Net loss improved to $2.8 million and Adjusted
EBITDA loss improved to $1.5 million year over year
Expands Distribution into 4,300 Walmart
Stores
Zevia PBC (“Zevia” or the “Company”) (NYSE: ZVIA), the Company
bringing naturally delicious, zero sugar, clean-label beverages
across usage occasions today reported results for the third quarter
ended September 30, 2024.
Third Quarter 2024 Highlights
- Net sales of $36.4 million, a decline of $6.7 million year over
year
- Gross profit margin was 49.1%, an improvement of 3.7 percentage
points year over year
- Net loss was $2.8 million, including $1.0 million of non-cash
equity-based compensation expense, an improvement of $8.4 million
year over year
- Adjusted EBITDA loss was $1.5 million(1), an improvement of
$7.6 million year over year
- Loss per share was $0.04 to Zevia’s Class A Common
stockholders, an improvement of $0.12 year over year
- Subsequent to the third quarter, Zevia expanded distribution to
more than 4,300 U.S. Walmart stores from the 800 it previously
served
(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.
“We are very pleased to have delivered vast improvements in net
loss and adjusted EBITDA, despite coming in slightly below our net
sales expectations,” said Amy Taylor, President and Chief Executive
Officer. “Through the strong execution of our Productivity
Initiative, we now expect to achieve $15 million in annual cost
savings, the majority of which we plan to reinvest in growth
initiatives”.
“Looking ahead, we expect to resume net sales growth in the
fourth quarter, in large part due to expanded nationwide
distribution at Walmart. This partnership not only bolsters volume,
but also fosters awareness and trial across regions where we are
underpenetrated and growing fastest. Overall, we remain laser
focused on executing a powerful brand marketing strategy, building
sustainable distribution expansion and delivering product
innovation that is unmatched in the natural soda category, all of
which we believe will help pave the way to strong profitable growth
long term.”
Third Quarter 2024 Results
Net sales decreased 15.6% to $36.4 million in the third quarter
of 2024 compared to $43.1 million in the third quarter of 2023,
largely due to the expected lost distribution in our club channel
and one customer in our mass channel, resulting in reduced volumes
of 12.2%, and to a lesser degree due to increased promotional
activity at retailers.
Gross profit margin was 49.1% in the third quarter of 2024
compared to 45.4% in the third quarter of 2023, an improvement of
3.7 percentage points. The improvement was primarily due to lower
inventory write-downs and favorable unit costs, partially offset by
higher promotional levels.
Selling and marketing expenses were $12.0 million, or 32.9% of
net sales, in the third quarter of 2024 compared to $20.5 million,
or 47.5%, of net sales in the third quarter of 2023. The
improvement was primarily due to a decrease in freight transfers
and warehousing costs as a result of the impact of supply chain
logistics challenges in the prior year as well as the Productivity
Initiative, and a decrease in repackaging and freight out costs.
These decreases were partially offset by investments made in
marketing to drive brand awareness.
General and administrative expenses were $7.4 million, or 20.3%
of net sales, in the third quarter of 2024 compared to $8.3
million, or 19.1%, of net sales in the third quarter of 2023. The
decrease of $0.9 million was primarily driven by a decrease in
costs as a result of our Productivity Initiative.
Restructuring expenses were $0.1 million in the third quarter of
2024 and primarily includes costs to exit two of our third-party
warehouse and distribution facilities.
Equity-based compensation, a non-cash expense, was $1.0 million
in the third quarter of 2024, compared to $1.9 million in the third
quarter of 2023. The decrease of $0.8 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 third quarter of 2024 was $2.8 million,
compared to net loss of $11.3 million in the third quarter of
2023.
Loss per share for the third quarter of 2024 was $0.04 to
Zevia’s Class A Common stockholders, compared to loss per share of
$0.16 in the third quarter of 2023.
Adjusted EBITDA loss was $1.5 million in the third quarter of
2024, compared to an Adjusted EBITDA loss of $9.1 million in the
third quarter of 2023. 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 September 30, 2024, the Company had $32.7 million in cash
and cash equivalents and no outstanding debt, as well as an unused
credit line of $20 million.
Guidance
The Company is updating its guidance for the full year of 2024
to reflect recent results. Net sales for the full year of 2024 are
now expected to be in the range of $154 million to $156 million.
For the fourth quarter of 2024, net sales are expected to be in the
range of $38 million to $40 million. Adjusted EBITDA losses for the
fourth quarter of 2024 are expected to be in the range of $1.8
million to $2.2 million.
We have not provided the forward-looking GAAP equivalent to our
Adjusted EBITDA outlook or a GAAP reconciliation as a result of the
uncertainty regarding, and the potential variability of,
reconciling items such as stock-based compensation, income tax, and
charges associated with restructuring and cost saving initiatives,
including but not limited to severance costs,
warehouse/distribution facility exit costs, and asset impairments.
Accordingly, a reconciliation of this non-GAAP guidance metric to
its corresponding GAAP equivalent is not available without
unreasonable effort. These items are inherently variable and
uncertain and depend on various factors, some of which are outside
of the Company’s control or ability to predict. However, it is
important to note that the reconciling items could have a
significant effect on future GAAP results. We have provided
historical reconciliations of GAAP to non-GAAP metrics in tables at
the end of this release. For more information regarding the
non-GAAP financial measures discussed in this earnings release,
please see "Reconciliation of GAAP to non-GAAP Financial Results"
below.
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 Guidance, expected
benefits of and annualized cost savings from the Productivity
Initiative, long-term growth opportunities, future results of
operations or financial condition, strategic direction, and plans
and objectives of management for future operations, including
marketing, distribution expansion and product innovation.
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, cost reduction initiatives, and to compete effectively,
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, our ability to maintain our
listing on the New York Stock Exchange, 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,
and vegan. 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 grocery, drug, warehouse club, mass, natural,
convenience and ecommerce channels.
(ZEVIA-F)
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(in thousands, except share and
per share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net sales
$
36,366
$
43,089
$
115,591
$
128,630
Cost of goods sold
18,516
23,517
63,080
69,261
Gross profit
17,850
19,572
52,511
59,369
Operating expenses:
Selling and marketing
11,981
20,455
40,673
48,467
General and administrative
7,377
8,250
23,186
23,102
Equity-based compensation
1,034
1,876
3,950
6,614
Depreciation and amortization
310
411
1,041
1,234
Restructuring
112
—
977
—
Total operating expenses
20,814
30,992
69,827
79,417
Loss from operations
(2,964
)
(11,420
)
(17,316
)
(20,048
)
Other income, net
118
165
357
908
Loss before income taxes
(2,846
)
(11,255
)
(16,959
)
(19,140
)
(Benefit) provision for income taxes
(4
)
(5
)
43
31
Net loss and comprehensive loss
(2,842
)
(11,250
)
(17,002
)
(19,171
)
Loss attributable to noncontrolling
interest
315
3,033
2,760
4,932
Net loss attributable to Zevia
PBC
$
(2,527
)
$
(8,217
)
$
(14,242
)
$
(14,239
)
Net loss per share attributable to common
stockholders
Basic
$
(0.04
)
$
(0.16
)
$
(0.25
)
$
(0.27
)
Diluted
$
(0.04
)
$
(0.16
)
$
(0.25
)
$
(0.27
)
Weighted average common shares
outstanding
Basic
59,490,258
50,754,470
58,037,780
50,074,992
Diluted
59,490,258
50,754,470
58,037,780
50,074,992
ZEVIA PBC
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
32,688
$
31,955
Accounts receivable, net
10,008
11,119
Inventories
20,690
34,550
Prepaid expenses and other current
assets
2,676
5,063
Total current assets
66,062
82,687
Property and equipment, net
1,490
2,109
Right-of-use assets under operating
leases, net
1,509
1,959
Intangible assets, net
3,276
3,523
Other non-current assets
522
579
Total assets
$
72,859
$
90,857
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
14,865
$
21,169
Accrued expenses and other current
liabilities
7,700
5,973
Current portion of operating lease
liabilities
629
575
Total current liabilities
23,194
27,717
Operating lease liabilities, net of
current portion
892
1,373
Other non-current liabilities
58
—
Total liabilities
24,144
29,090
Stockholders’ equity
Class A common stock
60
54
Class B common stock
13
17
Additional paid-in capital
188,014
191,144
Accumulated deficit
(115,579
)
(101,337
)
Total Zevia PBC stockholders’
equity
72,508
89,878
Noncontrolling interests
(23,793
)
(28,111
)
Total equity
48,715
61,767
Total liabilities and equity
$
72,859
$
90,857
ZEVIA PBC
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended September
30,
2024
2023
Operating activities:
Net loss
$
(17,002
)
$
(19,171
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Non-cash lease expense
450
423
Depreciation and amortization
1,041
1,234
Loss on disposal of property, equipment
and software, net
55
101
Amortization of debt issuance cost
57
57
Equity-based compensation
3,950
6,614
Changes in operating assets and
liabilities:
Accounts receivable, net
1,111
(5,295
)
Inventories
13,860
(21,822
)
Prepaid expenses and other assets
2,387
(451
)
Accounts payable
(6,296
)
30,312
Accrued expenses and other current
liabilities
1,727
(1,234
)
Operating lease liabilities
(427
)
(436
)
Other non-current liabilities
58
—
Net cash provided by (used in) operating
activities
971
(9,668
)
Investing activities:
Purchases of property, equipment and
software
(238
)
(1,557
)
Proceeds from sales of property, equipment
and software
—
2,343
Net cash (used in) provided by investing
activities
(238
)
786
Financing activities:
Proceeds from revolving line of credit
8,000
—
Repayment of revolving line of credit
(8,000
)
—
Proceeds from exercise of stock
options
—
25
Net cash provided by financing
activities
—
25
Net change from operating, investing, and
financing activities
733
(8,857
)
Cash and cash equivalents at beginning of
period
31,955
47,399
Cash and cash equivalents at end of
period
$
32,688
$
38,542
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, (2) provision
(benefit) for income taxes, (3) depreciation and amortization, (4)
equity-based compensation, and (5) restructuring expenses (for
2024, in light of our Productivity Initiative). 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 restructuring. 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 a
comparative measure. 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 FINANCIAL RESULTS
(in thousands)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net loss and comprehensive loss
$
(2,842
)
$
(11,250
)
$
(17,002
)
$
(19,171
)
Other income, net*
(118
)
(165
)
(357
)
(908
)
(Benefit) provision for income taxes
(4
)
(5
)
43
31
Depreciation and amortization
310
411
1,041
1,234
Equity-based compensation
1,034
1,876
3,950
6,614
Restructuring
112
—
977
—
Adjusted EBITDA
$
(1,508
)
$
(9,133
)
$
(11,348
)
$
(12,200
)
* Includes interest (income) expense, and foreign currency
(gains) losses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106357116/en/
Investors Greg Davis Zevia PBC 424-343-2654
Gregory@zevia.com
Reed Anderson ICR 646-277-1260 Reed.Anderson@icrinc.com
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