Q4 Net Sales up 6.9%, including unit volumes up
3.7%
Zevia PBC (“Zevia” or the “Company”) (NYSE: ZVIA), the company
bringing great tasting, zero sugar beverages made with simple,
plant-based ingredients across all usage occasions to households
across income levels, today reported results for the fourth quarter
and fiscal year ended December 31, 2023.
Fourth Quarter 2023 Highlights
- Net sales increased 6.9% year over year to $37.8 million,
returning to growth
- Unit volume increased 3.7% year over year to 2.8 million
equivalized cases
- Gross profit margin was 40.7%, down 3.6 percentage points year
over year, primarily driven by inventory losses while accelerating
our supply chain transition
- Net loss was $9.2 million, including $1.7 million of non-cash
equity-based compensation expense
- Adjusted EBITDA loss was $6.8 million(1)
- Loss per share was $0.14 per diluted share to Zevia’s Class A
Common stockholders
Full Year 2023 Highlights
- Net sales increased 2.0% year over year to $166.4 million,
reflecting the impact of short-term supply chain disruptions
encountered during the year
- Unit volume decreased 6.9% year over year to 12.7 million
equivalized cases
- Gross profit margin was 44.9%, up 2.0 percentage points year
over year
- Net loss was $28.3 million, including $8.3 million of non-cash
equity-based compensation expense
- Adjusted EBITDA loss was $19.0 million(1)
- Loss per share was $0.41 per diluted share to Zevia’s Class A
Common stockholders
(1) 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.
“Our fourth quarter volume growth reflects continued underlying
consumer demand, a healthy business within our core customer base
and exciting growth levels with developing customers,” said Amy
Taylor, President and Chief Executive Officer. “We enter 2024 on a
strong foundation, with a stable and scalable supply chain and the
brand refresh fully in market. Our liquidity position and gross
margins allow us to invest in growth amid tailwinds from consumer
trends, building on our position as the number one consumer choice
among natural beverages.”
“We continue to expect top-line acceleration for the full year
of 2024 from a mix of volume and price, and gains in household
penetration as we execute key initiatives to drive distribution
expansion.” Taylor continued. “This includes Zevia’s
route-to-market evolution, and an initial expansion into the
convenience channel.”
Fourth Quarter 2023 Results
Net sales increased 6.9% to $37.8 million in the fourth quarter
of 2023 compared to $35.4 million in the fourth quarter of 2022,
driven by higher price realizations and volumes that increased
3.7%.
Gross profit decreased 1.7% to $15.4 million in the fourth
quarter of 2023 compared to $15.7 million in the fourth quarter of
2022, and gross profit margin of 40.7% was down 3.6 percentage
points compared to the fourth quarter of 2022. The decline in gross
profit margin was driven by the decision made in the latter half of
the quarter relating to the brand refresh, SKUs optimization, and
procurement changes which led to inventory losses.
Selling and marketing expenses were $13.8 million, or 36.6%, of
net sales in the fourth quarter of 2023 compared to $10.0 million,
or 28.3%, of net sales in the fourth quarter of 2022. The increase
was primarily due to higher freight and freight transfer costs
related to the short-term supply chain logistics challenges in 2023
which have been remediated, and higher warehousing costs as we
continued to manage our inventory back to optimal levels.
General and administrative expenses were $8.4 million, or 22.2%,
of net sales in the fourth quarter of 2023 compared to $8.5
million, or 24.1%, of net sales in the fourth quarter of 2022.
Equity-based compensation, a non-cash expense, was $1.7 million
in the fourth quarter of 2023, compared to $3.1 million in the
fourth quarter of 2022. The decrease of $1.4 million was largely
due to the accelerated method of expense recognition on certain
equity awards issued in connection with the Company’s IPO in 2021,
partially offset by equity-based compensation expense related to
new equity awards granted.
Net loss for the fourth quarter of 2023 was $9.2 million,
compared to net loss of $6.2 million in the fourth quarter of
2022.
Loss per share for the fourth quarter of 2023 was $0.14 per
diluted share to Zevia’s Class A Common stockholders, compared to
loss per share of $0.09 in the fourth quarter of 2022.
Adjusted EBITDA loss was $6.8 million in the fourth quarter of
2023, compared to an Adjusted EBITDA loss of $2.9 million in the
fourth quarter of 2022. 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 2023 Results
Net sales increased 2.0% to $166.4 million in the full year of
2023 compared to $163.2 million in the full year of 2022, primarily
driven by higher price realizations which were partially offset by
a decrease in volumes due to short-term logistics challenges in the
midst of a supply chain transition.
Gross profit increased 6.8% to $74.8 million in the full year of
2023 compared to $70.0 million in the full year of 2022, and gross
profit margin of 44.9% was up 2.0 percentage points compared to the
full year of 2022. These improvements were primarily driven by
pricing increases in 2022 and 2023, partially offset by lower
volumes and higher inventory losses.
Selling and marketing expenses were $62.3 million, or 37.4%, of
net sales in the full year of 2023 compared to $52.9 million, or
32.4%, of net sales in the full year of 2022. The increase was
primarily due to higher freight and warehousing costs associated
with the short-term supply chain logistics challenges in the third
and fourth quarters of 2023.
General and administrative expenses were $31.5 million, or
18.9%, of net sales in the full year of 2023 compared to $36.8
million, or 22.5%, of net sales in the full year of 2022. The
decrease was primarily due to a $2.6 million decrease in
employee-related costs, and $2.8 million decrease driven by cost
productivity initiatives.
Equity-based compensation, a non-cash expense, was $8.3 million
in the full year of 2023, compared to $26.9 million in the full
year of 2022. The decrease of $18.6 million was primarily driven by
$11.2 million of lower equity-based compensation expense due to the
acceleration of vesting of RSU awards upon retirement of senior
management employees during 2022, $5.9 million of expense related
to the accelerated method of expense recognition on certain equity
awards issued in connection with the Company’s IPO in 2021, and
$2.7 million related to RSU and restricted phantom stock awards
that vested over six months following the IPO in the prior year,
partially offset by equity-based compensation expense related to
new equity awards granted.
Net loss for the full year of 2023 was $28.3 million, compared
to net loss of $47.6 million in the full year of 2022.
Loss per share for the full year of 2023 was $0.41 per diluted
share to Zevia’s Class A Common stockholders, compared to loss per
share of $0.81 in the full year of 2022.
Adjusted EBITDA loss was $19.0 million in the full year of 2023,
compared to an Adjusted EBITDA loss of $19.6 million in the full
year of 2022. 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 December 31, 2023, the Company had $32.0 million in cash
and cash equivalents and no outstanding debt, as well as an unused
credit line of $20 million.
Guidance
The Company expects net sales for the first quarter of 2024 to
be in the range of $38 million to $40 million.
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 “anticipate,”
“believe,” “consider,” “contemplate,” “continue,” “could,’”
“estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “on
track,” “outlook,” “plan,” “potential,” “predict,” “project,”
pursue,” “seek,” “should,” “target,” “will,” “would,” or the
negative of these words or other similar words, terms or
expressions with similar meanings. 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 2024 Guidance and
anticipated growth and distribution expansion, future results of
operations or financial condition, strategic direction, plans and
objectives of management for future operations, branding, operating
environment, distribution, velocity, pricing and costs.
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, our ability to successfully execute on our rebranding
strategy and to compete effectively, cost reduction initiatives,
our ability to maintain supply chain service levels and any
disruption of our supply chain, product demand, changes in the
retail landscape or in sales to any key customer; change in
consumer preferences, pricing factors, our ability to manage
changes in our workforce, future cyber incidents and other
disruptions to our information systems, failure to comply with
personal data protection and privacy laws, the impact of inflation
on our sales growth and cost structure such as increased commodity,
packaging, transportation and freight, warehouse, labor and other
input costs and other economic conditions, our reliance on contract
manufacturers and service providers, competitive and governmental
factors outside of our control, such as pandemics or epidemics,
adverse global macroeconomic conditions, including relatively high
interest rates, instability in financial institutions and a
recessionary environment, any potential shutdown of the U.S.
government, and geopolitical events or conflicts, including the
military conflicts in Ukraine and the Middle East and trade
tensions between the U.S. and China, failure to adequately protect
our intellectual property rights or infringement on intellectual
property rights of others, potential liabilities and costs from
litigation, claims, legal or regulatory proceedings, inquiries or
investigations, 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 Delaware 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. Zevia is distributed in more than 34,000
retail locations in the U.S. and Canada through a diverse network
of major retailers in the food, drug, warehouse club, mass, natural
and ecommerce channels.
(ZEVIA-F)
ZEVIA PBC
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and
per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net sales
$
37,794
$
35,366
$
166,424
$
163,181
Cost of goods sold
22,405
19,713
91,666
93,160
Gross profit
15,389
15,653
74,758
70,021
Operating expenses:
Selling and marketing
13,845
10,025
62,312
52,869
General and administrative
8,393
8,536
31,495
36,793
Equity-based compensation
1,665
3,099
8,279
26,880
Depreciation and amortization
381
342
1,615
1,347
Total operating expenses
24,284
22,002
103,701
117,889
Loss from operations
(8,895
)
(6,349
)
(28,943
)
(47,868
)
Other (expense) income, net
(235
)
222
673
286
Loss before income taxes
(9,130
)
(6,127
)
(28,270
)
(47,582
)
Provision for income taxes
21
43
52
65
Net loss and comprehensive loss
(9,151
)
(6,170
)
(28,322
)
(47,647
)
Loss attributable to noncontrolling
interest
1,896
1,785
6,828
13,790
Net loss attributable to Zevia
PBC
$
(7,255
)
$
(4,385
)
$
(21,494
)
$
(33,857
)
Net loss per share attributable to common
stockholders
Basic
$
(0.14
)
$
(0.09
)
$
(0.41
)
$
(0.81
)
Diluted
$
(0.14
)
$
(0.09
)
$
(0.41
)
$
(0.81
)
Weighted average common shares
outstanding
Basic
52,220,804
47,368,849
50,618,758
43,469,383
Diluted
52,220,804
47,368,849
50,618,758
43,469,383
ZEVIA PBC
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
31,955
$
47,399
Accounts receivable, net
11,119
11,077
Inventories
34,550
27,576
Prepaid expenses and other current
assets
5,063
2,607
Total current assets
82,687
88,659
Property and equipment, net
2,109
4,641
Right-of-use assets under operating
leases, net
1,959
708
Intangible assets, net
3,523
4,385
Other non-current assets
579
539
Total assets
$
90,857
$
98,932
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
21,169
$
8,023
Accrued expenses and other current
liabilities
5,973
8,408
Current portion of operating lease
liabilities
575
715
Total current liabilities
27,717
17,146
Operating lease liabilities, net of
current portion
1,373
—
Total liabilities
29,090
17,146
Stockholders’ equity
Class A common stock
54
48
Class B common stock
17
22
Additional paid-in capital
191,144
189,724
Accumulated deficit
(101,337
)
(79,843
)
Total Zevia PBC stockholders’
equity
89,878
109,951
Noncontrolling interests
(28,111
)
(28,165
)
Total equity
61,767
81,786
Total liabilities and equity
$
90,857
$
98,932
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED)
(in thousands)
Year Ended December
31,
2023
2022
Operating activities:
Net loss
$
(28,322
)
$
(47,647
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Non-cash lease expense
567
653
Depreciation and amortization
1,615
1,347
Loss on disposal of property, equipment
and software, net
480
3
Amortization of debt issuance cost
76
64
Equity-based compensation
8,279
26,880
Changes in operating assets and
liabilities:
Accounts receivable, net
(42
)
(2,030
)
Inventories
(6,974
)
3,925
Prepaid expenses and other assets
(2,573
)
846
Accounts payable
13,640
(5,850
)
Accrued expenses and other current
liabilities
(2,435
)
1,703
Operating lease liabilities
(585
)
(672
)
Net cash used in operating activities
(16,274
)
(20,778
)
Investing activities:
Proceeds from maturities of short-term
investments
—
30,000
Purchases of property, equipment and
software
(1,624
)
(2,593
)
Proceeds from sales of property and
equipment
2,429
—
Net cash provided by investing
activities
805
27,407
Financing activities:
Payment of debt issuance costs
—
(334
)
Minimum tax withholding paid on behalf of
employees for net share settlement
—
(2,130
)
Proceeds from exercise of stock
options
25
124
Net cash provided by (used in) financing
activities
25
(2,340
)
Net change from operating, investing, and
financing activities
(15,444
)
4,289
Cash and cash equivalents at beginning of
period
47,399
43,110
Cash and cash equivalents at end of
period
$
31,955
$
47,399
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. Also, Adjusted EBITDA may in the future
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.
The following table presents a reconciliation of net loss, the
most directly comparable financial measure stated in accordance
with GAAP, to Adjusted EBITDA for the periods presented:
Three Months Ended December
31,
Year Ended December
31,
(in thousands)
2023
2022
2023
2022
Net loss and comprehensive loss
$
(9,151
)
$
(6,170
)
$
(28,322
)
$
(47,647
)
Other expense (income), net*
235
(222
)
(673
)
(286
)
Provision for income taxes
21
43
52
65
Depreciation and amortization
381
342
1,615
1,347
Equity-based compensation
1,665
3,099
8,279
26,880
Adjusted EBITDA
$
(6,849
)
$
(2,908
)
$
(19,049
)
$
(19,641
)
* 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/20240227272707/en/
Media Annie Thompson Edelman Smithfield 713-299-4115
Annie.Thompson@edelmansmithfield.com
Investors Greg Davis Zevia PBC 424-343-2654
Gregory@zevia.com
Reed Anderson ICR 646-277-1260 Reed.Anderson@icrinc.com
Zevia PBC (NYSE:ZVIA)
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