The Alkaline Water Company Inc. (NASDAQ and CSE: WTER)
(the “Company”), is a producer of premium bottled alkaline water,
flavored-infused waters, and CBD infused products sold under the
brand names Alkaline88®, A88 Infused™, and A88CBD™, respectively.
The Company today announces that it reported record fiscal
fourth-quarter and full-year revenue that exceeded expectations.
Financial results reported in this document are
preliminary. Final financial results and other disclosures
will be reported in our Annual Report on Form 10-K for the year
ended March 31, 2020, and may differ materially from the
results and disclosures in this document due to, among other
things, the completion of final review procedures, the occurrence
of subsequent events, or the discovery of additional information.
We expect to file our Form 10-K by August 14, 2020.
“Fiscal 2020 was a banner year for The Alkaline
Water Company. We delivered record revenue of $41.1 million, which
came in above the high end of our guidance range. Our lifestyle
brands are gaining momentum as we continue to make solid progress
toward our strategic goals. During the year, our teams expanded our
national footprint, added new trades, accelerated our c-store
penetration, launched a new line of in-demand CBD products,
established a direct to consumer e-commerce presence, and made good
progress on our flavors and eco-friendly offerings,” stated Richard
A Wright, President and CEO of The Alkaline Water Company.
“Our growing brands, Alkaline88®, A88 Infused™,
and A88CBD™, are resonating with the health and wellness-focused
consumers. More households have tasted our water over the past
three months than at any time in the Company’s history. We
see solid demand from new and existing retailers who are increasing
shelf space for all-natural products. Also, our entrance into the
much larger hospitality space and our recently launched e-commerce
site, Alkaline88.com, will provide new growth catalysts in the
coming year. While we are not providing full-year guidance due to
COVID related macro uncertainties, we expect our growing brands to
outperform their respective segment growth. In particular, our
major growth catalysts will include our single-serve sizes,
flavor-infused waters, and eco-friendly aluminum bottle. In
addition, there is a pent up demand for our proprietary CBD
products that will see accelerated growth in the third and fourth
quarter of fiscal 2021. Our experienced team of professionals and
our efficient variable cost business model ensures that we will be
able to execute on all of our current business objectives.”
Key Operational Highlights:
- Reported record April sales of $7.1 million, representing
growth of approximately 171% over the prior-year month.
- More than doubled supply chain capabilities and secured
domestic suppliers for every component of our product
portfolio.
- Successfully launched direct-to-consumer, end-to-end e-commerce
platforms, A88CBD.com, and Alkaline88.com.
- Expanded online and brick-and-mortar channels for the A88CBD™
portfolio of products.
- Added over 15,000 retail locations during the current calendar
year bringing national retail footprint up to 70,000 stores.
- Delivered 300,000 aluminum bottles of Alkaline88® in 500-ml
sustainable single-serve packaging to the California and Texas
markets.
- A88 Infused™ flavor waters to reach up to 12,500 stores
nationwide by the end of Summer.
- Strengthened leadership team; added Director of Operations,
Director National Sales, and sales and operational executives to
its CBD operations.
“We delivered exceptional growth during our
fiscal Q4 as demand for our products continued to accelerate
throughout the quarter and into the new fiscal year. Our team and
partners adjusted quickly to the surging demand, driving strong
growth, and creating new opportunities for our growing lifestyle
brands. To further strengthen our brand equity and to align with
shifting consumer buying trends, we launched our direct-to-consumer
e-commerce site during that quarter. And for the first time in the
company’s history, we will launch our full-scale traditional
marketing program led by the highly reputable Los Angeles based
agency, Davis Elen. This national campaign will enhance our
existing digital strategies with TV, radio, billboards, social
media, and online ads to provide users with a seamless omnichannel
experience for all our product categories.”
Fiscal Q4 2020 Financial Highlights
(Unaudited):
- Revenue of approximately $12.1 million, increased $4.1 million
or approximately 51% year-over-year primarily due to strong demand
across all product categories.
- Revenue increased by approximately $3.5 million or 43%
sequentially.
- Gross profit of $4.8 million, increased approximately $1.8
million or 59% year-over-year, primarily due to the increase in
sales.
- Gross Profit dollars increased by approximately $1.4 million or
42% sequentially.
- Gross margin of 40%, a 2% improvement year-over-year.
- Net loss per share of $0.08 was flat year over year.
Fiscal 2020 Full Year Highlights
(Unaudited):
- Revenue of approximately $41.1 million, increased $8.9 million
or approximately 28% compared to fiscal 2019.
- Gross profit of approximately $16.8 million, increased $3.9
million or 30.1% compared to fiscal 2019.
- Gross margin of 41%, an improvement year-over-year.
- Net loss of approximately $14.8 million an increase of $6.2
million, primarily resulting from an increase in non-cash charges
of $1.6 million and $4.5 million of non-recurring expenses.
- Net loss per share of $0.34 increased by $0.07 compared to
fiscal 2019.
- Cash balance of $4.6 million as of March 31, 2020.
(All amounts are in U.S. dollars)
“Fiscal 2021 is off to a great start with FQ1
shaping to be another record quarter for the Company. As we look to
the future, we believe that we are building a strong national
lifestyle brand and that our eco-friendly aluminum bottles,
flavored infused waters, and CBD products will all contribute
significantly to our fiscal year 2021’s success.”
Fiscal 2021 Revenue
Guidance
“Normally, we would be offering our guidance for
fiscal 2021. Unfortunately, none of our sales channel partners have
provided guidance that would give us confidence in giving any
numbers at this time. We hope to provide full-year guidance in our
upcoming FQ1 call, which will be after our earnings release and on
or before August 14,” concluded Mr. Wright.
Recent Business and Operational
Highlights
National Footprint and Channel
Expansion
- Alkaline88® flagship brand of premium alkaline water is now
available in 70,000 stores across all trades in the U.S.
- Delivered 300,000 aluminum bottles of Alkaline88® in 500-ml
sustainable single-serve packaging to the California and Texas
markets.
- Expands online and brick and mortar channels for A88CBD™
portfolio of products.
- Products now available online at Amazon, CBD.co,
healwithnature.com, and DirectCBDOnline.com and at PureCBD and
Alchemist Kitchen retail locations, in L.A. and New York.
- Accelerated convenience store growth strategy with several new
distribution agreements.
- Added the nation’s second-largest distributor, which extends
our reach to approximately 15,000 stores nationwide.
- Potential reach canvases the entire nation, with a
concentration in California, Texas, and the Northwest markets.
- Added over 10,000 new convenience stores since the inception of
the program and the Company expects to reach approximately 25,000
stores by the end of fiscal 2021.
- Expanded into natural and specialty food channel with C.A.
Fortune.
- Expanded national distribution with KeHE for flavor-infused
waters and UNFI and broker CA Fortune for its A88CBD™ portfolio of
products.
- Received summer commitments from 12,500 retailers for
flavor-infused products.
Innovation and Product Portfolio
Expansion
- Launched A88 infused™ and introduced a robust line of A88CBD™
infused portfolio of products.
- Launched A88CBD™ topical portfolio in January and the A88CBD™
ingestibles product line in May of 2020.
- The topical product lineup includes salves, balms, lotions,
essential oils, and bath-salts, all made with lab-tested full and
broad-spectrum hemp.
- The ingestible product lineup includes gummies, capsules, and
tinctures, all made with lab-tested broad-spectrum hemp.
- Announced new single-serve 500ml Eco-friendly Aluminum bottles.
- To be carried by national distributor KeHE with support from
leading national broker CA Fortune.
Corporate Development
- Enhanced digital customer experience by adding new content and
features to A88CBD.com
- Strong monthly viewership across both e-commerce platforms with
an approximately 26% return customer rate on the A88CBD™ product
line.
- Featured and showcased A88 Infused™ flavor-infused and A88CBD™
product line at various national expos and tradeshows.
- Ranked #1 best selling national brand by units sold at the 2020
KeHE Holidays of Hope Show.
- Announced listing on the Canadian Stock Exchange and terminated
TSX.V listing.
- Alkaline88® select premier marketing firm, Davis Elen, as the
agency of record.
Brand Awareness
- Alkaline88® remains the #1 selling bulk alkaline water
nationally.
- Introducing new brand ambassadors, Justin Sander and Brent
Marks, two of dirt-track racing rising stars.
- Alkaline88® showcased the A88CBD™ product portfolio at the
ECRM® CBD Health and Beauty Jacksonville Expo.
- Announces new marketing initiatives and brand refresh for
Alkaline88®.
Other than as set out in the Company’s current
report on Form 8-K filed on July 17, 2020, copy of which is
available on EDGAR at www.sec.gov and SEDAR at www.sedar.com, and
as set out in this news release, there have been no material
business developments since June 26, 2020, being the date of the
news release announcing the postponement of filing of the Company’s
annual financial statements, annual management’s discussion and
analysis and annual information form for the year ended March 31,
2020, due to logistics and delays caused by the COVID-19
pandemic.
The following table summarizes the operating
results for the three months, and full-year ended March 31, 2020,
and 2019 (Unaudited):
(All Amounts are in U.S. dollars and
millions)
|
For the year ended March 31, 2020 |
|
For the year ended March 31, 2019 |
|
Year over YearChange % |
Revenue |
$ |
41.1 |
|
|
$ |
32.2 |
|
|
27 |
% |
Cost of Good Sold |
$ |
24.3 |
|
|
$ |
19.3 |
|
|
26 |
% |
Gross Profit |
$ |
16.8 |
|
|
$ |
12.9 |
|
|
30 |
% |
|
|
|
|
|
|
Net Loss |
$ |
(14.8 |
) |
|
$ |
(8.6 |
) |
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2020 |
|
For the three months ended March 31, 2019 |
|
Year over YearChange % |
Revenue |
$ |
12.1 |
|
|
$ |
8.0 |
|
|
51 |
% |
Cost of Good Sold |
$ |
7.3 |
|
|
$ |
5.0 |
|
|
46 |
% |
Gross Profit |
$ |
4.8 |
|
|
$ |
3.0 |
|
|
59 |
% |
|
|
|
|
|
|
Net Loss |
$ |
(4.0 |
) |
|
$ |
(2.8 |
) |
|
40 |
% |
Conference Call Information
The Alkaline Water Company will conduct a
conference call to review its operating results for the quarter and
full-year ended March 31, 2020, on Thursday, July 23, 2020, at 5:00
PM Eastern Time. This call may include material information not
included in this press release.
Date: July 23, 2020
Time: 5:00 PM Eastern Time (ET)
Dial-in Number for U.S. and Canadian
Callers: 877-407-3088 Dial-in Number for
International Callers (Outside of the U.S. and
Canada): 201-389-0927
Participating on the call will be the Company’s President and
CEO Richard A. Wright and Chief Financial Officer David Guarino,
who will discuss operational and financial highlights for the
full-year and fiscal fourth quarter, as well as 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 July 24,
2020, at approximately 10:30 AM (ET). To access the replay, please
dial 877-660-6853 in the U.S. or Canada and 201-612-7415 for
international callers. The conference ID# is 13706941.
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 A88CBD™
brand, featuring a broad line of topical and ingestible products.
These products are made with lab-tested full and broad-spectrum
hemp and include salves, balms, lotions, essential oils,
bath-salts, CBD infused drinks, tinctures, capsules, gummies, and
powder packs. To purchase A88CBD Infused™ products online, visit us
at www.A88CBD.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’s recently
launched e-commerce site, Alkaline88.com, will provide new growth
catalysts in the coming year; that the Company expects its growing
brands to outperform their respective segment growth; that the
Company’s major growth catalysts will include the single-serve
sizes, flavor infused waters, and eco-friendly aluminum bottle;
that there is pent us demand for the Company’s proprietary CBD
products that will see accelerated growth in the third and fourth
quarter of fiscal 2021; that the Company’s experienced team of
professionals and the Company’s efficient variable cost business
model insures that the Company will be able to execute on all of
its current business objectives; that the Company’s full-scale
traditional marketing program will enhance the Company’s existing
digital strategies with TV, radio, billboards, social media, and
online ads to provide users with a seamless omnichannel experience
for all the Company’s product categories; that FQ1 is shaping to be
another record quarter for the Company; that the Company believes
that the Company is building a strong national lifestyle brand and
that the Company’s eco-friendly aluminum bottles, flavored infused
waters, and CBD products will all contribute significantly to the
Company’s fiscal year 2021’s success; and that the Company hopes to
provide full-year guidance in its upcoming FQ1 call which will be
after its earnings release and on or before August 14.
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.
The Alkaline Water Company Inc.
Richard A. Wright President and CEO, or
Sajid DaudiDirector of Investor Relations & Corporate
Communications 800-923-1910 investors@thealkalinewaterco.com
Media
Jessica Starman 888-461-2233 jessica@elev8newmedia.com
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