Pulse Provides Q3 Report and Outlook
DENVER, Nov. 14, 2016 (GLOBE NEWSWIRE) -- The Pulse Beverage Corporation ("Pulse") (OTCQX:PLSB), makers of Natural Cabana(R) Lemonades/Limeades and Coconut Waters, and PULSE(R) Heart & Body Health functional beverages, today provided its Q3 Report and Outlook. Business Highlights for Q3-2016 to Date:
During Q3-2016 Pulse continued its strategic decision to move from a direct store delivery distribution system ("DSD") to a hybrid system of 75 of its strongest Class "A" DSDs and 20 wholesalers, concentrating placements into high volume cold box sets. During this time Pulse eliminated a number of weaker, non-performing DSDs in certain geographical areas in order to move its distribution to a warehouse direct to wholesaler system. This decision was made to reduce overhead associated with the effort to manage a direct store delivery distribution system. Pulse rationalized the number and placement of salespeople in the field. The overall effect was a reduction of $437,000 in overhead during the nine months ended September 30, 2016 compared to 2015. Fixed overhead has been reduced to below $80,000 per month going into Q4-2016. The decrease in net sales and gross profit during Q3-2016 was planned in order to grow sales from a more profitable fixed overhead base. During Q3-2016 Pulse reduced freight-out and costly promotional programs which increased gross profit and contribution margins. During Q3-2016 we provided an additional $107,495 to fully allow for a doubtful account in Mexico. We expect to partially recover this account receivable in the future. We also wrote-off a $40,000 financing fee during Q3-2016. During Q3 Pulse introduced its newest private label product, "Citrus Tree(R)", which is Natural Cabana(R) Lemonade/Limeade formula in a 16.9oz glass bottle in four flavors: Natural, Strawberry, Tropical Mango and Cherry Limeade. This new product is a private label brand sold through Acme Markets, a division of Albertsons, a 176 store supermarket chain in New York and Philadelphia metro areas having a population of more than 40 million. Pulse has sold more than 5,000 cases to date since its introduction. Robert E. Yates, CEO of Pulse, said, "We are in the midst of a major thrust in the American Northeast and are thrilled to bring on Citrus Tree(R) to help broaden our reach into the American Northeast, a highly populated and influential region." In September, 2016 Pulse announced that 57 Tom Thumb supermarkets, a Division of Safeway Dallas/Ft Worth and 44 Randalls supermarkets, a Division of Safeway Houston, as well as 90 Albertsons supermarkets in the Dallas/Ft Worth metroplex area are all carrying Natural Cabana Lemonade/Limeade and Coconut Water in 182 upscale supermarket stores. Additionally, Pulse secured listings for its 20oz Natural Cabana(R) Lemonade/Limeade in 64 PriceRite supermarkets found in Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia. Parley Sheya, VP and National Sales Manager of Pulse, said, "These high end supermarket stores are an exciting addition for us as they are busy upscale competitive stores. Revenue associated with these listings will start to be fully realized starting in Q4-2016 and fully realized during 2017." During October, 2016 Pulse secured placement of Natural Cabana(R) Lemonade/Limeade in 340 Walmart Supercenters and Neighborhood Markets in the States of Alaska, Washington, Oregon, California, Idaho, Colorado, Utah, Arizona, Nevada, New Mexico and West Texas. The sets will be completed by the end of October. As part of the Walmart rollout Pulse adds KeHE Distributors LLC to assist in the distribution of its products into Washington, Oregon, Idaho and Northern California. The KeHe network includes 17 North American warehouses and 470 trucks with daily routes serving nearly half of the top 100 retailers from coast to coast. Additionally, Pulse secured listings to sell Natural Cabana(R) Coconut Water through 29 Dierbergs Markets, one of the dominant grocery store retailers in the St. Louis area and through Stater Bros Markets, a 169 store supermarket chain in Southern California. Pulse will be placed in the high traffic cold box produce section of Stater Bros Markets. Bob Yates, CEO of Pulse, said, "When we team up with major retailers like Walmart, consumers easily find our prominently displayed products thereby increasing revenue and earnings for our shareholders; we estimate annual sales from this new listing of over $1,000,000." Mr. Yates went on to add, "KeHE will help us with other major retailers we were not able to get to with our existing distribution network. Our effort over the last few months in moving to a hybrid distribution system has allowed us to reduce our overhead costs which will move us towards profitability sooner. The full effect of our overhead reductions will be fully realized in 2017. We continue to be pleased with the overwhelming success of our new coconut water. We are confident in the marketing strategies and the delivery/execution of our new strategic growth plan into 2017 and we look forward to communicating with our shareholders as these growth plans unfold during the remainder of 2016."
