**EXHIBIT 20.1**

 

 

222 Lakeview Avenue, Suite 1500,West Palm Beach, FL  33401

 

 

***NEWS RELEASE***

 

**CRUZANINTERNATIONAL, INC. ANNOUNCES FINANCIAL RESULTS**

**FOR THIRDQUARTER AND NINE MONTHS ENDED JUNE 30, 2005**

 

WEST PALM BEACH, FLORIDA – August 15,2005 – Cruzan International, Inc. (AMEX: RUM), producer and distributor ofthe Cruzan line of rums from the Virgin Islands and a leading distiller of rumand brandy, and importer and marketer of premium branded spirits, todayreported financial results for its third quarter and nine months ended June 30,2005.

 

Net sales for fiscal 2005’sthird quarter were $27,792,244, compared with $25,485,359 reported for fiscal2004’s third quarter.  Gross profit was$8,958,394, compared to $7,965,878 in the same period last year, and thirdquarter net loss was $256,368, or $0.04 per diluted share, compared with a netloss of $224,506 or $0.04 per diluted share, one year ago.

 

Net sales for fiscal 2005’snine-month period were $77,496,071, compared with $69,966,854 reported forfiscal 2004’s nine-month period.  Grossprofit was $25,889,011, compared to $23,871,871 in the same period last year,and nine-month net loss was $178,062, or $0.03 per diluted share, compared withnet income of $1,745,308 or $0.30 per diluted share, one year ago.

 

Commenting on the results, JayS. Maltby, Chairman and Chief Executive Officer said, “Our strong top-linesales and gross profit growth during the past nine months was primarily due toour focus on our growing premium brands business.  Once again, I am pleased to announce thatsales of our award winning Cruzan Rums continue their strong growth, with netsales increasing 29.8% and 30.2% over last year’s third quarter and nine-monthperiod, respectively.  Although operatingincome has declined in the nine-month period due to our continuing investmentin building the Cruzan Rum brand, we saw operating income improve in the thirdquarter.”

 

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Mr. Maltby continued, “Salesin our bulk alcohol and vinegar and cooking wine segments have also improved,although we are still experiencing pressure on margins as we continue torealize increased energy and raw material costs and resistance to priceincreases from customers in these business segments.  Sales in our bottling operations segmentappear to have stabilized, and this, coupled with the full implementation ofour bottling rationalization plan makes us believe that we will see improvementin operating income of our bottling operations in future quarters.”

 

Cruzan International, Inc.is a major supplier of rum, brandy and wine to the beverage alcoholindustry.  The Company also producesultra-premium single-barrel aged rums and tropical rums, vinegar and otheralcohol-related products.

 

Statements contained in this pressrelease, other than historical facts, are “forward-looking statements” withinthe meaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities and Exchange Act of 1934. Cruzan intends that such forward-looking statements shall be subject tothe safe harbors created thereby.  Thesestatements involve various risks and uncertainties, including withoutlimitation those contained in the section entitled “Risks that May AffectFuture Results” in Item 7, “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” in Cruzan’s Annual Report on Form 10-Kfor the fiscal year ended September 30, 2004.  As a result, future results may differmaterially from the expected results represented by the forward looking-statementscontained in this press release.

 
| Contact: |   | Ezra  Shashoua, Executive Vice President & Chief Financial Officer |
|----------|--------|-----------------------------------------------------------------------------|
|     |   | William  Viggiano, Vice President & Controller                     |
|     |   | 561-655-8977                                                                |

 

***—Financial Results Follow—***

 

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CRUZANINTERNATIONAL, INC.

Statementsof Income

 
| **Periods ended**                         | ** ** | **Three Months** | ** ** | **Statement of Income  as a% of  Net Sales** | ** ** |
|-------------------------------------------|------------|------------------|------------|----------------------------------------------|------------|
| **June 30,**                         | ** ** | **2005**         | ** ** | **2004**                                     | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Net sales                                 |       | $                | 27,792,244 |                                         | $          | 25,485,359 |   | 100.0 | % | 100.0 | % |
| Cost of sales                             |       | 18,833,850       |       | 17,519,481                                   |       | 67.8 | % | 68.7 | % |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Gross profit                              |       | 8,958,394        |       | 7,965,878                                    |       | 32.2 | % | 31.3 | % |
| Selling, general and administrative       |       | 9,879,545        |       | 9,479,264                                    |       | 35.5 | % | 37.2 | % |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Operating income (loss)                   |       | (921,151         | )          | (1,513,386                                   | )          | -3.3 | % | -5.9 | % |
| Interest expense                          |       | (645,876         | )          | (551,933                                     | )          | -2.3 | % | -2.2 | % |
| Other income, net                         |       | 274,122          |       | 260,644                                      |       | 1.0 | % | 1.0 | % |
|                                      |       |             |       |                                         |       |   |   |   |   |
| (Loss) before income taxes                |       | (1,292,905       | )          | (1,804,675                                   | )          | -4.7 | % | -7.1 | % |
| Income tax benefit                        |       | 1,036,538        |       | 1,580,169                                    |       | 3.7 | % | 6.2 | % |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Net loss                                  |       | $                | (256,368   | )                                            | $          | (224,506 | ) | -0.9 | % | -0.9 | % |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Loss per common share:                    |       |             |       |                                         |       |   |   |   |   |
| Basic                                     |       | $                | (0.04      | )                                            | $          | (0.04 | ) |   |   |   |   |
| Diluted                                   |       | $                | (0.04      | )                                            | $          | (0.04 | ) |   |   |   |   |
|                                      |       |             |       |                                         |       |   |   |   |   |
| Common shares and equivalents outstanding |       |             |       |                                         |       |   |   |   |   |
| Basic                                     |       | 6,378,948        |       | 5,647,782                                    |       |   |   |   |   |
| Diluted                                   |       | 6,378,948        |       | 5,647,782                                    |       |   |   |   |   |
| Shares outstanding at end of period       |       | 6,747,306        |       | 6,338,519                                    |       |   |   |   |   |
|                                           |            |                  |            |                                              |            |  |  |  |  |  |  |  |

 

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| **Periods ended**                         | ** ** | **Nine Months** | ** ** | **Statement of Income  as a% of  Net Sales** | ** ** |
|-------------------------------------------|------------|-----------------|------------|----------------------------------------------|------------|
| **June 30,**                         | ** ** | **2005**        | ** ** | **2004**                                     | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Net sales                                 |       | 77,496,071      |       | 69,966,854                                   |       | 100.0 | % | 100.0 | % |
| Cost of sales                             |       | 51,607,060      |       | 46,094,983                                   |       | 66.6 | % | 65.9 | % |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Gross profit                              |       | 25,889,011      |       | 23,871,871                                   |       | 33.4 | % | 34.1 | % |
| Selling, general and administrative       |       | 27,038,436      |       | 23,109,709                                   |       | 34.9 | % | 33.0 | % |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Operating income (loss)                   |       | (1,149,425      | )          | 762,162                                      |       | -1.5 | % | 1.1 | % |
| Interest expense                          |       | (2,010,217      | )          | (1,958,351                                   | )          | -2.6 | % | -2.8 | % |
| Other income, net                         |       | 688,711         |       | 1,264,069                                    |       | 0.9 | % | 1.8 | % |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Income (loss) before income taxes         |       | (2,470,931      | )          | 67,880                                       |       | -3.2 | % | 0.1 | % |
| Income tax benefit                        |       | 2,292,870       |       | 1,677,428                                    |       | 3.0 | % | 2.4 | % |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Net income (loss)                         |       | (178,062        | )          | 1,745,308                                    |       | -0.2 | % | 2.5 | % |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Earnings (loss) per common share:         |       |            |       |                                         |       |   |   |   |   |
| Basic                                     |       | (0.03           | )          | 0.31                                         |       |   |   |   |   |
| Diluted                                   |       | (0.03           | )          | 0.30                                         |       |   |   |   |   |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Common shares and equivalents outstanding |       |            |       |                                         |       |   |   |   |   |
| Basic                                     |       | 6,351,995       |       | 5,620,427                                    |       |   |   |   |   |
| Diluted                                   |       | 6,351,995       |       | 5,737,336                                    |       |   |   |   |   |
|                                      |       |            |       |                                         |       |   |   |   |   |
| Shares outstanding at end of period       |       | 6,747,306       |       | 6,338,519                                    |       |   |   |   |   |
|                                      |       |            |       |                                         |       |   |   |   |   |
|                                           |            |                 |            |                                              |            |  |  |  |  |  |

 

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CRUZAN INTERNATIONAL, INC.

Condensed Consolidated BalanceSheets

 
| ** **                                      | ** ** | ** **        | ** **  | ** **             | ** ** | **Balance Sheet  as a% of  Total Assets** | ** ** |
|-------------------------------------------------|------------|-------------------|-------------|------------------------|------------|-------------------------------------------|------------|
| ** **                                      | ** ** | **June 30,** | ** **  | **September 30,** | ** ** | **June 30,**                         | ** ** | **September 30,** | ** ** |
| ** **                                      | ** ** | **2005**          | ** **  | **2004**               | ** ** | **2005**                                  | ** ** | **2004** | ** ** |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| ASSETS                                          |       |              |        |                   |       |                                      |       |   |   |
| CURRENT ASSETS                                  |       |              |        |                   |       |                                      |       |   |   |
| Cash and short-term investments                 |       | $                 | 2,188,343   |                   | $          | 3,833,828                                 |       | 1.7 | % | 3.0 | % |
| Receivables                                     |       | 25,012,866        |        | 20,418,736             |       | 19.0                                      | %          | 16.0 | % |
| Inventories                                     |       | 31,905,359        |        | 29,162,496             |       | 24.2                                      | %          | 22.8 | % |
| Other current assets                            |       | 5,152,732         |        | 7,736,190              |       | 3.9                                       | %          | 6.1 | % |
| Total current assets                            |       | 64,259,300        |        | 61,151,250             |       | 48.8                                      | %          | 47.8 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| PROPERTY AND EQUIPMENT, net                     |       | 38,754,727        |        | 39,949,850             |       | 29.4                                      | %          | 31.3 | % |
| OTHER ASSETS                                    |       | 28,625,774        |        | 26,731,526             |       | 21.7                                      | %          | 20.9 | % |
| Total assets                                    |       | $                 | 131,639,801 |                   | $          | 127,832,626                               |       | 100.0 | % | 100.0 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| LIABILITIES  AND STOCKHOLDERS’ EQUITY      |       |              |        |                   |       |                                      |       |   |   |
| CURRENT LIABILITIES                             |       |              |        |                   |       |                                      |       |   |   |
| Current maturities of long-term debt            |       | $                 | 27,100,000  |                   | $          | 4,000,000                                 |       | 20.6 | % | 3.1 | % |
| Accounts payable                                |       | 14,212,839        |        | 11,868,947             |       | 10.8                                      | %          | 9.3 | % |
| Other accrued expenses                          |       | 3,835,292         |        | 4,726,253              |       | 2.9                                       | %          | 3.7 | % |
| Total current liabilities                       |       | 45,148,131        |        | 20,595,200             |       | 34.3                                      | %          | 16.1 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| LONG-TERM DEBT, less current maturities         |       | 21,774            |        | 25,674,240             |       | 0.0                                       | %          | 20.1 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| DEFERRED INCOME TAXES                           |       | —            |        | 648,000                |       | —                                    |       | 0.5 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| OTHER LIABILITIES                               |       | 1,285,598         |        | 1,091,248              |       | 1.0                                       | %          | 0.9 | % |
|                                            |       |              |        |                   |       |                                      |       |   |   |
| STOCKHOLDERS’ EQUITY                       |       | 85,184,298        |        | 79,823,938             |       | 64.7                                      | %          | 62.4 | % |
| Total liabilities and stockholders’ equity |       | $                 | 131,639,801 |                   | $          | 127,832,626                               |       | 100.0 | % | 100.0 | % |

 

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