Company to Host Conference Call at 5:00pm ET Today
PORTLAND, Ore., Aug. 14,
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 second quarter end 2023 financial results for the
period ended June 30, 2023.
Second Quarter 2023 Highlights:
- Craft C+P reports a 43% increase in net sales from the
prior-year second quarter
- Craft C+P printed a record number of cans for four consecutive
months, over 4 million cans in the quarter, and achieved positive
EBITDA for the Craft C+P segment in June
2023
- Spirits made incremental progress cutting operating losses from
the prior-year second quarter
"While I am extremely pleased with the increase in digital can
sales, the Company made progress improving operations across both
of its businesses," said Geoffrey
Gwin, Eastside's CEO.
"Craft has become the preeminent decorated digital can provider in
the Pacific Northwest and our spirits business has made more
progress in reaching our goal of EBITDA profitability than we
expected at this point in the year."
Financial Results
Gross sales for the three months ending June 30, 2023 decreased to $2.8 million from $5.1
million due to bulk spirits sales of $2.6 million for the three months ending
June 30, 2022. Excluding bulk spirits
sales, gross sales increased $0.2
million from the prior-year quarter. Craft C+P sales
increased due to digital can printing as that business segment won
new customers and expanded business with existing customers.
Gross profit for the three months ending June 30, 2023 decreased to $26,000 from $1.5
million due to bulk spirits sales gross profit of
$1.6 million for the three months
ending June 30, 2022. Excluding bulk
spirits gross profit, gross profit increased $0.2 million from the prior-year quarter.
Gross margin was 1% for the three months ending June 30, 2023 and 30% for the three months ending
June 30, 2022. Last year's
gross margins were due to selling a portion of our inventory of
highly valuable whiskey inventory. Craft margins increased
sequentially as digital can printing volumes improved through the
quarter.
Operating costs for the three months ending June 30, 2023 decreased to $1.4 million from $2.6
million for the three months ending June 30, 2022 primarily related to decreased
compensation related to headcount, professional fees and
sponsorship costs. The Company has undertaken a broad
restructuring in spirits which has lowered sales and realigned
investment focusing on the most profitable spirits brands and
regions.
Net loss for the three months ending June
30, 2023 decreased to $1.6
million from $1.8 million,
which included bulk spirits sales net income of $1.6 million for the three months ending
June 30, 2022. Excluding bulk spirits
net income, net loss was reduced by $1.7
million from the prior-year quarter. The Company reported
adjusted EBITDA of $(1.0) million and
$(0.4) million for the three months
ending June 30, 2023 and 2022,
respectively. Excluding bulk spirits adjusted EBITDA of
$1.6 million for the three months
ending June 30, 2022, adjusted EBITDA
improved $1.0 million from the
prior-year quarter. (See description of adjusted EBIDTA in "Use of
Non-GAAP Measures" below.)
During the six months ending June 30,
2023, the Company sold 135,167 shares of common stock in
at-the-market public placements with the proceeds used to fund
operations and invest in working capital primarily in its digital
can printing business.
The Company is reaffirming guidance that Craft C+P will continue
to see improvements by printing a record number of cans and
generating cash flow in the third quarter of 2023, and spirits will
further reduce its operating loss in the third quarter.
Reverse Stock Split
The Company effected a 1-for-20 reverse common stock split on
May 12, 2023. All shares 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 table below provides a reconciliation of
this non-GAAP financial measure with the most directly comparable
GAAP financial measure.
Second Quarter 2023 Conference Call Details
Date and Time: Monday, August 14,
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 #2681925. 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 June 30, 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
|
|
|
June 30,
2023
|
December 31,
2022
|
Assets
|
(Unaudited)
|
|
Current
assets:
|
|
|
Cash
|
$839
|
$723
|
Trade receivables,
net
|
926
|
876
|
Inventories
|
3,610
|
4,442
|
Prepaid expenses and
current assets
|
768
|
579
|
Total current
assets
|
6,143
|
6,620
|
Property and equipment,
net
|
5,156
|
5,741
|
Right-of-use
assets
|
2,492
|
2,988
|
Intangible assets,
net
|
5,576
|
5,758
|
Other assets,
net
|
340
|
369
|
Total
Assets
|
$ 19,707
|
$ 21,476
|
|
|
|
Liabilities and
Stockholders' Equity (Deficit)
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$ 2,363
|
$ 1,728
|
Accrued
liabilities
|
1,481
|
1,509
|
Deferred
revenue
|
154
|
18
|
Current portion of
secured credit facilities, net of debt issuance costs
|
3,513
|
3,442
|
Current portion of
note payable, related party
|
4,654
|
4,598
|
Current portion of
notes payable
|
7,749
|
-
|
Current portion of
lease liabilities
|
803
|
991
|
Other current
liability, related party
|
1,224
|
725
|
Total current
liabilities
|
21,941
|
13,011
|
Lease liabilities, net
of current portion
|
1,804
|
2,140
|
Note payable, related
party
|
-
|
92
|
Notes payable, net of
current portion
|
-
|
7,749
|
Total
liabilities
|
23,745
|
22,992
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
Common stock, $0.0001
par value; 1,750,000 shares authorized; 968,176 and 809,963
shares issued and outstanding as of June 30, 2023 and December 31,
2022, respectively
|
-
|
-
|
Preferred stock,
$0.0001 par value; 100,000,000 shares authorized; 2,500,000 shares
issued and outstanding as of both June 30, 2023 and December 31,
2022
|
-
|
-
|
Additional paid-in
capital
|
74,299
|
73,505
|
Accumulated
deficit
|
(78,337)
|
(75,021)
|
Total stockholders'
equity (deficit)
|
(4,038)
|
(1,516)
|
Total Liabilities
and Stockholders' Equity (Deficit)
|
$ 19,707
|
$ 21,476
|
Eastside Distilling,
Inc. and Subsidiaries
For the Three and
Six Months Ended June 30, 2023 and 2022
(Dollars and shares
in thousands, except per share amounts)
(Unaudited)
|
|
Consolidated
Statements of Operations:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Sales
|
$2,757
|
$5,123
|
|
$5,636
|
$8,903
|
Less customer programs
and excise taxes
|
96
|
266
|
|
122
|
306
|
Net sales
|
2,661
|
4,857
|
|
5,514
|
8,597
|
Cost of
sales
|
2,635
|
3,405
|
|
4,847
|
6,198
|
Gross
profit
|
26
|
1,452
|
|
667
|
2,399
|
Operating
expenses:
|
|
|
|
|
|
Sales and marketing
expenses
|
369
|
729
|
|
880
|
1,376
|
General and
administrative expenses
|
1,194
|
1,748
|
|
2,558
|
3,678
|
(Gain) loss on
disposal of property and equipment
|
(135)
|
101
|
|
(129)
|
101
|
Total operating
expenses
|
1,428
|
2,578
|
|
3,309
|
5,155
|
Loss from
operations
|
(1,402)
|
(1,126)
|
|
(2,642)
|
(2,756)
|
Other income (expense),
net
|
|
|
|
|
|
Interest
expense
|
(326)
|
(762)
|
|
(655)
|
(1,168)
|
Other
income
|
85
|
100
|
|
56
|
100
|
Total
other income (expense), net
|
(241)
|
(662)
|
|
(599)
|
(1,068)
|
Loss before income
taxes
|
(1,643)
|
(1,788)
|
|
(3,241)
|
(3,824)
|
Provision for income
taxes
|
-
|
-
|
|
-
|
-
|
Net loss
|
(1,643)
|
(1,788)
|
|
(3,241)
|
(3,824)
|
Preferred stock
dividends
|
(37)
|
(36)
|
|
(75)
|
(75)
|
Net loss attributable
to common shareholders
|
$(1,680)
|
$(1,824)
|
|
$(3,316)
|
$(3,899)
|
|
|
|
|
|
|
Basic net loss per
common share
|
$(1.96)
|
$(2.39)
|
|
$(3.94)
|
$(5.16)
|
Basic weighted average
common shares outstanding
|
856
|
764
|
|
841
|
755
|
Eastside Distilling,
Inc. and Subsidiaries
For the Three and
Six Months Ended June 30, 2023 and 2022
(Dollars in
thousands)
|
|
Segments:
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
(Dollars in
thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Craft
C+P
|
|
|
|
|
|
Sales
|
$ 1,949
|
$1,429
|
|
$3,405
|
$ 2,505
|
Net sales
|
1,904
|
1,329
|
|
3,381
|
2,405
|
Cost of
sales
|
1,967
|
1,698
|
|
3,545
|
2,809
|
Gross profit
|
(63)
|
(369)
|
|
(164)
|
(404)
|
Total operating
expenses
|
565
|
1,097
|
|
1,314
|
1,947
|
Net loss
|
$(578)
|
$(1,376)
|
|
$ (1,462)
|
$ (2,272)
|
Gross margin
|
-3 %
|
-28 %
|
|
-5 %
|
-17 %
|
|
|
|
|
|
|
Spirits
|
|
|
|
|
|
Sales
|
$808
|
$3,694
|
|
$2,231
|
$ 6,398
|
Net sales
|
757
|
3,528
|
|
2,133
|
6,192
|
Cost of
sales
|
668
|
1,707
|
|
1,302
|
3,389
|
Gross profit
|
89
|
1,821
|
|
831
|
2,803
|
Total operating
expenses
|
358
|
722
|
|
880
|
1,347
|
Net income
(loss)
|
$(238)
|
$1,099
|
|
$(17)
|
$ 1,456
|
Gross margin
|
12 %
|
52 %
|
|
39 %
|
45 %
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
Total operating
expenses
|
$ 505
|
$ 759
|
|
$ 1,115
|
$1,861
|
Net loss
|
$(827)
|
$(1,511)
|
|
$ (1,762)
|
$ (3,008)
|
|
|
Adjusted EBITDA
Reconciliation:
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
Net loss
|
$(1,643)
|
$(1,788)
|
|
$(3,241)
|
$(3,824)
|
Add:
|
|
|
|
|
|
Interest
expense
|
326
|
762
|
|
655
|
1,168
|
Depreciation and
amortization
|
410
|
423
|
|
817
|
686
|
EBITDA
|
(907)
|
(603)
|
|
(1,769)
|
(1,970)
|
(Gain) loss on
disposal of property and equipment
|
(135)
|
101
|
|
(129)
|
101
|
Stock
compensation
|
55
|
145
|
|
166
|
520
|
Adjusted
EBITDA
|
$ (987)
|
$ (357)
|
|
$(1,732)
|
$(1,349)
|
|
|
|
|
|
|
|
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SOURCE Eastside Distilling, Inc.