NewAge, Inc. (Nasdaq: NBEV), the Colorado-based direct-to-consumer (D2C) organic and healthy products company, today announced record financial results for the second quarter of 2021 with a net revenue of $124 million, net income of $17.4 million, adjusted EBITDA1 of $1.7 million, and basic earnings per share of $0.11.
For the three months ending June 30, 2021, net revenue was $124 million, an increase of $61 million or 98%.
Gross profit for the quarter was $84 million, an increase of $46 million or 120%, resulting in a gross margin of 67.6%, compared to a 60.8% in the prior-year period, an increase of 6.8 percentage points.
Net income was $17.4 million, an increase of $26.9 million compared ot a net loss of ($9.6) million in the prior-year period. Adjusted EBITDA was $1.7 million, an increase of $7.2 million compared to a loss of ($5.5) million in the prior-year period. Basic earnings per share was a positive $0.11, an increase of $0.21 compared to a loss of ($0.10) in the prior-year period.
Brent Willis, Chief Executive Officer of NewAge, commented,
“The second quarter saw accelerated top and bottom-line results and continued income statement improvement. In the quarter, we completed the Aliven acquisition, had a very successful annual meeting, further integrated ARIIX capturing additional cost and revenue synergies, and continued expansion of our social selling initiatives worldwide. We strengthened our team and positioned NewAge for even further transformative performance as our strategy unfolds.”
“This is our third consecutive quarter of positive adjusted EBITDA,” commented Kevin Manion, NewAge’s new Chief Financial Officer. “Financially, our focus is on developing, utilizing and driving consistent company-wide metrics to improve EBITDA margins through operational improvements and reducing SG&A costs, specifically from consolidating the recent acquisitions. With these activities, we are confident in continued growth throughout 2021 and thereafter.
I see NewAge as extremely well positioned to deliver superior organic growth and transformative, accretive external growth. I have spent most of my career in the consumer goods industry and see the NewAge Social Selling Network and our D2C route-to-market as the new winning industry model that will deliver outsized returns for shareholders.”
Second Quarter 2021 Financial Results
Net revenue was $124 million for the three months ending June 30, 2021, versus $63 million for the second quarter of the prior year, an increase of 98%. The growth in net revenue was driven by the acquisitions of ARIIX and Aliven. Leading the growth on a proforma basis was the combined European business that increased 24% and the United States business that increased 15%. These were offset by China, Japan and the impact of COVID-19 in a number of markets around the world.
Gross margin for the second quarter of 2021 was $84 million or 67.6% of net revenue compared with $38 million or 60.8% of net revenue for the prior-year period, a 120% increase of $46 million and an increase of 6.8 gross margin percentage points. The gross margin percentage increase was driven by higher net revenue from the Direct/Social Selling Division and the disposition of the retail brands’ business completed in September 2020.
Net operating loss was ($9.6) million for the second quarter of 2021 compared to a loss of ($8.8) million for the prior-year period. Net income was $17.4 million, correlating to a positive basic EPS of $0.11 per share, an increase of 21 cents from the prior-year period. Adjusted EBITDA was $1.7 million, compared with ($5.5) million for the prior-year period, an improvement of $7.2 million.
The company ended the quarter with a strong balance sheet, with cash and cash equivalents of $92 million and debt of $31.5 million, exclusive of operating lease liabilities. Subsequent to the quarter-end, $9.7 million of debt was forgiven.
“Our second-quarter results demonstrated commendable progress converging our companies and capturing both revenue and cost synergies. Carrying this momentum forward, we expect continued strong results from operations throughout the year as we build out additional platforms and programs for our global sales force. We believe we are stronger and better positioned than we have ever been, with differentiated health and wellness brands and an on-trend D2C business system, with an expanding e-commerce Subscriber base and an increasing and strengthening team of exclusive Brand Partner influencers,” concluded Mr. Willis.
About NewAge, Inc.
NewAge is a purpose-driven firm dedicated to inspiring the planet to Live Healthy™. Colorado-based NewAge commercializes a portfolio of organic and healthy products worldwide through primarily a direct-to-consumer (D2C) route to market distribution system across more than 75 countries. The company competes in three major category platforms: Health and Wellness, Inner and Outer Beauty and Nutritional Performance and Weight Management — leading a network of more than 400,000 exclusive independent Brand Partners, empowered with the leading social selling tools and technology around the world.
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