NewAge, Inc. (Nasdaq: NBEV), the Colorado-based
healthy products company intending to become the world’s leading
social selling and distribution company, today announced financial
results for the quarter ended December 31, 2020, with net revenue
reaching $90.4 million, an increase of 53%. Adjusted EBITDA(1) also
exceeded expectations reaching $2.9 million, NewAge’s first
positive adjusted EBITDA quarter in nearly two years.
Highlights for the Full Year
2020:
- Acquired and integrated ARIIX
reaching nearly $500 million in pro forma revenue
- Divested BWR and other retail
brands, eliminating more than $7.0 million of loses
- Identified more than $20 million in
cost synergies, captured more than 50% already
- Strengthened balance sheet through
early 2021 with almost $100MM in cash
- Launched Noni+CBD in Japan and
multiple other new products worldwide
Brent Willis, Chief Executive Officer of NewAge
commented, “2020 was another transformative year for NewAge,
whereby we reached nearly half a billion dollars in pro forma
revenue and achieved positive adjusted EBITDA in the fourth
quarter, and we believe we are just getting started. Beyond the
scale and profitability benefits that came with ARIIX and the four
other companies that merged with us in November, we significantly
strengthened our management teams and execution capabilities, and
as a result are seeing excellent organic growth momentum in
2021.”
Mr. Willis continued, “We are seeing record
growth in Western Europe, the U.S., and Mexico, and are now seeing
resurgence in both China and Japan in Q1 2021. The recently
announced letter of intent to acquire Aliven in Japan, will add
further momentum in this highly profitable core market for NewAge.
We continue to make substantial progress on converging our
companies and capturing cost synergies and are ahead of schedule on
capturing our $20 million target. This will further add to the
bottom line, on top of the benefits that accrue from the
disposition of BWR.”
“We believe our social selling focus and direct
route-to-market is both pandemic and recession resilient, and we
are beginning to see the benefits of our business model. During the
remainder of 2021 we will continue pursuing our key strategies of:
converging with ARIIX and reducing costs; enhancing our social
selling platform; driving organic growth by focusing on key
geographic regions; and pursuing strategic acquisitions and
collaboration opportunities that will drive value for all of our
stakeholders,” said Willis.
On November 16, 2020, NewAge closed its merger
transaction with ARIIX and began fully integrating and converging
NewAge, Morinda, ARIIX, MaVie, Limu, and Zennoa. Accordingly,
fourth quarter results for NewAge include operating results for
ARIIX from the closing date forward.
Fourth Quarter 2020 Financial Results,
Unaudited
Net revenue reached $90.4 million for the
quarter ended December 31, 2020, versus $59.2 million for the
fourth quarter of the prior year, an increase of 53%. Contributing
to the results were the U.S., which grew 11% in the three months
ended December 31, 2020 compared to the same period of the prior
year, the Direct to Store (DSD) Division, which was up 15% and the
contributions from the ARIIX acquisition starting in November.
Gross margin in the fourth quarter of 2020
reached $60.4 million, or 66.8% of net revenue, compared with $32.2
million, or 54.3% of net revenue in the same period of the prior
year, an increase of 12.5 percentage points. Gross margin
percentage increase was driven by higher net revenue from our
Direct/Social Selling Division and the elimination of the BWR
business.
Net loss was $4.0 million, an improvement of
$61.8 million compared to a net loss of $65.8 million, in the
fourth quarter of the prior year. Adjusted EBITDA(1) was $2.9
million for the fourth quarter of 2020, compared with a negative
$17.4 million for the fourth quarter of 2019, an improvement in
Adjusted EBITDA of $20.2 million.
Full-Year 2020 Financial Results,
Unaudited
Net revenue reached $279.5 million for the year
ended December 31, 2020, versus $253.7 million in 2019, an increase
of 10.2%. Pro forma combined revenues for the full year 2020, were
nearly $500 million. The year-over-year increase is primarily due
to $32.0 million in added revenue from ARIIX beginning on November
16, 2020, which was not part of 2019 results, and an increase in
sales of $4.3 million in our DSD division.
Gross margin for the year ended December 31,
2020 reached $177.5 million, or 63.5% of net revenue, compared with
$152.7 million, or 60.2% of net revenue for the year ended December
31, 2019, an increase of $24.8 million or 3.3 percentage points.
Gross margin increase was driven by higher relative sales, the
additions of the new businesses as well as the divestment of the
low and negative margin retail brands.
Net loss was $39.3 million for the for the year
ended December 31, 2020, compared to a net loss of $89.8 million
for the year ended December 31, 2019. The improvement of $50.5
million was a result of the improved operating performance and a
significant non-recurring impairment expense in 2019 related to its
now divested retail brands.
“What we saw financially in the fourth quarter
was the just the start of what we believe to be the trend in top
and bottom-line growth. We have communicated since our inception
four years ago that as we gained the scale in our operations that
the benefits would translate directly to EBITDA margin. We saw the
beginning of that in the fourth quarter. Leading into 2021, ARIIX
convergence and cost synergy capture is ahead of expectations,
organic growth is ahead of expectations, and we are in a very
strong financial position to take advantage of a wealth of organic
and external growth opportunities that continue to present
themselves,” concluded Mr. Willis.
(1) EBITDA and Adjusted EBITDA are non-GAAP
financial measures with reconciliations provided in the table
below. The financials in this press release represent the unaudited
performance of NewAge, and will be confirmed with the filing of the
Company’s 10K.
Conference Call
The Company will host a live conference call and
webcast today at 8:30 a.m. ET. Conference call details are provided
below. Interested investors can dial into the conference call to
hear the details of management's update and participate in a
question and answer session.
Date: Tuesday, March 16,
2021Time: 8:30 a.m. Eastern time Toll-free
dial-in number: 1-877-407-3982International
dial-in number: 1-201-493-6780Conference
ID: 13716836
The conference call will also be broadcast live
and available for replay here and via the investors section of the
Company’s website at
https://newagebev.com/en-us/our-story/investors. The webcast replay
will be available for approximately 45 days following the call.
Please dial into the conference call 15 minutes
prior to the start time due to increased demand for conference
calls. You will be asked to register your name and
organization.
A replay of the conference call will be
available after 11:30 a.m. Eastern Time on the same day through
Tuesday, March 23, 2021.
Toll-free replay number:
1-844-512-2921International replay number:
1-412-317-6671Replay ID: 13716836
About NewAge, Inc. (NASDAQ:
NBEV)NewAge is a purpose-driven
firm intending to become the world’s leading social selling and
distribution company. Colorado-based NewAge commercializes a
portfolio of organic and healthy products worldwide through
primarily a direct route-to-market system. The company competes in
three major category platforms including health and wellness,
healthy appearance, and nutritional performance and leads a network
of more than 400,000 exclusive independent distributors and brand
partners around the world.
The Company operates the
websites NewAge.com, Noninewage.com, Ariix.com,
Mavie.com, Thelimucompany.com, Zennoa.com and a number of other
individual brand websites.
Safe Harbor DisclosureThis
press release contains forward-looking statements that are made
under the safe harbor provisions within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are any statement reflecting management's expectations
regarding future results of operations, economic performance, and
financial condition. The forward-looking statements are based on
the assumption that operating performance and results will continue
in line with historical results. Management believes these
assumptions to be reasonable, but there is no assurance they will
prove to be accurate. Forward-looking statements, specifically
those concerning future performance, are subject to certain risks
and uncertainties, and actual results may differ materially. NewAge
competes in a rapidly growing and transforming industry, and risk
factors, including those disclosed in the Company's filings with
the Securities and Exchange Commission, might affect the Company's
operations. Unless required by applicable law, the Company
undertakes no obligation to update or revise any forward-looking
statements.
For investor inquiries about
NewAge please contact:
NewAge Investor Relations:Riley
TimmerVice President, Investor RelationsTel:
1-801-870-8685Riley_Timmer@NewAge.com
Investor Relations Counsel:Reed
AndersonICR – Strategic Communications and AdvisoryTel:
1-646-277-1260newage@icrinc.com
Non-GAAP Financial MeasuresThe
primary purpose of using non-GAAP financial measures is to provide
supplemental information that we believe may be useful to investors
and to enable investors to evaluate our results in the same way we
do. We also present the non-GAAP financial measures because we
believe they assist investors in comparing our performance across
reporting periods on a consistent basis, as well as comparing our
results against the results of other companies, by excluding items
that we do not believe are indicative of our core operating
performance. Specifically, we use these non-GAAP measures as
measures of operating performance; to prepare our annual operating
budget; to allocate resources to enhance the financial performance
of our business; to evaluate the effectiveness of our business
strategies; to provide consistency and comparability with past
financial performance; to facilitate a comparison of our results
with those of other companies, many of which use similar non-GAAP
financial measures to supplement their GAAP results; and in
communications with our board of directors concerning our financial
performance. Investors should be aware, however, that not all
companies define these non-GAAP measures consistently.
We provide in the table below a reconciliation
from the most directly comparable GAAP financial measure to the
non-GAAP financial measures presented.
EBITDA and Adjusted EBITDA. The
calculation of our EBITDA and Adjusted EBITDA is presented below
(in thousands):
|
Three Months
Ended |
|
Year
Ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(4,039 |
) |
|
$ |
(65,851 |
) |
|
$ |
(39,344 |
) |
|
$ |
(89,835 |
) |
EBITDA Non-GAAP adjustments: |
|
|
|
|
|
|
|
Interest expense |
|
2,343 |
|
|
|
548 |
|
|
|
4,036 |
|
|
|
3,677 |
|
Income tax expense (benefit) |
|
9 |
|
|
|
(100 |
) |
|
|
1,895 |
|
|
|
12,668 |
|
Depreciation and amortization expense |
|
3,321 |
|
|
|
1,983 |
|
|
|
8,928 |
|
|
|
8,759 |
|
|
|
|
|
|
|
|
|
EBITDA |
|
1,634 |
|
|
|
(63,420 |
) |
|
|
(24,485 |
) |
|
|
(64,731 |
) |
Adjusted EBITDA Non-GAAP adjustments: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
1,223 |
|
|
|
1,110 |
|
|
|
4,638 |
|
|
|
6,388 |
|
Impairment of goodwill and identifiable intangible assets |
|
- |
|
|
|
44,925 |
|
|
|
- |
|
|
|
44,925 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
2,857 |
|
|
$ |
(17,385 |
) |
|
$ |
(19,847 |
) |
|
$ |
(13,418 |
) |
|
|
|
|
|
|
|
|
EBITDA is defined as net income (loss) adjusted
to exclude GAAP amounts for interest expense, income tax expense
(benefit), and depreciation and amortization expense. For the
calculation of Adjusted EBITDA, we also exclude the following item
for the periods presented.
Stock-Based Compensation Expense: Our
compensation strategy includes the use of stock-based compensation
to attract and retain employees, directors and consultants. This
strategy is principally aimed at aligning the employee interests
with those of our stockholders and to achieve long-term employee
retention, rather than to motivate or reward operational
performance for any particular period. As a result, stock-based
compensation expense varies for reasons that are generally
unrelated to operational decisions and performance in any
particular period.
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