EXHIBIT 99.1
CENTRAL EUROPEAN DISTRIBUTION CORPORATION ANNOUNCES 400 PERCENT INCREASE IN
THIRD QUARTER NET PROFITS; REVENUES UP OVER 30 PERCENT YEAR ON YEAR.
ALEXANDRIA, VA., NOVEMBER 11, 1998/ CENTRAL EUROPEAN DISTRIBUTION CORPORATION
(NASDAQ: CEDC), today announced third quarter earnings of $329,000, or $.10 per
share on a fully diluted basis for the three-month period ending September 30,
1998, compared to $65,000, or $0.04 per share on a fully diluted basis for the
same period in 1997. Total revenues rose 30 percent to $12.97 million during
the quarter ended September 30, 1998 from $9.98 million for the third quarter
1997. Both revenues and earnings were a record for the company.
For the nine-month period ended September 30, 1998, earnings increased over
500 percent of $860,000, or $0.38 per share on a fully diluted basis, from
$140,000, or $0.08 per share on a fully diluted basis in the nine months ended
September 30, 1997, as after tax margin on revenue increased to 2.5 percent from
0.5 percent. Total revenues increased 27 percent to $34.86 million from $27.50
million during the same period in 1997. Also, during the third quarter the
company repaid its outstanding debt and is now debt free.
William Carey, Chairman and CEO commented, "The third quarter was our transition
from a private to a public company. Our record earnings and revenues are a
result of both our continuing strong internal growth and the immediate effective
use of capital raised in the IPO. The capital raised has enabled us to achieve
increased margins of several hundred basis points in our domestic vodka
business, which comprises over 50% of total sales."
"Outside factors, namely the Russian crisis, which caused abnormal currency
fluctuations in the quarter, were properly managed and had only a minimal effect
on operations. The Polish currency, the zloty, has since recovered and is
currently near its yearly high against the dollar. We view the strength of the
zloty as a vote of confidence in the continuing growth of the Polish economy and
a final decoupling from the view that Poland is dependent on the Russian
market."
The Company also announced that it has received the exclusive distribution
rights in Poland for Evian water, the world's leading bottled water, from the
Dannon Group of France. Mr. Carey further commented, "With the introduction of
Evian water, we continue to add non-alcoholic brand names to our product
portfolio. In recent months we have added non-alcoholic products such as
Poland's number two export drink and Dunhill Cigars. As previously announced,
signing new exclusive brands is one of our primary strategies. Since the IPO on
July 27, 1998, we have
signed five new spirit brands, Camus Cognac, Dekuyper Liqueurs, Black and White,
Vat 69 and White Horse scotches, that are now exclusively distributed, as well
as the above mentioned non-alcoholic products. We are currently in discussions
with several major brands about exclusive distribution of their products in
Poland and we are actively pursuing acquisitions, as stated in the registration
statement, that will significantly increase the breadth of our distribution in
Poland."
Mr. Carey concluded, "During this quarter we have been able to further penetrate
key accounts, including the largest chain of vodka stores, and the rapidly
growing petroleum retail outlets, including British Petroleum, as a result of
our ability to provide a complete portfolio of imported wines, beer and spirits
as well as domestic vodka on a nationwide basis. We look to continue to gain
market share in the Polish vodka market by opening additional key accounts,
which will enable us to add our imported products through these new outlets.
These factors should all contribute to our continued growth in revenues and
earnings."
CEDC is the leading importer of beer, wine and spirits, as well as the largest
distributor of domestic vodka on a nationwide basis in Poland, a four billion
dollar market at the retail level in 1997. The Company operates eight regional
distribution centers in major urban areas throughout Poland, one of Europe's
fastest growing economies, from which it distributes many of the world's leading
brands of spirits, wines and beers, including brands such as Johnnie Walker, Jim
Beam, Sutter Home, Miller, Corona and Guinness.
Except for the historical information contained herein, the matters discussed in
this news release are forward looking statements that involve risks and
uncertainties that are detailed from time to time in the Company's SEC reports,
including but not limited to the discussions in the Management's Discussion &
Analysis included in the Quarterly Report on Form 10-Q for third quarter 1998.
For further information please contact Jeffrey Peterson, Executive Vice
President, at 941-330-1558.
-2-
CENTRAL EUROPEAN DISTRIBUTION CORPORATION
Consolidated Income Statement and Balance Sheet Data
(Unaudited), (In thousands except per share data)
3 months ended 9 months ended
-------------------------------- --------------------------------
Sept. 30, 1998 Sept. 30, 1997 Sept. 30, 1998 Sept. 30, 1997
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $12,968 $ 9,977 $34,861 $27,499
Gross profit 1,911 1,406 5,268 3,740
Selling, general & administrative expenses 1,507 1,148 3,913 3,057
Operating income 404 258 1,355 683
Non-operating income (expense)
Interest (expense) (75) (25) (180) (106)
Interest income 99 -- 99 --
Realized and unrealized foreign currency transaction
(losses) gains, net 70 (65) 30 (278)
Other (expense) income, net 3 (4) 31 35
Income before income taxes 501 164 1,335 334
Income tax expense 172 99 475 194
Net income $ 329 $ 65 $ 860 $ 140
NET INCOME PER COMMON SHARE, BASIC AND DILUTIVE $ 0.10 $ 0.04 $ 0.38 $ 0.08
Weighted average common shares outstanding, basic
and dilutive 3,193 1,780 2,256 1,780
At Sept. 30, 1998 At Dec. 31, 1997
(unaudited)
Cash $ 4,946 $ 1,053
Accounts receivable 7,294 6,970
Inventories 3,548 3,280
Equipment, net 803 503
Total assets 16,977 12,530
Total current liabilities 5,430 12,149
Long term debt and capital lease obligations -- 47
Stockholders' equity 11,547 334