Third Quarter Net Sales Increased 11% to $138MM; Year-To-Date
Third Quarter Gross Margin of 41%, an Improvement of Over 1,400 Basis Points Over 2022
Company Raises Full Year
Company Announces $40MM Share Repurchase Program
Third Quarter 2023 Highlights Compared to Prior-Year Period
- Net sales grew by 11% to
$138 million driven by strong 8% net sales growth and 5% volume growth ofVita Coco Coconut Water which continues to be the largest contributor to growth on a consolidated basis. - Gross profit was $56 million, or 41% of net sales, an increase of
$24 million as compared to 26% of net sales in the prior-year period with the improvement driven by lower year-over-year transportation costs, net sales growth and higherVita Coco Coconut Water pricing. - Net income was
$15 million , or$0.26 per diluted share, compared to$7 million , or$0.13 per diluted share. Net income benefited from strong net sales growth and gross margin improvement resulting primarily from decreased transportation costs, partially offset by increased investments in sales, general and administrative ("SG&A") and a mark-to-market adjustment in foreign currency hedges. - Non-GAAP Adjusted EBITDA1 was
$27 million , compared to$12 million in the prior-year period, up$15 million due to improvements in gross profit partially offset by increased SG&A spending.
2023 Year-To-Date Highlights Compared to Prior-Year Period
- Net sales grew 15% to
$387 million driven by strong 16% net sales growth and 13% volume growth ofVita Coco Coconut Water which continues to be the largest contributor to growth on a consolidated basis. - Gross profit was
$141 million , or 36% of net sales, an increase of$60 million as compared to 24% of net sales in the prior-year period, with the increase driven primarily by lower year-over-year transportation costs, net sales growth and increasedVita Coco Coconut Water pricing. - Net income was
$40 million , or$0.68 per diluted share, compared to$11 million , or$0.19 per diluted share, in the prior-year period with the increase driven by strong net sales growth and gross margin improvement resulting primarily from decreased transportation costs, partially offset by increased investments in SG&A, a mark-to-market adjustment in foreign currency hedges, and increased tax expense. - Non-GAAP Adjusted EBITDA1 was
$60 million , compared to$16 million in the prior-year period due to improvements in gross profit partially offset by increased SG&A spending.
Third Quarter 2023 Consolidated Results
Net sales increased
Improved gross margins and gross profit versus prior-year resulted from the reduction of transportation costs coupled with increased branded pricing and increased sales volumes. Gross profit was
SG&A expenses in the third quarter of 2023 were
Net income was
Non- GAAP Adjusted EBITDA1 for the third quarter of 2023 was
Balance Sheet
As of
On
Fiscal Year 2023 Full Year Outlook
The Company is updating its previously communicated full year 2023 guidance:
- Expect net sales growth of approximately 13-15% compared to fiscal year 2022 [previously 10-12%], based on mid teens
Vita Coco Coconut Water growth and strength in private label resulting from expanded distribution with new and existing customers, plus our revised expectation of retaining the majority of a key customer's private label coconut water business. - Full year gross margins in the range of 35% to 37% [no change] benefiting from improved transportation costs and branded pricing, partially offset by expected private label price/mix impacts.
- Forecast Adjusted EBITDA2 in the range of
$64-67 million [previously$56-60 million ] reflecting full year net sales growth and gross margin improvement offset by increased investment in SG&A to support the long term growth of the company.
Management to provide an update on its private label business and outlook during the earnings conference call later today.
Footnotes:
(1) Adjusted EBITDA represents earnings before interest, taxes, depreciation, and amortization, as adjusted for certain items as set forth in the reconciliation table of U.S. GAAP to non-GAAP information and is a measure calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to the Use of Non-GAAP Financial Information herein for further discussion and reconciliation of this measure to GAAP measures.
(2) GAAP Net Income 2023 outlook is not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors, including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.
Conference Call and Webcast Details
The
About The
The
The company is a
Contacts
Investor Relations:
investors@thevitacococompany.com
Non-GAAP Financial Measures
In addition to disclosing results determined in accordance with
These measures are not in accordance with, or an alternative to,
Forward-Looking Statements
This press release contains forward-looking statements 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. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including but not limited to, statements regarding our future financial and operating performance, including our GAAP and non-GAAP guidance, our strategy, projected costs, prospects, expectations, plans, objectives of management, supply chain predictions, customer and supplier relationships and expected net sales and category share growth.
The forward-looking statements in this release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company’s control. These factors include, but are not limited to, those discussed under the caption “Risk Factors” in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and our other filings with the
Website Disclosure
We intend to use our websites, vitacoco.com and investors.thevitacococompany.com, as a means for disclosing material non-public information and for complying with the
THE | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(Amounts in thousands, except share data) | |||||||
2023 | 2022 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 94,885 | $ | 19,629 | |||
Accounts receivable, net of allowance of | 79,577 | 43,350 | |||||
Inventory | 50,380 | 84,115 | |||||
Supplier advances | 1,525 | 1,534 | |||||
Derivative assets | 3,147 | 3,606 | |||||
Asset held for sale | — | 503 | |||||
Prepaid expenses and other current assets | 17,794 | 22,181 | |||||
Total current assets | 247,308 | 174,918 | |||||
Property and equipment, net | 2,225 | 2,076 | |||||
7,791 | 7,791 | ||||||
Supplier advances | 3,462 | 4,360 | |||||
Deferred tax assets, net | 4,251 | 4,256 | |||||
Right-of-use assets, net | 1,718 | 2,679 | |||||
Other assets | 1,724 | 1,677 | |||||
Total assets | $ | 268,479 | $ | 197,757 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | 21,411 | 15,910 | |||||
Accrued expenses and other current liabilities | 51,242 | 38,342 | |||||
Notes payable, current | 15 | 23 | |||||
Derivative liabilities | 1,371 | 71 | |||||
Total current liabilities | 74,039 | 54,346 | |||||
Notes payable, long-term | 15 | 25 | |||||
Other long-term liabilities | 1,822 | 2,293 | |||||
Total liabilities | 75,876 | 56,664 | |||||
Stockholders’ equity: | |||||||
Common stock, | 629 | 622 | |||||
Additional paid-in capital | 158,244 | 145,210 | |||||
Retained earnings | 93,969 | 55,183 | |||||
Accumulated other comprehensive loss | (1,311 | ) | (994 | ) | |||
(58,928 | ) | (58,928 | ) | ||||
Total stockholders’ equity attributable to The | 192,603 | 141,093 | |||||
Total liabilities and stockholders’ equity | $ | 268,479 | $ | 197,757 |
THE | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
(Amounts in thousands, except for share and per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net sales | $ | 138,064 | $ | 124,043 | $ | 387,468 | $ | 335,796 | |||||||
Cost of goods sold | 81,893 | 91,467 | 246,542 | 254,868 | |||||||||||
Gross profit | 56,171 | 32,576 | 140,926 | 80,928 | |||||||||||
Operating expenses | |||||||||||||||
Selling, general and administrative | 32,649 | 23,960 | 89,855 | 73,018 | |||||||||||
Income (Loss) from operations | 23,522 | 8,616 | 51,071 | 7,910 | |||||||||||
Other income (expense) | |||||||||||||||
Unrealized gain/(loss) on derivative instruments | (3,959 | ) | 952 | (1,758 | ) | 6,416 | |||||||||
Foreign currency gain/(loss) | (1,211 | ) | (364 | ) | (430 | ) | (508 | ) | |||||||
Interest income | 824 | 20 | 1,105 | 30 | |||||||||||
Interest expense | (1 | ) | (130 | ) | (31 | ) | (213 | ) | |||||||
Total other income (expense) | (4,347 | ) | 478 | (1,114 | ) | 5,725 | |||||||||
Income before income taxes | 19,175 | 9,094 | 49,957 | 13,635 | |||||||||||
Income tax expense | (4,011 | ) | (1,836 | ) | (10,101 | ) | (3,011 | ) | |||||||
Net income | $ | 15,164 | $ | 7,258 | $ | 39,856 | $ | 10,624 | |||||||
Net income per common share | |||||||||||||||
Basic | $ | 0.27 | $ | 0.13 | $ | 0.71 | $ | 0.19 | |||||||
Diluted | $ | 0.26 | $ | 0.13 | $ | 0.68 | $ | 0.19 | |||||||
Weighted-average number of common shares outstanding | |||||||||||||||
Basic | 56,493,757 | 55,785,622 | 56,290,195 | 55,658,946 | |||||||||||
Diluted | 59,271,757 | 56,579,912 | 58,494,045 | 56,029,069 |
THE | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
(Amounts in thousands) | |||||||
Nine Months Ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 39,856 | $ | 10,624 | |||
Adjustments required to reconcile net income to cash flows from operating activities: | |||||||
Depreciation and amortization | 503 | 1,442 | |||||
(Gain)/loss on disposal of equipment | 19 | — | |||||
Bad debt expense | 255 | 348 | |||||
Unrealized (gain)/loss on derivative instruments | 1,758 | (6,416 | ) | ||||
Stock-based compensation | 7,126 | 5,657 | |||||
Impairment loss on long-lived asset | 363 | 619 | |||||
Noncash lease expense | 966 | 963 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (37,234 | ) | (20,696 | ) | |||
Inventory | 33,815 | (255 | ) | ||||
Prepaid expenses, net supplier advances, and other assets | 5,215 | (4,433 | ) | ||||
Accounts payable, accrued expenses, and other liabilities | 17,361 | (6,034 | ) | ||||
Net cash provided by (used in) operating activities | 70,003 | (18,181 | ) | ||||
Cash flows from investing activities: | |||||||
Cash paid for property and equipment | (533 | ) | (907 | ) | |||
Proceeds from sale of property and equipment | 5 | — | |||||
Net cash used in investing activities | (528 | ) | (907 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock awards | 5,915 | 2,675 | |||||
Borrowings on credit facility | — | 22,000 | |||||
Repayments of borrowings on credit facility | — | (12,500 | ) | ||||
Cash received (paid) on notes payable | (18 | ) | (22 | ) | |||
Net cash provided by (used in) financing activities | 5,897 | 12,153 | |||||
Effects of exchange rate changes on cash and cash equivalents | 212 | (544 | ) | ||||
Net increase/(decrease) in cash and cash equivalents | 75,584 | (7,479 | ) | ||||
Cash and cash equivalents at beginning of the period | 19,629 | 28,690 | |||||
Cash, cash equivalents and restricted cash at end of the period (1) | $ | 95,213 | $ | 21,211 |
1Includes
RECONCILIATION FROM GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||
(in thousands) | ||||||||||||||
Net income | $ | 15,164 | $ | 7,258 | $ | 39,856 | $ | 10,624 | ||||||
Depreciation and amortization | 163 | 497 | 503 | 1,442 | ||||||||||
Interest income | (824 | ) | (20 | ) | (1,105 | ) | (30 | ) | ||||||
Interest expense | 1 | 130 | 31 | 213 | ||||||||||
Income tax expense | 4,011 | 1,836 | 10,101 | 3,011 | ||||||||||
EBITDA | 18,515 | 9,701 | 49,386 | 15,260 | ||||||||||
Stock-based compensation (a) | 2,862 | 1,457 | 7,126 | 5,657 | ||||||||||
Unrealized (gain)/loss on derivative instruments (b) | 3,959 | (952 | ) | 1,758 | (6,416 | ) | ||||||||
Foreign currency (gain)/loss (b) | 1,211 | 364 | 430 | 508 | ||||||||||
Secondary Offering Costs (c) | — | — | 856 | — | ||||||||||
Other Adjustments (d) | 329 | 1,240 | 329 | 1,240 | ||||||||||
Adjusted EBITDA | $ | 26,876 | $ | 11,810 | $ | 59,885 | $ | 16,249 |
(a) | Non-cash charges related to stock-based compensation, which vary from period to period depending on volume and vesting timing of awards. We adjusted for these charges to facilitate comparison from period to period. |
(b) | Unrealized gains or losses on derivative instruments and foreign currency gains or losses are not considered in our evaluation of our ongoing performance. |
(c) | Reflects other non-recurring expenses related to costs associated with the secondary offering in which |
(d) | Reflects other charges primarily related to the impairment loss related to assets held for sale in both periods and other non-recurring expenses. |
SUPPLEMENTAL INFORMATION | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||
Vita Coco Coconut Water | $ | 89,683 | $ | 82,643 | $ | 253,825 | $ | 217,934 | |||
Private Label | 28,257 | 24,786 | 77,366 | 68,413 | |||||||
Other | 2,706 | 1,367 | 7,490 | 7,553 | |||||||
Subtotal | 120,646 | 108,796 | 338,681 | 293,900 | |||||||
International segment | |||||||||||
Vita Coco Coconut Water | 11,350 | 10,637 | 33,628 | 30,110 | |||||||
Private Label | 5,421 | 3,810 | 13,140 | 9,521 | |||||||
Other | 647 | 800 | 2,019 | 2,265 | |||||||
Subtotal | 17,418 | 15,247 | 48,787 | 41,896 | |||||||
Total net sales | $ | 138,064 | $ | 124,043 | $ | 387,468 | $ | 335,796 |
COST OF GOODS SOLD & GROSS PROFIT | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Cost of goods sold | |||||||||||||||
$ | 70,437 | $ | 78,516 | $ | 214,214 | $ | 220,615 | ||||||||
International segment | 11,456 | 12,951 | 32,328 | 34,253 | |||||||||||
Total cost of goods sold | $ | 81,893 | $ | 91,467 | $ | 246,542 | $ | 254,868 | |||||||
Gross profit | |||||||||||||||
50,208 | 30,279 | 124,466 | 73,285 | ||||||||||||
International segment | 5,963 | 2,297 | 16,460 | 7,643 | |||||||||||
Total gross profit | $ | 56,171 | $ | 32,576 | $ | 140,926 | $ | 80,928 | |||||||
Gross margin | |||||||||||||||
41.6 | % | 27.8 | % | 36.8 | % | 24.9 | % | ||||||||
International segment | 34.2 | % | 15.1 | % | 33.7 | % | 18.2 | % | |||||||
Consolidated | 40.7 | % | 26.3 | % | 36.4 | % | 24.1 | % |
SUPPLEMENTAL INFORMATION | |||||||
VOLUME (CE) | |||||||
Three Months Ended | Nine Months Ended | ||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||
Vita Coco Coconut Water | 9,234 | 8,670 | 26,511 | 23,269 | |||
Private Label | 3,185 | 2,346 | 8,454 | 7,213 | |||
Other | 265 | 200 | 714 | 1,092 | |||
Subtotal | 12,684 | 11,216 | 35,679 | 31,574 | |||
International segment* | |||||||
Vita Coco Coconut Water | 1,504 | 1,581 | 4,665 | 4,412 | |||
Private Label | 725 | 492 | 1,766 | 1,326 | |||
Other | 10 | 13 | 46 | 38 | |||
Subtotal | 2,239 | 2,086 | 6,477 | 5,776 | |||
Total volume (CE) | 14,923 | 13,302 | 42,156 | 37,350 |
Note: A CE is a standard volume measure used by management which is defined as a case of 12 bottles of 330ml liquid beverages or the same liter volume of oil.
*International Other excludes minor volume that is treated as zero CE
Source: The
2023 GlobeNewswire, Inc., source