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Swiss Water Reports Strong Third Quarter and Year to Date Volumes, Revenue, Net Income, and Adjusted EBITDA along with an Expansion of its Credit Facilities

VANCOUVER, British Columbia, Nov. 09, 2022 (GLOBE NEWSWIRE) -- Swiss Water Decaffeinated Coffee Inc. (TSX: SWP) ("Swiss Water" or "the Company"), a leading specialty coffee company and premium green coffee decaffeinator, today reported strong financial results for the three and nine months ended September 30, 2022.

Three and Nine Months ended September 30, 2022 Financial and Operational Highlights

1 Adjusted EBITDA is defined in the ?Non-IFRS Measures' section of the MD&A and is a "Non-GAAP Financial Measure" as defined by CSA Staff Notice 52-306.

"We are very pleased to report that the strong performance we achieved during the first half of this year strengthened further during the third quarter. Total volume grew by 6% during the quarter, and our biggest market, North America, maintained its positive growth trend. Our existing customers continue to experience growing demand for their chemical free decaf offerings. While at the same time, we are seeing very good evidence in the marketplace that the methylene chloride decaffeination process used by many of our competitors is declining in preference by roasters and consumers," said Frank Dennis, Swiss Water's President and CEO. "Operationally, we were pleased to have recently announce the expansion of our credit facilities with our existing lenders. Not only does this solidify our capital plan for our immediate needs, but represents a statement of support in our ability to grow our business into the future. On a more cautionary note, as we look forward to the remainder of 2022, we are starting to experience the growing impact of macroeconomic risks within the business. Evidence is emerging that persistent inflationary pressure and increasing interest rates are undermining consumer sentiment in some of our key markets. Consequently, we expect that our rate of volume growth may slow down as we move through the balance of this year.   In addition, coffee futures prices remain high relative to historical trends and continue to drive a significant increase in our working capital and liquidity needs. We will pay close attention to these emerging risks and implement appropriate mitigation efforts as required", Dennis added.

Operational Highlights

The following table shows changes in volumes during the three and nine months ended September 30, 2022, compared to the same period in 2021.

Volumes3 months ended
September 30, 2022
9 months ended
September 30, 2022
Change in total volumes+6%+22%
By customer type  

Financial Highlights

In $000s except per share amounts 3 months ended
September 30
9 months ended
September 30
(unaudited)  2022   2021 2022  2021
Revenue $46,154  $35,496$132,937 $89,947
Gross profit  6,614   6,018 20,329  13,222
Operating income  3,293   3,325 10,589  5,169
Net (loss) income  (204)  135 2,641  255
Adjusted EBITDA1  4,343   3,974 13,572  8,422
Net (loss) income per share ? basic2 $(0.02) $0.01$0.29 $0.03
Net (loss) income per share ? diluted2 $(0.02) $0.01$0.29 $0.03

1  Adjusted EBITDA is defined in the ?Non-IFRS Measures' section of the MD&A and is a "Non-GAAP Financial Measure" as defined by CSA Staff Notice 52-306.
2  Per-share calculations are based on the weighted average number of shares outstanding during the periods. Diluted earnings per share take into account shares that may be issued upon conversion of the convertible debenture, the exercise of warrants, and RSUs as well as the impact on earnings from changes in the fair market value of the embedded option in the convertible debenture (until July 20, 2021) and conversion of RSUs and the exercise of warrants.


Adjusted EBITDA

Swiss Water defines Adjusted EBITDA as net income before interest, depreciation, amortization, impairments, share-based compensation, gains/losses on foreign exchange, gains/losses on disposal of property and capital equipment, fair value adjustments on embedded options, loss on extinguishment of debt, adjustment for the impact of IFRS 16 - Leases, and provision for income taxes. The Company's definition of Adjusted EBITDA also excludes unrealized gains and losses on the undesignated portion of foreign exchange forward contracts.

To help readers better understand Swiss Waters' financial results, the following table provides a reconciliation of net income, an IFRS measure, to Adjusted EBITDA as follows:

In $000s3 months ended
September 30
9 months ended
September 30
(unaudited)2022  2021  2022  2021 
Net income (loss) for the period$(204)$135 $2,641 $255 
Income tax expense (52) (48) 949  381 
Income (loss) before tax$(256)$87 $3,590 $636 
Finance income (124) (102) (335) (370)
Finance expenses 1,321  1,125  3,990  3,175 
Loss on extinguishment of Mill Road        
   convertible debenture -  1,385  -  1,385 
Depreciation & amortization 1,840  1,698  5,332  5,114 
Unrealized loss on foreign exchange forward contracts 699  (46) 840  263 
Fair value loss on the embedded option -  56  -  48 
Loss (gain) on foreign exchange 1,396  364  1,849  (207)
Share-based compensation 170  111  379  485 
Impact of IFRS 16 - Leases (701) (704) (2,073) (2,107)
Adjusted EBITDA$4,346 $3,974 $13,572 $8,422 

Company Profile

Swiss Water Decaffeinated Coffee Inc. is a leading specialty coffee company and a premium green coffee decaffeinator that employs the proprietary Swiss Water® Process to decaffeinate green coffee without the use of solvents such as methylene chloride. It also owns Seaforth Supply Chain Solutions Inc., a green coffee handling and storage business. Both businesses are located in the cities of Burnaby and Delta, British Columbia, Canada.

Additional Information

A conference call to discuss Swiss Water's recent financial results will be held on November 10, 2022, at 10:00 am Pacific (1:00 pm Eastern). To access the conference call, please dial 1-888-506-0062 (toll free) or 1-973-528-0011 (international); participant access code: 422896. A replay will be available through November 24, 2022 at 1-877-481-4010 (toll free) or 1-919-882-2331 (international); passcode: 47102.

A more detailed discussion of Swiss Water Decaffeinated Coffee Inc.'s recent financial results is provided in the Company's Management Discussion and Analysis filed on SEDAR (www.sedar.com) and the Company's website (investor.swisswater.com).

For more information, please contact:

Iain Carswell, Chief Financial Officer
Swiss Water Decaffeinated Coffee Inc.
Phone: 604.420.4050
Email: investor-relations@swisswater.com
Website: investor.swisswater.com

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements may include such words as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance, as well as management's current estimates, but which are based on numerous assumptions and may prove to be incorrect. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties, including, but not limited to, risks related to processing volumes and sales growth, operating results, the supply of utilities, the supply of coffee and packaging materials, supply of labour force, general industry conditions, commodity price risks, technology, competition, foreign exchange rates, construction timing, costs and financing of capital projects, a potential impact of the COVID-19 and/or other pandemic, global and local climate changes, changes in interest rates, inflation, and general economic conditions. The forward-looking statements and financial outlook information contained herein are made as of the date of this press release and are expressly qualified in their entirety by this cautionary statement. Except to the extent required by applicable securities law, Swiss Water undertakes no obligation to publicly update or revise any such statements to reflect any change in management's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those described herein.

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News published on 9 november 2022 at 20:50 and distributed by: