Miami, FL – November 29, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on New Age Beverage Corporation (NASDAQ: NBEV).
New Age Beverages Corporation (NASDAQ: NBEV) staged a strong come back on Wednesday when the stock surged more than 20 percent. Does it mean that the stock is out of the woods now after hitting the 52-week high on September 21? Yes, there is enough interest from investors after the United States farm bill offering sufficient scope for hemp and related products. Therefore, it is an opportunity that one can look into.
During the conference call, New Age Beverages’ CFO, said that the biggestprogress it made in the third quarter was its improved balance sheet. By the end of the third quarter and the start of the fourth, it finalized six key initiatives.
- A fresh line of credit for $12 million that became effective since September.
- The completion of an $11.8 million underwritten offering with Northland and Roth.
- The company has paid in full a convertible loan of $4.8 million – This means that there is no threat of conversion option.
- The elimination of the Series B notes, which were inherited and totaled $1.4 million, which is the last debt in any form.
- The launching of an at-the-market (ATM) that generated about $38 million in cash.
- The company could raise as much as $51.9 million through an underwritten offering.
These factors will ensure that there is cash of over $80 million enabling New Age Beverages to follow not only transformative path but also tap growth opportunities of organic and external.
Work Is Paying Off
The company’s CEO, Brent Willis, indicated that its core business and brands like Bucha are doing very well. This meant that the work is done paying off, and the new products to are showing signs of growth. This will expand the distribution for the complete portfolio, while the availability of funds and expansion of portfolio will help New Age Beverages with fresh channels thus boosting its prospects.
Over the last six weeks, the company received approval for expanding its Loblaw’s grocery retailer across three of its other main brands. As far as revenue generation, the September quarter has witnessed a drop in gross and net revenues to $15.3 million and $13.2 million respectively from the previous year period. This was due to the shortfall in working capital thus affecting revenue in the range of $5.8 – $6.2 million. Since the company could manage cash, it will not be an issue in the upcoming quarters.
The Hemp FarmingAct of 2018 would remove hemp as a selected controlled substance thus legalizing the crop in the United States. This would enable CBD to be sold in all 50 States legally. This is in contrast to the earlier classification of a controlled substance. As a result, there was not much scope of increasing investment thus offering complete access to a range of advisory, market development, and financial services. As far as New Age Beverages, the company has the opportunity to be the first in CBD through its CBD portfolio launch.
With its DSD division, the company is confident of delivering a 10thstraight year of growth. The company claimed that its division is full of refilled inventory in its partner brands too. The segment delivered the highest monthly sales in the year and largest October in its history. New Age Beverages introduced brands like Marley Mate, Xing Craft, and Marley Cold Brew in the first nine-month period that gained traction.
Celsius Holdings, Inc. (NASDAQ: CELH)delivered54 percent growth in revenue to $16.6 million while gross profit grew 47 percent from the previous year third quarter. The company is also expanding into CVS (NYSE: CVS) and Target (NYSE: TGT) stores thus boosting its product availability. The firm has introduced Coconut and Cranberry Lemon flavors and launched a fresh distribution with cold vault placement. The company sees enough demand and is keen to take advantage of it.
Reed’s, Inc. (NYSE: REED) sufferednet sales fall of one percent to $10.8 million although core brand’s gross sales witnessed 3 percent expansion. However, gross margin grew 5.9 percentage points to 25 percent. This is attributed to initiatives taken to enhance its financial and business models.
New Age Beverages stock has already taken a beating and is now on the recovery path. Therefore, NBEV should be out of the woods as worries over working capital availability ended and farm bill benefits. This should make the stock to be a good buy at $4.43 with a stop loss below $3 for a target of $8 in short-term.
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