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Panache Beverages Reports 68% Revenue Growth for the Second Quarter 2012 Compared to Its Second Quarter 2011

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Foreign Markets and the Addition of Five Distributors Drive Strong Revenue Growth

NEW YORK, Aug. 22, 2012 (GLOBE NEWSWIRE) -- Panache Beverage, Inc. (OTCQB:WDKA.PK), an alcoholic beverage company specializing in the development, global sales and marketing of spirits brands, today announced revenues of $671,041 for the three months ended June 30, 2012, representing an increase of 68% over revenues of $398,512 reported for the three months ended June 30, 2011. On a sequential quarter-to-quarter basis, the Company reported revenue growth of 82% over revenues of $368,483 reported during the first quarter 2012. The increase in revenue was primarily due to the implementation of Panache's marketing strategies in new markets and growth in existing markets. Specifically, sales in international markets have increased substantially.

Highlights from the Second Quarter 2012

  • Panache continued its expansion into foreign markets by securing O.B.H. Wine and Spirits Inc. as an exclusive partner to represent Wodka and Alchemia brands in Canada. Panache and O.B.H are in the process of securing approval from the LCBO to sell and market the brands throughout all provinces and territories of Canada.
     
  • Wodka Vodka has been accepted as a core range product for LMG Bottlemart Group, which represents 12% of the total Australian packaged liquor market and comprises over 2,000 members throughout the country. The acceptance of Wodka by LMG Bottlemart is an endorsement of the brand's strategy, marketing, and pricing.
      
  • Alibi American Whiskey has received its Certificate of Label Approval from TTB. The approval paves the way for Panache to roll out this highly anticipated brand in the third quarter of this year.
     
  • Panache added five distributors and expanded into three states in the second quarter of 2012. Its brands are now available in 30 states across the United States.

Cost of goods sold was $438,211, or 65% of revenue during the three months ended June 30, 2012, compared with 97% of revenue during the three months ended June 30, 2011. For the six months ended June 30, 2012, cost of goods sold was approximately 67% of revenue compared to approximately 78% of revenue during the six months ended June 30, 2011. The decrease in costs of goods sold as a percentage of revenue during the three and six month periods ended June 30, 2012 in comparison to the same periods in 2011 is mostly due increased efficiencies in operations and higher gross profit on international sales, which accounted for a higher percentage of sales in 2012.

James Dale, the Chief Executive Officer of Panache Beverages, stated, "We are very pleased with the financial performance achieved during the second quarter of 2012 as well as our accomplishments with respect to rolling out our products. We expect to report strong growth in the second half of 2012 and into the foreseeable future as we continue to execute on our business plan."

About Panache Beverages, Inc.

Panache Beverage, Inc. (WDKA) based in New York, NY is an alcoholic beverage company specializing in the development, global sales and marketing of spirits brands. The Company's expertise lies in the strategic development and aggressive early growth of its brands establishing its assets as viable and attractive acquisition candidates for the major global spirits companies. Panache intends to build its brands as individual acquisition candidates while continuing to develop its pipeline of new brands in to the Panache portfolio. Panache's existing portfolio contains three brands: Wodka Vodka (www.welovewodka.com), Alchemia Infused Vodka (www.alchemiainfusions.com) and Alibi American Whiskey (www.alibiamerica.com).

For more information visit: http://www.panachespirits.com

Safe Harbor

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate," "project" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the events or results anticipated by these forward-looking statements may not occur. Further information on Panache Beverages' risk factors is contained in its filings with the Securities and Exchange Commission, including the Form 10-KSB for the year ended December 31, 2011 and the Form 10-QSB filed March 31, 2012. Panache Beverages does not undertake any duty nor does it intend to update the results of these forward-looking statements.

     
     
PANACHE BEVERAGE, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
     
  June 30,
2012
December 31,
2011
     
ASSETS    
Current Assets    
Cash and cash equivalents $21,242 $152,464
Accounts receivable – net 640,207 430,087
Inventory 71,030 41,723
Prepaid expenses and other current assets 109,774 106,661
Total Current Assets 842,253 730,935
     
Property and Equipment - net 12,358 6,565
     
TOTAL ASSETS $854,611 $737,500
     
LIABILITIES AND EQUITY (DEFICIT)    
     
Current Liabilities    
Accounts payable $869,677 $621,397
Due to factor 385,333 317,293
Notes payable 50,500 28,000
Loans payable – related parties 421,437 358,629
Consulting fees payable – related party  --  2,705
Accrued interest 38,860 38,860
Other current liabilities 423,494 335,464
Total Current Liabilities 2,189,301 1,702,348
     
Long term debt 183,500 183,500
     
Total Liabilities 2,372,801 1,885,848
     
Equity (Deficit)    
Common stock, par value $0.001; 200,000,000 and 200,000,000  shares authorized as of June 30, 2012 and December 31, 2011, respectively; 26,332,891 and 25,107,891 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively 26,333 25,108
Additional paid in capital 2,603,815 1,303,412
Additional paid in capital - warrants 285,869 163,097
Treasury stock, at cost, 50,000 and 0 shares as of June 30, 2012 and December 31, 2011, respectively -50,000  -- 
Retained (deficit) -4,112,146 -2,516,269
Total stockholders' deficit -1,246,129 -1,024,652
Non-controlling interests -272,061 -123,696
Total Equity (Deficit) -1,518,190 -1,148,348
     
TOTAL LIABILITIES AND EQUITY (DEFICIT) $854,611 $737,500
         
         
PANACHE BEVERAGE, INC.        
CONSOLIDATED STATEMENTS OF OPERATIONS - (Unaudited)      
         
         
   For the three months ended
June 30, 
 For the six months ended
June 30, 
  2012 2011 2012 2011
         
REVENUES - NET $671,041 $398,512 $1,039,524 $831,692
         
COST OF GOODS SOLD 438,211 387,771 696,340 647,452
         
GROSS PROFIT 232,830 10,741 343,184 184,240
         
OPERATING EXPENSES        
Advertising and promotion 240,326 505,331 527,101 1,002,246
Consulting 62,740 42,856 284,409 63,817
Professional fees 335,333 54,411 622,003 65,225
General and administrative 454,208 98,399 888,706 256,199
TOTAL OPERATING EXPENSES 1,092,607 700,997 2,322,219 1,387,487
         
LOSS FROM OPERATIONS -859,777 -690,256 -1,979,035 -1,203,247
         
OTHER EXPENSE        
 Interest expense -12,091 -34,114 -23,151 -34,114
         
LOSS FROM OPERATIONS AND BEFORE NON-CONTROLLING INTERESTS -871,868 -724,370 -2,002,186 -1,237,361
         
LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 111,830 621,794 406,309 1,221,025
         
LOSS BEFORE PROVISION FOR INCOME TAXES -760,038 -102,576 -1,595,877 -16,336
         
PROVISION FOR INCOME TAXES  --   --   --   -- 
         
NET LOSS ATTRIBUTABLE TO PANACHE BEVERAGE, INC. ($760,038) ($102,576) ($1,595,877) ($16,336)
         
BASIC AND DILUTED RESULTS PER SHARE OF COMMON STOCK:        
         
 LOSS PER SHARE ATTRIBUTABLE TO PANACHE BEVERAGE, INC.: BASIC AND DILUTED ($0.03)  N/A  ($0.06)  N/A 
         
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED 26,332,891  N/A  25,839,924  N/A 
     
     
PANACHE BEVERAGE, INC.    
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)    
     
   For the six months ended 
  2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net (loss) income for the period ($1,595,877) ($16,336)
Adjustments to Reconcile Net (Loss) Income to Net Cash Used in Operating Activities:    
 Non-controlling interest -406,309 -1,221,025
 Depreciation 2,647 417
 Bad debt expense  --  2,026
 Stock issued for services rendered 395,000  -- 
 Advertising expense from capital contribution 257,944 905,655
 Stock-based compensation 56,900  -- 
Changes in assets and liabilities:    
Accounts receivable -210,120 -145,806
Inventory -29,307 43,499
Prepaid expenses -3,113  -- 
Accounts payable 248,280 126,126
Consulting fees payable – related party -2,705 -31,390
Accrued interest  --  -5,705
Other current liabilities 88,030 16,308
CASH FLOWS USED IN OPERATING ACTIVITIES -1,198,630 -326,231
     
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of property and equipment -8,440 -1,658
CASH FLOWS USED IN INVESTING ACTIVITIES -8,440 -1,658
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from notes payable 22,500 328,521
Repayments of notes payable  --  -355,104
Proceeds from loans payable – related parties 62,808 283,511
Repayments of loans payable – related parties  --  -166,106
Net increase in due to factor 68,040 161,588
Contributions from non-controlling interests  --  54,505
Proceeds from issuance of stock and warrants 972,500  -- 
Repurchase of treasury stock -50,000  -- 
     
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 1,075,848 306,915
     
NET INCREASE (DECREASE) IN CASH -131,222 -20,974
Cash, beginning of period 152,464 29,776
Cash, end of period $21,242 $8,802
     
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid for interest $23,151 $28,409
     
NONCASH INVESTING AND FINANCING ACTIVITIES    
Stock issued for services rendered $395,000  $-- 
Capital contribution – Advertising services $257,944  $-- 
CONTACT: Investor Contact:
         Gerald Kieft
         WSR Communications
         772-219-7525 (tel)
         IR@theWSRcommunications.com
         http://wsrcommunications.ir.stockpr.com/panacheimports/
         overview
Source: Panache Beverage, Inc.