Achieves Record Net Sales of $39 Million
Add after last paragraph of release: financial tables and Use of
Non-GAAP Financial Information.
The updated release reads:
ZEVIA ANNOUNCES THIRD QUARTER 2021
RESULTS
Achieves Record Net Sales of $39 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 third quarter ended
September 30, 2021.
Third Quarter 2021 Highlights
- Net sales grew to $39.0 million, a 22% increase versus Q3
2020
- Year-to-date net sales grew to $104.0 million, a 27% increase
versus the same period in 2020
- Unit volume was 3.5 million equivalized cases, up 26% from Q3
2020
- Gross profit increased to $17.0 million, or 44% of net
sales
- Net loss was $49.8 million and $0.75 loss per share, including
$45.7 million of non-cash equity-based compensation expense
- Adjusted EBITDA loss was $3.5 million(1)
“We delivered strong double-digit growth in the third quarter
reporting record net sales of $39.0 million, up 22% versus a year
ago, up 13% versus the second quarter of 2021 and up 88% on a
2-year growth basis. Moreover, to date, trends have accelerated
early in the fourth quarter as we continued gaining momentum across
a range of channels, reflecting ongoing increases in household
penetration and spending driven by our leading repurchase and
loyalty metrics,” said Paddy Spence, Chair and Chief Executive
Officer of Zevia. “Our team is executing well against core
strategic priorities around channel expansion, innovation and
supply chain efficiency. The recent launch of our Creamy Root Beer
flavor provides a great example as rapid acceptance by consumers is
driving higher velocities and distribution gains, and this product
is highly incremental, as 31% of our Creamy Root Beer purchasers
are new to the Zevia brand. We continue scaling our business
aggressively to meet the growing demand for Zevia products and
mitigation efforts are helping address cost pressures broadly
affecting our industry. We believe our growth algorithm is firmly
on track and we are making significant progress on ESG initiatives
aimed at improving global public health by reducing sugar intake as
well as replacing single-use plastics with sustainable
alternatives.”
Third Quarter Results
Net sales increased 22% to $39.0 million in the third quarter of
2021 compared to $32.0 million in the third quarter of 2020. The
growth in net sales was primarily attributable to 26% volume growth
partially offset by a 4% decrease in average price per case due to
higher trade promotions to drive consumer trial and repeat purchase
in the third quarter of 2021.
Gross profit improved to $17.0 million for the third quarter, a
14% increase compared to $14.9 million in the prior year period. As
a percentage of net sales, gross margin was 44% in the third
quarter of 2021 compared to 47% in the third quarter of 2020. The
decline in gross margin resulted from higher trade promotions.
Selling and marketing expense was $12.8 million compared to $7.0
million for the third quarter of 2020, primarily due to higher
freight volumes and rates and increased marketing spend in 2021 to
continue to invest in and grow the Zevia brand.
General and administrative expense was $7.7 million compared to
$4.9 million for the third quarter of 2020, primarily due to public
company costs and increased employee headcount to support
growth.
Equity-based compensation, a non-cash expense, was $45.7 million
for the three months ended September 30, 2021 compared to $28,000
for the three months ended September 30, 2020. The increase of
$45.7 million was primarily driven by expense recognition
associated with restricted stock unit (“RSU”) awards and phantom
stock awards that generally vest as a result of the expiration of
the Initial Public Offering lock-up period in January 2022.
Net loss for the third quarter of fiscal 2021 was $49.8 million,
or $0.75 of diluted loss per share to Zevia’s common class A Common
Stockholders.
Adjusted EBITDA loss was $3.5 million in the third quarter of
fiscal 2021, compared to Adjusted EBITDA income of $3.0 million in
the third quarter of fiscal 2020. 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.
ESG Metrics and developments
In addition to financial metrics, the Company also reports ESG
metrics regarding sugar reduction, plastic packaging reduction, and
affordability. In the third quarter, Zevia estimates it eliminated
approximately three thousand metric tons of sugar from consumers’
diets by selling its zero sugar, naturally sweetened products and
replacing legacy sugary sodas.
The Company also estimates that it eliminated approximately 50
million plastic bottles from littering roadways, waterways, and
communities by selling beverages only in aluminum packaging.
Regarding affordability, the Company’s products are priced at an
average retail price per ounce of $0.07, representing the 36th
percentile within all non-alcoholic, ready-to-drink beverages,
excluding dairy and non-dairy protein. Among non-alcoholic
beverages offered by companies that are certified B Corps, like
Zevia, the Company’s products are at the 36th percentile on price,
meaning that 64% of these products are more expensive than Zevia on
a price per ounce basis.
Balance Sheet and Cash Flows
As of September 30, 2021, the Company had $78.7 million in cash
and no outstanding debt. During the first nine months of fiscal
2021, cash used in operating activities was $13.1 million compared
to cash used in operating activities of $2.1 million during the
first nine months of 2020. The Company spent $2.3 million on
capital expenditures during the first nine months of fiscal 2021 to
support its growth initiatives compared to capital expenditures of
$0.8 million during the first nine months of fiscal 2020.
Webcast
The Company will host a conference call today at 9:00 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,” 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 the anticipated
growth, distribution and velocity. 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, 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 SEC for additional information regarding the risks
and uncertainties that may cause actual results to differ
materially from those expressed in any forward-looking
statement.
(1) Adjusted net loss and Adjusted EBITDA are non-GAAP financial
measures. See the supplementary schedules in this press release for
a discussion of how we define and calculate these measures and a
reconciliation thereof to the most directly comparable GAAP
measures.
About Zevia
Zevia PBC, a 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 2020, Zevia is distributed in more than 25,000
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 INCOME (LOSS) (UNAUDITED) (in
thousands, except for share amounts)
For the Three Months Ended
September 30,
For the Nine Months September
30,
2021
2020
2021
2020
Net sales
$
38,956
$
32,035
$
104,002
$
82,202
Cost of goods sold
21,952
17,109
56,570
44,409
Gross profit
17,004
14,926
47,432
37,793
Operating expenses: Selling and marketing expenses
12,834
6,973
31,525
19,611
General and administrative expenses
7,698
4,935
19,352
13,853
Equity-based compensation
45,731
28
45,804
86
Depreciation and amortization
239
256
713
729
Total operating expenses
66,502
12,192
97,394
34,279
Income (loss) from operations
(49,498
)
2,734
(49,962
)
3,514
Other expense, net
(213
)
(276
)
(251
)
(543
)
Income (loss) before Income Taxes
(49,711
)
2,458
(50,213
)
2,971
Provision for income taxes
(50
)
—
(50
)
—
Net Income (loss) and Comprehensive Income (loss)
(49,761
)
2,458
(50,263
)
2,971
Net income (loss) attributable to Zevia LLC prior to the
Reorganization Transactions
(1,411
)
2,458
(1,913
)
2,971
Loss attributable to noncontrolling interest
22,527
—
22,527
—
Net loss attributable to Zevia PBC
$
(25,823
)
$
—
$
(25,823
)
$
—
Net loss per share attributable to common stockholders, basic (1)
$
(0.75
)
N/A
$
(0.75
)
N/A
Net loss per share attributable to common stockholders, diluted (1)
$
(0.75
)
N/A
$
(0.75
)
N/A
Weighted average common shares outstanding, basic
34,440,982
N/A
34,440,982
N/A
Weighted average common shares outstanding, diluted
34,440,982
N/A
34,440,982
N/A
(1)
Represents earnings per share of Class A
common stock and weighted-average shares of Class A common stock
outstanding for the period from July 22,2021 through September 30,
2021, the period following the reorganization transactions and
initial public offering
ZEVIA PBC CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (in thousands, except unit and per unit
amounts) September 30, 2021 December 31,
2020 ASSETS Current assets: Cash
$
78,720
$
14,936
Accounts receivable, net
14,507
6,944
Inventories
24,927
20,800
Prepaid expenses and other current assets
5,101
1,492
Total current assets
123,255
44,172
Property and equipment, net
2,740
991
Right-of-use assets under operating leases, net
356
773
Intangible assets, net
3,788
3,939
Other non-current assets
3
81
Total assets
$
130,142
$
49,956
LIABILITIES AND REDEEMABLE CONVERTIBLE PREFERRED UNITS AND
MEMBERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable
$
11,925
7,770
Accrued expenses
4,454
3,429
Operating lease liabilities
396
623
Other current liabilities
2,991
2,251
Total current liabilities
19,766
14,073
Operating lease liabilities, net of current portion
4
238
Total liabilities
19,770
14,311
Commitments and contingencies (Note 9) Redeemable convertible
preferred units: No par values. None authorized and outstanding as
of September 30, 2021. Authorized units of 34,410,379, 26,322,803
units issued and outstanding as of December 31, 2020; and aggregate
liquidation preference $329,753 as of December 31, 2020.
—
232,457
Permanent Equity (Deficit) Members’ deficit
—
(196,812
)
Preferred Stock, $0.001 par value. 10,000,000 shares authorized, no
shares issued and outstanding as of September 30, 2021. No shares
authorized, issued and outstanding as of December 31, 2020.
—
—
Class A common stock, $0.001 par value. 550,000,000 shares
authorized, 34,453,247 shares issued and outstanding as of
September 30, 2021. No shares authorized, issued and outstanding as
of December 31, 2020.
34
—
Class B common stock, $0.001 par value. 250,000,000 shares
authorized, 30,113,152 shares issued and outstanding as of
September 30, 2021. No shares authorized, issued and outstanding as
of December 31, 2020.
30
—
Additional paid-in capital
142,813
—
Accumulated deficit
(25,823
)
—
Total Zevia’s Equity / members’ (deficit)
117,054
(196,812
)
Noncontrolling Interests
(6,682
)
—
Total Equity
110,372
(196,812
)
Total liabilities, redeemable convertible preferred units and
equity
$
130,142
$
49,956
ZEVIA PBC CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED) (in thousands)
For the Nine Months Ended
September 30,
(in thousands)
2021
2020
Operating activities: Net income (loss)
$
(50,263
)
$
2,971
Adjustments to reconcile net income (loss) to net cash used in
operating activities: Non-cash lease expense
417
389
Depreciation and amortization
713
703
Loss on sale of equipment
9
—
Amortization of debt issuance cost
94
39
Equity-based compensation
45,804
86
Changes in operating assets and liabilities: Accounts receivable,
net
(7,563
)
(3,428
)
Inventories
(4,127
)
(9,688
)
Prepaid expenses and other current assets
(3,609
)
(237
)
Other non-current assets
(28
)
(22
)
Accounts payable
4,155
3,901
Accrued expenses
1,025
1,575
Operating lease liabilities
(461
)
(284
)
Other current liabilities
740
1,874
Net cash used in operating activities
(13,094
)
(2,121
)
Investing activities: Purchases of property and equipment
(2,308
)
(781
)
Net cash used in investing activities
(2,308
)
(781
)
Financing activities: Proceeds from revolving line of credit
(1)
74,721
82,989
Repayment of revolving line of credit (1)
(74,721
)
(80,207
)
Proceeds from Paycheck Protection Program Loan
—
1,429
Distribution to unitholders for tax payments
(2,669
)
—
Equity financing cost
—
(85
)
Proceeds from exercise of common units
10
16
Proceeds from issuance of Class A common stock sold in initial
public offering, net of underwriting discounts and commissions
139,689
—
Use of proceeds from issuance of Class A common stock to purchase
Zevia LLC Units
(49,609
)
—
Proceeds from the cancellation of options in IPO
2
—
Payment for cancellation of options
(4
)
—
Payment of Offering Costs
(8,101
)
—
Repurchase of Zevia LLC units
(17
)
—
Exercise of stock options
(115
)
—
Net cash provided by financing activities
79,186
4,142
Net change from operating, investing, and financing activities
63,784
1,240
Cash at beginning of period
14,936
3,243
Cash at end of period
$
78,720
$
4,483
Use of Non-GAAP Financial Information
We use financial measures that are not calculated in accordance
with U.S. generally accepted accounting principles (“GAAP”),
Adjusted EBITDA, and Adjusted Net Income (Loss). The Company’s
management believes that Adjusted EBITDA and Adjusted Net Income
(Loss), when taken together with our financial results presented in
accordance with GAAP, provide 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 and Adjusted
Net Income (Loss) are helpful to our investors as they are measures
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 (loss) income adjusted to
exclude: (1) income tax expense, (2) depreciation and amortization
and (3) other income (expense), net, (4) interest expense, and (5)
equity-based compensation expense. 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. We calculate Adjusted Net Income (Loss) as
net (loss) income adjusted to exclude equity-based compensation
expense.
Adjusted EBITDA and Adjusted Net Income (Loss) are presented for
supplemental informational purposes only, have limitations as
analytical tools 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 expense. A
limitation of Adjusted Net Income (Loss) is that it does not
consider the impact of equity-based compensation expense, including
the potential dilutive impact thereof. In addition, our use of
Adjusted EBITDA and Adjusted Net Income (Loss) may not be
comparable to similarly titled measures of other companies because
they may not calculate Adjusted EBITDA or Adjusted Net Income
(Loss) in the same manner, limiting their usefulness as comparative
measures. Because of these limitations, when evaluating our
performance, you should consider Adjusted EBITDA and Adjusted Net
Income (Loss) alongside other financial measures, including our net
loss or income and other results stated in accordance with
GAAP.
ZEVIA PBC Reconciliation of GAAP to Non-GAAP
Measures Net income (loss) to Adjusted EBITDA
reconciliation (in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2021
2020
2021
2020
Net income (loss)
$
(49,761
)
$
2,458
$
(50,263
)
$
2,971
Add back: Income tax expense (benefit)
50
—
50
—
Depreciation and amortization
239
256
713
729
Other expense, net
213
276
251
543
Equity-based compensation expense
45,731
28
45,804
86
Adjusted EBITDA
$
(3,528
)
$
3,018
$
(3,445
)
$
4,329
ZEVIA PBC Reconciliation of GAAP to
Non-GAAP Measures Net income (loss) to Adjusted net income
(loss) reconciliation (in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2021
2020
2021
2020
(in thousands) Net income (loss)
$
(49,761
)
$
2,458
$
(50,263
)
$
2,971
Add back: Equity-based compensation expense
45,731
28
45,804
86
Adjusted net income (loss)
$
(4,030
)
$
2,486
$
(4,459
)
$
3,057
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211112005315/en/
Stephanie Schonauer Investor Contact 714-313-7827
Steph@zevia.com
Reed Anderson ICR 646-277-1260 reed.anderson@icrinc.com
Zevia PBC (NYSE:ZVIA)
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