Colorado-based New Age Beverages was one of a number of publicly traded companies to have claimed loans under the Paycheck Protection Program (PPP), according to research by the investment bank Morgan Stanley.
Signed into law in March as part of the $2.2 trillion CARES Act in response to the coronavirus pandemic, P.P.P. was designed to address financial pressures affecting U.S. small business owners with $349 billion in loans. The typical loan size is $206,000, according to the Small Business Administration (SBA). The loans are forgivable if the companies receiving them keep workers employed during the COVID-19 crisis.
Based out of Denver, New Age Beverages owns and markets a variety of brands, including Aspen Pure, Bucha, Coco Libre, Marley, and Xing Tea. The company also owns marketing and sales agency Brands Within Reach.
According to Morgan Stanley, New Age took a $6.9 million loan against a market cap of $137 million.
BevNET reached out to New Age for comment but did not immediately receive a response.
The P.P.P., which operates on a first-come, first-serve basis, has attracted controversy and frustration, particularly amongst small business owners who feel the money is being distributed unevenly and who saw the loan fund exhausted before their applications could be processed or approved. Fiesta Restaurant Group ($189 million market value), which owns and operates Pollo Tropical and Taco Cabana franchises, and sandwich chain Potbelly ($85 million market value) claimed $10 million loans from the program, the maximum allowable amount. Meanwhile, two subsidiaries of Ruth’s Hospitality Group, which owns Ruth’s Chris Steak House, each also took $10 million loans; as of Wednesday, a petition urging the company to return the $20 million has amassed over 200,00 signatures.
Earlier this week, Randy Garutti, CEO of fast casual chain Shake Shack, announced that the company was returning a $10 million loan it received under P.P.P.
Congress is expected to vote this week on a new $500 billion coronavirus relief bill, which includes a further $320 billion in additional P.P.P. funding.
In an earnings call last month, New Age reported $253.7 million in revenue for 2019, up 386% from $52.2 million in 2018, largely stemming from its acquisition of Morinda, Inc., a Utah-based company that produces and sells Tahitian Noni Juice. Gross profit was $152.7 million, up 60.2% from $9.3 million in net sales the year before. Net loss was $89.8 million, compared to net loss of $12.1 million in 2018, which the company said was due to a $44.9 million impairment charge.
During the call, New Age CEO Brent Willis said the company’s long term plan to simultaneously grow multiple small beverage brands was “no longer strategic” and that it planned to review and potentially divest some of its core portfolio. Olivier Sonnois, president for North America at New Age, later told BevNET that Aspen Pure and Coco Libre are closer to exit status while Bucha, Marley and Xing are currently under review.