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Financial report summary
?Risks
- We rely on distributors to distribute our products in the DSD sales channel and in international markets. If we are unable to maintain good relationships with our existing distributors, our business will suffer.
- Consolidation of retailers, wholesalers and distributors in the industry may result in downward pressure on sales prices, and the changing landscape of the retail market, including the rapid growth in e-commerce, could adversely affect our results of operations.
- We rely on third-party co-packers to manufacture our products. If we are unable to maintain good relationships with our co-packers or their ability to manufacture our products becomes constrained or unavailable to us, our business could suffer.
- Our customers are material to our success. If we are unable to maintain good relationships with our existing customers, our business could suffer.
- Our demand generation strategies through use of third-parties, including celebrities, social media influencers, and others may expose us to risk of negative publicity, litigation, and/or regulatory enforcement action, which could impact our future profitability.
- We have extensive commercial arrangements with Pepsi and, as a result, significant disagreements with Pepsi or a termination of these arrangements could materially adversely impact our financial position and results of operations.
- Our failure to accurately estimate demand for our products could adversely affect our business and financial results.
- Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected products.
- Our continued expansion outside of the U.S. exposes us to uncertain conditions and other risks in international markets.
- Numerous U.S. and international laws, including export and import controls, affect our ability to compete in international markets.
- Failure to successfully complete or manage strategic transactions can adversely affect our business.
- We depend upon our trademarks and proprietary rights, and any failure to protect our intellectual property rights or any claims that we are infringing upon the rights of others may adversely affect our competitive position.
- We must continually maintain, protect or upgrade our information technology systems, including protecting us from internal and external cyber-security threats.
- If we fail to comply with data privacy and personal data protection laws, we could be subject to adverse publicity, government enforcement actions or private litigation, which may negatively impact our business and operating results.
- If we fail to manage future growth effectively, our business could be materially adversely affected.
- Global or regional catastrophic events could impact our operations and affect our ability to grow our business.
- Climate change and natural disasters may affect our business.
- We rely on our management team and other key personnel.
- If we fail to attract or maintain a highly skilled and diverse workforce, our business could be negatively affected.
- The FDA could take issue with the manufacturer, composition/ingredients, packaging, marketing/labeling, storage, transportation, and/or distribution of our products.
- The FTC regulates advertising and may review the truthfulness of and substantiation for any claim we make related to our products.
- We are subject to significant competition by other companies in the functional beverage product industry.
- Our inability to innovate successfully and to provide new cutting-edge products could adversely affect our business and financial results.
- Changes in consumer product and shopping preferences may reduce demand for some of our products.
- We derive virtually all of our revenues from functional beverage products, and competitive pressure in the functional beverage product category could adversely affect our business and operating results.
- We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success and significant marketing and advertising could be needed to achieve and sustain brand recognition.
- If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
- Our sales are affected by seasonality.
- Product safety and quality concerns, or other negative publicity (whether or not warranted) could damage our brand image and corporate reputation and may cause our business to suffer.
- Failure by suppliers or third-party co-packers to comply with applicable laws and regulations, or with specifications and other requirements for our products, may adversely impact our business.
- Litigation could expose us to significant liabilities and reduce demand for our products.
- If we fail to remediate our existing material weaknesses or do not maintain an effective internal control environment as well as adequate control procedures over our financial reporting, investor confidence may be adversely affected thereby affecting the value of our stock price.
- We currently face an investigation from the SEC, the timeline for which and the results of which are currently unknown.
- Strikes or work stoppages or labor unrest can cause our business to suffer.
- Fluctuations in our effective tax rate could adversely affect our financial condition and results of operations.
- We may be required in the future to record a significant charge to earnings if our goodwill or intangible assets become impaired.
- Fluctuations in foreign currency exchange rates may adversely affect our operating results.
- Potential changes in accounting standards or practices or taxation may adversely affect our financial results.
- Uncertainty in the financial markets and other adverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affect our industry, business and results of operations.
- Our investments are subject to risks which may cause losses and affect the liquidity of these investments.
- The market price and trading volume of our common stock has been, and may continue to be, volatile and could decline significantly.
- Our Board has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate control. We have outstanding shares of preferred stock with rights and preferences superior to those of our common stock.
- Certain of our affiliated stockholders can exert significant influence on the Company’s corporate affairs.
Management Discussion
- For the year ended December 31, 2023, revenue was approximately $1,318.0 million, an increase of $664.4 million or 102% from $653.6 million for the year ended December 31, 2022. This growth was primarily the result of increased revenues from North America, where 2023 revenues were $1,263.3 million, an increase of $645.9 million or 105% from 2022. North America was driven by continued gains in distribution points and SKUs per location.
- European revenues for 2023 were approximately $43.7 million, which increased by $12.7 million or 41% from 2022. Asia-Pacific revenues contributed an additional $4.8 million, an increase of $1.1 million or 30% from 2022. Other international markets, including Puerto Rico, generated approximately $6.2 million in revenue during 2023, an increase from $1.4 million in 2022.
- For the year ended December 31, 2023, gross profit increased by $362.2 million or 134% to $633.1 million from $270.9 million for the year ended December 31, 2022. Gross profit margins increased to 48.0% for the year ended December 31, 2023 from 41.4% for the year ended December 31, 2022. Gross profit improvements were attributed to efficiencies in raw material sourcing, and product waste reduction.