Zevia PBC Reports Decline in Sales and Net Loss for Q3 and Nine Months Ended September 30, 2024

Zevia PBC reported a decline in financial performance for the three and nine months ended September 30, 2024, compared to the same periods in 2023. Net sales for the third quarter were $36.4 million, down 15.6% from $43.1 million in the prior year. For the nine months, net sales decreased by 10.1% to $115.6 million from $128.6 million. The decline was attributed to reduced sales volumes, particularly from lost distribution in club and mass channels, and a strategic exit from the Kids and Mixers product categories.

Despite the drop in sales, Zevia PBC reported improvements in operational efficiency. The company achieved a gross profit of $17.9 million for the third quarter, down from $19.6 million, but the gross margin improved to 49.1% from 45.4% year-over-year. Total operating expenses decreased significantly, with selling and marketing expenses falling to $12.0 million from $20.5 million, reflecting cost-cutting measures under the "Productivity Initiative." This initiative, initiated in May 2024, aims to reduce costs and improve efficiency, with expected annualized benefits of approximately $15 million.

Zevia PBC's loss from operations for the third quarter was $2.96 million, a notable improvement from a loss of $11.4 million in the same quarter of 2023. The net loss for the third quarter was $2.84 million, compared to $11.25 million in the prior year. For the nine months, the net loss was $17 million, a slight improvement from $19.2 million in 2023.

The company’s cash and cash equivalents increased to $32.7 million as of September 30, 2024, from $31.9 million at the end of 2023. Net cash provided by operating activities for the nine months was $971,000, a significant turnaround from a net cash used of $9.7 million in the same period of 2023. This improvement was primarily driven by changes in operating assets and liabilities.

Zevia PBC continues to face external challenges, including inflationary pressures and high interest rates, which have impacted transportation, labor, and commodity costs. The company has also noted increased promotional spending to drive sales velocity and liquidate excess inventory, with expectations for resolution by the end of 2024.

As of September 30, 2024, Zevia PBC had 59,912,868 shares of Class A common stock and 13,101,213 shares of Class B common stock outstanding. The company remains focused on enhancing brand awareness, expanding distribution channels, and continuous product innovation to drive future sales growth.