Swiss Water Reports 2020 First Quarter Results

A conference call to discuss Swiss Water’s recent financial results will be held tomorrow, May 7th 2020 at 9:00 am Pacific Time (12:00 pm Eastern Time). To access the conference call, please dial [phone] (toll free) or [phone] (international). A replay will be available through May 21, 2020 at [phone] (toll free) or [phone] (international) passcode: 34630.

VANCOUVER, British Columbia, May 06, 2020 (GLOBE NEWSWIRE) -- Swiss Water Decaffeinated Coffee Inc. (TSX – SWP) (“Swiss Water” or “the company”) today reported financial results for the three months ended March 31, 2020, representing the first quarter of the company’s current fiscal year. Swiss Water is a premium green coffee decaffeinator that employs the proprietary SWISS WATER Process to decaffeinated green coffee without the use of chemicals.

For the three months ended March 31, 2020, Swiss Water’s gross profit, operating income, net income and EBITDA were all up year-over-year, although the company recorded lower volumes and revenues when compared to Q1 of last year. Volumes were negatively impacted by a spike in coffee commodity prices which began in the last weeks of 2019 and persisted through the first quarter of this year. By the end of December 2019, the New York ‘C’ Arabica Futures Contract (“NY’C”) had moved to a peak of US$1.45/lb, 45% above the January to November average of approximately US$0.98. While Swiss Water’s volumes remained strong through the fourth quarter, they began to weaken markedly in the first quarter as the higher NY’C impacted the overall coffee market.  As has been the case with previous spikes in the NY’C, many of the company’s customers curtailed coffee purchases and drew down their existing inventories while waiting for the commodity price to soften. Subsequent to the end of the first quarter, the NY‘C began to drop and, in  early May 2020, was trading at approximately US$1.10/lb.

In addition to the spike in coffee commodity prices, the onset of the COVID-19 pandemic began to impact Swiss Water toward the end of the first quarter and, as with businesses in every sector of the economy, has created an uncertain outlook for the balance of this year.

“When the pandemic was declared early in March, we saw an immediate increase in volume demand from those customers that supply the retail grocery trade as consumers loaded their pantries in anticipation of quarantines and supply disruptions, or simply consumed their coffee at home,” said Frank Dennis, Swiss Water’s President and CEO. “However, at the same time, demand from customers who serve the out-of-home market began to soften as coffee shops and restaurants around the world were shuttered or restricted to takeout and drive-through service only. As this situation persists, it’s having an increasingly negative impact on demand from both our specialty and some of our large commercial accounts. Depending on how long it takes for the vital out-of-home channel to resume normal operations, we may ultimately experience a decline in our annual volumes for 2020.”