Fourth Quarter Net Sales Increased 23% to $34.2
Million 2021 Net Sales Increased 26% to $138.2 Million Provides
2022 Net Sales Guidance of $177 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 fourth quarter and
fiscal year ended December 31, 2021.
Fourth Quarter 2021 Highlights
- Net sales of $34.2 million, a 23% increase versus Q4 2020
- Unit volume was 3.0 million equivalized cases, up 22% from Q4
2020
- Gross profit margin of 40.3% compared to 42.1% in Q4 2020
- Net loss was $37.4 million, or $0.59 per diluted share to
Zevia’s Class A Common stockholders, including $31.9 million of
non-cash equity-based compensation expense
- Adjusted EBITDA loss was $5.3 million(1)
Full Year 2021 Highlights
- Net sales of $138.2 million, a 26% increase versus 2020
- Unit volume was 12.3 million equivalized cases, up 25% from
2020
- Gross profit margin of 44.3% compared to 45.0% in 2020
- Net loss was $87.7 million, or $1.33 per diluted share to
Zevia’s Class A Common stockholders, including $77.7 million of
non-cash equity-based compensation expense
- Adjusted EBITDA loss was $8.7 million(1)
“In 2021, we continued executing our long-term strategic plan to
transform our organization and drive growth by enhancing unit
economics, growing our consumer base through innovation and
marketing, and expanding our channel strategy,” said Paddy Spence,
Chair and Chief Executive Officer of Zevia. “Fourth quarter growth
was strong and accelerated sequentially, fueled by broad-based
volume gains across our product portfolio and distribution
channels. Our focused approach to driving trial continues to yield
strong results, as Zevia added over one million new households to
our consumer base."
Mr. Spence continued, “Channel expansion remained a key factor
for continued growth and has proven highly incremental in the
Warehouse Club channel, where more than 65% of Zevia buyers were
new to the brand. Moreover, we are bringing new consumers to the
soda category in Warehouse Club, as more than 75% of Zevia buyers
in Warehouse Club outlets were making their first soft drink
purchase in that channel. We remain well positioned for strong
top-line gains driven by velocity initiatives, new retail
distribution and price realization, all of which we expect to
accelerate as 2022 unfolds. Profitability is also poised for
continued improvement as pricing and scale related efficiencies
take hold, helping to mitigate the impact of cost pressures
stemming from inflation and other supply chain constraints that are
broadly affecting our industry. Looking forward, we continue to
prioritize growth to meet the increasing consumer demand for
affordable, great tasting, zero sugar, zero calorie beverages with
simple, plant-based ingredients.”
Fourth Quarter Results
Net sales increased 23% to $34.2 million in the fourth quarter
of 2021 compared to $27.8 million in the fourth quarter of 2020.
Growth in fourth quarter net sales was primarily attributable to a
22% increase in volume.
Gross profit improved to $13.8 million for the fourth quarter of
2021, an 18% increase compared to $11.7 million in the prior year
period as growth in net sales was partially offset by higher costs
and mix factors. As a percentage of net sales, gross profit margin
was 40.3% in the fourth quarter of 2021 compared to 42.1% in the
fourth quarter of 2020. The decline in gross margin was primarily
due to a combination of inflationary headwinds, including an
increase in aluminum prices, consistent with recent industry
trends, as well as product mix.
Selling and marketing expense was $10.9 million or 32% of net
sales in the fourth quarter of 2021 compared to $7.7 million or 28%
of net sales for the fourth quarter of 2020. The increase was
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 $8.2 million or 24% of
net sales in the fourth quarter of 2021 compared to $5.0 million or
18% of net sales for the fourth quarter of 2020. The increase was
primarily due to the addition of public company costs, as well as
higher headcount and expenses to support growth.
Equity-based compensation, a non-cash expense, was $31.9 million
in the fourth quarter of 2021, reflecting restricted stock unit
awards and phantom stock awards that generally vest over six months
following the initial public offering (“IPO”). In the fourth
quarter of 2020, the Company recognized $7.8 million of non-cash,
equity-based compensation expense in connection with a tender offer
conducted in that period.
Net loss for the fourth quarter of 2021 was $37.4 million, or
$0.59 per diluted share to Zevia’s Class A Common stockholders.
Adjusted EBITDA loss was $5.3 million in the fourth quarter of
2021, compared to an Adjusted EBITDA loss of $1.0 million in the
fourth quarter of 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.
Full Year 2021 Results
Net sales increased 26% to $138.2 million in the full year of
2021 compared to $110.0 million in the full year of 2020 primarily
attributable to a 25% increase in volume.
Gross profit improved to $61.2 million in the full year of 2021,
a 24% increase compared to the $49.5 million in the full year of
2020. As a percentage of net sales, gross profit margin was 44.3%
in the full year of 2021 compared to 45.0% in the full year of
2020, reflecting inflation and product mix factors.
Selling and marketing expense was $42.4 million or 31% of net
sales in the full year of 2021 compared to $27.3 million or 25% of
net sales in the full year of 2020 due to higher freight volumes
and rates and increased marketing spend to grow the Zevia®
brand.
General and administrative expense was $27.5 million or 20% of
net sales in the full year of 2021 compared to $18.8 million or 17%
of net sales in the full year of 2020. The increase was primarily
due to the addition of public company costs as well as higher
headcount and expenses to support growth.
Equity-based compensation, a non-cash expense, was $77.7 million
in the full year of 2021 compared to $7.9 million in the full year
of 2020, reflecting restricted stock unit awards and phantom stock
awards that generally vest over six months following the IPO.
Net loss for 2021 was $87.7 million, or $1.33 per diluted share
to Zevia’s Class A Common stockholders.
Adjusted EBITDA loss was $8.7 million in the full year of 2021
compared to Adjusted EBITDA income of $3.3 million in the full year
of 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
The Company also reports ESG metrics regarding sugar reduction,
plastic packaging reduction, and affordability. In the fourth
quarter of 2021, Zevia estimates it eliminated approximately three
thousand metric tons of sugar from consumers’ diets, as well as
approximately 40 million plastic bottles by selling beverages only
in aluminum packaging. The Company’s products were also priced at
an average retail price per ounce of $0.07, representing the 36th
percentile within all non-alcoholic, ready-to-drink beverages,
making them affordable for a broad range of income levels.
Balance Sheet and Cash Flows
As of December 31, 2021, the Company had $73.1 million in cash
and cash equivalents and short-term investments and no outstanding
debt. During the full year of fiscal 2021, cash used in operating
activities was $17.8 million compared to cash used in operating
activities of $3.3 million during 2020. The Company spent $3.1
million on capital expenditures during the full year of fiscal 2021
to support its growth initiatives compared to capital expenditures
of $0.8 million during 2020. Zevia recently closed on a $20 million
asset-based line of credit with Bank of America, expandable to $30
million, to add to its available liquidity.
2022 Guidance
The Company expects net sales for the full year of 2022 to be in
the range of $177 million to $182 million, an increase of 28% to
32% versus 2021. For the first quarter of 2022, net sales are
expected to be in the range of $36 million to $38 million, an
increase of 17% to 24% compared to the first 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,” 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.
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 2021, 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
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands, except for share
and per share amounts)
For the Three Months Ended
December 31,
For the Year Ended December
31,
2021
2020
2021
2020
Net sales
$
34,170
$
27,823
$
138,172
$
110,025
Cost of goods sold
20,388
16,114
76,958
60,523
Gross profit
13,782
11,709
61,214
49,502
Operating expenses:
Selling and marketing
10,878
7,722
42,403
27,333
General and administrative
8,165
4,963
27,516
18,845
Equity-based compensation
31,919
7,784
77,724
7,870
Depreciation and amortization
284
232
997
932
Total operating expenses
51,246
20,701
148,640
54,980
Loss from operations
(37,464
)
(8,992
)
(87,426
)
(5,478
)
Other income (expense), net
44
(50
)
(207
)
(593
)
Loss before Income Taxes
(37,420
)
(9,042
)
(87,633
)
(6,071
)
Provision (benefit) for income taxes
(16
)
—
34
—
Net loss and comprehensive loss
(37,404
)
(9,042
)
(87,667
)
(6,071
)
Net loss attributable to Zevia LLC prior
to the Reorganization Transactions
—
9,042
1,913
6,071
Loss attributable to noncontrolling
interest
17,241
—
39,768
—
Net loss attributable to Zevia
PBC
$
(20,163
)
$
—
$
(45,986
)
$
—
Net loss per share attributable to common
stockholders
Basic
$
(0.59
)
N/A
$
(1.33
)
(1)
N/A
Diluted
$
(0.59
)
N/A
$
(1.33
)
(1)
N/A
Weighted average common shares
outstanding
Basic
34,457,684
N/A
34,450,409
(1)
N/A
Diluted
34,457,684
N/A
34,450,409
(1)
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 December 31, 2021, the period
following the reorganization transactions and initial public
offering
ZEVIA PBC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
December 31, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
43,110
$
14,936
Short-term investments
30,000
—
Accounts receivable, net
9,047
6,944
Inventories
31,501
20,800
Prepaid expenses and other current
assets
3,421
1,492
Total current assets
117,079
44,172
Property and equipment, net
3,664
991
Right-of-use assets under operating
leases, net
211
773
Intangible assets, net
3,738
3,939
Other non-current assets
301
81
Total assets
$
124,993
$
49,956
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED UNITS AND MEMBERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
13,492
$
8,971
Accrued expenses and other current
liabilities
6,705
4,479
Operating lease liabilities
236
623
Total current liabilities
20,433
14,073
Operating lease liabilities, net of
current portion
1
238
Total liabilities
20,434
14,311
Redeemable convertible preferred units
—
232,457
Permanent Equity (Deficit)
Members’ deficit
—
(196,812
)
Class A common stock
34
—
Class B common stock
30
—
Additional paid-in capital
174,404
—
Accumulated deficit
(45,986
)
—
Total Zevia’s Equity / members’
(deficit)
128,482
(196,812
)
Noncontrolling Interests
(23,923
)
—
Total Equity
104,559
(196,812
)
Total liabilities, redeemable
convertible preferred units and equity
$
124,993
$
49,956
ZEVIA PBC
CONSOLIDATED STATEMENT OF CASH
FLOWS (UNAUDITED)
(in thousands)
For the Year Ended December
31,
2021
2020
Operating activities:
Net loss
$
(87,667
)
$
(6,071
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash lease expense
562
509
Depreciation and amortization
997
932
(Gain) loss on sale of equipment
(4
)
2
Amortization of debt issuance cost
94
52
Equity-based compensation
77,724
7,870
Changes in operating assets and
liabilities:
Accounts receivable, net
(2,062
)
(2,069
)
Inventories
(10,701
)
(9,408
)
Prepaid expenses and other assets
(2,481
)
(187
)
Accounts payable
4,396
2,373
Accrued expenses and other current
liabilities
1,960
3,155
Operating lease liabilities
(624
)
(416
)
Net cash used in operating activities
(17,806
)
(3,258
)
Investing activities:
Payments for purchases of short-term
investments
(30,000
)
—
Purchases of property and equipment
(3,143
)
(805
)
Net cash used in investing activities
(33,143
)
(805
)
Financing activities:
Proceeds from revolving line of credit
74,721
113,056
Repayment of revolving line of credit
(74,721
)
(113,056
)
Proceeds from Paycheck Protection Program
Loan
—
1,429
Repayment of Paycheck Protection Program
Loan
—
(1,429
)
Proceeds from issuance of redeemable
convertible preferred units, net of issuance costs
—
190,435
Repurchase of common and redeemable
convertible preferred units
—
(175,000
)
Proceeds from transaction in common and
redeemable convertible preferred units
—
311
Payment of debt issuance costs
—
(20
)
Distribution to unitholders for tax
payments
(2,669
)
—
Proceeds from exercise of common units
10
30
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
(178
)
—
Net cash provided by financing
activities
79,123
15,756
Net change from operating, investing, and
financing activities
28,174
11,693
Cash and cash equivalents at beginning of
year
14,936
3,243
Cash and cash equivalents at end of
year
$
43,110
$
14,936
Use of Non-GAAP Financial Information
We use a financial measure that is not calculated in accordance
with U.S. generally accepted accounting principles (“GAAP”),
Adjusted EBITDA. The Company’s management believes that Adjusted
EBITDA, 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 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 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 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 (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.
ZEVIA PBC
Reconciliation of GAAP to
Non-GAAP Measures
Net Loss to Adjusted EBITDA
reconciliation (UNAUDITED)
(in thousands)
For the Three Months Ended
December 31,
For the Year Ended December
31,
(in thousands)
2021
2020
2021
2020
Net loss and comprehensive loss
$
(37,404
)
$
(9,042
)
$
(87,667
)
$
(6,071
)
Other (income) expense, net*
(44
)
50
207
593
Provision (benefit) for income taxes
(16
)
—
34
—
Depreciation and amortization
284
232
997
932
Equity-based compensation expense
31,919
7,784
77,724
7,870
Adjusted EBITDA
$
(5,261
)
$
(976
)
$
(8,705
)
$
3,324
* 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/20220224005288/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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