Record Revenue of $60.6 Million Represents
Year-over-Year Growth of 32%
The Company Issues Guidance of $70 Million for
Fiscal Year 2023
Management Highlights Plan for Pathway to
Profitability
(All amounts are unaudited and in U.S.
dollars)
The Alkaline Water Company Inc. (NASDAQ and CSE: WTER) (the
“Company”), the country’s largest independent alkaline water
company and the Clean Beverage® company, today reported financial
results for full fiscal year ending March 31, 2022. The Company
reported revenue of $60.6 Million, the highest yearly revenue in
company history, representing year-over-year growth of 32%. The
Company filed the corresponding form 10-K with the SEC on July 14,
2022, also available here: ir.thealkalinewaterco.com
Full-Year Fiscal 2022 Financial
Performance (all amounts in U.S. dollars)
(unaudited):
- Record revenue of $60.6 Million, a year-over-year (“YoY”)
increase of 32%
- 32% YoY growth is highest percentage fiscal-year growth since
FY2019
- Gross Profit of $15.2 Million
- Cost of Goods Sold equaled $45.4 Million
- Net loss of $39.4 Million
- EPS of ($0.40)
Record Fiscal Year 2022 Revenue and
Fiscal Year 2023 Guidance:
“Topline revenue for fiscal year 2022 was the best ever for The
Alkaline Water Company,” said Frank Lazaran, President and CEO of
The Alkaline Water Company. “Our record revenue of $60.6 million
represents a 32% growth over last year and is the strongest
year-over-year growth we’ve seen since 2019.
“Alkaline88 is a stronger brand than it has ever been. We remain
confident in The Alkaline Water Company’s ability to continue to
grow double digits year-over-year in fiscal year 2023 and are
issuing revenue guidance of $70 Million for fiscal year 2023.
“We expect our topline to be driven by the momentum we’re
carrying forward as one of the fastest-growing top-ten brands in
one of the fastest growing beverage categories. We believe that we
will continue to see continued organic growth within our existing
retail clients and distribution expansion to new clients throughout
the country. Our confidence is bolstered by the fact that early
results from the first quarter of fiscal year 2023 indicate another
record quarter to report in August 2022.”
A Pathway to
Profitability:
In the first 40 days of Mr. Lazaran serving as the Company’s
CEO, management has begun to conduct a thorough review of the
expense structure of the company. The Company has identified
various changes that have the potential to improve profitability by
an estimated $4.5-$5 million in annual expense reductions and
margin enhancements, once they are fully implemented.
The Company has already instituted changes that will result in over
$2 million in estimated savings over the next year. Management will
give an update on further progress in the Company’s first quarter
fiscal 2023 call in August 2022.
“In addition to continuing to grow topline sales in Fiscal 2023,
the Company will be laser focused on providing a pathway to
profitability,” continued Mr. Lazaran. “This will be driven by cost
structure optimization, margin enhancement, and a much greater
disciplined capital management approach.”
Some ways in which the Company will create cost-savings
benefits include:
- Adding strategic copacking partners to decrease freight
costs and provide production capacity for growing sales needs. This
includes a recent new addition in the Midwest and a northern
California plant coming online in the next two months.
- Increasing production capabilities and efficiencies within
copackers and raw materials providers, by using
state-of-the-art equipment and streamlining the production process
where possible, to increase margins on finished products
- Eliminating redundancies and decrease inefficiencies in
third-part services and partnerships
- Evaluating the overall structure and productivity of the
Company itself to ensure it is operating as efficiently as
possible
- Initiating a more disciplined capital management approach
“These initiatives will not negatively impact topline sales. We
will continue to drive revenue, while simultaneously improving the
bottom line and increasing shareholder value,” stated Mr.
Lazaran.
Fourth Quarter Fiscal Year 2022 Key
Business and Operational Highlights
- Alkaline88 expanded into thousands of new stores throughout
the country.
- These stores included approximately 400 Stop & Shop stores
in the Northeast, 200 Meijer Express in the Midwest, and over 600
stores in the Grand Canyon Division of one of the nation’s leading
C-Store chains, among others.
- Alkaline88 is a Category Leading Brand in Dollar and Unit
Volume Growth.*
- For fiscal year 2022 and continuing into the new fiscal year,
Alkaline88 had the second-best year-over-year growth rate in
both dollar and unit volume amongst the top-ten value added
water.
- Alkaline88 outpaced the category growth rate by nearly
double in dollar volume and more than eight times in unit
volume.
- Alkaline88 was one of only 3 top-ten brands to gain market
share.
*According to xAOC Nielsen data for the
52-weeks ending 5/21/22.
- Alkaline88 announced the operation of a new co-packer in
Phoenix, AZ.
- AZ Custom Bottled Water LLC began producing Alkaline88 products
to meet demand in the Southwest region and beyond.
- Alkaline88 initiated two new DSD partnerships in the Pacific
Northwest and Alaska.
- Columbia Distributing and Bill’s Distributing will support
Alkaline88’s expansion by improving distribution and brand presence
throughout their covered regions.
“Our company’s steady growth is a result of the consistent
addition of new clients, the expansion of SKUs within existing
clients, and organic growth driven by Alkaline88 drinkers,”
continued Mr. Lazaran. “Alkaline88 finished the fiscal year
strongly, with wins in all three categories. These three factors
have driven regular double-digit year-over-year sales growth for
Alkaline88 and give us continued confidence going forward in our
company’s topline growth in fiscal 2023.
“We believe that Alkaline88 is well positioned to continue to be
a consistent leader in unit and dollar growth and brand expansion
compared to other top-ten peers, even as we refocus on becoming a
profitable brand. As we continue to strengthen our production and
distribution networks and optimize our corporate structure,
Alkaline88 will grow much more efficiently. These Company-wide
improvements will bolster the strength of the brand, improve the
bottom line, and enhance shareholder value.”
Cash Flow and Operational
Runway:
Since March 31, 2022 the company has raised additional capital
through the exercise of multiple sets of warrants from long-term
investors. Additionally, the Company recently extended its
revolving credit facility and increased its limit from $7 million
to $10 million.
“The Company’s ability to operate as a going concern is
dependent on obtaining adequate capital to fund operating losses
until the Company becomes profitable,” said David Guarino, Company
CFO. “The Company has initiated a cost-reduction strategy to
proactively reduce our monthly burn rate. While we are not prepared
to give exact numbers or a timeline yet, we anticipate our burn
rate to trend downward and, eventually, settle between 25 and 50%
less than it is right now. We’ll share more about this progress on
our first quarter call.
“With that plan, our cash on hand, plus anticipated warrant
exercises and debt settlements, our line of credit, and the sales
agreement with Roth Capital Partners, LLC, we plan to fund our
current planned operations and capital needs. However, if our
current plans change or are accelerated or we choose to increase
our production capacity, we may seek to sell additional equity or
debt securities or obtain additional credit facilities, including
seeking investments from strategic investors.”
Fiscal 2022 Complete Financial
Results
Complete results for the Company’s fiscal 2022 year have been
filed on SEDAR under the Company’s profile on www.sedar.com and on
EDGAR at www.sec.gov.
Full Year Fiscal 2022 Conference
Call
The Company will hold a conference call Friday, July 15th, at
8:45 AM Eastern Time.
Conference Call Details: Date: July 15, 2022 Time: 8:45
AM 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 Conference ID Number:
13731538
Participating on the call will be the Company’s President and
CEO, Frank Lazaran, and Chief Financial Officer, David Guarino, who
will discuss operational and financial highlights for fiscal year
2022 and outlook for fiscal year 2023. They will be joined for the
question-and-answer portion of the call by the Company’s Chief
Marketing Officer, Tom Hutchison, and Frank Chessman, Executive
Director of Sales and Operations.
To join the live conference call, please dial into the
above-referenced telephone numbers five to ten minutes prior to the
scheduled call time.
A replay will be available for one week starting on July 15,
2022, at approximately 12:45 PM (ET). To access the replay, please
dial 877-660-6853 in the U.S. or Canada and 201-612-7415 for
international callers and use Access ID: 13731538
About The Alkaline Water Company:
The Alkaline Water Company is the Clean Beverage® company making
a difference in the water you drink and the world we share.
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 alkaline drinking water with trace minerals and electrolytes and
boasts our trademarked “Clean Beverage” label. In 2021, The
Alkaline Water Company was pleased to welcome Shaquille O’Neal to
its board of advisors and to serve as the celebrity brand
ambassador for Alkaline88®.
To purchase The Alkaline Water Company’s products online, visit
us at www.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 remains confident in the Company’s
ability to continue to grow double digits year-over-year in fiscal
year 2023; the statements relating to the Company’s revenue
guidance of $70 million for fiscal year 2023; the Company’s
expectation that the Company’s topline to be driven by the momentum
the Company is carrying forward as one of the fastest-growing
top-ten brands in one of the fastest growing beverage categories;
the Company’s belief that the Company will continue to see
continued organic growth within the Company’s existing retail
clients and distribution expansion to new clients throughout the
country; the statement relating to another record quarter to report
in August 2022; the statements relating to the Company’s plan for
pathway to profitability; the statements relating to various
changes that have the potential to improve profitability by an
estimated $4.5-$5 million in the Company’s annual expense reduction
and margin enhancements, once they are fully implemented; that the
Company has already instituted changes that will result in over 2
million dollars in estimated savings over the next year; that in
addition to continuing to grow topline sales in Fiscal 2023, the
Company will be laser focused on providing a pathway to
profitability and this will be driven by cost structure
optimization, margin enhancement, and a much greater disciplined
capital management approach; the statements relating to some ways
in which the Company will create cost-saving benefits, including
(i) adding strategic copacking partners to decrease freight costs
and provide production capacity for growing sales needs, which
includes a recent new addition in the Midwest and a northern
California plant coming online in the next two months; (ii)
increasing production capabilities and efficiencies within
copackers and raw materials providers, by using state-of-the-art
equipment and streamlining the production process where possible,
to increase margins on finished products; (iii) eliminating
redundancies and inefficiencies in third-party services and
partnerships; (iv) evaluating the overall structure and
productivity of the Company itself to ensure it is operating as
efficiently as possible; and (v) initiating a more disciplined
capital management approach; that the Company’s cost-saving
initiatives will not negatively impact topline sales and the
Company will continue to drive revenue, while simultaneously
improving the bottom line and increasing shareholder value; that
Columbia Distributing and Bill’s Distributing will support
Alkaline88’s expansion by improving distribution and brand presence
throughout their covered regions; that the consistent addition of
new clients, the expansion of SKUs within existing clients, and
organic growth driven by Alkaline88 drinkers give the Company
continued confidence going forward in the Company’s topline growth
in fiscal 2023; the Company’s belief that Alkaline88 is well
positioned to continue to be a consistent leader in unit and dollar
growth and brand expansion compared to other top-ten peers, even as
the Company refocuses on becoming a profitable brand; that as the
Company continues to strengthen its production and distribution
networks and optimize its corporate structure, Alkaline88 will grow
much more efficiently and these Company-wide improvements will
bolster the strength of the brand, improve the bottom line, and
enhance shareholder value; that the Company’s ability to operate as
a going concern is dependent on obtaining adequate capital to fund
operating losses until the Company becomes profitable; the
statement relating to the cost-reduction strategy to proactively
reduce the Company’s monthly burn rate; that the Company
anticipates its burn rate to trend downward and, eventually, settle
between 25 and 50% less than it is right now; that with the plan
for the cost-reduction strategy, the Company’s cash on hand, plus
anticipated warrant exercises and debt settlements, the Company’s
line of credit, and the sales agreement with Roth Capital Partners,
LLC, the Company plans to fund its current planned operations and
capital needs; and that if the Company’s current plans change or
are accelerated or the Company chooses to increase its production
capacity, the Company may seek to sell additional equity or debt
securities or obtain additional credit facilities, including
seeking investments from strategic investors.
The material assumptions supporting these forward-looking
statements include, among others, that the Company’s cost-saving
measures will be effective to reduce the Company’s annual expense
and enhance the Company’s margin to the extent anticipated by the
Company; that the Company’s burn rate to trend downward and,
eventually, settle between 25 and 50% less than it is right now as
a result of the Company’s proactive reduction in its monthly burn
rate; 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. In
addition, the Company’s fiscal year 2023 revenue guidance is based
on the Company’s expectation that the Company’s topline to be
driven by the momentum the Company is carrying forward as one of
the fastest-growing top-ten brands in one of the fastest growing
beverage categories; the Company’s belief that the Company will
continue to see continued organic growth within the Company’s
existing retail clients and distribution expansion to new clients
throughout the country; and the assumption that the Company will
have another record quarter for the first quarter of fiscal year
2023. 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/20220714005728/en/
The Alkaline Water Company Inc. Jeff Wright Director of
Investor Relations 866-242-0240
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
