Shares of New Age Beverages Corp. (NBEV) gained about 8% early Friday after the company reported a double-digit increase in fourth-quarter revenues, which also surpassed the estimates. The top-line growth was driven by the stable demand for the company’s core products.
The Denver, Colorado-based organic drink maker reported a 24% increase in fourth-quarter net revenues to $14 million, which came in above analysts’ forecast. Gross revenue was up 27%. There was double-digit growth in organic revenues of all the core brands – Bucha, Marley, and Xing – as the improved distribution network added to the sales momentum.
The company reported an operating loss of $10.13 million for the December quarter, wider than the $4.87 million loss reported a year earlier.
There was double-digit growth in organic revenues of all the core brands – Bucha, Marley, and Xing – as the improved distribution network pushed up sales
“2018 was an extremely challenging as we spent almost the entire year recovering from inventory shortfalls due to working capital constraints. Those impacts completely distorted the underlying strength of the firm,” said CEO Brent Willis.
As part of its efforts to expand market share, the company last year acquired Morinda Holdings for $85 million, thereby gaining global market access for its Health Sciences products and CBD-infused beverages.
Also see: Coca-Cola posts in-line results for Q4
Currently, the management’s growth strategy stresses extensive use of working capital for the development of the core business and the CBD portfolio, in addition to investments in external growth opportunities such as alliances and acquisitions.
A key legislation
Giving a significant boost to the business prospects of manufacturers of organic and cannabis-based drinks, the federal government last year passed the new Farm Bill. An important aspect of the Bill is the removal of industrial hemp, the most common source of CBD, from the Controlled Substance Act.
Encouraged by the favorable regulation, New Age Beverages has stepped up the efforts to secure retailer-distributor commitments in key markets including the states of Colorado, California, Washington, and Oregon.
Last month, the company announced the appointment of Amy Kuzdowicz to its board of directors. Kuzdowicz, who currently serves as senior vice president and chief accounting officer of Jack Entertainment, worked as the chief financial officer of Rock Ohio Caesars most recently.
Shares of New Age Beverages gained about 8% in pre-market trading Friday following the quarterly report, after closing the previous session slightly higher. The value of stock more than doubled over the past twelve months, but the momentum slowed in the early months of 2019.
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