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    Eastside Distilling Reports Fourth Quarter 2023 Financial Results

    4/1/24 4:30:00 PM ET
    $EAST
    Beverages (Production/Distribution)
    Consumer Staples
    Get the next $EAST alert in real time by email

    Company to Host Conference Call at 8:30 am ET Tuesday, April 2, 2024

    PORTLAND, Ore., April 1, 2024 /PRNewswire/ -- Eastside Distilling, Inc. (NASDAQ:EAST) ("Eastside" or the "Company"), a consumer-focused beverage company that builds craft inspired experiential brands and high-quality artisanal products around premium spirits, digital can printing, co-packing and mobile filling, reported fourth quarter and year end financial results for the period ended December 31, 2023.

    Eastside Distilling (PRNewsfoto/Eastside Distilling, Inc.)

    Fourth Quarter 2023 Highlights:

    • Craft digitally printed a record 14.1 million cans in 2023
    • Company expecting record can printing in the first quarter of 2024 of over 4.7 million cans; an 88% increase year over year
    • Spirits operating losses improved by 74% and expects continued improvement in the first quarter of 2024

    "The Company finished the year with substantially improved results in both businesses, most notably in our Spirits business," said Geoffrey Gwin, Eastside's CEO. "In addition, we are excited to report we expect record digital can printing results in the first quarter—we are off to a great start."

    Financial Results

    Gross sales for the three months ending December 31, 2023 decreased to $2.1 million from $2.4 million for the three months ending December 31, 2022, as both mobile canning and spirits sales were down, offset by an increase in digital can printing. Year over year results are not directly compatible given the large sales of bulk spirits in 2022.

    Gross profit for both the three months ending December 31, 2023 and 2022 was flat at $(0.1) million. Gross margin was (6)% for both the three months ending December 31, 2023 and 2022. Spirits margins increased as the Company has focused on profitable segments.

    Operating costs for the three months ending December 31, 2023 decreased to $1.4 million from $1.8 million for the three months ending December 31, 2022 primarily due to decreased headcount, professional fees and sponsorship costs. The Company has undertaken a broad restructuring in spirits which has lowered sales and realigned investment to focus on the most profitable spirits brands and regions.

    Net loss for the three months ending December 31, 2023 decreased to $2.1 million from $9.7 million, which included $0.4 million and $7.5 million resulting from an impairment loss during the three months ending December 31, 2023 and 2022, respectively. The Company reported adjusted EBITDA of $(1.3) million and $(1.6) million for the three months ending December 31, 2023 and 2022, respectively. (See description of adjusted EBITDA in "Use of Non-GAAP Measures" below.)

    During the year ending December 31, 2023, the Company sold 304,305 shares of common stock in at-the-market public placements, with the proceeds used primarily to fund the operations of its digital can printing business.

    Reverse Stock Split

    The Company effected a 1-for-20 reverse common stock split on May 12, 2023. All share quantities and per share information in this earnings release have been adjusted to give effect to this reverse stock split.

    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 final table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

    Fourth Quarter 2023 Conference Call Details

    Date and Time: Tuesday, April 2, 2024 at 8:30 am 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.

    Replay: A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, replay access code #3217484. 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 highest 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 audited financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on Form 10-K for the period ended December 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

    December 31, 2023 and 2022

    Dollars in thousands, except share and per share







    2023





    2022



    Assets

















    Current assets:

















    Cash



    $

    403





    $

    723



    Trade receivables, net





    559







    836



    Inventories





    3,212







    4,442



    Prepaid expenses and other current assets





    363







    619



    Total current assets





    4,537







    6,620



    Property and equipment, net





    4,768







    5,741



    Right-of-use assets





    2,602







    2,988



    Intangible assets, net





    5,005







    5,758



    Other assets, net





    568







    369



    Total Assets



    $

    17,480





    $

    21,476





















    Liabilities and Stockholders' Equity (Deficit)

















    Current liabilities:

















    Accounts payable



    $

    2,076





    $

    1,728



    Accrued liabilities





    575







    1,509



    Deferred revenue





    88







    18



    Current portion of secured credit facilities, net of debt issuance costs





    -







    3,442



    Current portion of note payable, related party





    92







    4,598



    Current portion of notes payable





    486







    -



    Current portion of lease liabilities





    888







    991



    Other current liability, related party





    -







    725



    Total current liabilities





    4,205







    13,011



    Lease liabilities, net of current portion





    1,824







    2,140



    Secured credit facilities, related party





    2,700







    -



    Secured credit facilities, net of debt issuance costs





    342







    -



    Note payable, related party





    -







    92



    Notes payable, net of current portion





    7,556







    7,749



    Total liabilities





    16,627







    22,992





















    Stockholders' equity (deficit):

















    Common stock, $0.0001 par value; 6,000,000 shares and 1,750,000 shares authorized as of December 31, 2023 and 2022, respectively; 1,705,987 and 809,963 shares issued and outstanding as of December 31, 2023 and 2022, respectively





    -







    -



    Preferred stock, $0.0001 par value; 100,000,000 shares authorized; 2,500,000 Series B shares issued and outstanding as of both December 31, 2023 and 2022





    -







    -



    Preferred stock, $0.0001 par value; 240,000 shares authorized; 200,000 Series C shares issued and outstanding as of December 31, 2023 and 0 shares issued and outstanding as of December 31, 2022





    -







    -





















    Additional paid-in capital





    83,559







    73,505



    Accumulated deficit





    (82,706)







    (75,021)



    Total stockholders' equity (deficit)





    853







    (1,516)



    Total Liabilities and Stockholders' Equity (Deficit)



    $

    17,480





    $

    21,476



     

    Eastside Distilling, Inc. and Subsidiaries

    For the Three Months and Years Ended December 31, 2023 and 2022

    (Dollars and shares in thousands, except per share amounts)



    Consolidated Statements of Operations:





    Three Months Ended

    December 31,





    Years Ended

    December 31,







    2023





    2022





    2023





    2022





























    Sales



    $

    2,081





    $

    2,360





    $

    10,798





    $

    14,327



    Less customer programs and excise taxes





    79







    51







    299







    444



    Net sales





    2,002







    2,309







    10,499







    13,883



    Cost of sales





    2,120







    2,457







    9,438







    11,442



    Gross profit





    (118)







    (148)







    1,061







    2,441



    Operating expenses:

































    Sales and marketing expenses





    338







    547







    1,599







    2,625



    General and administrative expenses





    1,256







    1,291







    4,646







    6,407



    (Gain) loss on disposal of property and

    equipment





    (196)







    (43)







    (364)







    58



    Total operating expenses





    1,398







    1,795







    5,881







    9,090



    Loss from operations





    (1,516)







    (1,943)







    (4,820)







    (6,649)



    Other income (expense), net

































    Interest expense





    (246)







    (240)







    (1,108)







    (2,216)



    Impairment loss





    (364)







    (7,453)







    (364)







    (7,453)



    Loss on debt to equity conversion





    -







    -







    (1,321)







    -



    Other income





    (12)







    (73)







    78







    52



    Total other income (expense), net





    (622)







    (7,766)







    (2,715)







    (9,617)



    Loss before income taxes





    (2,138)







    (9,709)







    (7,535)







    (16,266)



    Provision for income taxes





    -







    -







    -







    -



    Net loss





    (2,138)







    (9,709)







    (7, 535)







    (16,266)



    Preferred stock dividends





    (37)







    (37)







    (150)







    (150)



    Net loss attributable to common shareholders



    $

    (2,175)





    $

    (9,746)





    $

    (7,685)





    $

    (16,416)





































    Basic net loss per common share



    $

    (1.39)





    $

    (12.42)





    $

    (7.04)





    $

    (21.40)



    Basic weighted average common shares

    outstanding





    1,570







    785







    1,091







    767



     

    Eastside Distilling, Inc. and Subsidiaries

    For the Three Months and Years Ended December 31, 2023 and 2022

    (Dollars in thousands)



    Segments:





    Three Months Ended

    December 31,





    Years Ended

    December 31,







    2023





    2022





    2023





    2022



    Craft C+P

































    Sales



    $

    1,180





    $

    1,245





    $

    6,817





    $

    5,626



    Net sales





    1,154







    1,245







    6,712







    5,526



    Cost of sales





    1,451







    1,532







    6,829







    6,341



    Gross profit





    (297)







    (287)







    (117)







    (815)



    Total operating expenses





    624







    468







    2,637







    3,494



    Net loss



    $

    (937)





    $

    (763)





    $

    (2,749)





    $

    (4,249)



    Gross margin





    -26 %







    -23 %







    -2 %







    -15 %





































    Spirits

































    Sales



    $

    901





    $

    1,115





    $

    3,981





    $

    8,701



    Net sales





    848







    1,064







    3,787







    8,357



    Cost of sales





    669







    925







    2,609







    5,101



    Gross profit





    179







    139







    1,178







    3,256



    Total operating expenses





    293







    569







    1,476







    2,532



    Impairment loss





    364







    7,453







    364







    7,453



    Net loss



    $

    (474)





    $

    (7,960)





    $

    (601)





    $

    (6,781)



    Gross margin





    21 %







    13 %







    31 %







    39 %





































    Corporate

































    Total operating expenses



    $

    481





    $

    758





    $

    1,768





    $

    3,064



    Loss on debt to equity conversion





    -







    -







    1,321







    -



    Net loss



    $

    (727)





    $

    (986)





    $

    (4,185)





    $

    (5,236)





    Adjusted EBITDA Reconciliation:





    Three Months Ended

    December 31,





    Years Ended

    December 31,









    2023







    2022







    2023







    2022



    Net loss



    $

    (2,138)





    $

    (9,709)





    $

    (7,535)





    $

    (16,266)



    Add:

































    Interest expense





    246







    240







    1,108







    2,216



    Depreciation and amortization





    234







    416







    1,356







    1,520



    EBITDA





    (1,658)







    (9,053)







    (5,071)







    (12,530)



    (Gain) loss on disposal of property and

    equipment





    (196)







    (43)







    (364)







    58



    Loss on debt to equity conversion





    -







    -







    1,321







    -



    Impairment loss





    364







    7,453







    364







    7,453



    Stock compensation





    148







    17







    246







    663



    Adjusted EBITDA



    $

    (1,342)





    $

    (1,626)





    $

    (3,504)





    $

    $(4,356)

     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/eastside-distilling-reports-fourth-quarter-2023-financial-results-302104799.html

    SOURCE Eastside Distilling, Inc.

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