Castle Brands has posted a sharp rise in net losses, despite a slight lift in sales in its latest fiscal year.

The US-based spirits developer and marketer, whose portfolio includes Boru vodka, Gosling's rum and Limoncello, said yesterday (1 July) that net losses for the year to the end of March climbed to US$27.6m from $16.5m a year earlier. Sales for the period, however, increased by 9% to $27.3m from $25.2m.

Operating loss in the year rose to $29.5m from $18m.

In volume terms, total US case sales were up in the year by 8%, although total global sales were flat.

For the final quarter of the year, net losses almost trebled to $13m from $4.5m year-on-year, with sales holding steady, up 5% to $6.4m from $6.1m. Operating losses followed net losses, rising to $13.5m from $4.6m.

"In connection with the annual impairment tests for goodwill and intangible assets under SFAS 142, the fair value of each of our reporting units was determined at 31 March 31 by weighting a combination of the present value of the company's discounted anticipated future operating cash flows and values based on market multiples of revenue and 'EBITDA of comparable companies," the company said. The valuations resulted in a goodwill impairment loss of around $8.8m for the year.

"Our US (activities) continue to perform well while our international business is poised to resume growth following changes we implemented over the past several months," said Donald Marsh, Castle's president and chief operating officer. "Depletions ... were reported up 16% for the fourth quarter. We feel that this bodes well for our case sales in future periods.

"We have intensified our cost control initiatives as we strive towards profitability and we are making progress as we continue to focus on our brand development strategy," Marsh continued. "We believe through a combination of our cost cutting efforts and continued brand development we will achieve profitability."