New Age Beverages (NBEV) Misses Q1 EPS by 2c, Revenues Beat

New Age Beverages (NASDAQ: NBEV) reported Q1 EPS of ($0.14), $0.02 worse than the analyst estimate of ($0.12). Revenue for the quarter came in at $63.7 million versus the consensus estimate of $62.92 million.

• Q1 2020 net revenue was nearly $64 million, an increase of 9% versus prior year, 6% of which was organic growth
• Gross margin reached 65%, a significant increase versus prior quarters in the second half of 2019 as product, channel mix, and product profitability improved
• Key markets of China, Japan, and North America saw growth versus the first quarter of 2019. Online ordering and direct-to-home fulfillment model resonating worldwide

Key Highlights

• Net revenue was $63.7 million versus $58.3 million in the prior year quarter, an increase of $5.4 million or 9.2%
• Gross margin reached 65.2%, up 1,085 basis points sequentially versus the fourth quarter of 2019
• Net loss was $11.6 million, or $0.14 per common share

“We saw growth in our core large markets and core large category platforms during the quarter,” said Brent Willis, Chief Executive Officer of NewAge. “Our Noni by NewAge segment saw excellent growth led by China and the European market. We also experienced renewed growth in Japan compared to the first quarter of 2019 and our Direct Store Distribution division had its best first quarter in history with double digit growth.”

“We have had a number of business disruptions and negative impacts from COVID-19 in markets worldwide, which has continued into the second quarter of 2020. Sales and distribution to on-premise and foodservice outlets are down over 70% between January and April. Many retailers have significantly curtailed any new product initiatives, and in-store merchandising has been virtually impossible. In our Noni by NewAge segment, our ability to hold group meetings and engage in peer-to-peer selling has dramatically changed, but despite all the challenges, the organization has responded decisively to offset the negative impacts. The incremental sales of our immunity strengthening products, the rapid expansion of our e-commerce and social selling tools, and other initiatives have not just offset the negative revenue impacts, but also resulted in overall growth worldwide of more than 9%. I am so proud of all of our associates and business partners with how quickly they have responded to the new operating environment.” Mr. Willis went on to add, “We have focused intently on the health and safety of our employees and partners and adjusted our operations to meet recommended government guidelines. We sincerely appreciate the efforts of all our associates in rapidly adapting and excelling in these unprecedented times.”“We believe we are well-positioned to emerge from the current environment and capitalize on current and future opportunities given that the vast majority of our Noni by NewAge segment’s revenue is ordered and fulfilled online and delivered direct to consumer’s homes. We are seeing strong response from our immunity products, our new Noni plus shots, and our new Te Mana Shape intermittent fasting smoothies. We still see challenges across our business from COVID-19, but remain confident in both our near-term and long-term growth outlooks,” continued Brent Willis, Chief Executive Officer of NewAge.

For earnings history and earnings-related data on New Age Beverages (NBEV) click here.

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