Company to Host Conference Call at
5:00pm ET Today
PORTLAND, Ore., March 31,
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 fourth quarter and year end 2022 financial
results for the period ended December 31,
2022.
Fourth Quarter 2022
Highlights:
- Raised $5.2 million of cash
during the quarter and $0.3 million
subsequent to year-end; proceeds used to fund working capital
- Significant reduction in operating costs
- Improved spirits gross sales over 50% for the year despite
challenging business environment
"We made substantial progress in improving our business and are
reaching news milestones in digital printing, while we continue to
implement key restructuring initiatives in our spirits business. I
expect meaningful improvements in our performance in 2023," said
Geoffrey Gwin, Eastside's CEO.
Financial Results
Gross sales for the year ending December
31, 2022 increased to $14.3
million from $12.9 million for
the year ending December 31, 2021 due
to the sale of nearly 1,450 barrels for gross proceeds of
$4.4 million. Craft C+P sales
decreased due to competitive pressure in the legacy mobile canning
business. In addition, anticipated sales from digital printing did
not materialize fast enough to offset the decline in mobile
canning.
Gross profit for the year ending December
31, 2022 decreased to $2.4
million from $2.9 million for
the year ending December 31, 2021.
Gross margin was 18% for the year ending December 31, 2022 as the Company continues to
ramp up digital printing. Spirits margins increased primarily due
to excess bulk spirits sales.
Operating costs for the year ending December 31, 2022 decreased to $9.1 million from $9.8
million for the year ending December
31, 2021 primarily related to decreased professional fees
and compensation, partially offset by increased rent as the Company
entered into additional leases to support new business
initiatives.
Net loss for the year ending December 31,
2022 increased to $16.4
million from $2.2 million for
the year ending December 31, 2021.
The Company reported adjusted EBITDA of $(4.4) million and $(4.8)
million for the years ending December
31, 2022 and 2021, respectively. (See description of
adjusted EBIDTA in "Use of Non-GAAP Measures" below.)
During the fourth quarter, the Company delivered 8,014 cases of
spirits. Of that total, Portland Potato Vodka represented 5,000
cases. Azuñia volumes continue to cycle higher volumes from last
year—volumes that were not profitable and Burnside's volume was not
enough to offset the successful 2021 holiday programming. The
following table details cases delivered during the quarters and
years ending December 31, 2022 and
2021:
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
9 Liter
Cases
|
2022
|
2021
|
Change
|
%
|
|
2022
|
2021
|
Change
|
%
|
Azuñia
|
1,784
|
2,032
|
(248)
|
-12 %
|
|
6,920
|
11,491
|
(4,571)
|
-40 %
|
Burnside
|
1,039
|
1,299
|
(260)
|
-20 %
|
|
3,756
|
4,615
|
(859)
|
-19 %
|
Hue-Hue
|
101
|
109
|
(8)
|
-7 %
|
|
378
|
368
|
10
|
3 %
|
Portland Potato
Vodka
|
4,967
|
4,721
|
246
|
5 %
|
|
18,911
|
19,094
|
(183)
|
-1 %
|
Eastside
Brands
|
123
|
203
|
(80)
|
-39 %
|
|
453
|
345
|
108
|
31 %
|
Legacy
Brands
|
-
|
24
|
(24)
|
-100 %
|
|
14
|
386
|
(372)
|
-96 %
|
|
8,014
|
8,388
|
(374)
|
-4 %
|
|
30,432
|
36,299
|
(5,867)
|
-16 %
|
The Company ended the quarter with cash of $0.7 million. During the quarter, the Company
raised $5.2 million and paid down
$3.7 million of debt.
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.
Fourth Quarter 2022 Conference
Call Details
Date and Time: Friday, March 31,
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 #6918006. 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 impact of COVID-19 and
related business disruption, 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-K for the period ended December 31, 2022, 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, 2022
and 2021
Dollars in
thousands, except share and per share
|
|
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
723
|
|
|
$
|
3,276
|
|
Trade receivables,
net
|
|
|
876
|
|
|
|
1,446
|
|
Inventories
|
|
|
4,442
|
|
|
|
6,510
|
|
Prepaid expenses and
current assets
|
|
|
579
|
|
|
|
2,873
|
|
Total current
assets
|
|
|
6,620
|
|
|
|
14,105
|
|
Property and equipment,
net
|
|
|
5,741
|
|
|
|
2,163
|
|
Right-of-use
assets
|
|
|
2,988
|
|
|
|
3,211
|
|
Intangible assets,
net
|
|
|
5,758
|
|
|
|
13,624
|
|
Other assets,
net
|
|
|
369
|
|
|
|
457
|
|
Total Assets
|
|
$
|
21,476
|
|
|
$
|
33,560
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,728
|
|
|
$
|
1,265
|
|
Accrued
liabilities
|
|
|
1,509
|
|
|
|
833
|
|
Deferred
revenue
|
|
|
18
|
|
|
|
-
|
|
Current portion of
secured credit facilities, net of debt issuance
costs
|
|
|
3,442
|
|
|
|
5,725
|
|
Note payable, related
party
|
|
|
4,598
|
|
|
|
-
|
|
Current portion of
notes payable
|
|
|
-
|
|
|
|
894
|
|
Current portion of
lease liabilities
|
|
|
991
|
|
|
|
781
|
|
Other current
liability, related party
|
|
|
725
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
13,011
|
|
|
|
9,498
|
|
Lease liabilities, net
of current portion
|
|
|
2,140
|
|
|
|
2,498
|
|
Note payable, related
party
|
|
|
92
|
|
|
|
92
|
|
Notes payable, net of
current portion
|
|
|
7,749
|
|
|
|
8,073
|
|
Total
liabilities
|
|
|
22,992
|
|
|
|
20,161
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Common stock, $0.0001
par value; 35,000,000 shares authorized;
16,199,269 and 14,791,449 shares issued and outstanding as of
December 31, 2022 and 2021, respectively
|
|
|
2
|
|
|
|
1
|
|
Preferred stock,
$0.0001 par value; 100,000,000 shares authorized;
2,500,000 shares issued and outstanding as of both December 31,
2022 and 2021
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
73,503
|
|
|
|
72,003
|
|
Accumulated
deficit
|
|
|
(75,021)
|
|
|
|
(58,605)
|
|
Total stockholders'
equity (deficit)
|
|
|
(1,516)
|
|
|
|
13,399
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
21,476
|
|
|
$
|
33,560
|
|
Eastside Distilling,
Inc. and Subsidiaries
Consolidated
Statements of Operations
For the Three and
Twelve Months Ended December 31, 2022 and 2021
(Dollars and shares
in thousands, except per share amounts)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
Sales
|
$2,360
|
$2,752
|
|
$14,327
|
$12,890
|
Less customer programs
and excise taxes
|
51
|
158
|
|
444
|
496
|
Net sales
|
2,309
|
2,594
|
|
13,883
|
12,394
|
Cost of
sales
|
2,457
|
1,996
|
|
11,442
|
9,484
|
Gross
profit
|
(148)
|
598
|
|
2,441
|
2,910
|
Operating
expenses:
|
|
|
|
|
|
Sales and marketing
expenses
|
547
|
527
|
|
2,625
|
2,614
|
General and
administrative expenses
|
1,291
|
1,772
|
|
6,407
|
6,777
|
(Gain) loss on
disposal of property and
equipment
|
(43)
|
(2)
|
|
58
|
419
|
Total operating
expenses
|
1,795
|
2,297
|
|
9,090
|
9,810
|
Loss from
operations
|
(1,943)
|
(1,699)
|
|
(6,649)
|
(6,900)
|
Other income (expense),
net
|
|
|
|
|
|
Interest
expense
|
(240)
|
(369)
|
|
(2,216)
|
(1,254)
|
Impairment
loss
|
(7,453)
|
-
|
|
(7,453)
|
-
|
Other income
(expense)
|
(73)
|
(142)
|
|
52
|
2,100
|
Total other
income (expense), net
|
(7,766)
|
(511)
|
|
(9,617)
|
846
|
Loss before income
taxes
|
(9,709)
|
(2,210)
|
|
(16,266)
|
(6,054)
|
Provision for income
taxes
|
-
|
-
|
|
-
|
-
|
Net loss from
continuing operations
|
(9,709)
|
(2,210)
|
|
(16,266)
|
(6,054)
|
Net income (loss) from
discontinued
operations
|
-
|
(11)
|
|
-
|
3,858
|
Net loss
|
(9,709)
|
(2,221)
|
|
(16,266)
|
(2,196)
|
Preferred stock
dividends
|
(37)
|
(27)
|
|
(150)
|
(27)
|
Deemed dividend-debt
extinguishment
|
-
|
-
|
|
-
|
(2,288)
|
Net loss attributable
to common shareholders
|
$(9,746)
|
$(2,248)
|
|
$(16,416)
|
$(4,511)
|
EPS:
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
Basic and diluted net
loss per common share
|
$(0.62)
|
$(0.16)
|
|
$(1.07)
|
$(0.35)
|
Basic and diluted
weighted average common
shares outstanding
|
15,705
|
14,496
|
|
15,337
|
12,708
|
Eastside Distilling,
Inc. and Subsidiaries
For the Three and
Twelve Months Ended December 31, 2022 and 2021
(Dollars in
thousands)
|
Segments:
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
Spirits
|
|
|
|
|
|
Sales
|
$ 1,115
|
$ 1,368
|
|
$ 8,701
|
$ 5,672
|
Net sales
|
1,064
|
1,210
|
|
8,357
|
5,176
|
Cost of
sales
|
925
|
754
|
|
5,101
|
3,743
|
Gross profit
|
139
|
456
|
|
3,256
|
1,433
|
Total operating
expenses
|
901
|
1,271
|
|
4,496
|
5,634
|
Net income
(loss)
|
(8,520)
|
(1,324)
|
|
(10,917)
|
155
|
|
|
|
|
|
|
Craft
C+P
|
|
|
|
|
|
Sales
|
$ 1,245
|
$ 1,384
|
|
$ 5,626
|
$ 7,218
|
Net sales
|
1,245
|
1,384
|
|
5,526
|
7,218
|
Cost of
sales
|
1,532
|
1,242
|
|
6,341
|
5,741
|
Gross profit
|
(287)
|
142
|
|
(815)
|
1,477
|
Total operating
expenses
|
894
|
1,026
|
|
4,594
|
4,176
|
Net loss
|
(1,189)
|
(897)
|
|
(5,349)
|
(2,351)
|
EBITDA
Reconciliation:
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
Net income
(loss)
|
$(9,709)
|
$(2,221)
|
|
$(16,266)
|
$(2,196)
|
Add:
|
|
|
|
|
|
Interest
expense
|
240
|
369
|
|
2,216
|
1,254
|
Depreciation and
amortization
|
416
|
334
|
|
1,520
|
1,237
|
EBITDA
|
(9,053)
|
(1,518)
|
|
(12,530)
|
295
|
(Gain) loss on disposal of
property and equipment
|
(43)
|
(2)
|
|
58
|
419
|
Impairment loss
|
7,453
|
-
|
|
7,453
|
-
|
Gain on termination of license
agreement
|
-
|
-
|
|
-
|
(2,850)
|
Forgiveness of debt - PPP
|
-
|
-
|
|
-
|
(1,448)
|
Remeasurement of deferred
consideration
|
-
|
-
|
|
-
|
(750)
|
Gain on disposal of offsite
inventory
|
-
|
-
|
|
-
|
(1,047)
|
Stock compensation
|
17
|
44
|
|
663
|
621
|
Adjusted
EBITDA
|
$(1,626)
|
$(1,476)
|
|
$(4,356)
|
$(4,760)
|
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SOURCE Eastside Distilling, Inc.