Eastside Distilling, Inc. (EAST) Q2 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights significant growth in digital printing revenue and gross profit, along with improved operational efficiencies. Despite a net loss, the company shows progress in financial performance and has an optimistic outlook for Q3. The reset in the tequila strategy poses risks, but the overall positive momentum in sales and strategic initiatives suggests a potential stock price increase of 2% to 8% over the next two weeks.
Key Financial Performance
Consolidated Sales $3.1 million for Q2 '24, up from $2.8 million for Q2 '23, an increase of 11% due to an increase in printed can sales.
Craft Sales $2.4 million for Q2 '24, up from $1.9 million for Q2 '23, driven by improved sales and production throughput in the printing operation.
Spirit Sales $700,000 for Q2 '24, down from $800,000 for Q2 '23, a decrease of 12% due to lower volumes in tequila as a result of changes in the go-to-market strategy.
Consolidated Gross Profit $200,000 for Q2 '24, up from $26,000 for Q2 '23, an increase primarily due to higher printed can sales.
Consolidated Gross Margins 5% for Q2 '24, up from 1% for Q2 '23, reflecting improved sales performance.
Craft Profit Margin No reportable profit margin for Q2 '24, compared to negative 3% for Q2 '23, indicating challenges in improving margins.
Spirit Margins 26% for Q2 '24, up from 12% for Q2 '23, due to improved gross margins following the reset of the go-to-market strategy.
Operating Expenses $1.3 million for Q2 '24, down from $1.4 million for Q2 '23, reflecting successful restructuring efforts.
Net Loss $1.5 million for Q2 '24, slightly improved from $1.6 million for Q2 '23, indicating progress in financial performance.
Adjusted EBITDA Flat at negative $900,000 for both Q2 '24 and Q2 '23, showing no change in operational cash flow.
Debt Facility Closed on a $1.1 million debt facility for working capital during Q2.
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Operating Highlights
Digital Printing Revenue: Craft saw a nearly 50% increase in digital printing revenue, setting records for can sales.
Tequila Go-to-Market Strategy: Resetting distribution and pricing strategy for tequila to improve gross margins.
Market Performance in Oregon and Arizona: Better performance in states like Oregon and Arizona, with outstanding performance in Oregon.
Operational Efficiencies: Corporate expenses have decreased quarter-over-quarter for the last two years.
Production Throughput: Craft printed a record 6 million cans in Q2 of '24.
Strategic Shift in Spirits: Initiated a reset of the tequila go-to-market strategy, focusing on new distribution and pricing.
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Risk or Challenges
Market Acceptance and Product Success: Risks related to the company's acceptance of its products in the market and success in obtaining new customers.
Product Development: Challenges in product development that may affect future growth and market positioning.
Business Model Execution: Risks associated with the ability to execute the business model and strategic plans.
Integration of Acquisitions: Challenges in successfully integrating acquired entities and assets.
Capital Acquisition: Risks related to the ability to obtain necessary capital for operations and growth.
Going Concern: Concerns regarding the company's ability to continue as a going concern.
Gross Margin Improvement: Need for Craft to improve gross margins, reduce machine downtime, and minimize scrap.
Tequila Go-to-Market Strategy: Risks associated with the reset of the tequila go-to-market strategy, including distribution and pricing changes.
Sales Volatility: Sales volatility in the spirits segment, particularly with tequila, impacting overall revenue.
Economic Factors: Potential economic factors that could impact consumer spending and overall market conditions.
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Guidance & Outlook
Digital Printing Capacity: The company has a plan in place to significantly boost digital can printing capacity, addressing challenges and aiming to unlock additional capacity.
Tequila Go-to-Market Strategy: The company initiated a reset of its tequila go-to-market strategy, focusing on new distribution, pricing changes, and improving gross margins.
Cost Management: Corporate expenses have decreased quarter-over-quarter, reflecting ongoing restructuring efforts.
Sales Growth: Consolidated sales were up 11% in Q2 2024, with expectations for continued growth in the second half of the year.
Gross Profit Improvement: Gross profits increased substantially by 84% in Q2 2024, with expectations for further improvements in Q3.
EBITDA Outlook: The company reported a $53,000 loss in EBITDA for the quarter, with optimism for improved performance in Q3.
Craft Sales Performance: Craft sales were $2.4 million for Q2 2024, with a notable increase in printed can sales and a record of 6 million cans printed.
Spirits Sales Performance: Spirit sales were $700,000 for Q2 2024, with expectations for better performance in the back half of the year.
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Shareholder Return Plan
Share Buyback Program: None
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Key Q&A
Q:Review of Unclear Management Responses
A:No significant questions were raised during the session.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Arizona PPV
CEO day
Craft example
Craft issue
Craft margin
Gwin Tiffany
Oregon Arizona
Oregon number
PPV Oregon
Spirit success
Tiffany number
Tiffany today
barrel profit
book challenge
business Craft
call past
can Spirit
capacity conference
capacity plan
capital floor
case fund
challenge capacity
change market
conference call
conference evening
debt facility
distribution market
downtime scrap
effort loss
evening today
example increase
facility capital
fact barrel
fact reset
traction
EAST Transcript
Eastside Distilling, Inc. (EAST) Q3 2024 Earnings Call Transcript
Positive11-15
The earnings call summary highlights positive financial performance, including improved sales and EBITDA. The acquisition of Beeline Financial Holdings is a strategic move, enhancing growth potential in the mortgage sector. Despite risks like market acceptance and competitive pressures, the company's restructuring efforts show progress. The direct equity placement indicates confidence in shareholder value enhancement. The Q&A section lacks concerns, suggesting analyst confidence. Overall, the company's strategic initiatives and financial improvements point to a positive stock price reaction over the next two weeks.
Eastside Distilling, Inc. (EAST) Q2 2024 Earnings Call Transcript
Positive8-14
The earnings call highlights significant growth in digital printing revenue and gross profit, along with improved operational efficiencies. Despite a net loss, the company shows progress in financial performance and has an optimistic outlook for Q3. The reset in the tequila strategy poses risks, but the overall positive momentum in sales and strategic initiatives suggests a potential stock price increase of 2% to 8% over the next two weeks.
Eastside Distilling, Inc. (EAST) Q4 2023 Earnings Call Transcript
Unknown4-2
The earnings call reveals declining sales and margins, with a lack of significant improvements in financial performance. Despite some positive developments in digital printing and spirits, the overall sentiment is negative due to flat or declining key metrics. The Q&A section highlights capacity constraints and management's inability to provide clear answers, which could further unsettle investors. The lack of a clear strategic plan and guidance also contributes to a negative outlook.
Eastside Distilling, Inc. (EAST) Q3 2023 Earnings Call Transcript
Unknown11-18
Despite improved gross margins and reduced losses, the earnings call reveals concerning factors: a debt-for-equity swap, plans to increase share count, and challenges in mobile canning. The Q&A highlights uncertainties in spirits and digital printing growth, with management avoiding specifics. Economic headwinds and destocking further cloud the outlook. These elements suggest a negative stock price reaction.
EAST Report
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Where does this earnings call transcript come from?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
