The Best Stock to Watch: The Alkaline Water Company – A Possible Takeover Target


The Alkaline Water Company’s rapid distribution channel expansion is quite impressive. The company could become an attractive buyout for a large soda conglomerate. Falling soda sales cause a flurry of acquisitions.

The Alkaline Water Company Inc. (NASDAQ and CSE: WTER) (the “Company”), is a producer of premium bottled alkaline water, flavor-infused waters, and CBD infused products sold under the brand names Alkaline88®, A88 Infused™, and A88CBD™, respectively. Today, the Company announces that its flagship brand, Alkaline88 is now available in over 200 new convenience store locations and across seven Core-Mark distribution centers.” Source: The Alkaline Water Company

In 2016 CBS News reports, Bottled water set to topple soda sales for the first time. Source: CBS News

Bottled water is no longer a luxury but a necessity in particular what happened in Flint MI with their water supply.

“Flint officials had failed to add needed corrosion controls to the river water. Lead from the city’s old pipes leached into the water, causing alarmingly high lead levels in the blood of many residents. Source New York Times

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Additionally, The Alkaline Water Co. has launched a new CBD products line for including CBD-water, capsules, tinctures, and gummies. This is a great advantage for The Alkaline Water Company Inc. Because they already have distribution in place in relationships with over 150,000 retail outlets.

Richard A. Wright President, Chief Executive Officer, Chief Operating Officer and Director is a serial entrepreneur with over 41 years of experience. Mr. Wright has extensive knowledge of finance, operations, sales and marketing and has participated in 100’s of M&A transactions throughout his career. As a veteran beverage executive, he has been quoted in The Wall Street Journal, Bloomberg, Forbes, featured on Cheddar live from the NYSE and TD Ameritrade’s Network live from Nasdaq, and continues to be quoted as an industry expert in several industry-focused trade publications on both functional water and CBD.

Results of Operations

Our results of operations for the three months ended June 30, 2020 and June 30, 2019 are as follows:

For the three of  the three months ended months ended June 30, June 30, 2020 2019

Revenue $ 14,219,424 $ 10,153,044

Cost of goods sold 8,369,526 6,028,197

Gross profit $ 5,849,898 $ 4,124,847

Net Loss $ (3,021,003) $ (5,056,188)

Revenue and Cost of Goods Sold

We had revenue from sales of our product for the three months ended June 30, 2020 of $14,219,424, as compared to $10,153,044 for the three months ended June 30, 2019, an increase of 40%. The increase in sales is due to the expanded distribution of our products to additional retailers throughout the country and increased demand due to Covid-19.

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We distribute our product through several channels. We sell through large national distributors (UNFI, KeHe, C&S, and Core-Mark), which together represent over 150,000 retail outlets. We also sell our product directly to retail clients, including convenience stores, natural food products stores, large ethnic markets, and national retailers. Some examples of retail clients are, Walmart, CVS, Family Dollar, Albertson/Safeway, Kroger, Schnucks, Smart & Final, Jewel-Osco, Sprouts, Bashas’, Stater Bros. Markets, Unified Grocers, Bristol Farms, Vallarta, Superior Foods, Ingles, Shaw’s, Raley’s, Harris Teeter, Festival Foods, HEB Brookshire’s, Publix, Shaw’s, Raley’s, Food Lion, Harris Teeter, and Festival Foods.

Cost of goods sold is comprised of production costs, shipping, and handling costs. For the three months ended June 30, 2020, we had cost of goods sold of $8,369,526, or 59% of revenue, as compared to cost of goods sold of $6,028,197 or 59% of revenue, for the three months ended June 30, 2019. Source: The Alkaline Water Company Inc.  SEC Filings

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