Company to Host Conference Call at 5:00 pm
ET Wednesday August 14,
2024
PORTLAND, Ore., Aug. 14,
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 second quarter financial results for the period
ended June 30, 2024.
Second Quarter 2024 Highlights:
- Craft digitally printed a quarter-record 6.0 million cans
representing a +43% increase over the prior year, increasing sales
+22% for the quarter.
- Spirits gross profit improved +84% compared to the prior year
quarter with substantial improvement in margins expected through
the balance of the year.
- The Company's overall operating loss decreased $0.2 million in the quarter over the prior
year.
Financial Results
Gross sales for the three months ending June 30, 2024 increased to $3.1 million from $2.8
million for the three months ending June 30, 2023. Higher digital printing sales were
offset by lower mobile canning and spirits sales. Spirits sales
fell primarily due to lower volumes of tequila driven by a
realignment of the brand with new distribution partners.
Gross profit for the three months ending June 30, 2024 increased to $0.2 million from $26,000 for the three months ending June 30, 2023. Consolidated gross margin was 5%
and 1% for the three months ending June 30,
2024 and 2023, respectively. Craft C+P gross margin
increased due to higher printed can volumes. Spirits gross margin
increased due to Azuñia tequila and other cost savings on raw
materials in 2024.
Operating costs for the three months ending June 30, 2024 decreased to $1.3 million from $1.4
million for the three months ending June 30, 2023 primarily due to decreased
headcount and lower professional fees and sponsorship costs. The
Company continues its broad restructuring in spirits as it realigns
investment focusing on the most profitable spirits brands and
regions.
Net loss for the three months ending June
30, 2024 decreased to $1.5
million from $1.6 million for
the three months ending June 30,
2023.
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.
Second Quarter 2024 Conference Call Details
Date and Time: Wednesday, August
14, 2024 at 5:00 pm 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 #7830926. 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
June 30, 2024 and
December 31, 2023
Dollars in
thousands, except share and per share
|
|
|
|
June 30,
2024
|
|
|
December 31,
2023
|
|
|
(unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
420
|
|
|
$
|
403
|
|
Trade receivables,
net
|
|
|
1,017
|
|
|
|
559
|
|
Inventories
|
|
|
3,043
|
|
|
|
3,212
|
|
Prepaid expenses and
other current assets
|
|
|
467
|
|
|
|
363
|
|
Total current
assets
|
|
|
4,947
|
|
|
|
4,537
|
|
Property and equipment,
net
|
|
|
4,282
|
|
|
|
4,768
|
|
Right-of-use
assets
|
|
|
2,140
|
|
|
|
2,602
|
|
Intangible assets,
net
|
|
|
4,798
|
|
|
|
5,005
|
|
Other assets,
net
|
|
|
422
|
|
|
|
568
|
|
Total
Assets
|
|
$
|
16,589
|
|
|
$
|
17,480
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,916
|
|
|
$
|
2,076
|
|
Accrued
liabilities
|
|
|
742
|
|
|
|
575
|
|
Deferred
revenue
|
|
|
51
|
|
|
|
88
|
|
Current portion of
secured credit facilities, related party
|
|
|
3,323
|
|
|
|
-
|
|
Current portion of
secured credit facilities, net of debt issuance costs
|
|
|
935
|
|
|
|
-
|
|
Current portion of
notes payable
|
|
|
8,117
|
|
|
|
486
|
|
Current portion of
notes payable, related party
|
|
|
92
|
|
|
|
92
|
|
Current portion of
lease liabilities
|
|
|
909
|
|
|
|
888
|
|
Other current
liability, related party
|
|
|
83
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
17,168
|
|
|
|
4,205
|
|
Lease liabilities, net
of current portion
|
|
|
1,355
|
|
|
|
1,824
|
|
Secured credit
facilities, related party
|
|
|
-
|
|
|
|
2,700
|
|
Secured credit
facilities, net of debt issuance costs
|
|
|
-
|
|
|
|
342
|
|
Notes payable, net of
current portion
|
|
|
-
|
|
|
|
7,556
|
|
Total
liabilities
|
|
|
18,523
|
|
|
|
16,627
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
|
|
|
|
Common stock, $0.0001
par value; 6,000,000 shares authorized as of
June 30, 2024 and
December 31, 2023; and 1,763,489 shares and
1,705,987 shares issued
and outstanding as of June 30, 2024 and
December 31, 2023,
respectively
|
|
|
-
|
|
|
|
-
|
|
Preferred stock,
$0.0001 par value; 100,000,000 shares authorized;
2,500,000 Series B
shares issued and outstanding as of both June 30,
2024 and December 31,
2023
|
|
|
-
|
|
|
|
-
|
|
Preferred stock,
$0.0001 par value; 240,000 shares authorized; 200,000
Series C shares
issued and outstanding as of both June 30, 2024 and
December 31,
2023
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
83,628
|
|
|
|
83,559
|
|
Accumulated
deficit
|
|
|
(85,562)
|
|
|
|
(82,706)
|
|
Total stockholders'
equity (deficit)
|
|
|
(1,934)
|
|
|
|
853
|
|
Total Liabilities
and Stockholders' Equity (Deficit)
|
|
$
|
16,589
|
|
|
$
|
17,480
|
|
Eastside Distilling,
Inc. and Subsidiaries
For the Three and
Six Months Ended June 30, 2024 and 2023
(Dollars and shares
in thousands, except per share amounts)
(Unaudited)
|
|
|
Consolidated
Statements of Operations:
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
3,061
|
|
|
$
|
2,757
|
|
|
$
|
5,548
|
|
|
$
|
5,636
|
|
Less customer programs
and excise taxes
|
|
|
109
|
|
|
|
96
|
|
|
|
185
|
|
|
|
122
|
|
Net sales
|
|
|
2,952
|
|
|
|
2,661
|
|
|
|
5,363
|
|
|
|
5,514
|
|
Cost of
sales
|
|
|
2,799
|
|
|
|
2,635
|
|
|
|
5,024
|
|
|
|
4,847
|
|
Gross profit
|
|
|
153
|
|
|
|
26
|
|
|
|
339
|
|
|
|
667
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
|
262
|
|
|
|
369
|
|
|
|
513
|
|
|
|
880
|
|
General and
administrative expenses
|
|
|
1,152
|
|
|
|
1,194
|
|
|
|
2,257
|
|
|
|
2,557
|
|
Gain on disposal of
property and equipment
|
|
|
(79)
|
|
|
|
(135)
|
|
|
|
(199)
|
|
|
|
(129)
|
|
Total operating
expenses
|
|
|
1,335
|
|
|
|
1,428
|
|
|
|
2,571
|
|
|
|
3,309
|
|
Loss from
operations
|
|
|
(1,182)
|
|
|
|
(1,402)
|
|
|
|
(2,232)
|
|
|
|
(2,642)
|
|
Other income (expense),
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(308)
|
|
|
|
(326)
|
|
|
|
(556)
|
|
|
|
(655)
|
|
Other income
|
|
|
2
|
|
|
|
85
|
|
|
|
7
|
|
|
|
56
|
|
Total other income
(expense), net
|
|
|
(306)
|
|
|
|
(241)
|
|
|
|
(549)
|
|
|
|
(599)
|
|
Loss before income
taxes
|
|
|
(1,488)
|
|
|
|
(1,643)
|
|
|
|
(2,781)
|
|
|
|
(3,241)
|
|
Provision for income
taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
|
(1,488)
|
|
|
|
(1,643)
|
|
|
|
(2,781)
|
|
|
|
(3,241)
|
|
Preferred stock
dividends
|
|
|
(37)
|
|
|
|
(37)
|
|
|
|
(75)
|
|
|
|
(75)
|
|
Net loss attributable
to common shareholders
|
|
$
|
(1,525)
|
|
|
$
|
(1,680)
|
|
|
$
|
(2,856)
|
|
|
$
|
(3,316)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
common share
|
|
$
|
(0.87)
|
|
|
$
|
(1.96)
|
|
|
$
|
$(1.65)
|
|
|
$
|
(3.94)
|
|
Basic weighted average
common shares outstanding
|
|
|
1,745
|
|
|
|
856
|
|
|
|
1,726
|
|
|
|
841
|
|
Eastside Distilling,
Inc. and Subsidiaries
For the Three and
Six Months Ended June 30, 2024 and 2023
(Dollars in
thousands)
(Unaudited)
|
|
|
Segments:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Dollars in
thousands)
|
2024
|
2023
|
|
|
2024
|
2023
|
|
|
Craft
C+P
|
|
|
|
|
|
|
|
|
Sales
|
$ 2,376
|
$1,949
|
|
|
$ 4,225
|
$ 3,405
|
|
|
Net sales
|
2,332
|
1,904
|
|
|
4,146
|
3,381
|
|
|
Cost of
sales
|
2,342
|
1,967
|
|
|
4,108
|
3,545
|
|
|
Gross profit
|
(10)
|
(63)
|
|
|
38
|
(164)
|
|
|
Total operating
expenses
|
738
|
565
|
|
|
1,376
|
1,314
|
|
|
Net loss
|
$(745)
|
$ (578)
|
|
|
$(1,335)
|
$ (1,462)
|
|
|
Gross margin
|
0 %
|
-3 %
|
|
|
1 %
|
-5 %
|
|
|
|
|
|
|
|
|
|
|
Spirits
|
|
|
|
|
|
|
|
|
Sales
|
$685
|
$ 808
|
|
|
$1,323
|
$ 2,231
|
|
|
Net sales
|
620
|
757
|
|
|
1,217
|
2,133
|
|
|
Cost of
sales
|
457
|
668
|
|
|
916
|
1,302
|
|
|
Gross profit
|
163
|
89
|
|
|
301
|
831
|
|
|
Total operating
expenses
|
247
|
358
|
|
|
481
|
880
|
|
|
Net loss
|
$(85)
|
$ (238)
|
|
|
$(176)
|
$(17)
|
|
|
Gross margin
|
26 %
|
12 %
|
|
|
25 %
|
39 %
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
$350
|
$ 505
|
|
|
$ 714
|
$ 1,115
|
|
|
Net loss
|
$(658)
|
$ (827)
|
|
|
$ (1,270)
|
$ (1,762)
|
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2024
|
|
|
|
2023
|
|
|
|
2024
|
|
|
|
2023
|
|
Net loss
|
|
$
|
(1,488)
|
|
|
$
|
(1,643)
|
|
|
$
|
(2,781)
|
|
|
$
|
(3,241)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
308
|
|
|
|
326
|
|
|
|
556
|
|
|
|
655
|
|
Depreciation and
amortization
|
|
|
322
|
|
|
|
410
|
|
|
|
628
|
|
|
|
817
|
|
EBITDA
|
|
|
(858)
|
|
|
|
(907)
|
|
|
|
(1,597)
|
|
|
|
(1,769)
|
|
Gain on disposal of
property and equipment
|
|
|
(79)
|
|
|
|
(135)
|
|
|
|
(199)
|
|
|
|
(129)
|
|
Stock
compensation
|
|
|
9
|
|
|
|
55
|
|
|
|
76
|
|
|
|
166
|
|
Adjusted
EBITDA
|
|
$
|
(928)
|
|
|
$
|
(987)
|
|
|
$
|
(1,720)
|
|
|
$
|
(1,732)
|
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SOURCE Eastside Distilling, Inc.