HICKSVILLE, NY -- (Marketwired) -- 11/18/16 -- Long Island Iced Tea Corp. (NASDAQ: LTEA) (the "Company"), a growth-oriented company focused on the ready-to-drink ("RTD") tea segment in the beverage industry, today reported results for the third quarter and nine months ended September 30, 2016.
For the third quarter of 2016, the Company reported net sales of $1,301,125 and a net loss of $4,891,028, compared to the prior year's third quarter net sales of $456,787 and net loss of $954,690, respectively. For the first nine months of 2016, the Company reported net sales of $3,412,961 and a net loss of $8,390,264, compared to the prior year's first nine months net sales of $1,397,244 and net loss of $2,016,842, respectively. The increase in net sales was primarily due to continued brand adoption and an increase in distribution including the addition of new customers and expansion into new geographies. Net losses increased primarily as the result of increased operating expenses resulting from increased payroll costs (including stock based compensation), increased Advisory Board and Board of Director fees, and increased legal and consulting fees. The Company has incurred non-cash expenses of $2.6 million in the third quarter of 2016, primarily related to stock-based compensation, amortization of deferred financing costs and inducement expenses related to the conversion of a credit facility. During the third quarter of 2016, the Company completed a capital raise that generated net proceeds to the Company of $5.9 million.
Philip Thomas, CEO of the Company said, "The third quarter of 2016 was another fantastic quarter for the Company. We are proud of achieving strong net sales growth through broadening our customer base and expanding our distribution footprint into new regional markets. New partnerships announced in the third quarter included Christmas Tree Shops, Menards, Ingles and Restaurant Depot. In addition, we formed new partnerships with strategic brokers and entered new geographies including Canada with Unique Foods and Puerto Rico with Tres Monjitas. These achievements, combined with our recently completed capital raise, provide us with strong momentum going into the fourth quarter and through to 2017."
Third Quarter Review - Comparison of Quarters Ended September 30, 2016 and 2015
- Net sales increased 185% to $1,301,125, compared to $456,787 in the prior year's third quarter.
- Gross margin decreased to 8% of net sales, compared to 14% in the prior year's third quarter.
- Operating expenses increased by $1,813,770, or 178%, to $2,831,769, compared to $1,017,999 in the prior year's third quarter.
- Net loss was $4,891,028, or $(0.75) per share, compared to a net loss of $954,690, or $(0.21) per share, in the prior year's third quarter.
Nine Month Review - Comparison of Nine-Months Ended September 30, 2016 and 2015
- Net sales increased 144% to $3,412,961, compared to $1,397,244 in the prior year's first nine months.
- Gross margin decreased to 5% of net sales, compared to 21% in the prior year's first nine months.
- Operating expenses increased by $3,730,656, or 165%, to $5,989,636, compared to $2,258,980 in the prior year's first nine months.
- Net loss was $8,390,264, or $(1.55) per share, compared to a net loss of $2,016,842, or $(0.58) per share in the prior year's first nine months.
About Long Island Iced Tea Corp.
Headquartered in Long Island, New York, Long Island Iced Tea Corp. operates in the ready-to-drink tea segment of the beverage industry. The Company has developed non-alcoholic, premium iced tea bottled beverages made with quality ingredients that are offered at an affordable price. The Company is currently organized around its flagship brand Long Island Iced Tea®, a premium, ready-to-drink iced tea sold primarily on the East Coast of the United States through a network of regional chains and distributors. The Company's website is www.longislandicedtea.com.
Forward Looking Statements
This press release includes statements of the Company's expectations, intentions, plans and beliefs that constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of the Company's business strategies and its expectations concerning future operations, margins, sales, new products and brands, potential joint ventures, potential acquisitions, expenses, profitability, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements include any statement that does not directly relate to a historical or current fact. You can also identify these and other forward-looking statements by the use of such words as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "thinks," "estimates," "seeks," "predicts," "could," "projects," "potential" and other similar terms and phrases, including references to assumptions. These forward looking statements are made based on expectations and beliefs concerning future events affecting the Company and are subject to uncertainties, risks and factors relating to its operations and business environments, all of which are difficult to predict and many of which are beyond its control, that could cause its actual results to differ materially from those matters expressed or implied by these forward looking statements. These risks include possible accounting adjustments made in the process of finalizing reported financial results, the Company's history of losses and expectation of further losses, its ability to expand its operations in both new and existing markets, its ability to develop or acquire new brands, its relationships with distributors, the success of its marketing activities, the effect of competition in its industry and economic and political conditions generally, including the current economic environment and markets. More information about these and other factors are described in the reports the Company files with the Securities and Exchange Commission, including but not limited to the discussions contained under the caption "Risk Factors." When considering these forward looking statements, you should keep in mind the cautionary statements in this press release and the reports the Company files with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and the Company cannot predict those events or how they may affect it. The Company assumes no obligation to update any forward looking statements after the date of this press release as a result of new information, future events or developments, except as required by the federal securities laws.
LONG ISLAND ICED TEA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2016 2015 2016 2015
------------ ------------ ------------ ------------
Net sales $ 1,301,125 $ 456,787 $ 3,412,961 $ 1,397,244
Cost of goods sold 1,196,790 392,606 3,253,278 1,104,723
------------ ------------ ------------ ------------
Gross profit 104,335 64,181 159,683 292,521
------------ ------------ ------------ ------------
Operating expenses:
General and
administrative
expenses 2,170,522 646,788 3,957,763 1,264,436
Selling and
marketing
expenses 661,247 371,211 2,031,873 994,544
------------ ------------ ------------ ------------
Total operating
expenses 2,831,769 1,017,999 5,989,636 2,258,980
------------ ------------ ------------ ------------
Operating loss (2,727,434) (953,818) (5,829,953) (1,966,459)
------------ ------------ ------------ ------------
Other expenses:
Other income
(expense) 4,070 - 4,070 (3,327)
Interest expense (579,710) (872) (976,427) (47,056)
Loss on induced
conversion
ofcredit facility
and warrants (1,587,954) - (1,587,954) -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss $ (4,891,028) $ (954,690) $ (8,390,264) $ (2,016,842)
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Weighted average
number of common
shares outstanding
- basic and diluted 6,514,295 4,470,639 5,407,036 3,450,625
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Basic and diluted
net loss per share $ (0.75) $ (0.21) $ (1.55) $ (0.58)
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