By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, April 17, 2013

The energy drinks and shot business defied the trend of many markets during and after the Great Recession a few years ago. While most industries had growth stymied, the energy drinks and shots industry grew by an amazing 60 percent from 2008 to 2012, according to Packaged Facts estimates earlier this year. The research firm estimated that total sales in the United States surpassed $12.5 billion in 2012. This industry growth resonated through CirTran Corporation (OTCBB:CIRC), a two-decade-old diversified company in the energy drink industry through its subsidiary, CirTran Beverage. CirTran Beverage is partnered with Play Beverages LLC to distribute the Playboy Energy Drink.

Also under the CirTran Corp. umbrella is Racore Technology, an electronics manufacturing subsidiary; CirTran-Asia, a subsidiary that manufactures electronics, fitness equipment and household product; and CirTran Online, a company involved in direct-to-consumer products.

CirTran on Wednesday filed its form 10-K with the Security and Exchange Commission.

Regarding the beverage space, sales from beverage distribution, which accounted for 98 percent of revenue for 2012, increased by 39 percent from the year prior to $4.26 million. In addition to existing sales channels in the United States, Canada, South America and Europe, CirTran added revenue from Asia, the Middle East and Africa in 2012.

That doesn’t imply that the company isn’t still experiencing growing pains, but they appear to be moving in the right direction. In 2011, CirTran reported a net loss of $6.58 million. In 2012, the net loss was trimmed all the way down to $375,813, an improvement of 94 percent.

The shift towards profitability was paced by a 43 percent decrease in operating expenses from $6.38 million in 2011 to $3.61 million in 2012.

The company is also working its way through a court battle with former partners of Play Beverage. Earlier this month, CirTran was relieved of $1.4 million in accrued royalties and other debt obligations claimed by the partners, which included LIB-MP Beverage, LLC, American Sales and Merchandising, LLC and individuals Warner K. Depuy, Michael Liberty and Jeffrey Pollack.

“The courts have ruled for CirTran, and we have benefitted from out-of-court settlements,” said Iehab J. Hawatmeh, CirTran’s founder, chairman and president. “Now we plan to work around the world for the rest of the year to further expand our beverage sales and be back to business full-time rather than to have to deal with law suits and litigation.”

While the tide could be turning on both sales and litigation fronts for CirTran, the company is still trading at sub-penny levels, which could certainly be attributed to a very large share structure of nearly 2 billion shares outstanding. To that end, though, the company is still only carrying a market capitalization of $1.75 million. 2013 could be a turning point for CirTran if it can continue to expand sales in the quickly growing energy drink sector and manage its operating costs. Proper due diligence is, as always, encouraged.

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