The Vita o pany(COCO) - 2025 Q4 - Annual Report

Financial Performance - Net sales for the year ended December 31, 2025, reached $609,780,000, an increase of 18.2% compared to $516,013,000 in 2024[273] - Gross profit for 2025 was $222,595,000, reflecting a 12.0% increase from $198,783,000 in 2024[273] - Income from operations increased to $82,532,000 in 2025, up 11.8% from $73,820,000 in 2024[273] - Net income for 2025 was $71,320,000, representing a 27.5% increase from $55,952,000 in 2024[273] Segment Performance - The Americas segment's net sales for Vita Coco Coconut Water grew by 23.6% to $424,319,000 in 2025, compared to $343,288,000 in 2024[275] - The International segment's net sales for Vita Coco Coconut Water increased by 43.0% to $71,943,000 in 2025, up from $50,318,000 in 2024[275] - Total volume in case equivalent (CE) for Vita Coco Coconut Water increased by 21.3% across both segments in 2025[276] - Americas net sales increased by $66.4 million, or 15.0%, driven by CE volume growth of 11.2% and branded pricing benefits[278] - Vita Coco Coconut Water net sales rose by $81.0 million, or 23.6%, due to increased CE volume and net pricing actions[278] - International net sales increased by $27.3 million, or 37.1%, with CE volume growth of 33.7%[281] Cost and Expenses - Total operating expenses for 2025 were $140,063,000, a 12.1% increase from $124,963,000 in 2024[273] - Total cost of goods sold increased by $70.0 million, or 22.1%, primarily due to CE volume increase and tariffs[283] - Selling, General & Administrative expenses rose by $15.1 million, or 12.1%, driven by higher personnel and marketing expenses[286] - Gross profit increased by $23.8 million, or 12.0%, with a gross margin decrease to 36.5%[284] Tax and Cash Flow - Income tax expense increased by $6.8 million, or 45.9%, with an effective tax rate of 23.3%[292] - Cash flows from operating activities increased by $4.3 million, or 10.0%, compared to the previous year[304] - Cash used in investing activities increased by $7.3 million, primarily due to leasehold improvements for new offices[305] - Net increase in cash and cash equivalents was $32.2 million, a decrease of 2.6% compared to the previous year[303] Debt and Obligations - As of December 31, 2025, the company had an immaterial amount of outstanding debt related to vehicle loans[308] - The company entered into a Credit Facility with Wells Fargo Bank providing for committed borrowings of $60 million, amended to extend maturity to February 13, 2030[309] - No amounts were drawn on the Credit Facility as of December 31, 2025, and the company was compliant with all financial covenants[311] - The company has contractual obligations under noncancelable operating leases with future minimum commitments of $18.6 million as of December 31, 2025[315] - As of December 31, 2025, the company had no outstanding balance on the Credit Facility, which must be repaid by February 2030[314] Revenue Recognition and Accounting Policies - The company recognizes revenue in accordance with ASC Topic 606, with revenue recognized when control of the promised good is transferred to the customer[319] - The company provides trade promotions and sales discounts, which are accounted for as a reduction of revenue[322] - Goodwill is tested for impairment annually on December 31, with no impairments recorded for the years ended December 31, 2025, and 2024[332] - The company has inventory purchase commitments due to be paid within one year, including raw material and packaging commitments[316] - The company accounts for stock-based compensation under ASC Topic 718, recognizing compensation expense over the requisite service period[326]