\nThe Alkaline Water Company Inc. (NASDAQ and CSE: WTER) (the \u201cCompany\u201d) is a producer of bottled alkaline drinking water, flavor-infused waters, and CBD infused products sold under the brand name Alkaline88\u00ae<\/sup>, A88\u2122, and A88CBD\u2122, respectively. Today, the Company announces revenue of $10.8 million for the fiscal second quarter ended September 30, 2020.\n<\/p>\n
Key Highlights:<\/b><\/p>\n \n\u201cDuring 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\u2019s data, our flagship brand, Alkaline88\u00ae, 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\u2019s 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,\u201d stated Richard A. Wright, president and chief executive officer of The Alkaline Water Company.\n<\/p>\n \n\u201cFor 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.\u201d\n<\/p>\n Fiscal 2021 Second Quarter Financial Results (unaudited)<\/b><\/p>\n (All amounts are in U.S. dollars) <\/b><\/p>\n Fiscal 2021 Revenue Guidance<\/b><\/p>\n \n\u201cWe 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\u00ae<\/sup>, eco-friendly aluminum bottles, A88 Infused\u2122<\/sup> flavors, and our A88CBD\u2122<\/sup> portfolio of products to contribute toward this growth, which we expect to accelerate during the third and fourth quarter of this fiscal year,\u201d added Mr. Wright.\n<\/p>\n \nOur forecasted revenue is based on our expectation that revenue growth will remain consistent for the fiscal year 2021. We further expect sales growth to continue in the natural foods, drug, c-stores, and specialty retailer channels. We are also expecting the hospitality and foodservice channels, which have only recently started selling our products, to be strong contributors in the fourth fiscal quarter.\n<\/p>\n \nAs our sales cycle is an average of 14 days, a slowdown of the growth in any of the areas set forth above during fiscal 2021 or other events could cause actual results to vary materially from this forecast. In addition, sales growth, which may significantly impact quarterly and annual revenue, is difficult to predict, especially in the current COVID environment, which is causing intense volatility in our end markets.\n<\/p>\n Recent Business and Operational Highlights <\/span><\/b><\/p>\n National Footprint and Channel Expansion <\/b><\/p>\n Innovation and Product Portfolio Expansion<\/b><\/p>\n Corporate Development<\/b><\/p>\n Brand Awareness<\/b><\/p>\n \nThe following table summarizes the operating results for the three months ended September 30, 2020, and 2019 (Unaudited):\n<\/p>\n \n(All Amounts are in U.S. dollars)\n<\/p>\n\n
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