The Alkaline Water Company Inc. (NASDAQ and CSE: WTER) (the
“Company”) is a producer of bottled alkaline drinking water,
flavor-infused waters, and CBD infused products sold under the
brand name Alkaline88®, A88™, and A88CBD™, respectively. Today, the
Company announces revenue of $10.8 million for the fiscal second
quarter ended September 30, 2020.
Key Highlights:
- Fiscal 2021 first-half revenue of $25 million increased 21%
over the same period last year.
- Fiscal Q2 earnings per share of ($0.06) improved by 14.3%
compared to the prior-year quarter, of which ($0.03) was related to
non-cash expenses.
- For fiscal 2021, the Company is now providing revenue guidance
in the range of $48 million to $52 million, representing full-year
growth of 17% to 27%.
- Introduced five category-leading items for the A88CBD™
portfolio of ingestible and topical products.
- Purchase orders for the quarter were the second-highest in the
Company’s history, excluding our COVID period from last
spring.
“During the fiscal second quarter, we made good progress toward
our strategic goals, gained market share, launched innovating new
products, added leading partners, and expanded into new growth
markets, all while navigating through a challenging COVID
environment. Our quarterly growth was impacted as various
distributors reduced deliveries and cleared excess inventory built
in the prior quarter. Delivery and inventory trends continued to
improve throughout the quarter, with order activity reverting to
pre-pandemic levels. Our fiscal third quarter is off to a strong
start, and we are seeing a record month of sales for October.
Demand for our lifestyle brands at the retail level remains strong,
and revenue grew a healthy 21% during the first half of our fiscal
year. According to the October 3 Nielsen’s data, our flagship
brand, Alkaline88®, has been the fastest-growing non-flavored
value-added water in the top 10 brands over the last 13, 26, and 52
week period. Our footprint continues to grow nationally, and this
quarter alone, we added over 1,000 new store locations for our A88
family of lifestyle brands. We see strong momentum across all our
product categories and consider this quarter’s performance to be an
outlier. As of early November, inventory at retailers has
normalized, driven by our aggressive summer marketing efforts. We
believe the actions taken positions us for stronger growth for the
balance of this fiscal year and beyond,” stated Richard A. Wright,
president and chief executive officer of The Alkaline Water
Company.
“For our A88CBD line of ingestible and topical products, we
launched five category-leading items this quarter. These products,
which include our delicious lemon-lime CBD water, vegan gummies,
zero-calorie powder packs, all-natural bath bombs, and cruelty-free
deep relief cream, complement our existing product lineup. Our
robust product lineup effectively positions us to capture share in
the estimated $20 billion-plus hemp-derived consumer products
market. We are in active discussions with over 9,000 retail
locations to take on our products over the coming 90 days. With an
in-demand portfolio of offerings, a strong partner network, and an
established retail base, we are taking aggressive actions to
capture share in the large and growing retail trades we currently
serve and greenfield opportunities in the CBD and hospitality and
foodservice arena. Additionally, our e-commerce sites continue to
exceed our expectations and provide another growth area driven by
shifting consumer behaviors. We also expect the multi-year health
and wellness trend to accelerate coming out of the COVID pandemic
and anticipate our lifestyle brands to benefit due to our sales and
marketing efforts made this year.”
Fiscal 2021 Second Quarter Financial Results
(unaudited)
(All amounts are in U.S. dollars)
- For the fiscal second-quarter ending September 30, 2020,
recorded revenue of approximately $10.8 million, an increase of
approximately 3% year-over-year.
- Gross profit in the fiscal second quarter of $4.4 million
declined by 1.3% compared to the prior-year quarter.
- Gross margin of 41.2% declined 170 basis points primarily due
to higher raw material costs.
- Total operating expenses for the fiscal second quarter were
$8.7 million, an increase of 18.7% year over year.
- Net loss for the fiscal second quarter was $4.4 million or
$0.06 per share versus a net loss of $2.9 million or $0.07 per
share in the fiscal second quarter of 2019. The bottom-line was
impacted by ($0.03) per share due to certain non-cash items.
Fiscal 2021 Revenue Guidance
“We have refrained from providing guidance this year due to the
COVID impact. While uncertainties remain, we see positive business
trends pointing to a stronger second half of our fiscal 2021. With
inventory trends normalizing and strong retail demand, we are
introducing our fiscal 2021 revenue guidance of $48 million to $52
million, representing full-year growth of 17% to 27%, with an
estimated gross profit of approximately $19 million to $21 million.
We expect all our lifestyle brands including, Alkaline88®,
eco-friendly aluminum bottles, A88 Infused™ flavors, and our
A88CBD™ portfolio of products to contribute toward this growth,
which we expect to accelerate during the third and fourth quarter
of this fiscal year,” added Mr. Wright.
Our forecasted revenue is based on our expectation that revenue
growth will remain consistent for the fiscal year 2021. We further
expect sales growth to continue in the natural foods, drug,
c-stores, and specialty retailer channels. We are also expecting
the hospitality and foodservice channels, which have only recently
started selling our products, to be strong contributors in the
fourth fiscal quarter.
As our sales cycle is an average of 14 days, a slowdown of the
growth in any of the areas set forth above during fiscal 2021 or
other events could cause actual results to vary materially from
this forecast. In addition, sales growth, which may significantly
impact quarterly and annual revenue, is difficult to predict,
especially in the current COVID environment, which is causing
intense volatility in our end markets.
Recent Business and Operational
Highlights
National Footprint and Channel Expansion
- Alkaline88® flagship brand of premium alkaline water is now
available in over 70,000 stores across all trades in the U.S.
- Expands into multi-billion dollar Hospitality and Foodservice
channel.
- Added Dot Foods Inc., the largest food redistributor in the
U.S., to present our Alkaline88®, A88 Infused™, and eco-friendly
aluminum bottles to its 4,300 customers nationwide.
- DOT Food to offer A88 Infused™ as a featured all-natural
flavored product.
- Added Independent Broker Alliance (IBA), an alliance of 30
independently owned and operated foodservice sales agencies.
- Adds CBD distributor BettermentRS.
- Adds Valu Merchandisers Company (VMC), a natural and organic
product distributor serving more than 3,800 independently owned
supermarkets in 35 states.
- Added seven new Core-Mark distribution centers.
- HomeGoods, a T.J. Maxx company, to carry the new 2-liter
product in 500 store locations.
- Alkaline88® available in 1-gallon and 1-liter sizes at all 123
Fareway store locations across six states in the Midwest.
- H-E-B to carry Alkaline88® aluminum bottles in 288 U.S.
stores.
- Expands online and brick and mortar channels for A88CBD™
portfolio of products.
- Products are now available in approximately 400 retail
locations, including YesWay, Elevated Wellness CBD, CBD Emporium,
Alchemist Kitchen, Pure CBD, Vitamin Plus (select locations), and
online at Amazon, CBD.co, healwithnature.com, and
DirectCBDOnline.com.
- Accelerated convenience store growth strategy with several new
distribution agreements.
- Added Mahaska, a Direct-Store-Delivery (DSD) provider, serving
over 5,000 customers, including supermarkets and convenience
stores, to drive growth in the mid-west region.
- Added 200 new c-stores locations, including FastTrip, Colbea,
Kenk, and CN Brown’s company-owned and serviced locations.
- Since the inception of the program, the Company has added over
12,000 new convenience stores and expects to reach approximately
25,000 convenience stores by the end of fiscal 2021.
- Expanded national distribution with KeHE for flavor-infused
waters and UNFI and broker C.A. Fortune for its A88CBD™ portfolio
of products.
Innovation and Product Portfolio Expansion
- Launched new 2-liter single-serve and six-packs, targeting high
volume shoppers, including the club market.
- Expanded topical product lineup; includes bath bombs and
deep-relief cream made with high-quality, lab-tested hemp
extract.
- Expanded ingestible product lineup; includes lemon-lime water,
gummies, and powder packs made with high-quality, lab-tested hemp
extract.
- Announced new single-serve 500ml Eco-friendly Aluminum bottles.
- To be carried by national distributor KeHE with support from
leading national broker C.A. Fortune.
Corporate Development
- Appoints Retail Industry Veteran Frank Lazaran to its Board of
Directors.
- Enhanced digital customer experience by adding new content and
features to A88CBD.com
- Featured and showcased the A88 family of products at various
national expos and tradeshows.
- Ranked #1 best selling national brand by units sold at the 2020
KeHE Holidays of Hope show and the KeHE Winter Virtual show.
Brand Awareness
- Alkaline88® remains the #1 selling bulk alkaline water
nationally.
- Alkaline88® Official Vendor for Kampgrounds of America (KOA®)
and Yogi Bear’s Jellystone Park™ Camp-Resorts.
The following table summarizes the operating results for the
three months ended September 30, 2020, and 2019 (Unaudited):
(All Amounts are in U.S. dollars)
In millions
For the three months ended
September 30, 2020
For the three months ended
September 30, 2019
Year over Year Change %
Revenue
$ 10,755,946
$ 10,444,978
3.0%
Cost of Good Sold
$ 6,326,958
$ 5,959,430
6.2%
Gross Profit
$ 4,428,988
$ 4,485,548
-1.3%
Operating Expenses
Sales and Marketing
$ 4,984,729
$ 4,809,882
3.6%
General and Administrative
$ 3,490,548
$ 2,247,371
55.3%
Depreciation
$ 184,406
$ 239,757
-23.1%
Total Operating Expense
$ 8,659,683
$ 7,297,010
18.7%
Total Operating Loss
$ (4,230,695)
$ (2,811,462)
50.5%
Net Loss
$ (4,361,628)
$ (2,924,957)
49.1%
Loss per Share (Basic and Diluted)
$ (0.06)
$ (0.07)
-14.3%
Weighted Avg. Shares Outstanding (Basic
and Diluted)
67,888,935
42,011,439
61.6%
Conference Call Information
The Alkaline Water Company will conduct a conference call to
review its operating results for the quarter ended September 30,
2020, on Monday, November 16, 2020, at 5:00 PM Eastern Time. This
call may include material information not contained in this press
release.
Date: November 16, 2020 Time: 5:00 PM Eastern Time
(E.T.) Dial-in Number for U.S. and Canadian Callers:
877-407-8293 Dial-in Number for International Callers (Outside
of the U.S. and Canada): 201-689-8349
Participating on the call will be the Company’s President and
CEO Richard A. Wright and Chief Financial Officer David Guarino.
They will discuss operational and financial highlights for the
fiscal second quarter and its outlook for the full fiscal year
2021.
To join the live conference call, please dial into the
above-referenced telephone numbers five to 10 minutes prior to the
scheduled call time.
A replay will be available for one week starting on November 17,
2020, at approximately 10:30 AM (E.T.). To access the replay,
please dial 877-660-6853 in the U.S. or Canada and 201-612-7415 for
international callers. The conference I.D. # is 13712984.
About The Alkaline Water
Company
Founded in 2012, The Alkaline Water Company (NASDAQ and CSE:
WTER) is headquartered in Scottsdale, Arizona. Its flagship
product, Alkaline88®, is a leading premier alkaline water brand
available in bulk and single-serve sizes along with eco-friendly
aluminum packaging options. With its innovative, state-of-the-art
proprietary electrolysis process, Alkaline88® delivers perfect 8.8
pH balanced alkaline drinking water with trace minerals and
electrolytes and boasts our trademarked label ‘Clean Beverage.’
Quickly being recognized as a growing lifestyle brand, Alkaline88®
launched A88 Infused™ in 2019 to meet consumer demand for
flavor-infused products. A88 Infused™ flavored water is available
in six unique all-natural flavors, with new flavors coming soon.
Additionally, in 2020, the Company launched A88 Infused Beverage
Division Inc., which includes the Company’s CBD water and
flavor-infused water. For the Company’s topical and ingestible
offerings, A88 Infused Products Inc. includes both the Company’s
lab-tested hemp extract salves, balms, lotions, essential oils, and
bath salts, along with broad-spectrum hemp, powder packs, oil
tinctures, capsules, and gummies.
To purchase A88CBD™ products online, visit us at A88CBD.com and
Alkaline88.com. To learn more about The Alkaline Water Company,
please visit www.thealkalinewaterco.com or connect with us on
Facebook, Twitter, Instagram, or LinkedIn.
Notice Regarding Forward-Looking Statements
This news release contains “forward-looking statements.”
Statements in this news 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
following: that the Company sees strong momentum across all its
product categories and consider this quarter’s performance to be an
outlier; that the Company believes the actions taken positions the
Company for stronger growth for the balance of this fiscal year and
beyond; that the Company’s robust product lineup effectively
positions the Company to capture share in the estimated $20
billion-plus hemp-derived consumer products market; that the
Company’s e-commerce sites provide another growth area driven by
shifting consumer behaviors; that the Company expects the
multi-year health and wellness trend to accelerate coming out of
the COVID pandemic and anticipates its lifestyle brands to benefit
due to its sales and marketing efforts made this year; that the
positive business trends point to a stronger second half of the
Company’s fiscal 2021; the statements relating to the Company
fiscal 2021 revenue guidance of $48 million to $52 million, with an
estimated gross profit of approximately $19 million to $21 million,
representing full-year growth of 17% to 27%; that the Company
expects all its lifestyle brands including, Alkaline88®,
eco-friendly aluminum bottles, A88 Infused™ flavors, and its
A88CBD™ portfolio of products to contribute toward this growth,
which the Company expects to accelerate during the third and fourth
quarter of this fiscal year; the Company’s expectation that revenue
growth will remain consistent for the fiscal year 2021; that the
Company expects sales growth to continue in the natural foods,
drug, c-stores, and specialty retailer channels; that the Company
is expecting the hospitality and foodservice channels, which have
only recently started selling the Company’s products, to be strong
contributors in the fourth fiscal quarter; and that the Company
expects to reach approximately 25,000 convenience stores by the end
of fiscal 20201.
The material assumptions supporting these forward-looking
statements include, among others, that the demand for the Company’s
products will continue to significantly grow; that the past
production capacity of the Company’s co-packing facilities can be
maintained or increased; that there will be increased production
capacity through implementation of new production facilities, new
co-packers and new technology; that there will be an increase in
number of products available for sale to retailers and consumers;
that there will be an expansion in geographical areas by national
retailers carrying the Company’s products; that there will be an
expansion into new national and regional grocery retailers; that
there will be an expansion into new e-commerce, home delivery,
convenience, and healthy food channels; that there will not be
interruptions on production of the Company’s products; that there
will not be a recall of products due to unintended contamination or
other adverse events relating to the Company’s products; and that
the Company will be able to obtain additional capital to meet the
Company’s growing demand and satisfy the capital expenditure
requirements needed to increase production and support sales
activity. Actual results could differ from those projected in any
forward-looking statements due to numerous factors. Such factors
include, among others, governmental regulations being implemented
regarding the production and sale of alkaline water or any other
products, including products containing hemp/CBD; the fact that
consumers may not embrace and purchase any of the Company’s
CBD-infused products; the fact that the Company may not be
permitted by the FDA or other regulatory authority to market or
sell any of its CBD-infused products; additional competitors
selling alkaline water and enhanced water products in bulk
containers reducing the Company’s sales; the fact that the Company
does not own or operate any of its production facilities and that
co-packers may not renew current agreements and/or not satisfy
increased production quotas; the fact that the Company has a
limited number of suppliers of its unique bulk bottles; the
potential for supply-chain interruption due to factors beyond the
Company’s control; the fact that there may be a recall of products
due to unintended contamination; the inherent uncertainties
associated with operating as an early stage company; changes in
customer demand and the fact that consumers may not embrace
enhanced water products as expected or at all; the extent to which
the Company is successful in gaining new long-term relationships
with new retailers and retaining existing relationships with
retailers; the Company’s ability to raise the additional funding
that it will need to continue to pursue its business, planned
capital expansion and sales activity; and competition in the
industry in which the Company operates and market conditions. These
forward-looking statements are made as of the date of this news
release, and the Company assumes 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 and Canada. Although the
Company believes that any beliefs, plans, expectations and
intentions contained in this news release are reasonable, there can
be no assurance that any such beliefs, plans, expectations or
intentions will prove to be accurate. Readers 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 the
Company files with the SEC, available at www.sec.gov, and on the
SEDAR, available at www.sedar.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201116005961/en/
The Alkaline Water Company Inc. Richard A. Wright President and
CEO Sajid Daudi Director of Investor Relations & Corporate
Communications 800-923-1910 investors@thealkalinewaterco.com Media
Jessica Starman 888-461-2233 jessica@elev8newmedia.com
Alkaline Water (NASDAQ:WTER)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alkaline Water (NASDAQ:WTER)
Historical Stock Chart
From Apr 2023 to Apr 2024