Zevia PBC (ZVIA) Q1 2025 Earnings Call May 07, 2025 04:30 PM ET Company Participants Jean Fontana - Senior MDAmy Taylor - President, CEO & DirectorGirish Satya - CFO & Principal Accounting OfficerBonnie Herzog - Managing Director Eric Serotta - Executive DirectorSarang Vora - Equity Research Conference Call Participants Jim Salera - Research AnalystAndrew Strelzik - Equity Research AnalystEric Des Lauriers - Senior Research Analyst Operator Greetings, and welcome to the ZBF PBC First Quarter twenty twenty f ...

Zevia PBC (ZVIA) Q1 2025 Earnings Call May 07, 2025 04:30 PM ET Speaker0 Greetings, and welcome to the ZBF PBC First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jean Fontana, Senior Managing Director with ADDO Investor Relations. Thank you. You may begin. Speaker1 Thank you, and welcome ...

1 2 MISSION .. ...creating a world of better-fon-you flavor, better for people and for the planet. zevia Source: Confidential & Proprietary – Do not distribute. © 2024 Zevia PBC 4 1 Numerator Shopper Metrics Report for 12M ending 03/31/2025 4 • • • • • | 2025 | Net Sales | Gross Margin | Net Loss | Adjusted EBITDA Loss¹ | | --- | --- | --- | --- | --- | | OL | $38.0 million (2.0%) vs. PY | 50.1% +440 basis points vs. PY | -$6.4 million +$0.8 million vs. PY | -$3.3 million +$2.2 million vs. PY | 1 Adjusted E ...

PART I Financial Information [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company presents its unaudited interim financial statements for Q1 2025, showing a net loss of $6.4 million and a cash position of $27.7 million [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets decreased to $62.0 million, primarily due to reductions in cash and inventories, while total equity declined to $37.3 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $27,717 | $30,653 | | Inventories | $17,105 | $18,618 | | Total current assets | $56,334 | $61,909 | | **Total assets** | **$61,974** | **$67,951** | | Total current liabilities | $24,031 | $24,222 | | **Total liabilities** | **$24,669** | **$25,006** | | **Total equity** | **$37,305** | **$42,945** | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Net sales slightly decreased by 2.0% to $38.0 million in Q1 2025, while gross profit improved, and the net loss narrowed to $6.4 million Q1 2025 vs Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $38,023 | $38,799 | | Gross profit | $19,035 | $17,719 | | Loss from operations | $(6,387) | $(7,283) | | Restructuring Costs | $2,138 | $0 | | **Net loss** | **$(6,371)** | **$(7,199)** | | Net loss per share (basic & diluted) | $(0.08) | $(0.10) | [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)) Total equity decreased by $5.6 million to $37.3 million, primarily driven by the quarterly net loss of $6.4 million - Total equity declined by $5.6 million during the first quarter of 2025, mainly due to the **net loss of $6.4 million**[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash used in operating activities was $2.9 million, and the company's cash and cash equivalents ended the period at $27.7 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,925) | $(3,202) | | Net cash used in investing activities | $(11) | $(33) | | Net cash provided by financing activities | $0 | $0 | | **Net change in cash** | **$(2,936)** | **$(3,235)** | | **Cash at end of period** | **$27,717** | **$28,720** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Key disclosures include revenue disaggregation, details on the undrawn $20 million credit facility, customer concentration, and a $2.1 million restructuring charge Revenue by Channel & Geography - Q1 2025 (in thousands) | Channel | Revenue | Geography | Revenue | | :--- | :--- | :--- | :--- | | Retail sales | $32,453 | U.S. | $34,751 | | Online/e-commerce | $5,570 | Canada | $3,272 | | **Total Net Sales** | **$38,023** | **Total Net Sales** | **$38,023** | - In Q1 2025, **three major customers (A, C, and J) each accounted for 14% of total net sales**[73](index=73&type=chunk) - The company initiated a Productivity Initiative, resulting in a **$2.1 million restructuring charge in Q1 2025**, primarily for employee termination expenses[79](index=79&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Productivity Initiative's impact, a slight sales decline, significant gross margin improvement, and adequate liquidity [Key Events and Performance Factors](index=20&type=section&id=Key%20Events%20and%20Performance%20Factors) Performance is driven by a Productivity Initiative expected to yield $15.0 million in annualized savings, alongside macroeconomic headwinds like inflation - The Productivity Initiative is expected to result in **annualized benefits of approximately $15.0 million**, with savings being reinvested into brand marketing and promotional activity[96](index=96&type=chunk) - The company is monitoring macroeconomic trends, including inflation and tariffs, which may create a challenging retail environment and impact consumer spending[92](index=92&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 saw a 2.0% net sales decrease to $38.0 million but a 440 basis point gross margin expansion to 50.1% Q1 2025 vs Q1 2024 Results (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $38,023 | $38,799 | (2.0)% | | Gross Profit | $19,035 | $17,719 | 7.4% | | Gross Margin | 50.1% | 45.7% | 4.4% | | Selling and marketing expenses | $15,323 | $15,070 | 1.7% | | General and administrative expenses | $6,978 | $8,115 | (14.0)% | | Restructuring expenses | $2,138 | $0 | N/A | - The decrease in net sales was primarily due to a **$2.5 million increase in allowances for incentives and discounts**, partially offset by $1.6 million from pricing increases[116](index=116&type=chunk) - Marketing expenses increased by $3.5 million (125.6%), funded by a **$3.2 million (25.8%) decrease in selling expenses** (freight, warehousing) resulting from the Productivity Initiative[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with $27.7 million in cash and an undrawn $20 million credit facility - The company has **$27.7 million in cash and cash equivalents** as of March 31, 2025[127](index=127&type=chunk) - A **$20 million revolving credit facility is available**, with no amount outstanding as of March 31, 2025[136](index=136&type=chunk)[138](index=138&type=chunk) - The company is obligated under a Tax Receivable Agreement (TRA) which could result in substantial future payments, estimated at a **potential $58.2 million through 2040**[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA improved to a loss of $3.3 million from a $5.5 million loss in the prior-year period Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss and comprehensive loss | $(6,371) | $(7,199) | | Other income, net | $(57) | $(97) | | Provision for income taxes | $41 | $13 | | Depreciation and amortization | $252 | $328 | | Equity-based compensation | $731 | $1,489 | | Restructuring | $2,138 | $0 | | **Adjusted EBITDA** | **$(3,266)** | **$(5,466)** | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from raw material costs, foreign exchange, inflation, and commodity prices - Profitability is dependent on raw material costs, particularly stevia and aluminum cans, with the price of aluminum expected to increase due to a **25% import tax**[159](index=159&type=chunk)[160](index=160&type=chunk) - The company has **diversified its stevia sourcing to a second supplier** to mitigate price and supply risks[159](index=159&type=chunk) - **Inflation has had a material effect on the business**, and the company may not be able to fully offset higher costs through price increases[164](index=164&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that the company's **disclosure controls and procedures were effective** at a reasonable assurance level as of March 31, 2025[166](index=166&type=chunk) - **No changes occurred during the quarter that materially affected** or are reasonably likely to materially affect the company's internal control over financial reporting[167](index=167&type=chunk) Part II. Other Information [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not subject to any material legal proceedings - The company is **not subject to any material legal proceedings**[169](index=169&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight potential adverse effects from economic disruptions, trade policies, and tariffs on key materials - A new risk factor has been added concerning **disruptions in the worldwide economy**, including changes to trade policies and tariffs[170](index=170&type=chunk)[171](index=171&type=chunk) - The U.S. government imposed a **25% tariff on steel and aluminum imports** and a 10% tariff on other product imports, which could adversely impact operating costs[171](index=171&type=chunk)[173](index=173&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[174](index=174&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[175](index=175&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[176](index=176&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company states that none of its directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - No directors or executive officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the quarter[177](index=177&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files

Exhibit 99.1 Zevia Announces First Quarter 2025 Results Delivers Net Sales at High End of Expectations, Improves Net Loss, Exceeds Adjusted EBITDA Outlook and Achieves Record Gross Margin Maintains 2025 Guidance LOS ANGELES – May 7, 2025 (BUSINESS WIRE) – Zevia PBC ("Zevia" or the "Company") (NYSE: ZVIA), the Company bringing naturally delicious, zero sugar, clean-label beverages, today reported results for the first quarter ended March 31, 2025. First Quarter 2025 Highlights "We are pleased to have deliver ...

Company Overview - Zevia PBC (NYSE: ZVIA) specializes in selling soda, energy drinks, and organic tea in the United States and Canada, emphasizing natural ingredients and zero sugar [1] Distribution and Market Presence - The company distributes the Zevia brand to a wide range of food retailers and other channels, indicating a strong market presence [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1]

Financial Performance - Net sales for 2024 were $155,049,000, a decrease of 6.5% from $166,424,000 in 2023[258] - The net loss attributable to Zevia PBC for 2024 was $20,005,000, compared to a loss of $21,494,000 in 2023, reflecting an improvement[258] - Net sales decreased to $155.0 million for the year ended December 31, 2024, down 6.8% from $166.4 million in 2023, primarily due to a reduction in equivalized cases sold[260] - Adjusted EBITDA for the year ended December 31, 2024, was $(15.2) million, compared to $(19.0) million for 2023, reflecting a net loss of $23.8 million in 2024 versus $28.3 million in 2023[296] Cost Management - Cost of goods sold decreased to $83,120,000 in 2024 from $91,666,000 in 2023, resulting in a gross profit of $71,929,000[258] - Cost of goods sold was $83.1 million in 2024, a decrease of 9.3% from $91.7 million in 2023, attributed to lower write-downs and a decrease in shipments[261] - Selling and marketing expenses were $57,132,000 in 2024, down from $62,312,000 in 2023, while general and administrative expenses decreased to $30,024,000 from $31,495,000[258] - Selling and marketing expenses were $57.1 million in 2024, an 8.3% decrease from $62.3 million in 2023, mainly due to reduced freight and warehousing costs[264] - General and administrative expenses decreased to $30.0 million in 2024, down 4.7% from $31.5 million in 2023, driven by efficiency initiatives[265] - Equity-based compensation expenses fell to $5.0 million in 2024, a 40.1% decrease from $8.3 million in 2023, primarily due to changes in expense recognition methods[266] - Restructuring expenses amounted to $2.1 million in 2024, reflecting costs related to employee severance and asset impairments[267] Profitability and Growth Initiatives - The Productivity Initiative incurred costs of $2.1 million in 2024, with expected annualized benefits of approximately $15 million[242] - The company expects to balance reinvestment of cost savings into brand marketing while pursuing profitability[242] - Future growth is anticipated to be driven by new distribution, increased organic sales, and continued pricing strength despite competitive pressures[243] Liquidity and Cash Flow - As of December 31, 2024, the company had $30.7 million in cash and cash equivalents, indicating adequate liquidity for ongoing operations[271] - Cash used in operating activities was $(1.0) million in 2024, a significant improvement from $(16.3) million in 2023, reflecting better working capital management[284] - Net cash used in operating activities for the year ended December 31, 2024, was $1.0 million, driven by a net loss of $23.8 million, partially offset by non-cash expenses of $7.4 million and a net increase in cash from changes in operating assets and liabilities of $15.4 million[286] - Net cash used in investing activities for the year ended December 31, 2024, was $0.3 million, primarily due to the purchase of property, equipment, and software[288] - Net cash provided by financing activities for the year ended December 31, 2024, was less than $0.1 million, primarily from proceeds of $8 million from a Secured Revolving Line of Credit, which was repaid in the same period[290] Tax and Deferred Assets - The company has a full valuation allowance against deferred tax assets totaling $78.9 million as of December 31, 2024[309] - The Company expects to realize a tax benefit of approximately $56.5 million from the Tax Receivable Agreement (TRA) as of December 31, 2024, an increase from $56.2 million in 2023[316] - The TRA requires the Company to pay 85% of the tax benefits realized from exchanges of Class B units for Class A common stock, with the remaining 15% benefiting the Company[312] - The Company has not recorded a liability related to deferred tax assets (DTAs) as it believes it is more likely than not that these will not be realized as of December 31, 2024[316] Supply Chain and Commodity Risks - The Company has entered into a two-year agreement effective October 15, 2023, with a multi-national ingredient company for fixed pricing on stevia extract, while also sourcing from a second supplier to mitigate risks[319] - The Company is exposed to a 25% import tax on aluminum due to recent U.S. trade policies, which could increase operating costs[320] - During the year ended December 31, 2024, three vendors accounted for approximately 89% of the Company's total raw material and finished goods purchases[322] - Foreign currency transaction losses amounted to approximately $0.7 million for the year ended December 31, 2024, compared to $0.0 million in 2023[323] - The Company is subject to commodity risks related to purchases of aluminum, diesel fuel, cartons, and corrugate, which may limit its ability to recover increased costs through pricing[325] Market Conditions and Strategic Position - The company experienced reduced sales volumes in 2024 due to lost distribution at certain retailers and strategic exits from specific product categories[243] - The Company is classified as an "emerging growth company" and may take advantage of certain exemptions from reporting requirements until December 31, 2026[318] - The Company anticipates that inflation may materially affect its business and financial condition, potentially limiting its ability to offset increased costs through price increases[324]

Confidential & Proprietary – Do not distribute. © 2024 Zevia PBC 1 Q4 2024 FINANCIAL RESULTS Non-GAAP Financial Information Confidential & Proprietary – Do not distribute. © 2024 Zevia PBC 2 We use Adjusted EBITDA, a financial measure in this presentation and the related earnings press release that is not calculated in accordance with U.S. generally accepted accounting principles information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a ...

Zevia PBC (NYSE:ZVIA) Q4 2024 Earnings Conference Call February 26, 2025 8:30 AM ET Company Participants Alex Liskin - ICR Amy Taylor - President and CEO Girish Satya - Principal Accounting Officer and CFO Conference Call Participants James Salera - Stephens Inc. Daniel Gold - BMO Sarang Vora - Telsey Advisory Group Operator By now, everyone should have access to the company's fourth quarter 2024 earnings press release and investor presentation made available this morning. This information is available on ...

Zevia (ZVIA) came out with a quarterly loss of $0.07 per share in line with the Zacks Consensus Estimate. This compares to loss of $0.14 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this stevia-sweetened soda maker would post a loss of $0.11 per share when it actually produced a loss of $0.04, delivering a surprise of 63.64%.Over the last four quarters, the company has surpassed consensus EPS estimates two times.Zevia, which belongs to the Zack ...