Alkaline Water Company Reports Fourth Quarter and Fiscal Year 2014
Financial Results
Store Count More Than Triples; Company Provides Guidance for
First Fiscal Quarter 2015
SCOTTSDALE, AZ--(Marketwired - Jul 1, 2014) - The Alkaline Water
Company Inc. (OTCBB: WTER) (the "Company"), developers of alkaline
water that is manufactured via an innovative state-of-the-art
proprietary electrolysis beverage process and packaged and sold in
3 liter and 1 gallon sizes under the trade name Alkaline88, has
announced financial results for the three and twelve months ended
March 31, 2014.
Fourth Quarter 2014 Highlights
Fourth quarter 2014 financial results, as compared to fourth
quarter 2013, were as follows:
- Year over year, revenues were $219,295 for the fourth quarter
2014, as compared to fourth quarter 2013 revenues of $15,110,
approximately a 14-fold increase.
- Operating expenses were $1,179,068, as compared to $152,366 for
the comparable period in 2013. The total for the 2014 period
included $632,934 in non-cash stock compensation charges.
- Net loss for the quarter totaled $(1,163,357), as compared to a
net loss of $(145,282) for the comparable period.
- Store count increased over three-fold from approximately 1,400
stores to approximately 6,000 stores through the first half of
calendar 2014.
- Co-packing plants expanded from 1 to 3 during calendar year
2014.
- Production capacity increased from 13 truckloads a month to
over 90 truck loads a month during calendar 2014.
Management Comment
"The close of our 2014 fiscal year was marked by a significant
increase in our customer store count, which is a direct result of
the intense planning on our national positioning program so that we
could be prepared for the summer months. As indicated
previously, we expect a great selling season for Alkaline88 and
tremendous acceptance of our water products in these
stores. In just over a year since we began our distribution
efforts, Alkaline88 is now available in 49 States and the District
of Columbia, and we are in 21 out of the top 75 retailers. Our
21 existing retailers account for about $270 billion in total
annual sales volume in the U.S. market, and with our positioning in
their stores, the visibility of our product is expected to increase
dramatically for consumers," stated Steven Nickolas, President
& CEO of the Company.
"While we have still plenty of room to grow by increasing our
penetration to new stores, we are also just beginning the sales
cycle to many of the stores to which we are currently selling and
expect growth to also come from continued increases in volume of
product to these retailers as well. In addition, with our
recently completed capital raise of $2.6 million and the 2
additional co-packing plants coming online since January 1st 2014,
our production capability to meet our retailer demand has improved
significantly," Mr. Nickolas stated further.
Based on these factors, the Company has issued the following
guidance:
- Sales for first quarter 2015 ending June 30, 2014 is expected
to be greater than the sales for the entire 2014 fiscal year;
- New single serving 700 ML bottle sales are expected to account
for approximately 13% of the sales in the quarter ending June 30,
2014.
- Two additional state of the art alkaline machines are expected
to go into full production during third quarter of calendar 2014,
(bringing our total to five) thereby facilitating production of 80
additional truck loads per month of product to fulfill anticipated
demand.
- A single truck load (depending on product mix) can generate up
to $11,000 in additional revenue.
Full-Fiscal Year 2014 Financial Results
In the description of the results below, the comparable period
in 2013 is defined as Inception (June 19, 2012) to March 31,
2013:
Revenue for the year-ended March 31, 2014 was $552,699, as
compared to $15,110 in the comparable period in 2013. The
increase in revenue is due to increased sell through of our
beverage products to retailers.
The Company's gross profit, as a percentage of revenue for the
year, was 25.5% compared to 46.9% for the same period in
2013. The decrease in gross profit margin was due to increased
shipping costs incurred from the Company's two existing co-packing
facilities based on the expansion of the Company's sales to
national retailers. As the Company attempts to expand the number of
co-packing facilities in certain geographic areas closer to its
customers' distribution points, it expects its shipping costs to
decline.
General and administrative expenses were $4,421,353 for the
year, as compared to $284,580 for the comparable period. The
increase in expenses is due to the expansion of the Company's
operations and other non-cash charges including $2,225,736 of stock
option compensation expense, $426,555 in stock compensation expense
and $541,158 of professional fees. The Company's stock and stock
option compensation expense was incurred as a part of the issuance
of certain stock options and stock grants to employees and key
consultants to develop the Company's business. Although a non-cash
expense, the value of such issuances had a material impact on
general and administrative expenses for the year ended March 31,
2014. For the period from inception (June 19, 2012) to March
31, 2013, (as it was prior to the acquisition of Alkaline Water
Corp.) the Company had nominal operations and expenditures,
consisting mainly of professional fees and rent, were significantly
less to support the Company's business at that time.
Net loss for the year ended March 31, 2014 was $(4,229,513)
compared to a loss of $(283,388) for the comparable period in 2013.
Included in the net loss was stock option compensation expense,
stock compensation expense and professional fees totaling
$3,193,449.
Additional details of the Company's business, finances,
appointments and agreements can be found as part of the Company's
continuous public disclosure as a reporting issuer with the
Securities and Exchange Commission ("SEC") available at
www.sec.gov. For more information, visit our website at
www.thealkalinewaterco.com.
The Alkaline Water Company, Inc. (OTCBB: WTER) has developed an
innovative, state of the art, proprietary electrolysis process that
produces healthy alkaline water for a balanced lifestyle. The
Company is focused on the business of distributing and marketing
for retail the sale of its cost-effectively packaged Alkaline88
water beverage products. Visit us at:
www.thealkalinewaterco.com.
About Alkaline Water Products Alkaline88's premier alkaline
water is an 8.8 pH balanced bottled alkaline drinking water
enhanced with trace minerals and electrolytes. The product
offers consumers the unique opportunity to purchase alkaline water
in conveniently packaged three liter and one gallon sizes (plus
700ml in select markets). The Alkaline Water Company Inc. is
currently in the midst of a national mass-market expansion program,
where the product is already available for consumer sales at a
growing number of major retail locations across many parts of the
United States. Learn more about the science behind alkaline
water by visiting www.thealkalinewaterco.com.
Notice Regarding Forward-Looking Statements This news release
contains "forward-looking statements." Statements in this
press release that are not purely historical are forward-looking
statements and include any statements regarding beliefs, plans,
expectations or intentions regarding the future. Such
forward-looking statements include, among other things, the
Company's expectation of a great selling season for Alkaline88 and
tremendous acceptance of the Company's water products in the
stores; the Company's statement that the visibility of the
Company's product is expected to increase dramatically for
consumers; the Company's statement that the Company has still
plenty of room to grow by increasing its penetration to new stores
and the Company's expectation that growth to come from continued
increases in volume of product to the retailers; the Company's
guidance relating to the sales for first quarter 2015 ending June
30, 2014, the percentage of single serving 700 ML bottle sales in
the sales in the quarter ending June 30, 2014, and the expectation
that two additional alkaline machines will go into full production
during third quarter of calendar 2014, thereby facilitating
production of 80 additional truck loads per month of product to
fulfil anticipated demand and a single truck load can generate up
to $10,000 in additional revenue. Actual results could differ from
those projected in any forward-looking statements due to numerous
factors. Such factors include, among others, the inherent
uncertainties associated with developing new products and operating
as a development stage company, changes in customer demand, the
extent to which we are successful in gaining new long-term
relationships with retailers or retaining existing ones, our
ability to raise the additional funding we will need to continue to
pursue our business and product development plans, competition in
the industry in which we operate and market conditions. These
forward-looking statements are made as of the date of this news
release, and we assume no obligation to update the forward-looking
statements, or to update the reasons why actual results could
differ from those projected in the forward-looking statements,
except as required by applicable law, including the securities laws
of the United States. Although we believe that any beliefs,
plans, expectations and intentions contained in this press release
are reasonable, there can be no assurance that any such beliefs,
plans, expectations or intentions will prove to be
accurate. Investors should consult all of the information set
forth herein and should also refer to the risk factors disclosure
outlined in the reports and other documents we file with the SEC,
available at www.sec.gov.
Contact: WTER Investor Relations Phone: (480) 656-2423 Email:
investors@thealkalinewaterco.com Website:
www.thealkalinewaterco.com
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