Net Sales Increased 33% to $46 Million
Reaffirming 2022 Net Sales Guidance of $177
Million to $182 Million
Zevia PBC (“Zevia” or the “Company”) (NYSE: ZVIA), the company
disrupting the liquid refreshment beverage industry with great
tasting, zero sugar beverages made with simple, plant-based
ingredients, today reported results for the second quarter ended
June 30, 2022.
Second Quarter 2022 Highlights
- Net sales increased 33% year over year to $45.5 million
- Unit volume increased 30% year over year to 3.9 million
equivalized cases
- Gross profit margin of 38.1%
- Net loss was $14.8 million, or $0.28 per diluted share to
Zevia’s Class A Common stockholders, including $8.0 million of
non-cash equity-based compensation expense
- Adjusted EBITDA loss was $6.4 million(1)
“Our second quarter net sales outpaced expectations and grew
33%, ahead of our guidance of $41 million to $43 million, driven
largely by volume growth, reflecting strong momentum for the Zevia
brand. Growth was balanced across channels as we continued to
expand our distribution with new and existing customers,” said Amy
Taylor, President and Chief Executive Officer of Zevia. “Our
initiatives around pricing, mix and pack optimization are gaining
traction, which should drive margin expansion in the back half
while also helping to mitigate inflationary cost pressures.”
“Consumers are choosing Zevia because they love the taste and
trust our brand. We are growing at a rate twice that of the
beverage category and have grown our user base faster than ever,
adding 1.4 million of our 7.8 million households in the last 12
months. This growth accelerates our impact as we continue to focus
on improving global health by making great-tasting, zero sugar
beverages with plant-based ingredients. As we sharpen our strategic
focus and continue to work to drive growth and momentum towards
profitability, we have added several key leaders in recent months
to strengthen our capabilities and execution in critical financial,
operational and commercial areas. Based on our strong performance
in the second quarter and our confidence in the trajectory of our
business, we are also reaffirming our 2022 net sales guidance of
$177-$182 million.”
Second Quarter Results
Net sales increased 33% to $45.5 million in the second quarter
of 2022 compared to $34.4 million in the second quarter of 2021.
Growth in second quarter net sales was primarily attributable to a
30% increase in volume driven by increased distribution and
consumer demand coupled with strategic price increases and
optimized promotional investments.
Gross profit improved to $17.4 million for the second quarter of
2022, a 7% increase compared to $16.2 million in the second quarter
of 2021, primarily driven by net sales growth partially offset by
increased expenses. Gross profit margin of 38.1% was down slightly
on a sequential basis and compared to 47.3% in the year earlier
period. The decline in gross profit margin was primarily due to the
impact of broad-based inflationary pressures.
(1) Adjusted EBITDA is a non-GAAP
financial measure. See the supplementary schedules in this press
release for a discussion of how we define and calculate this
measure and a reconciliation thereof to the most directly
comparable GAAP measure.
Selling and marketing expense was $13.9 million, or 30.6%, of
net sales in the second quarter of 2022 compared to $10.7 million,
or 31.2%, of net sales in the second quarter of 2021. The increase
was primarily due to higher freight and warehousing costs largely
due to increases in equivalized cases produced and sold,
broad-based inflation, and higher freight costs partially offset by
a decrease in marketing spend largely due to shift in timing and
increased efficiency of marketing programs.
General and administrative expense was $9.8 million, or 21.6%,
of net sales in the second quarter of 2022 compared to $6.0
million, or 17.4%, of net sales in the second quarter of 2021. The
increase was a result of higher headcount and personnel to support
growth and associated public company costs.
Equity-based compensation, a non-cash expense, was $8.0 million
in the second quarter of 2022, of which $3.8 million related to
restricted stock unit awards which were accelerated upon retirement
of certain senior management employees.
Net loss for the second quarter of 2022 was $14.8 million, or
$0.28 per diluted share to Zevia’s Class A Common stockholders.
Adjusted EBITDA loss was $6.4 million in the second quarter of
2022, compared to an Adjusted EBITDA loss of $0.4 million in the
second quarter of 2021. Adjusted EBITDA is a non-GAAP financial
measure. See the supplementary schedules in this press release for
a discussion of how we define and calculate this measure and a
reconciliation thereof to the most directly comparable GAAP
measure.
Balance Sheet and Cash Flows
As of June 30, 2022, the Company had $49.6 million in cash and
cash equivalents and short-term investments and no outstanding
debt. During the first six months of fiscal 2022, cash used in
operating activities was $19.6 million compared to essentially
breakeven during the first six months of 2021. The Company spent
$1.6 million on capital expenditures during the first six months of
fiscal 2022 to support its growth initiatives compared to capital
expenditures of $2.0 million during the first six months of
2021.
2022 Guidance
The Company is maintaining its guidance for the full year of
2022 and continues to expect net sales to be in the range of $177
million to $182 million, an increase of 28% to 32% versus 2021. For
the third quarter of 2022, net sales are expected to be in the
range of $46 million to $48 million, an increase of 18% to 23%
compared to the third quarter of 2021.
Webcast
The Company will host a conference call today at 8:30 a.m.
Eastern Time to discuss this earnings release. Investors and other
interested parties may listen to the webcast of the conference call
by logging on via the Investor Relations section of Zevia’s website
at https://investors.zevia.com/ or directly here. A replay of the
webcast will be available for approximately thirty (30) days
following the call.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain words such as “believe,”
“anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,”
“seek,” “pursue,” or words or phrases with similar meaning.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved. Forward-looking statements contained in
this press release relate to, among other things, statements
regarding anticipated growth, distribution, velocity, pricing and
costs. Forward-looking statements are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties, including, but not limited to, the ability to
develop and maintain our brand, change in consumer preferences,
pricing factors, the impact of inflation on our sales growth and
cost structure such as increased commodity, packaging,
transportation and freight, warehouse, labor and other input costs
and other economic, competitive and governmental factors outside of
our control, that may cause our business, strategy or actual
results to differ materially from the forward-looking statements.
We do not intend and undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
law. Investors are referred to our filings with the U.S. Securities
and Exchange Commission for additional information regarding the
risks and uncertainties that may cause actual results to differ
materially from those expressed in any forward-looking
statement.
About Zevia
Zevia PBC, a Delaware public benefit corporation designated as a
“Certified B Corporation,” is focused on addressing the global
health challenges resulting from excess sugar consumption by
offering a broad portfolio of zero sugar, zero calorie, naturally
sweetened beverages. All Zevia® beverages are made with a handful
of simple, plant-based ingredients, contain no artificial
sweeteners, and are Non-GMO Project verified, gluten-free, Kosher,
vegan and zero sodium. As of the second quarter of 2022, Zevia is
distributed in more than 31,000 retail locations in the U.S. and
Canada through a diverse network of major retailers in the food,
drug, mass, natural and ecommerce channels.
(ZEVIA-F)
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and
per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Net sales
$
45,542
$
34,352
$
83,576
$
65,046
Cost of goods sold
28,168
18,112
51,581
34,618
Gross profit
17,374
16,240
31,995
30,428
Operating expenses:
Selling and marketing
13,928
10,703
26,723
18,691
General and administrative
9,818
5,978
19,947
11,654
Equity-based compensation
8,043
36
16,944
73
Depreciation and amortization
328
230
679
474
Total operating expenses
32,117
16,947
64,293
30,892
Loss from operations
(14,743
)
(707
)
(32,298
)
(464
)
Other (expense) income, net
(44
)
(42
)
38
(38
)
Loss before income taxes
(14,787
)
(749
)
(32,260
)
(502
)
Provision for income taxes
(9
)
—
(21
)
—
Net loss and comprehensive loss
(14,796
)
(749
)
(32,281
)
(502
)
Net loss attributable to Zevia LLC prior
to the Reorganization Transactions
—
749
—
502
Loss attributable to noncontrolling
interest
3,706
—
10,293
—
Net loss attributable to Zevia
PBC
$
(11,090
)
$
—
$
(21,988
)
$
—
Net loss per share attributable to common
stockholders
Basic
$
(0.28
)
N/A
$
(0.57
)
N/A
Diluted
$
(0.28
)
N/A
$
(0.57
)
N/A
Weighted average common shares
outstanding
Basic
40,167,570
N/A
38,523,985
N/A
Diluted
40,167,570
N/A
38,523,985
N/A
ZEVIA PBC
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
June 30, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
49,648
$
43,110
Short-term investments
—
30,000
Accounts receivable, net
17,115
9,047
Inventories
33,924
31,501
Prepaid expenses and other current
assets
2,079
3,421
Total current assets
102,766
117,079
Property and equipment, net
4,710
3,664
Right-of-use assets under operating
leases, net
1,049
211
Intangible assets, net
3,638
3,738
Other non-current assets
575
301
Total assets
$
112,738
$
124,993
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
16,539
$
13,492
Accrued expenses and other current
liabilities
7,947
6,705
Current portion of operating lease
liabilities
685
236
Total current liabilities
25,171
20,433
Operating lease liabilities, net of
current portion
368
1
Total liabilities
25,539
20,434
Stockholders' equity
Class A common stock
43
34
Class B common stock
25
30
Additional paid-in capital
183,239
174,404
Accumulated deficit
(67,974
)
(45,986
)
Total Zevia PBC stockholder's
equity
115,333
128,482
Noncontrolling interests
(28,134
)
(23,923
)
Total equity
87,199
104,559
Total liabilities and equity
$
112,738
$
124,993
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended June
30,
2022
2021
Operating activities:
Net loss
$
(32,281
)
$
(502
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash lease expense
312
275
Depreciation and amortization
679
474
Loss on sale of equipment
3
8
Amortization of debt issuance cost
25
17
Equity-based compensation
16,944
73
Changes in operating assets and
liabilities:
Accounts receivable, net
(8,068
)
(2,473
)
Inventories
(2,423
)
(1,744
)
Prepaid expenses and other assets
1,371
350
Accounts payable
2,976
3,693
Accrued expenses and other current
liabilities
1,242
95
Operating lease liabilities
(334
)
(303
)
Net cash used in operating activities
(19,554
)
(37
)
Investing activities:
Proceeds from maturities of securities
30,000
-
Purchases of property and equipment
(1,557
)
(2,031
)
Net cash provided by (used in) investing
activities
28,443
(2,031
)
Financing activities:
Proceeds from revolving line of credit
—
64,308
Repayment of revolving line of credit
—
(64,308
)
Payment of debt issuance costs
(328
)
—
Minimum tax withholding paid on behalf of
employees for net share settlement
(2,130
)
—
Proceeds from exercise of common units
—
10
Proceeds from exercise of stock
options
107
—
Payment of deferred IPO costs
—
(3,829
)
Distribution to unitholders for tax
payments
—
(2,669
)
Net cash used in financing activities
(2,351
)
(6,488
)
Net change from operating, investing, and
financing activities
6,538
(8,556
)
Cash and cash equivalents at beginning of
period
43,110
14,936
Cash and cash equivalents at end of
period
$
49,648
$
6,380
Use of Non-GAAP Financial Information
We use Adjusted EBITDA, a financial measure that is not
calculated in accordance with U.S. generally accepted accounting
principles (“GAAP”). The Company’s management believes that
Adjusted EBITDA, when taken together with our financial results
presented in accordance with GAAP, provides meaningful supplemental
information regarding our operating performance and facilitates
internal comparisons of our historical operating performance on a
more consistent basis by excluding certain items that may not be
indicative of our business, results of operations or outlook. In
particular, we believe that the use of Adjusted EBITDA is helpful
to our investors as it is a measure used by management in assessing
the health of our business, determining incentive compensation and
evaluating our operating performance, as well as for internal
planning and forecasting purposes.
We calculate Adjusted EBITDA as net income (loss) adjusted to
exclude: (1) other income (expense), net, which includes interest
(income) expense, foreign currency (gains) losses, and (gains)
losses on disposal of fixed assets, (2) provision (benefit) for
income taxes, (3) depreciation and amortization, and (4)
equity-based compensation. Adjusted EBITDA may in the future also
be adjusted for amounts impacting net income related to the Tax
Receivable Agreement liability and other infrequent and unusual
transactions.
Adjusted EBITDA is presented for supplemental informational
purposes only, has limitations as an analytical tool and should not
be considered in isolation or as a substitute for financial
information presented in accordance with GAAP. Some of the
limitations of Adjusted EBITDA include that (1) it does not
properly reflect capital commitments to be paid in the future, (2)
although depreciation and amortization are non-cash charges, the
underlying assets may need to be replaced and Adjusted EBITDA does
not reflect these capital expenditures, (3) it does not consider
the impact of equity-based compensation expense, including the
potential dilutive impact thereof, and (4) it does not reflect
other non-operating expenses, including interest (income) expense,
foreign currency (gains) losses and (gains) losses on disposal of
fixed assets. In addition, our use of Adjusted EBITDA may not be
comparable to similarly titled measures of other companies because
they may not calculate Adjusted EBITDA in the same manner, limiting
its usefulness as comparative measures. Because of these
limitations, when evaluating our performance, you should consider
Adjusted EBITDA alongside other financial measures, including our
net loss or income and other results stated in accordance with
GAAP.
The following table presents a reconciliation of net loss, the
most directly comparable financial measure stated in accordance
with GAAP, to Adjusted EBITDA for the periods presented:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2022
2021
2022
2021
Net loss and comprehensive loss
$
(14,796
)
$
(749
)
$
(32,281
)
$
(502
)
Other expense (income), net*
44
42
(38
)
38
Provision for income taxes
9
—
21
—
Depreciation and amortization
328
230
679
474
Equity-based compensation
8,043
36
16,944
73
Adjusted EBITDA
$
(6,372
)
$
(441
)
$
(14,675
)
$
83
* Includes interest (income)
expense, foreign currency (gains) losses, and (gains) losses on
disposal of fixed assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005145/en/
Media Annie Samuelson Edelman 713-299-4115
Annie.Samuelson@edelman.com
Investors Reed Anderson ICR 646-277-1260
Reed.Anderson@icrinc.com
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