Hydralyte International: Leveraging a Rapidly Expanding Hydration Market in North America

Hydralyte International (ASX:HPC) is a rapid hydration solutions business with a solid manufacturing base and supply chain focused on the large North American and European markets. The company recently surpassed US$10.4 million in 12-month trailing revenue with a gross margin of a staggering 58 percent during Q3 FY23 delivering strong revenue of US$2.6 million in Q3 2023.

Hydralyte rapid rehydration product was also the number one SKU in the hydration category on Amazon Prime Day in Canada. Hydralyte delivered ~US$140,000 in gross sales over 48 hours – which has underpinned a strong ecommerce sales pipeline in the recent months.

Hydralyte is available in three forms: ready-to-drink, tablet and dissolvable powder stick. All three are widely accepted in the medical community. Hydralyte is also frequently used by professional athletes as an alternative to sports drinks.

Made from all-natural ingredients, it contains the precise ratio of glucose and electrolytes necessary to rehydrate. Its innovative formula contains up to 75 percent less sugar and four times more electrolytes than the majority of sports drinks.

Company Highlights

• Hydralyte International is a rapid hydration drink business with a focus on North America and established supply chains in both the United States and Canada.
• The company's 2023 financials are incredibly promising:
  • Trailing 12 months revenue of US$10.4 million in Q3 FY23
  • 58 percent gross margin in Q3 2023
  • Cash burn reduction of 47 percent on PCP to US$1.46 million in Q3 FY22, with initiatives in place expected to reduce this further
  • US$140,000 in gross sales from Amazon Prime Day in July.
• Although Hydralyte recently reduced its marketing expenditure, it still experienced strong revenue growth throughout the first three quarters of 2023, driven by ongoing eCommerce sales, an established brick-and-mortar footprint, new SKU additions and a partnership with leading entrepreneur and actress, Shay Mitchell.
• The United Kingdom represents an international expansion opportunity for Hydralyte, with products being sold on Amazon UK and appearing on store shelves in Whole Foods and Chemist Warehouse.
• Agreement with specialist e-commerce company RooLife Group Limited (ASX: RLG) to exclusively market, sell and distribute Hydralyte products in China
• Appointed leading health and wellness products broker LeBeau Excel as its new sales broker, giving Hydralyte the ability to significantly expand its footprint in the Canadian market.
• In addition to a solid manufacturing base and supply chain, Hydralyte is supported by leaders with decades of experience in health and wellness.
• Hydralyte products are widely accepted in both the medical and athletic communities. As a result, the company is extremely well-positioned to leverage the fast-growing electrolyte hydration drinks market.

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