The following is a summary of the Zevia PBC (ZVIA) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Zevia reported Q4 net sales of $37.8 million, up 6.9% compared to prior year, boosted by a price increase and a return to volume growth.

• Gross margin dropped 3.6 percentage points to 40.7%, impacted by supply chain transition and write-off of some legacy branded material.

• Selling, marketing, and G&A expenses rose, with significant surge in selling and marketing costs to $13.8 million, largely due to increased freight and warehouse expenses.

• The company experienced a net loss and loss per share increase to $9.2 million and $0.14 per share respectively, primarily due to supply chain issues.

• Zevia's balance sheet remains strong, with $32 million in cash and cash equivalents, and no outstanding debt.

Business Progress:

• Zevia saw a return to volume growth and net sales growth in Q4, supported by a successful customer fulfillment issue resolution and brand refresh.

• The brand is well-positioned to deliver a gross margin in the mid-40s, backed by strong consumer acceptance of its pricing.

• Growing consumer preference for clean label products provides business expansion opportunities, as seen in the launch into immediate consumption and cold single distributions.

• Zevia is striving to take its better-for-you beverages mainstream through initiatives like launching a regional direct store delivery (DSD), gaining distribution in some regional convenience chains in the U.S. and Canada, and ramping up marketing efforts.

• The company is focusing on high potential products and transitioning its supply chain to a new model, expected to improve its position regarding selling costs in 2024.

• Zevia expects Q1 2024 net sales to lie between $38 million and $40 million, choosing not to provide full year guidance until Q1 earnings call.

More details: Zevia IR

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