Swiss Water Decaffeinated Coffee Inc., a leading specialty coffee company and premium green coffee decaffeinator, reported financial results for the year ended December 31, 2021.
Financial and operational highlights:
- Fourth-quarter revenue was $35.1 million, an increase of 43% or $10.6 million when compared to the same period in 2020. Full-year revenue grew strongly and was $125.1 million, an increase of 28% or $27.5 million.
- Quarterly and annual volumes increased by 23% and 17%, respectively, compared to the same periods in 2020 reflecting new customer acquisition and organic growth with existing customers as the food service economy continues to recover.
- European business grew strongly with volumes up by 70% compared to the year ended December 31, 2020. Annual volumes in the Asia Pacific and North American regions grew strongly at 30% and 5% respectively.
- Production volumes were high during the fourth quarter and capacity utilization across the company’s three production lines exceeded 80%.
- Fourth-quarter adjusted EBITDA was $2.1 million, compared to $1.2 million in the same quarter in 2020, representing an increase of 78%. Full-year adjusted EBITDA grew strongly to $10.5 million compared to $7.0 million in 2020, an increase of 50%.
- Fourth-quarter net income was $0.2 million, compared to a net loss of $0.3 million in the same quarter in 2020, representing an increase of $0.5 million or 175%. Full-year net income fell to $0.5 million from $2.9 million in the same period in 2020 due to increased depreciation, a non-cash loss on the extinguishment of the convertible debenture and increased finance expenses.
- Swiss Water initiated on-site construction of a second production line in Delta, BC, in July 2021. The foundation was completed in the third quarter of 2021, and above ground construction commenced during the fourth quarter. The project is currently on time and on budget.
- Inflationary pressure increased within the company’s variable cost structure during the fourth quarter and led to an increase in processing prices to enable maintenance of margins.
“We are very proud to report that our volumes, revenues and adjusted EBITDA hit record levels in 2021," said Frank Dennis, Swiss Water’s president and CEO. "Annual revenue exceeded $100 million for the first time, and adjusted EBITDA moved beyond $10 million for the first time in the company’s history. Our existing customers are experiencing strong growth in demand for their chemical free decaf offerings and additionally, we have started to ship products to a number of new out-of-home customers in North America. We are seeing very good evidence in the marketplace that methylene chloride decaffeination is declining in preference by roasters and consumers. Furthermore, we are excited to share that our capacity utilization rate across our three production lines exceeded 80% during the fourth quarter and that these production rates drive solid profitability. As we look forward into 2022 we are continuing to see a strong order book and we are optimistic that, with maturing vaccination programs in most developed countries, we will continue to see favorable trading conditions in our key markets. On a more cautionary note, we are continuing to experience a marked slowdown in coffee deliveries as supply chain bottlenecks persist. Additionally, a rare double frost occurred last July in Brazil increasing coffee futures prices sharply through the fourth quarter which caused a significant increase in working capital needs. We will pay close attention to these emerging risks and increasing costs, with an increasing expectation for further pricing actions and other mitigation efforts. On a separate note, we commenced above ground construction of our second line in Delta, BC during the fourth quarter and we expect to commission this new line in 2023."
