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SCOTTSDALE, Ariz.–()–The Alkaline Water Company Inc. (NASDAQ and CSE: WTER) (the “Company”) is a producer of bottled alkaline consuming water, flavor-infused waters, and CBD infused merchandise offered beneath the model title Alkaline88®, A88™, and A88CBD™, respectively. Today, the Company broadcasts income of $10.Eight million for the fiscal second quarter ended September 30, 2020.

Key Highlights:

  • Fiscal 2021 first-half income of $25 million elevated 21% over the similar interval final 12 months.
  • Fiscal Q2 earnings per share of ($0.06) improved by 14.3% in comparison with the prior-year quarter, of which ($0.03) was associated to non-cash bills.
  • For fiscal 2021, the Company is now offering income steering in the vary of $48 million to $52 million, representing full-year development of 17% to 27%.
  • Introduced 5 category-leading gadgets for the A88CBD portfolio of ingestible and topical merchandise.
  • Purchase orders for the quarter have been the second-highest in the Company’s historical past, excluding our COVID interval from final spring.

“During the fiscal second quarter, we made good progress toward our strategic goals, gained market share, launched innovating new products, added leading partners, and expanded into new growth markets, all while navigating through a challenging COVID environment. Our quarterly growth was impacted as various distributors reduced deliveries and cleared excess inventory built in the prior quarter. Delivery and inventory trends continued to improve throughout the quarter, with order activity reverting to pre-pandemic levels. Our fiscal third quarter is off to a strong start, and we are seeing a record month of sales for October. Demand for our lifestyle brands at the retail level remains strong, and revenue grew a healthy 21% during the first half of our fiscal year. According to the October 3 Nielsen’s data, our flagship brand, Alkaline88®, has been the fastest-growing non-flavored value-added water in the top 10 brands over the last 13, 26, and 52 week period. Our footprint continues to grow nationally, and this quarter alone, we added over 1,000 new store locations for our A88 family of lifestyle brands. We see strong momentum across all our product categories and consider this quarter’s performance to be an outlier. As of early November, inventory at retailers has normalized, driven by our aggressive summer marketing efforts. We believe the actions taken positions us for stronger growth for the balance of this fiscal year and beyond,” said Richard A. Wright, president and chief government officer of The Alkaline Water Company.

“For our A88CBD line of ingestible and topical products, we launched five category-leading items this quarter. These products, which include our delicious lemon-lime CBD water, vegan gummies, zero-calorie powder packs, all-natural bath bombs, and cruelty-free deep relief cream, complement our existing product lineup. Our robust product lineup effectively positions us to capture share in the estimated $20 billion-plus hemp-derived consumer products market. We are in active discussions with over 9,000 retail locations to take on our products over the coming 90 days. With an in-demand portfolio of offerings, a strong partner network, and an established retail base, we are taking aggressive actions to capture share in the large and growing retail trades we currently serve and greenfield opportunities in the CBD and hospitality and foodservice arena. Additionally, our e-commerce sites continue to exceed our expectations and provide another growth area driven by shifting consumer behaviors. We also expect the multi-year health and wellness trend to accelerate coming out of the COVID pandemic and anticipate our lifestyle brands to benefit due to our sales and marketing efforts made this year.”

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Fiscal 2021 Second Quarter Financial Results (unaudited)

(All quantities are in U.S. {dollars})

  • For the fiscal second-quarter ending September 30, 2020, recorded income of roughly $10.Eight million, a rise of roughly 3% year-over-year.
  • Gross revenue in the fiscal second quarter of $4.Four million declined by 1.3% in comparison with the prior-year quarter.

    • Gross margin of 41.2% declined 170 foundation factors primarily because of greater uncooked materials prices.
  • Total working bills for the fiscal second quarter have been $8.7 million, a rise of 18.7% 12 months over 12 months.
  • Net loss for the fiscal second quarter was $4.Four million or $0.06 per share versus a web lack of $2.9 million or $0.07 per share in the fiscal second quarter of 2019. The bottom-line was impacted by ($0.03) per share because of sure non-cash gadgets.

Fiscal 2021 Revenue Guidance

“We have refrained from providing guidance this year due to the COVID impact. While uncertainties remain, we see positive business trends pointing to a stronger second half of our fiscal 2021. With inventory trends normalizing and strong retail demand, we are introducing our fiscal 2021 revenue guidance of $48 million to $52 million, representing full-year growth of 17% to 27%, with an estimated gross profit of approximately $19 million to $21 million. We expect all our lifestyle brands including, Alkaline88®, eco-friendly aluminum bottles, A88 Infused flavors, and our A88CBD portfolio of products to contribute toward this growth, which we expect to accelerate during the third and fourth quarter of this fiscal year,” added Mr. Wright.

Our forecasted income relies on our expectation that income development will stay constant for the fiscal 12 months 2021. We additional count on gross sales development to proceed in the pure meals, drug, c-stores, and specialty retailer channels. We are additionally anticipating the hospitality and foodservice channels, which have solely not too long ago began promoting our merchandise, to be robust contributors in the fourth fiscal quarter.

As our gross sales cycle is a mean of 14 days, a slowdown of the development in any of the areas set forth above throughout fiscal 2021 or different occasions may trigger precise outcomes to differ materially from this forecast. In addition, gross sales development, which can considerably affect quarterly and annual income, is tough to foretell, particularly in the present COVID atmosphere, which is inflicting intense volatility in our finish markets.

Recent Business and Operational Highlights

National Footprint and Channel Expansion

  • Alkaline88® flagship model of premium alkaline water is now out there in over 70,000 shops throughout all trades in the U.S.
  • Expands into multi-billion greenback Hospitality and Foodservice channel.

    • Added Dot Foods Inc., the largest meals redistributor in the U.S., to current our Alkaline88®, A88 Infused™, and eco-friendly aluminum bottles to its 4,300 clients nationwide.
    • DOT Food to supply A88 Infused™ as a featured all-natural flavored product.
    • Added Independent Broker Alliance (IBA), an alliance of 30 independently owned and operated foodservice gross sales companies.
  • Adds CBD distributor BettermentRS.
  • Adds Valu Merchandisers Company (VMC), a pure and natural product distributor serving greater than 3,800 independently owned supermarkets in 35 states.
  • Added seven new Core-Mark distribution facilities.
  • ResidenceGoods, a T.J. Maxx firm, to hold the new 2-liter product in 500 retailer places.
  • Alkaline88® out there in 1-gallon and 1-liter sizes in any respect 123 Fareway retailer places throughout six states in the Midwest.
  • H-E-B to hold Alkaline88® aluminum bottles in 288 U.S. shops.
  • Expands on-line and brick and mortar channels for A88CBD™ portfolio of merchandise.

    • Products at the moment are out there in roughly 400 retail places, together with YesWay, Elevated Wellness CBD, CBD Emporium, Alchemist Kitchen, Pure CBD, Vitamin Plus (choose places), and on-line at Amazon, CBD.co, healwithnature.com, and DirectCBDOnline.com.
  • Accelerated comfort retailer development technique with a number of new distribution agreements.

    • Added Mahaska, a Direct-Store-Delivery (DSD) supplier, serving over 5,000 clients, together with supermarkets and comfort shops, to drive development in the mid-west area.
    • Added 200 new c-stores places, together with FastTrip, Colbea, Kenk, and CN Brown’s company-owned and serviced places.
    • Since the inception of the program, the Company has added over 12,000 new comfort shops and expects to achieve roughly 25,000 comfort shops by the finish of fiscal 2021.
  • Expanded nationwide distribution with KeHE for flavor-infused waters and UNFI and dealer C.A. Fortune for its A88CBD™ portfolio of merchandise.

Innovation and Product Portfolio Expansion

  • Launched new 2-liter single-serve and six-packs, concentrating on excessive quantity buyers, together with the membership market.
  • Expanded topical product lineup; consists of bathtub bombs and deep-relief cream made with high-quality, lab-tested hemp extract.
  • Expanded ingestible product lineup; consists of lemon-lime water, gummies, and powder packs made with high-quality, lab-tested hemp extract.
  • Announced new single-serve 500ml Eco-friendly Aluminum bottles.

    • To be carried by nationwide distributor KeHE with assist from main nationwide dealer C.A. Fortune.

Corporate Development

  • Appoints Retail Industry Veteran Frank Lazaran to its Board of Directors.
  • Enhanced digital buyer expertise by including new content material and options to A88CBD.com
  • Featured and showcased the A88 household of merchandise at varied nationwide expos and tradeshows.

    • Ranked #1 greatest promoting nationwide model by models offered at the 2020 KeHE Holidays of Hope present and the KeHE Winter Virtual present.

Brand Awareness

  • Alkaline88® stays the #1 promoting bulk alkaline water nationally.
  • Alkaline88® Official Vendor for Kampgrounds of America (KOA®) and Yogi Bear’s Jellystone Park™ Camp-Resorts.

The following desk summarizes the working outcomes for the three months ended September 30, 2020, and 2019 (Unaudited):

(All Amounts are in U.S. {dollars})

In hundreds of thousands

For the three months

ended

September 30, 2020

For the three months

ended

September 30, 2019

Year over Year

Change %

Revenue

$ 10,755,946

$ 10,444,978

3.0%

Cost of Good Sold

$ 6,326,958

$ 5,959,430

6.2%

Gross Profit

$ 4,428,988

$ 4,485,548

-1.3%

 

 

 

 

Operating Expenses

 

 

 

Sales and Marketing

$ 4,984,729

$ 4,809,882

3.6%

General and Administrative

$ 3,490,548

$ 2,247,371

55.3%

Depreciation

$ 184,406

$ 239,757

-23.1%

Total Operating Expense

$ 8,659,683

$ 7,297,010

18.7%

 

 

 

 

Total Operating Loss

$ (4,230,695)

$ (2,811,462)

50.5%

 

 

 

 

Net Loss

$ (4,361,628)

$ (2,924,957)

49.1%

 

 

 

 

Loss per Share (Basic and Diluted)

$ (0.06)

$ (0.07)

-14.3%

 

 

 

 

Weighted Avg. Shares Outstanding (Basic and Diluted)

67,888,935

42,011,439

61.6%

Conference Call Information

The Alkaline Water Company will conduct a convention name to assessment its working outcomes for the quarter ended September 30, 2020, on Monday, November 16, 2020, at 5:00 PM Eastern Time. This name could embrace materials data not contained on this press launch.

Date: November 16, 2020

Time: 5:00 PM Eastern Time (E.T.)

Dial-in Number for U.S. and Canadian Callers: 877-407-8293

Dial-in Number for International Callers (Outside of the U.S. and Canada): 201-689-8349

Participating on the name will likely be the Company’s President and CEO Richard A. Wright and Chief Financial Officer David Guarino. They will focus on operational and monetary highlights for the fiscal second quarter and its outlook for the full fiscal 12 months 2021.

To be part of the stay convention name, please dial into the above-referenced phone numbers 5 to 10 minutes previous to the scheduled name time.

A replay will likely be out there for one week beginning on November 17, 2020, at roughly 10:30 AM (E.T.). To entry the replay, please dial 877-660-6853 in the U.S. or Canada and 201-612-7415 for worldwide callers. The convention I.D. # is 13712984.

About The Alkaline Water Company

Founded in 2012, The Alkaline Water Company (NASDAQ and CSE: WTER) is headquartered in Scottsdale, Arizona. Its flagship product, Alkaline88®, is a number one premier alkaline water model out there in bulk and single-serve sizes together with eco-friendly aluminum packaging choices. With its revolutionary, state-of-the-art proprietary electrolysis course of, Alkaline88® delivers excellent 8.Eight pH balanced alkaline consuming water with hint minerals and electrolytes and boasts our trademarked label ‘Clean Beverage.’ Quickly being acknowledged as a rising way of life model, Alkaline88® launched A88 Infused™ in 2019 to satisfy client demand for flavor-infused merchandise. A88 Infused™ flavored water is on the market in six distinctive all-natural flavors, with new flavors coming quickly. Additionally, in 2020, the Company launched A88 Infused Beverage Division Inc., which incorporates the Company’s CBD water and flavor-infused water. For the Company’s topical and ingestible choices, A88 Infused Products Inc. consists of each the Company’s lab-tested hemp extract salves, balms, lotions, important oils, and bathtub salts, together with broad-spectrum hemp, powder packs, oil tinctures, capsules, and gummies.

To buy A88CBD™ merchandise on-line, go to us at A88CBD.com and Alkaline88.com. To study extra about The Alkaline Water Company, please go to www.thealkalinewaterco.com or join with us on Facebook, Twitter, Instagram, or LinkedIn.

Notice Regarding Forward-Looking Statements

This information launch incorporates “forward-looking statements.” Statements on this information launch that aren’t purely historic are forward-looking statements and embrace any statements concerning beliefs, plans, expectations or intentions concerning the future. Such forward-looking statements embrace, amongst different issues, the following: that the Company sees robust momentum throughout all its product classes and take into account this quarter’s efficiency to be an outlier; that the Company believes the actions taken positions the Company for stronger development for the steadiness of this fiscal 12 months and past; that the Company’s strong product lineup successfully positions the Company to seize share in the estimated $20 billion-plus hemp-derived client merchandise market; that the Company’s e-commerce websites present one other development space pushed by shifting client behaviors; that the Company expects the multi-year well being and wellness pattern to speed up popping out of the COVID pandemic and anticipates its way of life manufacturers to profit because of its gross sales and advertising and marketing efforts made this 12 months; that the optimistic enterprise developments level to a stronger second half of the Company’s fiscal 2021; the statements referring to the Company fiscal 2021 income steering of $48 million to $52 million, with an estimated gross revenue of roughly $19 million to $21 million, representing full-year development of 17% to 27%; that the Company expects all its way of life manufacturers together with, Alkaline88®, eco-friendly aluminum bottles, A88 Infused flavors, and its A88CBD portfolio of merchandise to contribute towards this development, which the Company expects to speed up throughout the third and fourth quarter of this fiscal 12 months; the Company’s expectation that income development will stay constant for the fiscal 12 months 2021; that the Company expects gross sales development to proceed in the pure meals, drug, c-stores, and specialty retailer channels; that the Company is anticipating the hospitality and foodservice channels, which have solely not too long ago began promoting the Company’s merchandise, to be robust contributors in the fourth fiscal quarter; and that the Company expects to achieve roughly 25,000 comfort shops by the finish of fiscal 20201.

The materials assumptions supporting these forward-looking statements embrace, amongst others, that the demand for the Company’s merchandise will proceed to considerably develop; that the previous manufacturing capability of the Company’s co-packing services might be maintained or elevated; that there will likely be elevated manufacturing capability by means of implementation of recent manufacturing services, new co-packers and new know-how; that there will likely be a rise in variety of merchandise out there for sale to retailers and customers; that there will likely be an enlargement in geographical areas by nationwide retailers carrying the Company’s merchandise; that there will likely be an enlargement into new nationwide and regional grocery retailers; that there will likely be an enlargement into new e-commerce, dwelling supply, comfort, and wholesome meals channels; that there is not going to be interruptions on manufacturing of the Company’s merchandise; that there is not going to be a recall of merchandise because of unintended contamination or different antagonistic occasions referring to the Company’s merchandise; and that the Company will be capable of get hold of further capital to satisfy the Company’s rising demand and fulfill the capital expenditure necessities wanted to extend manufacturing and assist gross sales exercise. Actual outcomes may differ from these projected in any forward-looking statements because of quite a few elements. Such elements embrace, amongst others, governmental rules being carried out concerning the manufacturing and sale of alkaline water or another merchandise, together with merchandise containing hemp/CBD; the reality that buyers could not embrace and buy any of the Company’s CBD-infused merchandise; the indisputable fact that the Company will not be permitted by the FDA or different regulatory authority to market or promote any of its CBD-infused merchandise; further opponents promoting alkaline water and enhanced water merchandise in bulk containers decreasing the Company’s gross sales; the indisputable fact that the Company doesn’t personal or function any of its manufacturing services and that co-packers could not renew present agreements and/or not fulfill elevated manufacturing quotas; the indisputable fact that the Company has a restricted variety of suppliers of its distinctive bulk bottles; the potential for supply-chain interruption because of elements past the Company’s management; the indisputable fact that there could also be a recall of merchandise because of unintended contamination; the inherent uncertainties related to working as an early stage firm; modifications in buyer demand and the reality that buyers could not embrace enhanced water merchandise as anticipated or in any respect; the extent to which the Company is profitable in gaining new long-term relationships with new retailers and retaining current relationships with retailers; the Company’s capability to lift the further funding that it might want to proceed to pursue its enterprise, deliberate capital enlargement and gross sales exercise; and competitors in the business by which the Company operates and market situations. These forward-looking statements are made as of the date of this information launch, and the Company assumes no obligation to replace the forward-looking statements, or to replace the explanation why precise outcomes may differ from these projected in the forward-looking statements, besides as required by relevant regulation, together with the securities legal guidelines of the United States and Canada. Although the Company believes that any beliefs, plans, expectations and intentions contained on this information launch are affordable, there might be no assurance that any such beliefs, plans, expectations or intentions will show to be correct. Readers ought to seek the advice of all of the data set forth herein and must also check with the threat elements disclosure outlined in the studies and different paperwork the Company recordsdata with the SEC, out there at www.sec.gov, and on the SEDAR, out there at www.sedar.com.

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