Splash Beverage Group Reports Third Quarter 2023 Financial Results, Quarterly Revenues Rise 5%, Nine Month Revenues Rise 22%
14 Novembro 2023 - 10:32PM
via NewMediaWire –Splash Beverage Group, Inc. (NYSE American: SBEV)
("Splash" or the "Company"), a portfolio company of leading
beverage brands, today reported financial results for the third
quarter period ended September 30, 2023. Investors are encouraged
to read the Company’s quarterly report on Form 10-Q which was filed
with the Securities and Exchange Commissions (the “SEC”), contains
additional information, and is posted at
https://splashbeveragegroup.com/.
Third Quarter Financial Performance
- Net revenues for the third quarter
period ending September 30, 2023, increased to $5.1 million
compared to $4.9 million in the prior year period, an increase of
5% over the prior year period. For the nine-month period, revenues
increased $2.9 million dollars or a 22% increase to $16.2 million
compared to $13.3 million in the prior year period.
- Gross profit for the third quarter
period ending September 30, 2023, was $1.3 million compared to $1.8
million in the prior year period as a result of inventory reserves
and a one-time write down of old inventory raw materials. Gross
margin YTD as of September 30th, 2023, was 25% vs 33.2% Without the
one-time adjustment the year to date gross profit was 32.9% vs
33.2%.
- Operating Expenses improved 19%, to
$5.6 million, down from $6.9 million during the prior year
period.
- The third quarter loss from
continuing operations improved 16% from $5.1 million prior year to
$4.3 million in the current period. Net loss was $5.7 million
compared to $5.1 million in the prior year period. This includes a
reduction in Non-Cash items of $1.49M vs. $1.7M respectively. The
inventory adjustment, increase in freight cost, amazon fees, and
marketing expenses in 2023 to support the revenue growth impact
losses in the quarter.
As of September 30, 2023, the company had total cash and cash
equivalents of $96,121, compared with $4.4 million at December 31,
2022 primarily due to timing. Additional cash was raised early in
October along with incoming AR.
Robert Nistico, Splash Beverage Group’s Chairman and CEO,
commented, “Our 2023 third quarter results reflect strengths and
challenges that inevitably emerge in growth businesses such as
ours. We will be scheduling a conference call before the end of the
year in an effort to keep all informed and answer any questions.
Please see my comments on the highlights above and other downstream
topics:
- We’re encouraged by continued
growth in Net revenue against a strong prior year period. Q4 is off
to a good start, and we anticipate another record finish to the
year.
- As announced in Q2, we entered into
an initial agreement with a funding group for working capital and
acquisition funding. That has progressed as we now have executed
agreements and have been contacted by their escrow group in NY and
are awaiting further instructions. This is a non-dilutive
facility.
- We are deep into the due diligence
process with the previously announced Western Son acquisition and
are enthusiastic about adding the brand to the portfolio and their
talented leadership personnel to the Splash team. The addition
offers us a host of benefits beyond the revenue and gross profit
growth. We anticipate margin enhancement on our SALT, Pulpoloco and
Copa di Vino brands as a result of our ability to build a
centralized logistics hub in their North Texas facilities. The
brands margins are accretive to our existing brands, and we expect
this will help us as we march toward profitability. Our teams are
meeting regularly working through closing details, projections, and
synergies as we hope to close at the end of the year or early
January.
- We successfully launched TapouT
Energy and have received very positive feedback from both the
consumers and the trade. TapouT Energy’s strong gross margins will
contribute well to the entire portfolio’s blended gross margins as
it becomes a larger part of the revenue.
- As we continue to build
distribution and retail support (much more to come this year) we
also at a point as we enter into the new year, we believe it is
good management to break down the business in more detail and share
with shareholders on quarterly conference calls.
- Our distribution footprint
continued to expand for each of the brands during the quarter,
including new distribution partnerships Northern California,
Mississippi, Oklahoma, North Carolina, Georgia and Tennessee.
Gaining these key distribution partnerships enhances our ability to
reach the larger retailers and we’re excited to announce some new
and exciting authorizations in the coming months.
- In addition to tremendous freight
in and out savings, our intention is to locate our first paper can
roller there as we complete our dealings with CartoCan in
Germany.
- Acquisition remains a key strategy
for our long term growth, and we are currently in the early stages
of evaluating additional potential targets.
“As you all know, this has been a challenging year in the
capital markets. I want to thank all our shareholders personally
and reiterate that we are very aware of this fact and also believe
we are grossly undervalued, (myself as a large shareholder
included) and are optimistic that our hard work to correct this
will result in an improvement,” continued Mr. Nistico.
“As I mentioned last quarter, we remain committed to executing a
business plan that relies on 4 key pillars for success. We have a
strong management team, we have a diverse portfolio of brands that
match consumer trends, our marketing strategy continues to yield
new distribution agreements and retail authorizations, and we have
the financial flexibility we need. We look forward to the fourth
quarter of 2023 and a fantastic 2024.”
About Splash Beverage Group, Inc.
Splash Beverage Group, an innovator in the beverage industry,
owns a growing portfolio of alcoholic and non-alcoholic beverage
brands including Copa di Vino wine by the glass, SALT flavored
tequilas, Pulpoloco sangria, and TapouT performance hydration and
recovery drink. Splash’s strategy is to rapidly develop early-stage
brands already in its portfolio as well as acquire and then
accelerate brands that have high visibility or are innovators in
their categories. Led by a management team that has built and
managed some of the top brands in the beverage industry and led
sales from product launch into the billions, Splash is rapidly
expanding its brand portfolio and global distribution.
For more information
visit:www.SplashBeverageGroup.comwww.copadivino.comwww.drinksalttequila.comwww.pulpo-loco.comwww.tapoutdrinks.com
Forward-Looking Statement
This press release includes “forward-looking statements” within
the meaning of U.S. federal securities laws. Words such as
“expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements involve significant
risks and uncertainties that could cause the actual results to
differ materially from the expected results and, consequently, you
should not rely on these forward-looking statements as predictions
of future events. These forward-looking statements and factors that
may cause such differences include, without limitation, the risks
disclosed in the Company’s Annual Report on Form 10-K filed with
the SEC on March 31, 2022, and in the Company’s other filings with
the SEC. Readers are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
Except as required by law, the Company disclaims any obligation to
update or publicly announce any revisions to any of the
forward-looking statements contained in this press release.
Contact Information:
Splash Beverage
GroupInfo@SplashBeverageGroup.com954-745-5815
Splash Beverage Group, Inc. |
Condensed Consolidated Balance Sheets |
September 30, 2023 and December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
September 30,2023 |
|
December 31, 2022 |
Assets |
|
|
(unaudited) |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
96,121 |
|
|
$ |
4,431,745 |
|
Accounts receivable, net |
|
|
1,512,693 |
|
|
|
1,812,110 |
|
Prepaid expenses |
|
|
225,446 |
|
|
|
348,036 |
|
Inventory |
|
|
2,907,461 |
|
|
|
3,721,307 |
|
Other receivables |
|
|
376,905 |
|
|
|
344,376 |
|
Total current assets |
|
|
5,118,626 |
|
|
|
10,657,574 |
|
Non-current assets: |
|
|
|
|
|
|
|
|
Deposit |
|
$ |
49,398 |
|
|
$ |
49,290 |
|
Goodwill |
|
|
256,823 |
|
|
|
256,823 |
|
Intangible assets, net |
|
|
4,564,037 |
|
|
|
4,851,377 |
|
Investment in Salt Tequila USA, LLC |
|
|
250,000 |
|
|
|
250,000 |
|
Operating lease right of use asset |
|
|
619,559 |
|
|
|
750,042 |
|
Property and equipment, net |
|
|
385,603 |
|
|
|
489,597 |
|
Total non-current assets |
|
|
6,125,420 |
|
|
|
6,647,129 |
|
Total assets |
|
$ |
11,244,046 |
|
|
$ |
17,304,703 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
4,199,476 |
|
|
$ |
3,383,187 |
|
Liability to issue shares |
|
|
— |
|
|
|
91,800 |
|
Operating lease liabilities - current |
|
|
259,072 |
|
|
|
268,749 |
|
Notes payable, current portion |
|
|
5,548,830 |
|
|
|
1,080,257 |
|
Due to related party |
|
|
426,000 |
|
|
|
— |
|
Shareholder advance |
|
|
200,000 |
|
|
|
— |
|
Accrued interest payable |
|
|
496,384 |
|
|
|
141,591 |
|
Total current liabilities |
|
|
11,129,762 |
|
|
|
4,965,584 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Notes payable |
|
|
408,801 |
|
|
|
2,536,319 |
|
Operating lease liabilities - noncurrent |
|
|
363,313 |
|
|
|
480,666 |
|
Total long-term liabilities |
|
|
772,114 |
|
|
|
3,016,985 |
|
Total liabilities |
|
|
11,901,876 |
|
|
|
7,982,569 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no
shares issued |
|
|
— |
|
|
|
— |
|
Common Stock, $0.001 par, 300,000,000 shares authorized, 42,902,185
shares issued, 42,902,185 shares outstanding at September 30, 2023
and 41,085,520 shares issued, 41,085,520 shares outstanding at
December 31, 2022 |
|
|
42,902 |
|
|
|
41,086 |
|
Additional paid in capital |
|
|
126,648,371 |
|
|
|
121,632,547 |
|
Accumulated other comprehensive loss |
|
|
(8,448 |
) |
|
|
(20,472 |
) |
Accumulated deficit |
|
|
(127,340,655 |
) |
|
|
(112,331,027 |
) |
Total stockholders’ equity |
|
|
(657,830 |
) |
|
|
9,322,134 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
11,244,046 |
|
|
$ |
17,304,703 |
|
Splash Beverage Group, Inc. |
Condensed Consolidated Statements of Operations and
Comprehensive Loss |
For the Three and Nine Months Ended September 30, 2023 and
2022 (Unaudited) |
|
|
Three months ended September 30 |
|
Nine months ended September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net revenues |
|
|
5,144,069 |
|
|
|
4,870,407 |
|
|
|
16,161,747 |
|
|
|
13,295,921 |
|
Cost of goods sold |
|
|
(3,847,202 |
) |
|
|
(3,101,807 |
) |
|
|
(11,326,298 |
) |
|
|
(8,886,508 |
) |
Gross profit |
|
|
1,296,867 |
|
|
|
1,768,600 |
|
|
|
4,835,449 |
|
|
|
4,409,413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracted services |
|
|
382,096 |
|
|
|
438,004 |
|
|
|
1,094,398 |
|
|
|
1,196,852 |
|
Salary and wages |
|
|
1,195,916 |
|
|
|
1,262,935 |
|
|
|
3,794,179 |
|
|
|
3,180,198 |
|
Non-cash share-based compensation |
|
|
367,244 |
|
|
|
1,697,201 |
|
|
|
1,224,101 |
|
|
|
7,039,695 |
|
Other general and administrative |
|
|
3,048,779 |
|
|
|
2,734,377 |
|
|
|
8,617,013 |
|
|
|
7,698,231 |
|
Sales and marketing |
|
|
626,363 |
|
|
|
746,965 |
|
|
|
2,105,559 |
|
|
|
1,918,420 |
|
Total operating expenses |
|
|
5,620,398 |
|
|
|
6,879,482 |
|
|
|
16,835,250 |
|
|
|
21,033,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations |
|
|
(4,323,531 |
) |
|
|
(5,110,882 |
) |
|
|
(11,999,801 |
) |
|
|
(16,623,983 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
348 |
|
|
|
158 |
|
|
|
1,668 |
|
|
|
2,867 |
|
Interest expense |
|
|
(221,488 |
) |
|
|
(66,193 |
) |
|
|
(561,249 |
) |
|
|
(225,543 |
) |
Other Income |
|
|
— |
|
|
|
— |
|
|
|
49,819 |
|
|
|
— |
|
Amortization of debt discount |
|
|
(1,125,410 |
) |
|
|
— |
|
|
|
(2,500,065 |
) |
|
|
— |
|
Total other expense |
|
|
(1,346,550 |
) |
|
|
(66,035 |
) |
|
|
(3,009,827 |
) |
|
|
(222,676 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing
operations, net of tax |
|
|
(5,670,081 |
) |
|
|
(5,176,917 |
) |
|
|
(15,009,628 |
) |
|
|
(16,846,659 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from discontinued
operations, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(199,154 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of discontinued
operations |
|
|
— |
|
|
|
33,116 |
|
|
|
— |
|
|
|
148,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
discontinued operations |
|
|
— |
|
|
|
33,116 |
|
|
|
— |
|
|
|
(50,406 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,670,081 |
) |
|
$ |
(5,143,801 |
) |
|
$ |
(15,009,628 |
) |
|
$ |
(16,897,065 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation Income |
|
|
29,406 |
|
|
|
— |
|
|
|
12,024 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Loss |
|
$ |
(5,640,675 |
) |
|
$ |
(5,143,801 |
) |
|
$ |
(14,997,604 |
) |
|
$ |
(16,897,065 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - continuing
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding - continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
42,812,058 |
|
|
|
37,364,031 |
|
|
|
41,991,259 |
|
|
|
36,417,222 |
|
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