gross profit                                     64,085        61,846
Operating expenses
Sales and marketing                              38,859        46,146
General and administrative                       11,609        13,355
Total operating expenses                         50,468        59,501
Operating income                                 13,617        2,345
Interest expense, net                            25            47
Other financial expense, net                     210           172
Total financial expense, net                     235           219
Income before income taxes                       13,382        2,126
Income tax expense                               1,298         348
Net income for the period                    $   12,084     $  1,778
Net income per share
Basic                                        $   0.58       $  0.09
Diluted                                      $   0.57       $  0.08
Weighted average number of shares
Basic                                            20,682        20,908
Diluted                                          21,211        21,289





Consolidated Balance Sheets as of
                                           December 31,  March 31,
                                           2013          2014
                                           (Audited)     (Unaudited)
                                           (In thousands)
Assets
Cash and cash equivalents                  $   40,885    $  36,052
Inventories                                    140,709      143,089
Trade receivables                              123,936      98,851
Other receivables                              22,208       22,674
Derivative financial instruments               538          755
Total current assets                           328,276      301,421
Property, plant and equipment                  107,132      119,358
Intangible assets                              48,104       48,022
Deferred tax assets                            1,089        1,561
Other receivables                              398          443
Total non-current assets                       156,723      169,384
Total assets                                   484,999      470,805
Liabilities
Loans and borrowings                           15,452       24,008
Derivative financial instruments               103          68
Trade payables                                 90,749       66,858
Income tax payable                             9,869        10,549
Provisions                                     1,614        1,511
Other current liabilities                      29,674       26,012
Total current liabilities                      147,461      129,006
Employee benefits                              2,221        2,113
Provisions                                     714          704
Deferred tax liabilities                       2,997        2,906
Total non-current liabilities                  5,932        5,723
Total liabilities                              153,393      134,729
Shareholders' equity
Share capital                                  3,378        3,382
Share premium                                  193,649      196,404
Translation reserve                            3,394        3,327
Retained earnings                              131,185      132,963
Total shareholders' equity                     331,606      336,076
Total liabilities and shareholders' equity $   484,999   $  470,805





Consolidated Statements of Cash Flows
                                                    For the threemonths ended
                                                    March 31,
                                                    2013            2014
                                                    (Unaudited)
                                                      (In thousands)
Cash flows from operating activities
Net income for the period                           $   12,084      $ 1,778
Adjustments:
Amortization of intangible assets                       428           512
Change in fair value of derivative financial           -             408
instruments
Depreciation of property, plant and                    2,553         3,624
equipment
Share based payment                                     2,394         2,306
Interest expense, net                                   25            47
Income tax expense                                      1,298         348
                                                        18,782        9,023
Increase in inventories                                 (9,802)       (2,468)
Decrease in trade and other receivables                 11,189        24,707
Decrease in trade payables                              (19,233)      (24,072)
Increase (decrease) in employee benefits                14            (110)
Decrease in provisions and other current                (12,098)      (3,865)
liabilities
                                                        (11,148)      3,215
Interest paid                                           (54)          (36)
Income tax received                                     3,448         363
Income tax paid                                         (710)         (682)
Net cash from operating activities                      (8,464)       2,860
Cash flows from investing activities
Interest received                                       58            5
Proceeds from derivative financial                     (1,105)       (660)
instruments, net
Acquisition of property, plant and equipment           (10,604)      (15,684)
Acquisition of intangible assets                        (1,109)       (363)
Net cash from (used in) investing activities           (12,760)      (16,702)
Cash flows from financing activities
Proceeds from exercise of employee share                1,151         453
options
Change in short-term debt                               8,073         8,556
Net cash from (used in) financing activities            9,224         9,009
Net increase (decrease) in cash and cash                (12,000)      (4,833)
equivalents
Cash and cash equivalents at the beginning of           62,068        40,885
the period
Effect of exchange rates fluctuations on               (180)         -
cash and cash equivalents
Cash and cash equivalents at the end of the        $   49,888      $ 36,052
period





Information about revenue in reportable segments
                                                       Central &

                                                       Eastern
                                  Western
                    The Americas          Asia-Pacific Europe,       Total
                                  Europe
                                                       Middle East,

                                                       Africa
                    (In thousands)
Three months ended:
March 31, 2013      $   48,339    53,298  9,319        6,683         $ 117,639
(Unaudited)
March 31, 2014      $   34,758    62,550  11,906       8,958         $ 118,172
(Unaudited)





EBITDA
                                                    Three months ended
                                                    March 31,
                                                    2013           2014
                                                    (Unaudited)
                                                    (In thousands)
Reconciliation of Net
Income to EBITDA
Net income                                          $   12,084     $  1,778
Interest expense, net                                   25            47
Income tax expense (tax                                 1,298         348
benefit)
Depreciation and                                        2,981         4,136
amortization
EBITDA                                                  16,388        6,309
The following tables present the Company's revenue,
by product type for the periods presented, as well
as such revenue by product type as a percentage of
total revenue:
                                                    Three months ended
                                                    March 31,
                                                    2013           2014
                                                    (Unaudited)
                                                    Revenue
                                                    (in thousands)
Soda maker starter kits
(including                                          $   42,952     $  32,224

exchange cylinders)
Consumables                                             72,062        82,924
Other                                                   2,625         3,024
                                                                   
Total                                               $   117,639       118,172
                                                                   $
                                                    Three months ended
                                                    March 31,
                                                    2013           2014
                                                    (Unaudited)
                                                    As a percentage of revenue
Soda maker starter kits
(including                                              36.5%         27.3%

exchange cylinders)
Consumables                                             61.3%         70.2%
Other                                                   2.2%          2.5%
Total                                                   100.0%        100.0%



Logo - http://photos.prnewswire.com/prnh/20121107/NY07412LOGO



SOURCE SodaStream International Ltd.

Website: http://www.sodastream.com
 
Press spacebar to pause and continue. Press esc to stop.