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NEWAGE REPORTS 386% FULL YEAR 2019 REVENUE GROWTH

GlobeNewswire
NEWAGE REPORTS 386% FULL YEAR 2019 REVENUE GROWTH

NEWAGE REPORTS 386% FULL YEAR 2019 REVENUE GROWTH

 Mar. 16, 2020, 06:00 AM

Strong Balance sheet with over $250 million in assets and cash of $61 million

Business transformation resulted in developing an infrastructure across 60 countries and a near 5-fold increase in full year revenue

DENVER, March 16, 2020 (GLOBE NEWSWIRE) -- NewAge Beverages Corporation (Nasdaq: NBEV), the Colorado-based healthy products company dedicated to inspiring and educating the planet to “live healthy”, today announced financial results for the year ended December 31, 2019 with revenue growth of 386%.

Highlights for Full Year 2019 Compared to Full Year 2018:

  • Net revenue increased 386% to $253.7 million versus prior year of $52.2 million

  • Gross margins increased to 60.2% compared to 17.8% in the prior year

  • Net loss was $89.8 million, driven primarily by a non-cash impairment charge

  • Adjusted EBITDA* loss improved by $1.7 million to $13.4 million from $15.2 million in 2018

* Adjusted EBITDA is a non-GAAP financial measure. See the discussion and reconciliation of non-GAAP financial measures below.

 

Brent Willis, Chief Executive Officer of NewAge commented, “In 2019 we increased our scale five times, evolving from a $50 million company to one with net revenue above $250 million. Whilst doing so, we gained access to a range of new channels and opportunities across our infrastructure that now spans 60 countries worldwide. We also added global iconic brands like Nestea, Volvic, Illy, and Evian to our portfolio, strengthened our platform worldwide and made important investments in our leadership team.  We believe there is no better time to be in the business of healthy products, with a system like ours that primarily delivers directly to consumers’ homes.  We are extremely well positioned to address consumer concerns for staying healthy around the world with our unique portfolio of healthy products and omnichannel route to market.”

Full Year 2019 Financial Results                                                                                                                       

In 2019, net revenue was $253.7 million compared to $52.2 million in 2018, an increase of 386%.

Gross profit for 2019 increased 16-fold to $152.7 million compared to $9.3 million in 2018. Gross margin increased to 60.2% for 2019 compared to 17.8% for 2018, which reflects a significant improvement in product portfolio, penetration of more profitable channels, and access to new, more profitable markets.

Net loss was $89.8 million, or $1.16 per share, during 2019 compared to a net loss of $12.1 million, or $0.26 per share, in 2018. The increase in net loss during 2019 was significantly impacted by the $44.9 million non-cash impairment charge taken during the year related to our U.S. retail brands business.  Adjusted EBITDA loss improved by $1.7 million to $13.4 million from $15.2 million in the prior year period.

 

Gregory A. Gould, Chief Financial Officer, commented, “I believe we are well positioned for 2020 following our business transformation during 2019.  We have a strong balance sheet with over $60 million of cash and over $250 million in assets with less than $30 million of debt, as well as a scale and revenue base that is almost five times the size we were in the prior year. Growing at this pace is always a challenge, but in the process we have kept our balance sheet and capital structure strong, providing us with flexibility for our next steps in 2020.  We have impaired a majority of our U.S. retail business as we focus our efforts on our strongest and most profitable assets, which we expect to drive a meaningful improvement on our EBITDA in 2020.”

Fourth Quarter 2019 Financial Results                                                                                                                       

During the fourth quarter of 2019, net revenue increased 323% to $59.2 million compared to $14.0 million in the fourth quarter of 2018.

Gross profit in the fourth quarter of 2019 increased 10-fold to $32.2 million compared to $3.2 million in the fourth quarter of 2018. Gross margin increased to 54.3% for the fourth quarter of 2019 compared to 23.0% for the fourth quarter of 2018, reflecting the positive change in both product and channel mix, especially with our direct-to-consumer business.

Net loss was $65.9 million, or $0.83 per share, during the fourth quarter of 2019 compared to a net loss of $2.6 million, or $0.04 per share, in the fourth quarter of 2018. The increase in net loss was significantly impacted by the $44.9 million non-cash impairment charge taken during the fourth quarter of 2019.

 

Adjusted EBITDA was a loss of $17.4 million compared to an adjusted EBITDA loss of $8.7 million in the prior year period. The increased adjusted EBITDA loss was due primarily to the impact of the U.S. retail brands that are under strategic review, as well as continued softness in China that have been a consistent industry challenge since government intervention in the early part of 2019.

Conference Call

The Company will host a live conference call and webcast today at 8:00 a.m. ET. Conference call details are provided below. Interested investors can dial into the conference call to hear the details of management's update and participate in a question and answer session.

Date: Monday, March 16, 2020
Time: 8:00 a.m. Eastern time
Toll-free dial-in number: 1-866-221-1749
International dial-in number: 1-270-215-9924
Conference ID: 7818277

The conference call will also be broadcast live and available for replay here and via the investors section of the Company’s website at https://newagebev.com/en-us/our-story/investors. The webcast replay will be available for approximately 45 days following the call.

 

Please call the conference telephone number 5-10 minutes prior to the start time. You will be asked to register your name and organization.

A replay of the conference call will be available after 11:00 a.m. Eastern Time on the same day through Monday, March 23, 2020.

Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 7818277

About NewAge Beverages Corporation (NASDAQ: NBEV)
NewAge is a Colorado based healthy products company dedicated to inspiring and educating consumers to “Live Healthy.”  The Company is the only omni-channel distributed company with access to traditional retail, e-commerce, direct-to-consumer, and medical channels across 60 countries worldwide.  NewAge markets a portfolio of better-for-you products including the brands Tahitian Noni, TeMana, Nestea, Volvic, Illy Coffee, Evian, Búcha Live Kombucha, and others.  The Company operates the websites 
www.newage.comwww.nonibynewage.comwww.nestea.comwww.volvic.comwww.illy.comwww.evian.com, and a number of other individual brand websites. 

NewAge has exclusively partnered with the world's 5th largest water charity, WATERisLIFE, to end the world water crisis with the most innovative technologies available. Donate at WATERisLIFE.com to help us #EnditToday.

 

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4c780b76-2ca5-4b01-b4ad-329a9f9b5ef1

Safe Harbor Disclosure
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statement reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of the Company including statements regarding NewAge’s expectation to see continued growth. The forward-looking statements are based on the assumption that operating performance and results will continue in line with historical results. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate. Forward-looking statements, specifically those concerning future performance are subject to certain risks and uncertainties, and actual results may differ materially. NewAge competes in a rapidly growing and transforming industry, and risk factors, including those disclosed in the Company's filings with the Securities and Exchange Commission, might affect the Company's operations. Unless required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.

For investor inquiries about NewAge Beverages Corporation please contact:

Investor Relations Counsel:
John Mills/Scott Van Winkle
ICR – Strategic Communications and Advisory
Tel: 1-646-277-1254/1-617-956-6736

newage@icrinc.com

NewAge Beverages Corporation:
Gregory A. Gould
Chief Financial Officer
Tel: 1-303-566-3030

Greg_Gould@NewAge.com

 

 

NEW AGE BEVERAGES CORPORATION

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2019 AND 2018

(In thousands, except per share amounts)

 

 

 

 

 

 

ASSETS

2019

 

 

2018

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

  60,842

 

 

$

  42,517

 

Accounts receivable, net of allowance of $535 and $134, respectively

11,012

 

 

9,837

 

Inventories

36,718

 

 

37,148

 

Prepaid expenses and other

  4,384

 

 

  6,473

 

 

 

 

 

 

 

Total current assets

112,956

 

 

95,975

 

 

 

 

 

 

 

Long-term assets:

 

 

 

 

 

Identifiable intangible assets, net

43,443

 

 

67,830

 

Property and equipment, net

28,443

 

 

57,281

 

Goodwill

10,284

 

 

31,514

 

Right-of-use lease assets

38,458

 

 

18,489

 

Deferred income taxes

9,128

 

 

8,908

 

Restricted cash and other

  8,418

 

 

  6,935

 

 

 

 

 

 

 

Total assets

$

  251,130

 

 

$

  286,932

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

  13,259

 

 

$

  8,960

 

Accrued liabilities

49,451

 

 

34,019

 

Current portion of business combination liabilities

5,508

 

 

8,718

 

Current maturities of long-term debt

11,208

 

 

3,369

 

 

 

 

 

 

 

Total current liabilities

79,426

 

 

55,066

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

Business combination liabilities, net of current portion

 

 

 

43,412

 

Long-term debt, net of current maturities

12,802

 

 

1,325

 

Operating lease liabilities, net of current portion:

 

 

 

 

 

Lease liability

35,513

 

 

13,686

 

Deferred lease financing obligation

16,541

 

 

 

 

Deferred income taxes

5,441

 

 

9,747

 

Other

9,132

 

 

9,160

 

 

 

 

 

 

 

Total liabilities

158,855

 

 

132,396

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common Stock; $0.001 par value. Authorized 200,000 shares; issued and outstanding

 

 

 

 

 

81,873 and 75,067 shares as of December 31, 2019 and 2018, respectively

82

 

 

75

 

Additional paid-in capital

203,862

 

 

176,471

 

Accumulated other comprehensive income

802

 

 

626

 

Accumulated deficit

(112,471

)

 

(22,636

)

Total stockholders' equity

92,275

 

 

154,536

 

Total liabilities and stockholders' equity

$

  251,130

 

 

$

  286,932

 

 

 

 

 

 

 

 

NEW AGE BEVERAGES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

        

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

$

  59,225

 

 

$

  13,996

 

 

$

253,708

 

 

$

  52,160

 

Cost of goods sold

27,039

 

 

10,776

 

 

101,001

 

 

42,865

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

32,186

 

 

3,220

 

 

152,707

 

 

9,295

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Commissions

17,131

 

 

1,752

 

 

75,961

 

 

2,781

 

Selling, general and administrative

33,861

 

 

7,552

 

 

114,982

 

 

20,288

 

Business combination expense (gain):

 

 

 

 

 

 

 

 

 

 

 

Financial advisor and other transaction costs

-

 

 

3,189

 

 

-

 

 

3,189

 

Change in fair value of earnout obligations

(900

)

 

-

 

 

(13,809

)

 

100

 

Long-lived asset impairment expense:

 

 

 

 

 

 

 

 

 

 

 

Goodwill and identifiable intangible assets

44,925

 

 

-

 

 

44,925

 

 

-

 

Right-of-use assets

765

 

 

-

 

 

2,265

 

 

-

 

Depreciation and amortization expense

1,888

 

 

856

 

 

8,382

 

 

2,310

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

97,670

 

 

13,349

 

 

232,706

 

 

28,668

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

(65,484

)

 

(10,129

)

 

(79,999

)

 

(19,373

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Gain from sale of property and equipment

8

 

 

-

 

 

6,365

 

 

-

 

Interest expense

(548

)

 

(843

)

 

(3,677

)

 

(1,068

)

Gain (loss) from change in fair value of derivatives, net

67

 

 

(470

)

 

371

 

 

(470

)

Interest and other income (expense), net

6

 

 

(98

)

 

(227

)

 

(151

)

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

(65,951

)

 

(11,540

)

 

(77,167

)

 

(21,062

)

Income tax benefit (expense)

100

 

 

8,927

 

 

(12,668

)

 

8,927

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(65,851

)

 

$

  (2,613

)

 

$

(89,835

)

 

$

(12,135

)

Net loss per share attributable to

 

 

 

 

 

 

 

 

 

 

 

common stockholders (basic and diluted)

$

  (0.83

)

 

$

  (0.04

)

 

$

  (1.16

)

 

$

  (0.26

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of

 

 

 

 

 

 

 

 

 

 

 

Common Stock outstanding (basic and diluted)

79,351

 

 

67,077

 

 

77,252

 

 

46,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEW AGE BEVERAGES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2019 AND 2018

(In thousands)

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$

(89,835

)

 

$

(12,135

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Long-lived asset impairment expense

47,190

 

 

-

 

Depreciation and amortization

8,759

 

 

2,310

 

Non-cash lease expense

7,086

 

 

413

 

Stock-based compensation expense

6,388

 

 

2,533

 

Accretion and amortization of debt discount and issuance costs

1,937

 

 

780

 

Expense for make-whole premium

480

 

 

176

 

Issuance of common stock for acquisition expenses in business combination

-

 

 

1,166

 

Change in fair value of earnout obligations

(13,809

)

 

100

 

Gain from sale of property and equipment

(6,365

)

 

-

 

Deferred income tax benefit

(4,944

)

 

(8,927

)

(Gain) loss from change in fair value of derivatives

(371

)

 

470

 

Changes in operating assets and liabilities, net of effects of business combinations:

 

 

 

 

 

Accounts receivable

(501

)

 

1,286

 

Inventories

2,792

 

 

(3,374

)

Prepaid expenses, deposits and other

902

 

 

(1,777

)

Accounts payable

907

 

 

(3,583

)

Other accrued liabilities

7,583

 

 

(1,269

)

 

 

 

 

 

 

Net cash (used in) operating activities

(31,801

)

 

(21,831

)

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Net proceeds from sale of land and building in Japan:

 

 

 

 

 

Related to sale of property

35,873

 

 

-

 

Repair obligation

1,675

 

 

-

 

Capital expenditures for property and equipment

(5,357

)

 

(744

)

Security deposit under sale leaseback arrangement

(1,799

)

 

-

 

Cash paid for business combinations, net of cash acquired

(963

)

 

(28,694

)

 

 

 

 

 

 

Net cash provided by (used in) investing activities

29,429

 

 

(29,438

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from borrowings

61,288

 

 

9,526

 

Principal payments on borrowings

(43,887

)

 

(9,955

)

Proceeds from issuance of common stock

20,102

 

 

99,857

 

Proceeds from deferred lease financing obligation

17,640

 

 

-

 

Proceeds from exercise of stock options

624

 

 

-

 

Principal payments on business combination obligations

(34,000

)

 

-

 

Debt issuance costs paid

(951

)

 

(634

)

Make-whole premium on early prepayment of debt

(480

)

 

(176

)

Payments for deferred offering costs

(479

)

 

(2,217

)

Payments under deferred lease financing obligation

(463

)

 

-

 

 

 

 

 

 

 

Net cash provided by financing activities

19,394

 

 

96,401

 

 

 

 

 

 

 

Effect of foreign currency translation changes

1,693

 

 

439

 

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

18,715

 

 

45,571

 

Cash, cash equivalents and restricted cash at beginning of year

45,856

 

 

285

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at end of year

$

  64,571

 

 

$

  45,856

 

 

 

 

 

 

 

Non-GAAP Financial Measures

The primary purpose of using non-GAAP financial measures is to provide supplemental information that we believe may be useful to investors and to enable investors to evaluate our results in the same way we do. We also present the non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis, as well as comparing our results against the results of other companies, by excluding items that we do not believe are indicative of our core operating performance. Specifically, we use these non-GAAP measures as measures of operating performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communications with our board of directors concerning our financial performance. Investors should be aware, however, that not all companies define these non-GAAP measures consistently.

 

We provide in the table below a reconciliation from the most directly comparable GAAP financial measure to each non-GAAP financial measure presented.

EBITDA and Adjusted EBITDA. The calculation of our EBITDA and Adjusted EBITDA is presented below (in thousands):

NEW AGE BEVERAGES CORPORATION

ADJUSTED EBITDA CALCULATION

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

  (65,851

)

 

$

  (2,613

)

 

$

  (89,835

)

 

$

  (12,135

)

EBITDA Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

548

 

 

843

 

 

3,677

 

 

1,068

 

Income tax expense (benefit)

(100

)

 

(8,927

)

 

12,668

 

 

(8,927

)

Depreciation and amortization  expense

1,983

 

 

856

 

 

8,759

 

 

2,310

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

(63,420

)

 

(9,841

)

 

(64,731

)

 

(17,684

)

Adjusted EBITDA Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

1,110

 

 

1,146

 

 

6,388

 

 

2,533

 

Impairment of goodwill and identifiable intangible assets

44,925

 

 

-

 

 

44,925

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 

$

  (17,385

)

 

$

  (8,695

)

 

$

  (13,418

)

 

$

  (15,151

)

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA is defined as net income (loss) adjusted to exclude GAAP amounts for interest expense, income tax expense, and depreciation and amortization expense. For the calculation of Adjusted EBITDA, we also exclude the following items for the periods presented:

Stock-Based Compensation Expense: Our compensation strategy includes the use of stock-based compensation to attract and retain employees, directors and consultants. This strategy is principally aimed at aligning the employee interests with those of our stockholders and to achieve long-term employee retention, rather than to motivate or reward operational performance for any particular period. As a result, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.

Impairment of goodwill and identifiable intangible assets: We have excluded impairment write-downs related to goodwill and identifiable intangible assets since these non-cash charges are not indicative of our core operating performance.


Markets Insider and Business Insider Editorial Teams were not involved in the creation of this post.

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