Eastside Distilling Reports First Quarter 2023 Financial Results
Company to Host Conference Call at 5:00pm ET Today
PORTLAND, Ore., May 15, 2023 /PRNewswire/ -- Eastside Distilling, Inc. (NASDAQ:EAST) ("Eastside" or the "Company"), a consumer-focused beverage company that builds craft inspired experiential brands and high-quality artisan products around premium spirits, digital can printing, co-packing and mobile filling, reported first quarter end 2023 financial results for the period ended March 31, 2023.
First Quarter 2023 Highlights:
- Craft C+P reports a +37% increase in sales from prior-year quarter
- Craft C+P achieved a record number of cans printed in the quarter - over 2.5 million cans in the quarter and reaffirmed guidance of positive adjusted EBITDA for the Craft C+P segment
- Spirits achieved strong margins on bulk sales in the quarter
- Net loss decreased over $0.4 million from prior-year quarter
- Announced a 1 for 20 reverse stock split to address one of two Nasdaq compliance issues
"This quarter we made progress across the board in all segments and businesses" said Geoffrey Gwin, Eastside's CEO. "I expect stronger results in the 2nd quarter of this year excluding bulk barrel sales."
Financial Results
Gross sales for the three months ending March 31, 2023 decreased to $2.9 million from $3.8 million. Craft C+P sales increased due to digital printing, offset by lower results in mobile canning business. For the three months ending March 31, 2023 and 2022, the Company sold excess bulk spirits for $0.6 million and $1.5 million, respectively.
Gross profit for the three months ending March 31, 2023 decreased to $0.6 million from $0.9 million for the three months ending March 31, 2022. Gross margin was 22% for the three months ending March 31, 2023 and 25% for the three months ending March 31, 2022. Spirits margins increased primarily due to excess bulk spirits sales.
Operating costs for the three months ending March 31, 2023 decreased to $1.9 million from $2.6 million for the three months ending March 31, 2022 primarily related to decreased professional fees and compensation.
Net loss for the three months ending March 31, 2023 decreased to $1.6 million from $2.0 million for the three months ending March 31, 2022. The Company reported adjusted EBITDA of $(0.7) million and $(1.0) million for the three months ending March 31, 2023 and 2022, respectively. (See description of adjusted EBIDTA in "Use of Non-GAAP Measures" below.)
During the first quarter, the Company delivered 5,941 cases of spirits. Of that total, Portland Potato Vodka represented 4,000 cases. Azuñia volumes decreased due to two large inventory distributor purchases in the first quarter of 2022. The following table details cases delivered during the quarters ending March 31, 2023 and 2022:
9 Liter Cases | 2023 | 2022 | Change | % |
Azuñia | 1,013 | 2,059 | (1,046) | -51 % |
Portland Potato Vodka | 4,030 | 4,301 | (271) | -6 % |
Burnside | 771 | 1,005 | (235) | -23 % |
Eastside Brands | 86 | 68 | 18 | 26 % |
Hue-Hue | 41 | 84 | (43) | -51 % |
Legacy Brands | - | 11 | (11) | -100 % |
5,941 | 7,528 | (1,587) | -21 % | |
The Company will give further updates on its earnings conference call.
Use of Non-GAAP Measures
Eastside Distilling's management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of adjusted EBITDA as a supplement to GAAP results. Management believes this non-GAAP measure provides useful information about the Company's operating results and assists investors in comparing the Company's performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance.
The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, and other one-time items. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.
First Quarter 2023 Conference Call Details
Date and Time: Monday, May 15, 2023 at 5:00pm ET
Call-in Information: Interested parties can access the conference call by dialing (844) 889-4332 or (412) 717-9595.
Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available in the Conference Calls section of the Company's website at https://www.eastsidedistilling.com/conference-calls.
Presentation Information: Slides relating to this earnings release can be found on the Company's website in the Events and Presentations section of the Investor page at https://www.eastsidedistilling.com/events-and-presentations
Replay: A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, replay access code #3471174. A webcast replay will be available in the Conference Calls section of the Company's website at https://www.eastsidedistilling.com/conference-calls for 90 days.
About Eastside Distilling
Eastside Distilling, Inc. (NASDAQ:EAST) has been producing high-quality, award-winning craft spirits in Portland, Oregon, since 2008. The Company is distinguished by its highly decorated product lineup that includes Azuñia Tequilas®, Burnside Whiskeys®, Hue-Hue Coffee Rum®, and Portland Potato Vodkas®. All Eastside spirits are crafted from natural ingredients for quality and taste. Eastside's Craft Canning + Printing subsidiary is one of the Northwest's leading independent mobile canning, co-packing and digital can printing businesses.
Important Cautions Regarding Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements that reflect our expectations or anticipations rather than historical fact. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions, general competitive factors, the Company's ongoing financing requirements and ability to achieve financing, acceptance of the Company's products in the market, the Company's success in obtaining new customers, the Company's ability to execute its business model and strategic plans, and other risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"). A detailed discussion of the most significant risks can be found in the "Risk Factors" section of the Company's Annual Report on Form 10-K. The Company assumes no obligation to update the cautionary information in this press release.
Financial Summary Tables
The following financial information should be read in conjunction with the unaudited financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on Form 10-Q for the period ended March 31, 2023, which can be viewed at www.sec.gov and in the investor relations section of the Company's website at www.eastsidedistilling.com/investors.
Eastside Distilling, Inc. and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
Dollars in thousands, except share and per share | |||||||
March 31, 2023 | December 31, | ||||||
Assets | (Unaudited) | ||||||
Current assets: | |||||||
Cash | $ | 267 | $ | 723 | |||
Trade receivables, net | 860 | 876 | |||||
Inventories | 3,989 | 4,442 | |||||
Prepaid expenses and current assets | 941 | 579 | |||||
Total current assets | 6,057 | 6,620 | |||||
Property and equipment, net | 5,489 | 5,741 | |||||
Right-of-use assets | 2,698 | 2,988 | |||||
Intangible assets, net | 5,655 | 5,758 | |||||
Other assets, net | 354 | 369 | |||||
Total Assets | $ | 20,253 | $ | 21,476 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,077 | $ | 1,728 | |||
Accrued liabilities | 1,429 | 1,509 | |||||
Deferred revenue | 115 | 18 | |||||
Current portion of secured credit facilities, net of debt issuance costs | 3,377 | 3,442 | |||||
Current portion of note payable, related party | 4,651 | 4,598 | |||||
Current portion of notes payable | 7,749 | - | |||||
Current portion of lease liabilities | 870 | 991 | |||||
Other current liability, related party | 1,024 | 725 | |||||
Total current liabilities | 21,292 | 13,011 | |||||
Lease liabilities, net of current portion | 1,970 | 2,140 | |||||
Note payable, related party | - | 92 | |||||
Notes payable, net of current portion | - | 7,749 | |||||
Total liabilities | 23,262 | 22,992 | |||||
Stockholders' equity (deficit): | |||||||
Common stock, $0.0001 par value; 35,000,000 shares authorized; | 2 | 2 | |||||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; | - | - | |||||
Additional paid-in capital | 73,646 | 73,503 | |||||
Accumulated deficit | (76,657) | (75,021) | |||||
Total stockholders' equity (deficit) | (3,009) | (1,516) | |||||
Total Liabilities and Stockholders' Equity | $ | 20,253 | $ | 21,476 | |||
Eastside Distilling, Inc. and Subsidiaries | ||
For the Three Months Ended March 31, 2023 and 2022 | ||
(Dollars and shares in thousands, except per share amounts) | ||
(Unaudited) | ||
Consolidated Statements of Operations: | ||
2023 | 2022 | |
Sales | $2,879 | $3,780 |
Less customer programs and excise taxes | 26 | 40 |
Net sales | 2,853 | 3,740 |
Cost of sales | 2,212 | 2,793 |
Gross profit | 641 | 947 |
Operating expenses: | ||
Sales and marketing expenses | 511 | 647 |
General and administrative expenses | 1,364 | 1,930 |
Loss on disposal of property and equipment | 6 | - |
Total operating expenses | 1,881 | 2,577 |
Loss from operations | (1,240) | (1,630) |
Other income (expense), net | ||
Interest expense | (329) | (406) |
Other expense | (29) | - |
Total other income (expense), net | (358) | (406) |
Loss before income taxes | (1,598) | (2,036) |
Provision for income taxes | - | - |
Net loss | (1,598) | (2,036) |
Preferred stock dividends | (38) | (38) |
Net loss attributable to common shareholders | $(1,636) | $(2,074) |
EPS: | ||
2023 | 2022 | |
Basic and diluted net loss per common share | $(0.10) | $(0.14) |
Basic and diluted weighted average common shares outstanding | 16,475 | 14,901 |
Eastside Distilling, Inc. and Subsidiaries | ||
For the Three Months Ended March 31, 2023 and 2022 | ||
(Dollars in thousands) | ||
Segments: | ||
2023 | 2022 | |
Craft C+P | ||
Sales | $ 1,456 | $ 1,076 |
Net sales | 1,477 | 1,076 |
Cost of sales | 1,578 | 1,111 |
Gross profit | (101) | (35) |
Total operating expenses | 749 | 1,047 |
Net loss | (884) | (1,093) |
Gross margin | -7 % | -3 % |
Interest expense | $4 | $11 |
Depreciation and amortization | 368 | 221 |
Significant noncash items: | ||
Stock compensation | - | 205 |
Spirits | ||
Sales | $ 1,423 | $ 2,704 |
Net sales | 1,376 | 2,664 |
Cost of sales | 634 | 1,682 |
Gross profit | 742 | 982 |
Total operating expenses | 522 | 625 |
Net income | 221 | 357 |
Gross margin | 54 % | 37 % |
Depreciation and amortization | $39 | $ 42 |
Corporate | ||
Total operating expenses | $ 610 | $ 905 |
Net loss | (935) | (1,300) |
Interest expense | $325 | $395 |
Significant noncash items: | ||
Stock compensation | 111 | 170 |
Adjusted EBITDA Reconciliation: | ||
2023 | 2022 | |
Net loss | $(1,598) | $(2,036) |
Add: | ||
Interest expense | 329 | 406 |
Depreciation and amortization | 407 | 263 |
EBITDA | (862) | (1,367) |
Loss on disposal of property and equipment | 6 | - |
Stock compensation | 111 | 375 |
Adjusted EBITDA | $ (745) | $ (992) |
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SOURCE Eastside Distilling, Inc.