Zevia(US:ZVIA)2025-11-05 21:15Financial Performance - Net sales for the three months ended September 30, 2025, were $40.844 million, an increase of 12.1% compared to $36.366 million for the same period in 2024[117] - Gross profit for the nine months ended September 30, 2025, was $59.342 million, up from $52.511 million in 2024, reflecting a gross margin improvement[117] - Net sales for the three months ended September 30, 2025, were $40.8 million, a 12.3% increase from $36.4 million in the same period of 2024, driven by a 12.6% increase in equivalized cases sold[119] - Net sales for the nine months ended September 30, 2025, were $123.4 million, a 6.7% increase from $115.6 million in 2024, attributed to expanded distribution and pricing increases[131] Expenses and Cost Management - Selling and marketing expenses for the three months ended September 30, 2025, were $12.665 million, compared to $11.981 million in 2024, indicating increased investment in promotional activities[117] - General and administrative expenses for the nine months ended September 30, 2025, were $22.733 million, slightly down from $23.186 million in 2024, indicating cost management efforts[117] - Cost of goods sold for the nine months ended September 30, 2025, was $64.0 million, a 1.5% increase from $63.1 million in 2024, with favorable unit costs partially offsetting higher volumes[132] - Selling and marketing expenses for the nine months ended September 30, 2025, were $41.4 million, an increase of $0.7 million or 1.7% compared to $40.7 million in the same period of 2024[135] - General and administrative expenses increased by 4.0% to $7.7 million for the three months ended September 30, 2025, driven by higher variable compensation[127] Profitability and Loss - The company experienced a net loss attributable to Zevia PBC of $2.686 million for the three months ended September 30, 2025, compared to a net loss of $2.527 million in 2024[117] - The net loss for the nine months ended September 30, 2025, was $(9,870) thousand, compared to $(17,002) thousand for the same period in 2024[171] - Adjusted EBITDA for the three months ended September 30, 2025, was $(1,721) thousand, compared to $(1,508) thousand for the same period in 2024[171] Strategic Initiatives - The Productivity Initiative is expected to yield annualized benefits of approximately $20.0 million, with savings being reinvested into brand marketing and promotional activities[95] - Restructuring charges related to the Productivity Initiative were completed as of September 30, 2025, with no additional costs incurred in the third quarter of 2025[93] - The company anticipates continued growth driven by new distribution, increased organic sales, and product innovation, despite potential challenges from seasonality and competition[100] Cash Flow and Liquidity - As of September 30, 2025, the company had $26.0 million in cash and cash equivalents, which, along with operating activities and available borrowings, is expected to provide adequate liquidity for ongoing operations[144] - Net cash used in operating activities was $4.2 million for the nine months ended September 30, 2025, primarily driven by a net loss of $9.9 million, partially offset by non-cash expenses and changes in operating assets and liabilities[162] - The company had no outstanding amount on its Secured Revolving Line of Credit as of September 30, 2025, which has a borrowing capacity of up to $20 million[156] Market and Economic Conditions - The company has increased pricing on several products in response to widespread inflation, which may impact future sales volume[96] - Inflation has had a material effect on the company's business, and further significant inflationary pressures could harm financial condition[186] - The implementation of an import tax on aluminum has increased operating costs, with expectations of continued increases in cost of goods sold[182] - The company is subject to commodity risks related to purchases of aluminum, diesel fuel, cartons, and corrugate[187] Supply Chain and Operations - The company has approved sourcing from a second multi-national ingredient company for stevia leaf extract to diversify supply and mitigate price disruptions[181] - The company entered into a lease amendment extending the lease term through December 31, 2026, and expanding the total square footage from 17,923 square feet to 20,185 square feet[172]