The Alkaline Water Company announced Thursday a $5 million public offering to pay down debt and help pay operating expenses. The Scottsdale, Arizona-based company is offering 8,333,334 shares of common stock at a price to the public of $0.60 per share.
The publicly traded company is the largest independent alkaline water company in the country and hopes to expand further into the value-added, enhanced water market with the offering.
“Our ambition has always been to make Alkaline88 a household brand,” said Richard Wright, President and CEO of The Alkaline Water Company Inc. in the February earnings call. “For the first time in the company’s history, we are ranked as the seventh largest enhanced water company in the country after leapfrogging several competitors.”
The marketing strategy is to expand further into the retail market from convenience stores to big box retailers and increase its reach within e-commerce, hospitality and food service establishments.
Alkaline Water announced $15.1 million in revenue – a YoY increase of 57% in Q3 2022. Its products are available in about 80,000 major retail locations, according to the company.
Over the course of the last year, Alkaline Water Co. has leveraged its position in the enhanced water market through various partnerships. NBA Hall of Famer Shaquille O’Neal joined the company’s board and became the Alkaline88 brand ambassador. In December, the company announced that its A88CBD FreshCap product was now available. The product is a custom cap-delivery technology made by Vessl that adds CBD, vitamins, and other functional ingredients into the beverage. Recently, the company announced increased production with co-packer AZ Custom Bottled Water to expand its distribution of the Alkaline88 functional beverage line.
Alkaline Water Co. has grown its network to over 10 co-packers nationwide in an effort to ease supply chain disruptions and further its reach into other geographic markets. It also has direct-store delivery coverage in at least nine states.
In February, the company reiterated its guidance for $62 million for fiscal 2022, but cautioned that inflation could put pressure on the company.
“Sales have been excellent but like almost everyone, we have seen significant margin contraction as a result of inflationary pressures over the last 12 months,” Wright said during the earnings call. “We’ve taken a number of steps that will allow us to increase our margins beginning first quarter of fiscal 2023.”
The company did not comment on if the recent stock offering was meant to offset costs associated with high inflation.