The Alkaline Water Company Completes Company-Wide Review and Identifies Approximately $15 Million in Cost Savings and Margin Enhancements
August 09 2022 - 04:05PM
Business Wire
Amidst Enacting New Cost-Saving Measures, the
Company Recorded Year-Over-Year Sales Growth for the Month of July
of Approximately 30%
(All amounts are 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 announced it has
finished its exhaustive company-wide review and has identified
approximately $15 million in margin enhancements and expense
reductions compared to last fiscal year. The Company projects up to
$10 million in savings and margin improvement within fiscal year
2023. An additional $5 million of projected savings before the end
of fiscal year 2024 will result in an annualized reduction in the
Company’s cash burn rate of approximately $15 million when compared
to fiscal year 2022, significantly improving its bottom line.
“Having completed a thorough review and evaluation, The Alkaline
Water Company has identified and begun implementing a combination
of cost-reduction measures and margin enhancements that, once fully
implemented, will generate approximately $15 million dollars in
annual benefits compared to last fiscal year,” said Frank
Lazaran, President and CEO of The Alkaline Water Company. “Over the
past sixty days we have gained a confident understanding of how to
optimize operational efficiencies and substantially reduce the
Company’s cash burn without compromising growth.”
Last fiscal year, on its way to record revenue, The Alkaline
Water Company invested heavily in organizational growth,
professional services, and sales & marketing in order to drive
Alkaline88® to new heights. Now, a firmly established top-ten
value-added water brand, Alkaline88 has maintained its focus on
sales while pivoting to reduce G&A and Marketing
spending by as much as $8 million through various measures
including:
- Organizational restructuring
- Reductions in professional services
- Reductions in marketing and promotional expenses
Additionally, the Company projects up to $7 million in
annualized margin enhancements as a result of:
- Packaging changes
- Improved manufacturing efficiencies
- Pricing and promotional optimization
- Decreases in freight costs due to an enhanced distribution
network
“The combination of Alkaline88’s rising brand power and new
cost-cutting measures puts the Company in a strong position for
much more efficient, and ultimately self-sustaining, growth,”
continued Mr. Lazaran. “This is evidenced by our first full month
implementing our more cost-effective growth strategy, which we’re
pleased to announce was our best July ever for revenue. Our
sales were up approximately 30% over last year, reinforcing our
optimism about Alkaline88’s future, continuing to drive topline
sales on our new pathway to profitability.”
Company management will share more details on their upcoming
fiscal year 2023 first quarter conference call which will take
place Tuesday, August 16th before market open. Call-in instructions
will be provided in a future press release.
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: the statements relating to approximately $15 million in
cost savings or expense reductions and margin enhancements compared
to last fiscal year; that the Company projects up to $10 million in
savings and margin improvement within fiscal year 2023 and an
additional $5 million of projected savings before the end of fiscal
year 2024 will result in an annualized reduction in the Company’s
cash burn rate of approximately $15 million when compared to fiscal
year 2022, significantly improving its bottom line; that once fully
implemented, a combination of cost-reduction measures and margin
enhancements will generate approximately $15 million dollars in
annual benefits compared to last fiscal year; the statement
relating to optimizing operational efficiencies and substantially
reducing the Company’s cash burn without compromising growth; the
statement relating to pivoting to reduce G&A and marketing
spending by as much as $8 million through various measures
including: (i) organizational restructuring; (ii) reductions in
professional services; and (iii) reductions in marketing and
promotional expenses; that the Company projects up to $7 million in
annualized margin enhancements as a result of: (i) packaging
changes; (ii) improved manufacturing efficiencies; (iii) pricing
and promotional optimization; and (iv) decreases in freight costs
due to an enhanced distribution network; that the Company is in a
strong position for much more efficient, and ultimately
self-sustaining, growth; and the Company’s optimism about
Alkaline88’s future, continuing to drive topline sales on the
Company’s new pathway to profitability.
The material assumptions supporting these forward-looking
statements include, among others, that the Company’s cost-saving
and margin enhancement measures will be fully implemented and, once
implemented, they 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 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220809005936/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
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