Greetings. Welcome to the Alkaline Water Company's Full Year Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded.

At this time, I'll turn the conference over to Jeff Wright, Director of Investor Relations. Jeff, you may now begin..

Good morning, everyone, and thank you for joining us for The Alkaline Water Company's Full year fiscal 2022 earnings conference call. Shortly, you will hear from Frank Lazaran, our President and CEO; and David Guarino, our Chief Financial Officer.

During the call, we will be making forward-looking statements within the meaning of the Safe Harbor provisions of US securities laws, and we may make additional forward-looking statements during the question-and-answer session. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements.

Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements.

For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the company's Form 10-K, which was filed yesterday and its other reports filed with the SEC on EDGAR and with Canadian security regulators on SEDAR.

In addition, such forward-looking statements and any projections as to the Company's future performance, represent management's estimates as of today, July 15, 2022.

The company does not undertake to update any forward-looking statements or projections, except as required by applicable laws, including the security laws of the United States and Canada.

Actual results could differ materially from those contemplated by any forward-looking statements as a result of certain factors, including, but not limited to, general economic and business conditions, competitive factors, changes in business strategy or development plans, ability to attract or retain qualified professionals, as well as change in legal and regulatory requirements.

The company issued a press release announcing its financial results and filed the Form 10-K with the SEC. So participants on this call, who may not have already done so, may wish to look at those documents as the company will provide a summary of the results discussed on today's call.

In a moment, I will turn the call over to our new CEO, Frank Lazaran, who'll give you an overview of the company's fiscal year 2022 results and our preliminary outlook for fiscal year 2023. Following Frank's comments, David Guarino, our Chief Financial Officer, will provide an overview of the company's financial results.

Frank will follow David again, providing closing remarks. Then we'll be joined in the Q&A portion of our call by our Chief Marketing Officer, Tom Hutchison; and Frank Chessman, our Executive Director of Sales and Operations. Before turning the call over to Frank, I'd like to spend a moment introducing our new CEO to our shareholders.

As a 40-year veteran of the retail food industry, Frank brings decades of commercial and C-suite experience in scaling organizations, optimizing operations, and driving innovation in the retail sector. He has a solid track record for delivering operational excellence with balanced growth to companies facing unique challenges and complex situations.

He was most recently the Chairman, Chief Executive Officer and President of Marsh Supermarkets, Inc., a multi-format regional food retailer based in Indianapolis, Indiana.

Prior to Marsh, Frank served as the Chief Executive Officer, President and Director of Winn-Dixie Stores, Inc., which was a publicly traded company and one of the largest supermarket chains in the Southeast. Frank has served as a Director for us since the fall of 2020. Welcome, Frank. The call is yours..

Thank you, Jeff, for that kind introduction. Good morning, everyone, and thank you for joining us for The Alkaline Water Company's full fiscal year 2022 conference call. I am honored to be serving as the company's new CEO.

Before we begin, I'd like to recognize that much of the success and growth we've experienced as a company over the past 10 years is due in large part to the vision and leadership of company co-founder and former CEO, Ricky Wright. Ricky stepped down from his positions at the company at the beginning of June.

We wish him the best, and we thank him again for the time and effort he gave to this company leading Alkaline88 to become a top 10 value-added water brand with a foundation of strong sales and a growing national footprint. Thank you, Ricky.

Our objective will be to drive double-digit top line sales growth in fiscal year 2023 in spite of the challenges presented by the uncertainty in our economy while taking advantage of our momentum to refocus our efforts on improvements to the company's bottom line.

On this call, we will provide further clarity on our announcement we made last week about the steps we are taking to place us on a clear pathway to profitability.

And you will hear details and our progress to-date of our company-wide review process, which we anticipate will result in benefits to our bottom line of $4.5 million to $5 million annually once fully implemented.

I'll reiterate, these initiatives will not negatively impact top line sales, but rather, we will continue to drive revenue, while simultaneously improving the bottom line and increasing shareholder value.

This pivot put us on the pathway to profitability comes on the heels of fiscal year 2022, in which we saw our best sales quarters in company history. Not only did we report record revenues this year, but the second and third fiscal quarters represented year-over-year growth of over 50%.

We finished with our strongest sales quarter yet, bringing our full year fiscal 2022 revenue to approximately $60.6 million, a 32% increase over last year. This was the best year-over-year growth we've experienced since 2019.

As the company refocuses on profitable sales, we are confident that we will continue to see double-digit year-over-year sales growth in fiscal year 2023 and therefore are issuing sales guidance of a record $70 million for the fiscal year. Achieving our sales guidance would represent a two-year stack growth rate of over 50%.

Alkaline88 is already a top 10 value-added water brand in the US. So, even as we continue to grow towards $70 million, our priority in this inflationary environment is defining a pathway to profitability. We are still committed to growth because we know top line sales are the lifeblood of any CPG company.

Alkaline has consistently reported year-over-year growth in comparable quarters and has never had a down or flat year. We are off to a very good start in fiscal 2023 to continue both of those trends.

We just wrapped up our first quarter of fiscal year 2023 and will report on the final numbers in mid-August, but early results for the first quarter indicate another record quarter. Third-party data shows that Alkaline88 has firmly established itself as pace setter for growth amongst top 10 value-added water brands.

This year, beverage revenue growth is projected to increase less than it did last year.

But despite the slowdown, beverage revenue is still growing and according to Beverage Marketing Corp., the hydration category, which contains waters and sports drinks is still projected to grow 11.6% in wholesale dollars, down slightly from 13% growth reported for last year.

BMC's projections for the premium water segment specifically is projected to continue to grow at an even faster pace. We are encouraged by the fact that the Alkaline Water Company is positioned in a category designated for solid sales growth in the future.

Hydrations growth is projected to outpace major beverage categories like soft drinks, energy drinks, alcoholic beverages and more. And not only are we in a category with the strongest growth projections, but we are proud of the fact that we are a growth leader in that category.

According to the Nielsen data, Alkaline88 consistently outpaces the category in sales and unit growth and is a leader amongst the other top 10 value-added water brands.

For the 52-week period ending May 21, 2022 in all outlets combined, excluding Convenience, Alkaline88 had the second fast year-over-year growth in both dollar and unit volume amongst top 10 value-added water brands. Our year-over-year growth in unit volume was over 10 times the average unit volume growth of the other top 10 brands.

We sold over 27% more units in the last 12 months than we had the previous 12 months. We're especially proud of that in light of the fact that four of the top 10 brands had negative unit growth and three others were in single digits.

We believe that Alkaline88 will continue to be a consistent leader in both unit and dollar growth compared to other top 10 peers, even as we refocus on becoming a profitable brand.

Compared to the overall value-added category, we had more than double the year-over-year growth rate in dollar volume and more than eight times the category growth in unit volume. In that same time frame, we were one of only three top 10 brands to gain revenue market share.

As we face economic headwinds, Alkaline88's strong track record gives us confidence for continued growth. And let's not forget that year-over-year, Alkaline88 is taking up more shelf space, more room and shopping carts, and more market share from global beverage giants as an independent company that was founded just 10 short years ago.

Our consistent growth is largely attributable to the steady addition of new clients and the expansion of SKUs within existing clients, thanks to the hard work of our sales and marketing teams.

A few fourth quarter highlights include the addition of over 600 Circle K stores in their Grand Canyon division, over 400 stop and shops in the Northeast, over 220 Myer Express stores in the Midwest and 80 Navy Exchange Service Command stores. These are just a few of the new clients we added in Q4, which grew our ever-increasing national footprint.

Additional accounts, including many up and down the street stores were added, thanks to the work of our direct store delivery partners, who continue to deliver results above even our ambitious forecast.

Last earnings call, we shared that a key part of our growth strategy was to add over 10,000 new stores in fiscal 2023 as well as expand SKU count in a possible 15,000 stores of existing clients.

Just stays into our second quarter of fiscal 2023, we are already two-thirds of the way to our SKU expansion goal and are well on the way to meeting the new store goal as well. We will share even more news on our progress in the upcoming weeks.

In addition to new stores and SKU expansion, a third important factor in our growth is, of course, Alkaline88 drinkers, who continue to drive organic growth of our deliciously smooth water.

New client acquisition, SKU expansion and organic growth have proven to be strong forces for our brand, which will assist in mitigating some of the external economic pressures that the industry is experiencing. We are certainly not downplaying the economic uncertainty.

However, let me reiterate, Alkaline88 is well positioned to continue to be a category leader in growth and brand expansion. As evidenced by some significant wins in the first quarter of fiscal 2023, there are multiple catalysts for growth that bolster our confidence.

These include adding a new SKU to approximately 8,000 CVS stores for this summer, selling a new one gallon club pack in almost 600 Sam's Clubs across the country. New premium clients like Roundy's and AFEs, along with the expansion of our DSD network. In both sales channels and geographic markets, The Alkaline Water Company is gaining ground.

Our strongest channel has been and will continue to be traditional grocery. But our recent success in club, convenience, and specialty retail all indicate that our brand has significant potential across multiple channels.

Geographically, we've recently picked up major clients in the Northeast and Midwest, two targeted regions where we see significant upside. In the fourth quarter, we announced two DSD partners; Columbia Distributing in the Pacific Northwest and Bill's Distributing in Alaska.

Our rollout of strategic DSD partners in important regions around the country is improving our in-store brand presence, market penetration and top-line growth. We've since announced another partnership with Heidelberg, who covers 26,000 clients in Ohio and Northern Kentucky.

We continue to pursue additional DSD partnerships in regions where it makes sense from a sales and profitability standpoint. As The Alkaline Water Company continues to build on our brand's strong foundation, we clearly understand that our shareholders expect more than just sales growth.

In the 40 days since I assumed the role of CEO, we have begun an extensive review of the entire organization, working diligently and leaving no stone unturned as we create a plan for sustained profitable growth. This includes everything from co-packing partners to warehouses to corporate management and everything in between.

As we continue to pursue growth, the company will have a laser focus on providing and achievable pathway to profitability, driven by cost structure optimization, margin enhancement and a more disciplined approach to capital management.

Some of the areas we anticipate seeing continued cost savings benefit include; first, strengthening the strategic footprint of our network of co-packers. Two great examples of this are the fourth quarter addition of AZ custom bottled water right here in Phoenix, Arizona.

They are a highly capable plant and their full line production will help us meet growing demand in the region, as well as provide logistical benefits to reduce expenses for improved profitability. We also recently announced the addition of Century Springs, which brings Alkaline88 production to the Midwest for the first time.

We anticipate bringing online another co-packer in Northern California in late July or early August. The enhanced strategic footprint of our network decreases the distance to distribution centers, saving on freight costs at a time when it has never been more crucial due to record fuel cost.

Having a strong co-packing network also provides additional capacity to meet our growing sales needs. In addition to the newly added co-packers, we are reviewing our co-packing and raw materials networks in order to optimize the production capacities and efficiencies of each partner.

Working with high capacity, highly efficient plants will help us see increased margins in our finished products. When it makes sense from a cost benefit standpoint, we will continue to invest in the optimization of the production lines, machinery and processes of our partners.

For example, one of our co-packers is now able to blow our bottles on-premise as opposed to shipping form box in for the filling like they've done in the past. This alone could save us 20% per bottle in this plant due to reduced freight costs.

Thirdly, we are conducting a thorough evaluation of all outside services across all facets of the company, from marketing to sales to distribution, where redundancies or other inefficiencies exist, we are cutting cost, will be leaner as we continue working with the best of the best to deliver a great product to our customers.

In addition, we are reviewing the overall structure and productivity of the organization to ensure that we have the right pieces in place and optimal output across the board.

As stated before, the full implementation of these changes has the potential to improve profitability in the range of $4.5 million to $5 million in annual expense reductions and margin enhancement.

We clearly understand the sense of urgency that we must exhibit to improve profitability, and I'm pleased to share that we have already instituted changes that will result in over $2 million in savings over the next year.

The change is necessary to realize the remaining $2 million to $3 million in additional benefits will go into effect gradually over the foreseeable future, and we'll continue to identify additional ways to move Alkaline88 towards profitability.

For internal accountability, we have formed a project management office reporting directly to me which will have the responsibility of tracking the progress of the rollout of each of the initiatives as well as measuring their financial benefit to the company.

We will work with our PMO to keep you informed along the way of our progress, and we are looking forward to providing further updates in our subsequent earnings call. With the first quarter call being just a month away shareholders will already be able to see the progress we are making on margin optimization and bottom line improvement.

Regarding capital management, we have introduced a more rigorous capital expenditures approval process to ensure the prudent allocation of funds. These measures we are taking do not come at the expense of sales. Rather, they are intended to support sales growth by making us a stronger company overall.

As such, I can assure you that under the new review process, we will turn CapEx expenses requests around in a timely manner so as not to slow down any necessary allocation of capital that will help move our business forward and provide financial benefits. Now, David will give you an overview of our fiscal 2022 financial results.

I'll then close with the final remark and open the line for questions. Thank you.

David?.

Thanks, Frank. Before I begin, I'd like to encourage interested listeners to review our press release announcing our financial results and our Form 10-K that we filed yesterday with the SEC for a more detailed explanation on some of the year-over-year variances I'll be highlighting today.

Our revenue from sales of our products for the fiscal year ended March 31, 2022, was $60.6 million, a year-over-year increase of approximately 32%. That increase is primarily generated by our sales of our alkaline water.

This increase reflects organic growth, SKU expansion within our existing retailers and new sales of our products to additional retailers throughout the country. Gross profit for the fiscal year ended March 31, 2022, was approximately $15 million, while net loss for the year ended was approximately $39 million.

The change in the year-over-year loss was primarily due to increased costs in raw materials, freight costs and an increase in our total operating cost of $22 million. As Frank mentioned, the company has initiated a cost reduction strategy to proactively reduce our operating costs.

While we are not prepared to give exact numbers or time line yet, we anticipate our burn rate to trend downward and eventually settle between 25% to 50% less than it is right now. We'll share more about our progress on our first quarter call.

There was a net loss per share of $0.40 in the year ended March 31, 2022, compared to a net loss per share of $0.24 in the prior year. Our cash and cash equivalents on March 31, 2022, was approximately -- was approximately $1.5 million.

Net cash provided by financing activities for the year ended March 31, 2022, was approximately $25.2 million as compared to approximately $19.4 million for the year ended March 31, 2021. The increase in net cash provided by financing activities was primarily due to an increase in the exercise of warrants.

Additionally, our revolving credit facility with CNH Finance has been renewed and increased from $7 million to $10 million. Before I turn it back to Frank, I'd like to reiterate our full year guidance for the fiscal year ended March 31, 2023. We expect to deliver revenue of approximately $70 million.

We expect our top line to be driven primarily by the momentum we are carrying forward as one of the fastest-growing top 10 brands. We anticipate continued organic growth within our existing retail clients and distribution expansion to our new clients throughout the country. With that, I'd like to turn the call back over to Frank. Thank you..

Thank you, David. As I've mentioned throughout the call, there is a new focus on disciplined and accountability throughout the organization. Before I turn the call over to the operator for questions, I'd like to reiterate that we are working diligently to put our company on the pathway to profitability while continuing to drive top line sales.

Top line sales growth, no matter what has been the standard model for growing CPG companies for years now. Alkaline88 is the largest independent alkaline water company in the country. And over the past decade, we have seen peers in the water and beverage industry drive their top line sales at all costs.

Until very recently, this was a completely reasonable business model for many CPG companies, including brands in the water category such as BOSS, Essentia and Core.

Now, with the changing economic clients that has also seen global beverage and CPG companies putting much greater emphasis on the bottom-line it is vital for a CPG company like ours to not only drive sales and market share, but also to define and execute a clear path to making money. So, let me be clear.

Our goal moving forward is to work for both our consumers and our shareholders to sell more Alkaline88 than ever before, while demonstrably improving our bottom-line. Thank you.

Operator?.

Good morning gentlemen. Frank, thanks for the great job and taking us through your strategic view on costs and operations. I think the elephant in the room is a view to your strategy on product line.

I think one of the most compelling aspects of Alkaline Water through the history that I'm familiar with, granted, it's probably only been the past three years was the innovation, right? And the thinking about where the market is going to go. And I appreciate costs and operations consciousness.

But at the end of the day, in my view, it's about driving that topline, importantly, in building brand relevance. And I didn't hear much about how you viewed Alkaline Water's product line currently and where you see it going. So, that's probably the big question.

Then just maybe some details on the number of co-packers you have now, where you expect that number to go by fiscal year-end, the number of doors now, where you expect that to go by fiscal year-end next year? And I guess I'll turn it over to you on that..

Well, Kevin, thank you again for attending our call this morning. I'd like to reiterate, I clearly understand that at Alkaline88, the innovation of a prior leadership was vital to growing the brand and continuing to grow market share, which led to our double-digit comps, and we'll continue to do so.

Going through -- what we're going through as it relates to a thorough review of the organization and clearly defining a path to profitability does not preclude us from continuing to be innovative from a product line standpoint.

We are currently evaluating a couple of new products, which we'll disclose when we feel more comfortable with that in the early, early stages of that. So, I don't want anybody to mistake that just because we're going through this review of the company, that we are not going to be focused on different product lines, et cetera.

As it relates to some of the innovation that we've done, we're in the process sports, which we've launched the brand already. We've made the product available on our website through e-commerce. We've seeded it with smaller influencers so we can get feedback and learn before it hits retail shelves, and we do a marketing push, including leveraging Shaq.

We're doing the work now to generate awareness and excitement with the retailers and other key stakeholders, and our consumer marketing plan is awaiting final tweaks that will come as we establish, which REIT physical retailers and what geographies will get sport in the first phase.

So I think this is one of those particular items you're referencing that we see a future in it, and we're in the very, very early stages of that. I hope that addresses your question on innovation..

Yes, it helps, Frank. But I -- obviously, I -- you and I don't know each other, and it's sort of difficult for me to put together the pieces of your overall strategic thinking from what we've been able to share thus far. So I look forward to discussing it further.

But anything that you can offer about the current product line and how you see knocking down more doors, right? Given you've had some great experience at Marsh and Winn-Dixie, and I'd just like to understand how you can bring that to sort of the flip side, right, where you're not looking at product, but instead offering products to the chain?.

Let me -- what I want to do here, Kevin, is I'd like to first tell you from my perspective that we haven't announced yet, but there's several key announcements that will be coming in the near future of additional doors that we are authorized to be in, and we'll announce those very shortly.

So the sales team focus continues to be on getting into more stores and SKU expansion. As I mentioned in the call about the goal that we had to get SKU expansion into existing retailers, because let's face it, we look at it, we have the organic growth of our existing products and then we have the new SKU growth.

But -- if you'll allow me, I'd like to turn this over to Frank Chessman, our Executive Director of Sales Operations. He is the gentleman that spear hits the team that's delivered the great sales results to-date.

So, Frank, maybe if you wouldn't mind, given Kevin and the other folks on the call, a little bit of insight?.

Well, thank you, Frank. We have had tremendous response over the past year in terms of additional SKUs in stores organically, having added over 15,000 stores with additional items. Our momentum is strong in store. And of course, the launch of FreshCap, the new flavored product has been very well received.

We announced it at the WAFC, Western Association of Food Chains and it just had exceptional response. But we, as a company, continue to be regarded as a company of innovation. We're very proud of our large sustainable value proposition large bottles, we're clearly the leader in the market, and there's no one close.

And we're seeing great response to smaller – to our smaller convenience sizes. Our Shaq Paq is definitely product innovation that's been exceptionally received in the marketplace. You'll hear more about that. We are – we have new packs in the mass market, places like Sam's, BJ's in the Northeast. You'll soon be hearing about them with a new Club Pack.

So there's a ton of innovation. But clearly, we are a brand that's regarded by the retailer as the innovators in the alkaline water space. But also providing tremendous value to the consuming public, which we all know is really important.

And then having a new fresh cap that is dispensed – the only one that dispenses product into an alkaline water clearly not only innovative, but unique and a true value to the consumer. So lots of exciting things going on in a tough economic climate, right? I mean, let's not kid ourselves. It's tough out there. But we continue to be out in front of it.

And you're going to see tremendous growth in the convenience category. We've talked about it, tremendous synergy going on right now. So we have some announcements in that regard coming up with some big expansion in California and significant convenience stores there. But bottom line, when it comes to innovation, when it comes to quality product.

When it comes to a leadership position in the alkaline category, we truly are second to none at Alkaline88..

Thanks, Frank..

Kevin, if I can….

When I saw you at Expo West, I saw you and Tom in Expo West. It was the fresh cap was certainly hugely compelling. And I'm with you 100%.

Can you just give us some insight on maybe quantitative measures of where you are and where you hope to be? I think that's – I'm looking at it from an investment perspective, that's right? That's probably the -- right, the shining star, right, is where you can take things over the next year.

That's why I was looking for some insight on the network, co-packers, doors, and particularly your fresh cap product and introduction throughout your full distribution chain..

Well, you asked a lot of questions in one question there. But let me try to speak to that for you. In terms of co-packing, the beauty of fresh cap for us is that, it lets us expand into virtually every one of our co-packers across the country.

So we will be pre-filling the caps, distributing to our co-packers and we'll have the ability to put the product into our alkaline water at the co-packer or on our alkaline water. In terms of expansion, as far as the fresh cap, it's just been launched. The sports category, as you know, and it was nice visiting with you at the show.

Now you recall, the sport category has had an incredibly strong growth over the past three weeks, no signs of slowing down.

Our flagship brand has performance and a brand halo in sports already, right? And our spokesperson Shaq, who will be talking about this product and this launch it's just a perfect fit when you have an NBA Hall of Fame athlete, bringing credibility to a product like that, incidentally, he loves it.

As for expectations, this new product category for us is still developing in terms of projections and expectations. But I'll tell you this, and having been around a little bit from the inception, it kind of feels like when we started this thing, where I would go in and meet directly with category managers, et cetera.

And I'd walk away knowing how excited they were about Alkaline88. They're just as excited as that with our fresh cap. It's unique, it's different. We will also provide a value for something that is essentially unique in the marketplace, and you're going to see it on a lot of shelves.

You'll probably see it first extensively in California, Texas, with expansion into the Southeast. But rest assured, this is a product that we believe we'll be a home run if executed properly. And I have total confidence in our marketing team for the launch of that product..

Kevin, if I could jump in, too, on the co-packing piece of this. We currently, as we said, have nine co-packers, and we're adding the 10th in Northern Cal.

One item I'd like to mention as it relates to what Frank discussed and by the way, a great job, Frank, I appreciate that update, is that one of the plants right here in Phoenix is putting capping line in as we speak. So that will give us the opportunity to increase that cap, the infused cap.

So that's another facility that we'll have that will have the capability of producing that product. So that's what we're looking at.

But again, if I could just kind of -- not to cut off there, Kevin, but one thing I would just like to emphasize is that while we are clearly driving toward a pathway to profitability, we're not doing things here that are going to impact negatively our top line. We're just being much more prudent how we're evaluating things.

And if you could get a flavor of it, I believe, clearly from the conversation with Frank, I am very happy when I walked into this organization, and I've known Frank Chessman a long time, this type of sales organization he's assembled, I've already met a good number of his folks, and these people are clearly driven to drive the top line because we get it.

The ultimate goal is to keep moving this thing forward, but on a much different pathway as it relates to profitability. So I'm really excited about what we're going to be presenting in the next update call, we're going to be presenting some additional information on those topics. So hopefully, we've hit your questions head on..

Yes. I'm still a little cloudy on the door count, Frank. I don't know if you want to address that here. I mean, obviously, you spoke to some new introductions. Congratulations on that. I was just wondering if you were going to try to present Wall Street with targets..

Well, you mean targets in terms of number of new stores, et cetera..

Correct. Thank you..

Well, I can tell you, our target is to add an additional 15,000 stores over the next fiscal year. That's for sure. It will probably be more than that. But that's our target. Over the past year, we've added in terms of just new retailers, about 12,000 plus in terms of retail locations. It's something we live with two things in the sales organization.

One, constantly looking at new opportunities, significant change to go into expansion into areas that we're not in. Our biggest opportunity clearly is convenience, and we are building great momentum, Kevin, in the convenience category. And then in addition, our organic growth will add, I believe, over 20,000 stores with new SKUs this year.

So great organic growth along with new store growth for us to take us to our new guidance number, which we believe is very achievable..

Terrific. Thank you both, gentlemen. Appreciate the gander..

Thanks, Kevin..

Thank you, and I look forward to meeting you at some point in the near future, Kevin..

Thank you. At this time, I will turn the call over to Frank Lazaran for closing remarks..

Thank you. In closing, I would like to thank all of you for dialing in today. At Alkaline88, we are committed to continuing to drive the top line, as evidenced by the guidance we presented to produce annual sales of $70 million for fiscal year 2023 amidst these trying economic times.

This would again represent double-digit comps, which our shareholders have grown accustomed to seen from Alkaline88. In addition, we demonstrated that we have a clear focus on an achievable path to profitability.

Our initial review has identified approximately $4.5 million to $5 million of profit enhancements, and we are not stopping our review until we have explored and exhausted every possibility. We are committed to providing more clarity to our shareholders, as we work toward achieving our goals.

There is currently in place a much more disciplined approach to capital management, and we're developing plans for additional funding when the need arises to support our growth and protect shareholder value. While improving our profitability, we will not lose sight of the importance of top line sales growth and will not compromise that growth.

Once again, I'd like to thank you for joining us and for your continued interest in The Alkaline Water Company. Have a great day. Thank you..

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation..