Zevia(US:ZVIA)2026-02-25 21:14Financial Performance - Net sales for the year ended December 31, 2025, were $161.3 million, an increase from $155.0 million in 2024, representing a growth of approximately 8.0%[276] - The net loss attributable to Zevia PBC for 2025 was $9.9 million, a reduction from a net loss of $20.0 million in 2024[276] - Net sales for the year ended December 31, 2025, were $161.3 million, representing a 4.0% increase from $155.0 million in 2024, driven by an increase in equivalized cases sold to 12.7 million[279] - The company reported a net loss of $11.2 million for the year ended December 31, 2025, compared to a net loss of $23.8 million for 2024[316] - Adjusted EBITDA for the year ended December 31, 2025 was $(4.7) million, compared to $(15.2) million for 2024[316] Cost Management - Cost of goods sold increased to $83.8 million in 2025 from $83.1 million in 2024, reflecting ongoing inflationary pressures and tariff impacts[276] - Selling and marketing expenses decreased to $52.4 million in 2025 from $57.1 million in 2024, indicating improved cost management[276] - Selling and marketing expenses decreased by 8.3% to $52.4 million in 2025, while marketing expenses increased by 14.2% to $19.5 million[283][284] - General and administrative expenses remained flat at $30.0 million for both 2025 and 2024, reflecting higher accrued variable compensation offset by cost reductions[286] - Equity-based compensation expenses decreased by 24.1% to $3.8 million in 2025, primarily due to changes in expense recognition methods[287] Profitability - Gross profit for 2025 was $77.4 million, up from $71.9 million in 2024, resulting in a gross margin improvement[276] - Gross profit rose to $77.4 million in 2025, a 7.6% increase from $71.9 million in 2024, with gross margin improving to 48.0% from 46.4%[281][282] Strategic Initiatives - The company expects annualized benefits of approximately $20.0 million from the Productivity Initiative, with savings beginning in the second half of 2024 and continuing through 2026[254] - The Productivity Initiative included a workforce reduction, with restructuring charges of $2.2 million in 2025 and $2.1 million in 2024[254] - The company anticipates continued pricing strength and organic sales growth, despite potential impacts from seasonality and competition[259] - Marketing expenses are expected to increase as the company invests in brand awareness, with a significant increase in 2025 expected to continue into 2026[270] Liquidity and Capital Resources - As of December 31, 2025, the company had $25.4 million in cash and cash equivalents, providing adequate liquidity for ongoing operations[291] - The company entered into an Equity Distribution Agreement allowing for the potential sale of up to $20 million in Class A common stock, although no shares were issued under this agreement in 2025[292] - Future capital requirements will depend on revenue growth and expenditures, with potential needs for additional financing if existing resources are insufficient[294] - The company obtained a Secured Revolving Line of Credit with a commitment of $20 million, maturing on February 22, 2027, with no outstanding amount as of December 31, 2025[301] Inventory and Supply Chain - The company had no material long-term inventory purchase commitments as of December 31, 2025[320] - The Company has diversified its stevia sourcing strategy, now capable of procuring from three qualified entities, enhancing supply continuity and price leverage[342] - The Company relies on three vendors for 100% of its total raw material and finished goods purchases due to changes in supply chain processes[346] Tax and Regulatory Matters - The Company has a full valuation allowance against deferred tax assets (DTAs) totaling $83.7 million as of December 31, 2025, indicating that it is more likely than not that these DTAs will not be realized[331] - The Tax Receivable Agreement (TRA) liability, if tax benefits were fully realizable, would total $58.9 million as of December 31, 2025, up from $56.5 million in 2024[338] - The Company expects to benefit from 15% of any tax benefits realized under the TRA, with payments due within a specified period following tax return filings[334][335] Economic and Market Conditions - The implementation of an import tax on aluminum has increased operating costs, with a 25% tax from March to June 2025 and 50% starting in June 2025[343] - The Company is exposed to inflation risks that could materially affect its business and financial condition if costs rise significantly without the ability to offset through price increases[348] - Foreign currency transaction losses amounted to $0.7 million for the year ended December 31, 2024, while gains were less than $0.1 million for 2025[347] Compliance and Reporting - The company was in compliance with its financial covenant requiring a minimum fixed charge coverage ratio of 1.00 to 1.00 as of December 31, 2025[303] - The Company is classified as an "emerging growth company" and may take advantage of certain exemptions from reporting requirements until December 31, 2026[341]