Net Sales Increased 24% to $38 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 first quarter ended
March 31, 2022.
First Quarter 2022 Highlights
- Net sales of $38.0 million, a 24% increase versus Q1 2021
- Unit volume was 3.4 million equivalized cases, up 21% from Q1
2021
- Gross profit margin of 38.4% compared to 46.2% in Q1 2021
- Net loss was $17.5 million, or $0.30 per diluted share to
Zevia’s Class A Common stockholders, including $8.9 million of
non-cash equity-based compensation expense
- Adjusted EBITDA loss was $8.3 million(1)
“Strong top-line results in the first quarter were driven
largely by volume, and we also benefitted from optimized
promotional investments, reflecting continued momentum across our
business,” said Paddy Spence, Chair and Chief Executive Officer of
Zevia. “While margins were impacted by inflationary factors, they
are poised to move higher in subsequent quarters as our recent
pricing actions take effect. Underlying demand for our products
remains robust as we forge deeper connections with a growing base
of consumers seeking our affordable, great tasting, zero sugar,
zero calorie beverages made with simple, plant-based ingredients.
Our strategic plan is firmly on track and we continue pursuing
aggressive expansion of our distribution across new and existing
channels. Velocities are also improving, aided by product
innovation and marketing initiatives. With a powerful brand and
leverageable platform, we are well positioned for significant
growth and improving profitability as our business continues to
scale. We remain confident in our direction and are reaffirming our
guidance, including net sales growth of 28% to 32% for 2022.”
First Quarter Results
Net sales increased 24% to $38.0 million in the first quarter of
2022 compared to $30.7 million in the first quarter of 2021. Growth
in first quarter net sales was primarily attributable to a 21%
increase in volume driven by increased distribution and consumer
demand, and optimizing promotional investments.
Gross profit improved to $14.6 million for the first quarter of
2022, a 3% increase compared to $14.2 million in the first quarter
of 2021, as growth in net sales was partially offset by higher
costs. As a percentage of net sales, gross profit margin was 38.4%
in the first quarter of 2022 compared to 46.2% in the first quarter
of 2021. The decline in gross profit margin was primarily due to
broad-based inflationary factors, as well as product mix.
Selling and marketing expense was $12.8 million, or 34%, of net
sales in the first quarter of 2022 compared to $8.0 million, or
26%, of net sales in the first quarter of 2021.The increase was
primarily due to equivalized cases produced and sold, inflation,
higher freight costs and higher marketing investments to drive
velocity and grow the Zevia® brand.
General and administrative expense was $10.1 million, or 27%, of
net sales in the first quarter of 2022 compared to $5.7 million, or
18%, of net sales in the first quarter of 2021. The increase was
primarily due to an increase in employee headcount to support
growth and associated public company costs.
Equity-based compensation, a non-cash expense, was $8.9 million
in the first quarter of 2022, of which $3.1 million related to
restricted stock unit awards and phantom stock awards that vested
upon the expiration of the IPO lock-up period in January 2022.
Net loss for the first quarter of 2022 was $17.5 million, or
$0.30 per diluted share to Zevia’s Class A Common stockholders.
Adjusted EBITDA loss was $8.3 million in the first quarter of
2022, compared to an Adjusted EBITDA income of $0.5 million in the
first 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 March 31, 2022, the Company had $58.8 million in cash and
cash equivalents and short-term investments and no outstanding
debt. During the first three months of fiscal 2022, cash used in
operating activities was $11.4 million compared to cash used in
operating activities of $2.3 million during the first three months
of 2021. The Company spent $0.6 million on capital expenditures
during the first three months of fiscal 2022 to support its growth
initiatives compared to capital expenditures of $0.3 million during
the first three months of 2021.
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 second quarter of 2022, net sales are
expected to be in the range of $41 million to $43 million, an
increase of 19% to 25% compared to the second 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 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, pricing factors 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 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 first 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 INCOME (LOSS) (UNAUDITED)
(in thousands, except for share
and per share amounts)
Three Months Ended March
31,
2022
2021
Net sales
$
38,034
$
30,694
Cost of goods sold
23,413
16,506
Gross profit
14,621
14,188
Operating expenses:
Selling and marketing
12,795
7,988
General and administrative
10,129
5,676
Equity-based compensation
8,901
37
Depreciation and amortization
351
244
Total operating expenses
32,176
13,945
Income (loss) from operations
(17,555
)
243
Other income, net
82
4
Income (loss) before income
taxes
(17,473
)
247
Provision for income taxes
(12
)
—
Income (loss) and comprehensive income
(loss)
(17,485
)
247
Loss (income) attributable to
noncontrolling interest
6,587
(247
)
Net loss attributable to Zevia
PBC
$
(10,898
)
$
—
Net loss per share attributable to common
stockholders
Basic
$
(0.30
)
N/A
Diluted
$
(0.30
)
N/A
Weighted average common shares
outstanding
Basic
36,883,037
N/A
Diluted
36,883,037
N/A
ZEVIA PBC
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
March 31, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
28,818
$
43,110
Short-term investments
30,000
30,000
Accounts receivable, net
13,423
9,047
Inventories
32,421
31,501
Prepaid expenses and other current
assets
2,464
3,421
Total current assets
107,126
117,079
Property and equipment, net
4,069
3,664
Right-of-use assets under operating
leases, net
1,083
211
Intangible assets, net
3,688
3,738
Other non-current assets
514
301
Total assets
$
116,480
$
124,993
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
15,278
$
13,492
Accrued expenses and other current
liabilities
6,249
6,705
Current portion of operating lease
liabilities
608
236
Total current liabilities
22,135
20,433
Operating lease liabilities, net of
current portion
484
1
Total liabilities
22,619
20,434
Stockholders' equity
Class A common stock
39
34
Class B common stock
28
30
Additional paid-in capital
179,259
174,404
Accumulated deficit
(56,884
)
(45,986
)
Total stockholder's equity
122,442
128,482
Noncontrolling interests
(28,581
)
(23,923
)
Total equity
93,861
104,559
Total liabilities and equity
$
116,480
$
124,993
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended March
31,
2022
2021
Operating activities:
Net income (loss)
$
(17,485
)
$
247
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Non-cash lease expense
149
136
Depreciation and amortization
351
231
Amortization of debt issuance cost
—
13
Equity-based compensation
8,901
37
Changes in operating assets and
liabilities:
—
—
Accounts receivable, net
(4,376
)
(2,417
)
Inventories
(920
)
734
Prepaid expenses and other assets
957
(1,329
)
Accounts payable
1,645
1,200
Accrued expenses and other current
liabilities
(456
)
(1,033
)
Operating lease liabilities
(166
)
(150
)
Net cash used in operating activities
(11,400
)
(2,331
)
Investing activities:
Purchases of property and equipment
(565
)
(254
)
Net cash used in investing activities
(565
)
(254
)
Financing activities:
Proceeds from revolving line of credit
—
29,466
Repayment of revolving line of credit
—
(29,466
)
Payment of debt issuance costs
(213
)
—
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
16
—
Net cash (used in) provided by financing
activities
(2,327
)
10
Net change from operating, investing, and
financing activities
(14,292
)
(2,575
)
Cash and cash equivalents at beginning of
period
43,110
14,936
Cash and cash equivalents at end of
period
$
28,818
$
12,361
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.
ZEVIA PBC
Reconciliation of GAAP to
Non-GAAP Measures
Net Income (Loss) to Adjusted
EBITDA reconciliation (UNAUDITED)
(in thousands)
Three Months Ended March
31,
(in thousands)
2022
2021
Income (loss) and comprehensive income
(loss)
$
(17,485
)
$
247
Other income, net*
(82
)
(4
)
Provision for income taxes
12
—
Depreciation and amortization
351
244
Equity-based compensation
8,901
37
Adjusted EBITDA
$
(8,303
)
$
524
* 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/20220512005217/en/
Media Annie Samuelson Edelman 713-299-4115
Annie.Samuelson@edelman.com
Investors Reed Anderson ICR 646-277-1260
Reed.Anderson@icrinc.com
Zevia PBC (NYSE:ZVIA)
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