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 that revenue increased $1.7 million
year-over-year to $10.2 million for the fiscal third quarter ended
December 31, 2020.
Key Highlights:
- Fiscal 2021 third-quarter record revenue of $10.2 million
increased 20% year-over-year.
- Fiscal 2021 third-quarter earnings per share of ($0.06)
improved by 14.3% compared to the prior-year quarter, of which
($0.01) was related to non-cash expenses.
- Direct Store Delivery (DSD) network now reaches over 10,000
customers.
- A88CBD™ line expands national distribution network with KeHE,
UNFI, BettermentRS, and broker C.A. Fortune.
“We are proud to announce that we delivered record fiscal third
quarter revenue of $10.2 million. Our E-Commerce, A88CBD,
single-serve offerings, eco-friendly aluminum bottles, and
flavor-infused waters all contributed toward the record. Each
business line continues to grow, and we expect a significant
contribution from them over the next 12 months,” stated Ricky
Wright, President and CEO of The Alkaline Water Company. “We are
excited that the momentum we gained over the summer in our flagship
brand Alkaline88 continues. Based on 13 week Nielsen scanner data
ending 12/26/20, we continue to be the fastest-growing top 10
value-added water in the country. We outperform the category volume
growth by almost 2 times and the unit growth by over 5 times. We
are now the 8th largest vendor in the category. We see continued
strength in the 1/23/21 Nielsen scanner data as well.”
“We believe that the strategic actions we have taken this year
position us for strong growth and anticipate solid returns from the
investments we are making in the coming fiscal year. Since the end
of the quarter, we are working tirelessly on several initiatives.
These include expanding our DSD strategy in strategic regions. The
expansion plans should allow us to reach an additional 40,000 to
80,000 customers in the all-important convenience store channels.
Based on the changing shopping habits of consumers, we have
allocated additional resources to our E-Commerce and digital
marketing strategies both in the water and CBD categories. We have
tested and will expand on programs that have shown extraordinary
ROI’s in our test markets. By expanding our outlays to these water
and CBD initiatives, we expect to drive a significant amount of
sales through both our E-Commerce sites in fiscal 2022. Our
products will also be supported by our first-ever traditional
marketing campaign led by the Davis Elen agency.”
“With the change in administration in Washington, we are hopeful
that we will finally get clear guidance nationwide for our A88CBD
products. In anticipation of this, we expanded our retail
distribution network for our A88CBD products through KeHE, UNFI,
BettermentRS, and C.A. Fortune. We continue to leverage our
existing relationships to penetrate the brick-and-mortar retailers
with our A88CBD products and expect to be in thousands of stores in
the coming months.”
“On the operational side, we are in the process of expanding our
domestic capacity for our raw materials and increased finished
goods. We will be announcing new plants and new raw material
providers that should increase our overall capacity and positively
impact our gross margins. These initiatives will support all
aspects of the anticipated growth in E-Commerce, A88CBD, Alkaline88
single-serve offerings, Alkaline88 eco-friendly aluminum bottles,
and Alkaline88 flavor-infused waters.”
“In addition to increasing our gross margins and capacity, they
will significantly decrease our carbon footprint as our new vendors
will be closer to our existing plants. Since inception, we have
focused on having the smallest carbon footprint per liter of any
major water brand. In the past 52 weeks, we have taken major steps
in reducing our carbon footprint. We have already begun to include
25% recycled PET in our bulk sizes. We continue to focus on
sustainability throughout our new initiatives, as demonstrated by
being the first national water company with an aluminum bottle. We
are a Clean Beverage™ company and care about not only what goes
into our products but what we can do to minimize our impact on the
environment.”
“These and other initiatives, including international expansion
and the rebounding hospitality industry, should contribute to
significant revenue growth in fiscal 2022. Our Company and its
operations are well-positioned to be an omnichannel lifestyle brand
in fiscal 2022.”
Fiscal 2021 Third Quarter Financial Results
(unaudited)
(All amounts are in U.S. dollars)
- For the fiscal third-quarter ending December 31, 2020, recorded
record revenue of approximately $10.2 million, an increase of
approximately 20% year-over-year.
- Gross profit in the fiscal third quarter of $4.2 million
increased by 23.6% compared to the prior-year quarter.
- Gross margin of 41.2% improved by 110 basis points primarily
due to the increase in sales.
- Total operating expenses for the fiscal third quarter were $8.4
million, an increase of 37.0% year over year.
- Net loss for the fiscal third 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 third quarter of 2020. The bottom-line was impacted by
($0.01) per share due to certain non-cash items.s
Recent Business and Operational
Highlights
National Footprint and Channel Expansion
- Alkaline88® flagship brand of premium alkaline water is now
available in over 75,000 stores across all trades in the U.S.
- Launched Direct Store Delivery (DSD) strategy with
Mahaska.
- Alkaline88® 3-liters and A88-Infused flavors available in 99
Cent Only Stores across California, Texas, and Nevada.
- Sprouts to carry Alkaline88® eco-friendly aluminum bottles
across all stores nationwide.
- Added C.A. E-Comm to support e-commerce growth.
- 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.
- Added Independent Broker Alliance (IBA), an alliance of 30
independently owned and operated foodservice sales agencies.
- Expanded national distribution with KeHE for flavor-infused
waters and A88CBD™ topical products and BettermentRS, UNFI, and
broker C.A. Fortune for its A88CBD™ portfolio of products.
- Adds Valu Merchandisers Company (VMC), a natural and organic
product distributor serving more than 3,800 independently owned
supermarkets in 35 states.
- 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 6 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 300 retail
locations, including 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.
- Since the inception of the program, the Company has added over
12,000 new convenience stores and a target goal to reach
approximately 25,000 convenience stores.
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.
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.
The following table summarizes the operating results for the
three months ended December 30, 2020, and 2019 (Unaudited):
(All Amounts are in U.S. dollars)
In millions
For the three months ended
December 31, 2020
For the three months ended
December 31, 2019
Year over Year Change
%
Revenue
$
10,179,695.0
$
8,455,030.0
20.4
%
Cost of Goods Sold
$
5,985,210.0
$
5,061,324.0
18.3
%
Gross Profit
$
4,194,485.0
$
3,393,706.0
23.6
%
Operating Expenses
Sales and Marketing
$
4,654,930
$
4,077,599
14.2
%
General and Administrative
$
3,481,010
$
1,812,763
92.0
%
Depreciation
$
281,962
$
254,220
10.9
%
Total Operating Expense
$
8,417,902
$
6,144,582
37.0
%
Total Operating Loss
$
(4,223,417
)
$
(2,750,876
)
53.5
%
Net Loss
$
(4,360,334.0
)
$
(2,861,673
)
52.4
%
Loss per Share (Basic and Diluted)
$
(0.06
)
$
(0.07
)
-14.3
%
Weighted Avg. Shares Outstanding (Basic
and Diluted)
73,528,255
42,685,592
72.3
%
Conference Call Information
The Alkaline Water Company will conduct a conference call to
review its operating results for the quarter ended December 31,
2020, on Tuesday, February 16, 2021, at 5:00 PM Eastern Time. This
call may include material information not contained in this press
release.
Date: February 16, 2021
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): 201-389-0927
Participating in 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 third quarter.
Please dial into the above-referenced telephone numbers five to
10 minutes prior to the scheduled call time to join the live
conference call.
A replay will be available for one week starting on February 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 13716457.
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 expects a significant contribution from
each business line over the next 12 months; that the Company
believes that the strategic actions the Company has taken this year
position the Company for strong growth and anticipate solid returns
from the investments the Company is making in the coming fiscal
year; that the expansion plans should allow the Company to reach an
additional 40,000 to 80,000 customers in the all-important
convenience store channels; that the Company will expand on
programs that have shown extraordinary ROI’s in its test markets;
that the Company expects to drive a significant amount of sales
through both its E-Commerce sites in fiscal 2022; that the Company
is hopeful that it will finally get clear guidance nationwide for
its A88CBD products; that the Company expects that its A88CBD
products to be in thousands of stores in the coming months; that
new plants and new raw material providers that the Company will
announce should increase the Company’s overall capacity and
positively impact the Company’s gross margins and these initiatives
will support all aspects of the anticipated growth in E-Commerce,
A88CBD, Alkaline88 single-serve offerings, Alkaline88 eco-friendly
aluminum bottles, and Alkaline88 flavor-infused waters and they
will significantly decrease the Company’s carbon footprint as the
Company’s new vendors will be closer to the Company’s existing
plants; that these and other initiatives, including international
expansion and the rebounding hospitality industry, should
contribute to significant revenue growth in fiscal 2022; that the
Company and its operations are well-positioned to be an omnichannel
lifestyle brand in fiscal 2022 and the Company’s target goal to
reach approximately 25,000 convenience stores.
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/20210216006047/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
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