**EXHIBIT 20.1**

 

 

222 LAKEVIEW AVENUE, SUITE 1500, WEST PALMBEACH, FL 33401

 

 

***NEWS RELEASE***

 

**TODHUNTERINTERNATIONAL, INC., ANNOUNCES FINANCIAL RESULTS**

 

**FORFISCAL 2004 THIRD QUARTER AND NINE MONTHS ENDED**

 

**JUNE30, 2004**

 

WEST PALM BEACH, FLORIDA—August 13, 2004—TodhunterInternational, Inc. (AMEX: THT), producer and distributor of the Cruzan line ofrums from the Virgin Islands and a leading distiller of rum, brandy, andimporter and marketer of premium branded spirits, today reported financialresults for its third quarter and nine months ended June 30, 2004.

 

Net sales for 2004’s nine-month period were $69,966,854, anincrease of 6.2% over $65,876,955 in the same period last year. Gross profitwas $22,355,505, an increase of 4.2% over $21,453,113 in the same period lastyear.  Nine-month period net income was$1,745,308, or $0.30 per diluted share, compared to $1,828,042, or $0.32 perdiluted share, one year ago.  During theprior fiscal year’s first and third quarter’s, the Company incurred one-timecharges of approximately $1,078,000, net of income taxes, relating to theretirement of the Company’s former Chief Executive Officer and Chief FinancialOfficer.  After adding back thesecharges, earnings per diluted share were $0.52 in the nine-month period endedJune 30, 2003.

 

Net sales for fiscal 2004’s third quarter were $25,485,359,an increase of 10.4% over $23,087,731 in the same period last year. Grossprofit was $7,375,664, a decrease of 8.5% from $8,064,736 in the same periodlast year.  Third-quarter net loss was$224,506, or $0.04 per diluted share, compared with net income of $1,892,432,or $0.34 per diluted share, one year ago.

 

Commenting on the results, Jay S. Maltby, Chairman and ChiefExecutive Officer said, “While our operating and net income was adverselyaffected by decreased sales in our bottling operations and increased marketingexpenses related to the Cruzan brand, our premium brands business continues itsstrong sales and volume growth, with net sales increasing by 49.8 percent forthe quarter and 38.4 percent for the nine-month period.  We are very excited

 

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about the recent strong growth of the Cruzan brand in theface of increasing competition in the flavored rum category.  Our strong results validate our brandpromotion strategy and are an indication of the increasing acceptance of theCruzan brand in the trade and by consumers. The current heavy investmentspending in the Cruzan brand lays the foundation for substantial earnings infuture years.  Sales in our bottlingoperations, however, continued to decline as a result of a contraction in theready-to-drink product category, for which we are a major contractbottler.  Responding to this decline, inJuly 2004 we completed the consolidation of our bottling operations to reduceoverhead.  However, bottling operationsvolume has not met even our reduced expectations for this year, which hascaused a continuing loss in this segment. We are placing a renewed emphasis on the sales effort in this segment,seeking other contract bottling opportunities. Additional sales, coupled with savings to be realized from theconsolidation, should reverse this loss trend in future quarters.”  The Chairman also noted, “Our core bulkalcohol, vinegar and cooking wine businesses are stable and providing good cashflow to support our investment spending on Cruzan.”

 

Todhunter International, Inc., is a major supplier of rum,brandy and wine to the beverage alcohol industry. TheCompany also produces ultra-premium single-barrel aged rums and tropical rums,vinegar and other alcohol-related products.

 

Statements contained in this press release, other thanhistorical facts, are “forward-looking statements” within the meaning ofSection 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934. Todhunter intends that such forward-looking statementsshall be subject to the safe harbors created thereby. These statements involvevarious risks and uncertainties, including without limitation those containedin the section entitled “Forward-Looking Statements” in Todhunter’s AnnualReport on Form 10-K for the fiscal year ended September 30, 2003. As a result,future results may differ materially from the expected results represented bythe forward-looking statements contained in this press release.

 

Contact:       Ezra Shashoua, Executive Vice Presidentand Chief Financial Officer

William J. Viggiano, Controller

(561) 655-8977

 

*—Financial Results Follow—*

 

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TODHUNTER  INTERNATIONAL, INC.

Statements of Income

 
| **Periods ended**                         |   | **Three  Months** |       | **Statement  of Income  as a % of********Net Sales** |   |
|-------------------------------------------|--------|-------------------|------------|------------------------------------------------------|--------|
| **June 30,**                              |   | **2004**          |       | **2003**                                             |   | **2004** |   | **2003** |   |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Net sales                                 |   | $                 | 25,485,359 |                                                 | $      | 23,087,731 |   | 100.0 | % | 100.0 | % |
| Cost of sales                             |   | 18,109,695        |       | 15,022,995                                           |   | 71.1 | % | 65.1 | % |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Gross profit                              |   | 7,375,664         |       | 8,064,736                                            |   | 28.9 | % | 34.9 | % |
| Selling, general and administrative       |   | 8,889,050         |       | 6,305,257                                            |   | 34.9 | % | 27.3 | % |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Operating income (loss)                   |   | (1,513,386        | )          | 1,759,479                                            |   | -5.9 | % | 7.6 | % |
| Interest expense                          |   | (551,933          | )          | (985,150                                             | )      | -2.2 | % | -4.3 | % |
| Other income, net                         |   | 260,644           |       | 398,946                                              |   | 1.0 | % | 1.7 | % |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Income (loss) before income taxes         |   | (1,804,675        | )          | 1,173,275                                            |   | -7.1 | % | 5.1 | % |
| Income tax benefit                        |   | 1,580,169         |       | 719,157                                              |   | 6.2 | % | 3.1 | % |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Net income (loss)                         |   | $                 | (224,506   | )                                                    | $      | 1,892,432 |   | -0.9 | % | 8.2 | % |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Earnings (loss) per common share:         |   |              |       |                                                 |   |   |   |   |   |
| Basic                                     |   | ($0.04            | )          | $                                                    | 0.34   |   |   |   |   |   |
| Diluted                                   |   | ($0.04            | )          | $                                                    | 0.34   |   |   |   |   |   |
|                                      |   |              |       |                                                 |   |   |   |   |   |
| Common shares and equivalents outstanding |   |              |       |                                                 |   |   |   |   |   |
| Basic                                     |   | 5,647,782         |       | 5,574,322                                            |   |   |   |   |   |
| Diluted                                   |   | 5,647,782         |       | 5,647,923                                            |   |   |   |   |   |
| Shares outstanding at end of period       |   | 6,338,519         |       | 5,576,234                                            |   |   |   |   |   |

 

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TODHUNTER  INTERNATIONAL, INC.

Statements of Income

 
| **Periods ended**                         |   | **Nine  Months** |       | **Statement  of Income  as a % of********Net Sales** |   |
|-------------------------------------------|--------|------------------|------------|------------------------------------------------------|--------|
| **June 30,**                              |   | **2004**         |       | **2003**                                             |   | **2004** |   | **2003** |   |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Net sales                                 |   | $                | 69,966,854 |                                                 | $      | 65,876,955 |   | 100.0 | % | 100.0 | % |
| Cost of sales                             |   | 47,611,349       |       | 44,423,842                                           |   | 68.0 | % | 67.4 | % |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Gross profit                              |   | 22,355,505       |       | 21,453,113                                           |   | 32.0 | % | 32.6 | % |
| Selling, general  and administrative |   | 21,593,343       |       | 17,392,479                                           |   | 30.9 | % | 26.4 | % |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Operating income                          |   | 762,162          |       | 4,060,634                                            |   | 1.1 | % | 6.2 | % |
| Interest expense                          |   | (1,958,351       | )          | (2,583,583                                           | )      | -2.8 | % | -3.9 | % |
| Other income (expense), net               |   | 1,264,069        |       | (467,550                                             | )      | 1.8 | % | -0.7 | % |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Income before income taxes                |   | 67,880           |       | 1,009,501                                            |   | 0.1 | % | 1.5 | % |
| Income tax benefit                        |   | 1,677,428        |       | 818,541                                              |   | 2.4 | % | 1.2 | % |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Net income                                |   | $                | 1,745,308  |                                                 | $      | 1,828,042 |   | 2.5 | % | 2.8 | % |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Earnings per common share:                |   |             |       |                                                 |   |   |   |   |   |
| Basic                                     |   | $                | 0.31       |                                                 | $      | 0.33 |   |   |   |   |   |
| Diluted                                   |   | $                | 0.30       |                                                 | $      | 0.32 |   |   |   |   |   |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Common shares and equivalents outstanding |   |             |       |                                                 |   |   |   |   |   |
| Basic                                     |   | 5,620,427        |       | 5,572,608                                            |   |   |   |   |   |
| Diluted                                   |   | 5,737,336        |       | 5,639,825                                            |   |   |   |   |   |
|                                      |   |             |       |                                                 |   |   |   |   |   |
| Shares outstanding at end of period       |   | 6,338,519        |       | 5,576,234                                            |   |   |   |   |   |

 

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TODHUNTER  INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

 
|                                            |   |               |        |                     |   | **Balance  Sheet  as a % of********Total Assets** |   |
|-------------------------------------------------|--------|--------------------|-------------|--------------------------|--------|---------------------------------------------------|--------|
|                                            |   | **June 30,  2004** |        | **September  30,  2003** |   | **June 30,  2004**                                |   | **September  30,  2003** |   |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| ASSETS                                          |   |               |        |                     |   |                                              |   |   |   |
| CURRENT ASSETS                                  |   |               |        |                     |   |                                              |   |   |   |
| Cash and short-term investments                 |   | $                  | 2,364,128   |                     | $      | 16,737,621                                        |   | 1.8 | % | 12.0 | % |
| Receivables                                     |   | 17,673,859         |        | 18,746,413               |   | 13.8                                              | %      | 13.5 | % |
| Inventories                                     |   | 31,651,439         |        | 28,664,895               |   | 24.7                                              | %      | 20.6 | % |
| Other current assets                            |   | 7,512,970          |        | 6,767,759                |   | 5.9                                               | %      | 4.9 | % |
| Total current assets                            |   | 59,202,396         |        | 70,916,688               |   | 46.3                                              | %      | 50.9 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| PROPERTY AND EQUIPMENT, net                     |   | 39,811,503         |        | 40,056,612               |   | 31.1                                              | %      | 28.8 | % |
| OTHER ASSETS                                    |   | 28,975,544         |        | 28,325,773               |   | 22.6                                              | %      | 20.3 | % |
| Total assets                                    |   | $                  | 127,989,443 |                     | $      | 139,299,073                                       |   | 100.0 | % | 100.0 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |               |        |                     |   |                                              |   |   |   |
| CURRENT LIABILITIES                             |   |               |        |                     |   |                                              |   |   |   |
| Current maturities of long-term debt            |   | $                  | 4,000,000   |                     | $      | 4,000,000                                         |   | 3.1 | % | 2.9 | % |
| Accounts payable                                |   | 8,145,365          |        | 6,288,431                |   | 6.4                                               | %      | 4.5 | % |
| Other accrued expenses                          |   | 1,480,743          |        | 3,837,745                |   | 1.2                                               | %      | 2.8 | % |
| Total current liabilities                       |   | 13,626,108         |        | 14,126,176               |   | 10.6                                              | %      | 10.1 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| LONG-TERM DEBT, less current maturities         |   | 25,463,312         |        | 47,315,617               |   | 19.9                                              | %      | 34.0 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| DEFERRED INCOME TAXES                           |   | 5,334,500          |        | 5,243,000                |   | 4.2                                               | %      | 3.8 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| OTHER LIABILITIES                               |   | 1,069,697          |        | 2,002,761                |   | 0.8                                               | %      | 1.4 | % |
|                                            |   |               |        |                     |   |                                              |   |   |   |
| STOCKHOLDERS’ EQUITY                       |   | 82,495,826         |        | 70,611,519               |   | 64.5                                              | %      | 50.7 | % |
| Total liabilities and stockholders’ equity |   | $                  | 127,989,443 |                     | $      | 139,299,073                                       |   | 100.0 | % | 100.0 | % |

 

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