Eastside Distilling Reports Record Fourth Quarter and Full Year 2015 Results
2015 Sales Up 62% to Record $2.3 Million, Driven by Continued Successful Execution of National Roll-Out of Award-Winning Craft Spirits
/EINPresswire.com/ -- PORTLAND, OR -- (Marketwired) -- 04/13/16 -- Eastside Distilling, Inc. (OTCQB: ESDI), a producer of award-winning master-crafted spirits, reported financial results for the fourth quarter and full year ended December 31, 2015.
Fourth Quarter 2015 vs. Same Year-Ago Quarter, and Full Year Financial Highlights
- Revenue in Q4 2015 up 41% to Eastside quarterly record $982,000, full year up 62% to Eastside annual record $2.3 million.
- Gross profit in Q4 2015 up 54% to record $369,000, full year up 48% to record $832,000.
- Net loss in Q4 2015 decreased to $669,000 from a net loss of $3.7 million in Q4 2014, with full year net loss reduced to $3.5 million from a net loss of $4.1 million in 2014 (2014 results included a goodwill impairment charge of $3.2 million which occurred in Q4 2014).
2015 Operational Highlights
- Total 2015 Case shipments increased 60% to 10,200, with Q4 2015 case shipments up 43% versus the same year-ago quarter.
- Launched two new American Whiskeys, Barrel Hitch American Whiskey and Barrel Hitch 'Oregon Oak' American Whiskey in 2015, joining the company's full line of award-winning spirits that includes rums, vodka, bourbon, other specialty whiskeys, and seasonal/limited editions
- Eastside's new Barrel Hitch American Whiskey won the Triple Gold Medal for 'Best in Show' and Bronze Medal for packaging design at the 2015 MicroLiquor Spirit Awards
- Eastside's national rollout continued with new listing approvals and expanded distribution in major markets, including New York, Virginia, Texas, Indiana and Nevada. States where the company's spirits are approved for sale more than doubled, totaling 15 by year-end.
- Began operation of the company's new 41,000 sq. ft. distillery, which increased annual production capacity from 6,400 to about 100,000 cases annually, and with the potential to expand production up to 1 million cases annually as demand requires.
- Selected as the official provider of spirits for the 2015 Portland Rose Festival, Oregon's official civic festival which attracts more than 1 million visitors every year.
- Established multi-faceted marketing partnership with Comcast SportsNet Northwest, the Pacific Northwest's premier sports television network and home of the Trail Blazers.
- Appointed Steve Shum as CFO, bringing to Eastside more than 20 years of financial management and operational experience.
- 15-year industry veteran, Patrick Roth, appointed to new position of national sales manager.
Welcome to the Eastside
Fourth Quarter and Full Year 2015 Financial Results
Revenues in the fourth quarter of 2015 increased 41% to a record $982,000, compared to $696,000 in the same year-ago quarter. For the full year of 2015, revenues totaled $2.3 million, up 63% from $1.4 million in 2014. The increase in revenue in both periods is primarily attributable to increased penetration of existing markets in the Pacific Northwest as well as broader distribution to existing and new states across the South, Midwest, and East Coast.
Gross profit in fourth quarter of 2015 increased 54% to record $369,000, with gross profit for the full year up 48% to a record $832,000.
Gross margin in the fourth quarter 2015 was 38% versus 34.4% in the same year-ago period, and for the full year 2015 was 36% compared to 39% in 2014. The decrease in gross margins for the year primarily reflects the higher fixed costs associated with the company's new, larger production facility. The improvement in the gross margin during the final quarter reflected the benefit of the higher sales, which provided better coverage on those higher fixed facility costs. The company expects this trend to continue as it grows sales and maintains the current level of facility costs.
Net loss in the fourth quarter of 2015 totaled $669,000 or ($0.02) per basic and diluted share, compared to net loss of $3.8 million or ($0.10) per basic and diluted share in the year-ago quarter. For the full year of 2015, net loss totaled $3.6 million or ($0.08) per basic and diluted share, compared to net loss of $4.1 million or ($0.12) per basic and diluted share in 2014. The net loss in both the fourth quarter and full year of 2015 was primarily attributed to increased personnel, professional, legal and accounting expenses during the year as the company secured approval and expanded sales into new states, with these expenses partly offset by increased sales. This compares to the net loss in the year ago periods which were primarily due to a goodwill impairment charge of $3.2 million in Q4 2014 resulting from the divestiture of the company's legacy business.
Adjusted EBITDA for the fourth quarter of 2015 totaled a loss of $436,000 versus a loss of $529,000 in the same year-ago period. For the full year of 2015, adjusted EBITDA was a loss of $2.55 million compared a loss of $790,000 in 2014 (see definition and discussion about the company's presentation of adjusted EBITDA, a non-GAAP term, and its reconciliation to the nearest GAAP metric, below).
Cash at December 31, 2015 was $141,000 compared to $1.1 million at December 31, 2014. Subsequent to the end of the year, the company received $407,000 in gross proceeds from the initial closing of a private placement offering to accredited investors.
Further details about the company's 2015 results is available in its Annual Report Form 10-K, which can downloaded from the investor Relations section at www.eastsidedistilling.com or at the SEC's website at www.sec.gov.
Management Commentary
"2015 was another phenomenal year of innovation, growth and expansion for Eastside Distilling," said the company's CEO, Steven Earles. "We began the year by turning up operations at our new 41,000 sf. distillery, which now has the capacity for 10 times our actual sales volume in 2015.
"Also during the year we released another award-winning spirit to further round out our spirit portfolio, and engaged additional top national distributors as we entered several key new states. In fact, the number of approved states for selling Eastside liquors more than doubled in 2015, and now includes the top three states for alcohol consumption.
"We ended the year with another record holiday season, up 41% over 2014, with our company retail locations and in-store tastings at other liquor stores experiencing tremendous foot traffic by holiday shoppers.
"All of this supported a record level of case shipments for the year, along with record revenue and gross profit. Moreover, these results are demonstrating how our significant investment in product development, production capacity, key personnel, and growing our brand awareness is finally beginning to pay off.
"The record pace has continued into 2016, with shipments of more than 3,100 cases in the first three months representing an increase of 80% over the same year-ago period. To put this in perspective, this case number equals nearly a third of all of our shipments in 2015 and despite the first quarter being typically our slowest of the year.
"As our markets begin to mature and our brand awareness grows among our target demographics, we are seeing a number of opportunities for continued acceleration. The new states we've entered in 2015 are only now just beginning to track the same growth momentum we've seen with earlier states. For markets like New York, which we entered in mid-2015, we have seen distributor follow-on orders coming in increasingly larger and more quickly as the months progress. We expect this increasing scale to help drive down material and production costs, and thereby improve margins as we progress though the year.
"All of these positive factors are pointing to Eastside Distilling being on track for another consecutive year of record growth, with our new Barrel Hitch American Whiskey leading the way. We see this growth being driven by our continued expansion into new states and internationally, existing states coming up to speed, and by the continued strong industry tailwinds in the craft spirit space."
About Eastside Distilling
Eastside Distilling, Inc. (OTCQB: ESDI) is located in Southeast Portland's Distillery Row, and has been producing high-quality, master crafted spirits since 2008. Makers of award winning spirits, the company is unique in the marketplace and distinguished by its highly decorated product lineup that includes Barrel Hitch American Whiskies, Burnside Bourbon, Below Deck Rums, Portland Potato Vodka, and a distinctive line of infused whiskeys. All Eastside spirits are master crafted from natural ingredients for unparalleled quality and taste. The company is publicly traded under the symbol OTCQB: ESDI. For more information visit: www.eastsidedistilling.com
Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements. 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 ability to continue as a going concern; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's ability to obtain additional capital, the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission on April 13, 2016 Examples of forward-looking statements in this release may include statements related to our strategic focus, product verticals, anticipated revenue and profitability. The Company assumes no obligation to update the cautionary information in this release.
Fiscal Fourth Quarter and Full Year 2015 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 April 13, 2016 in its Annual Report on Form 10-K for the year ended December 31, 2015, and which can be viewed at www.sec.gov and in the investor relations section of the company's website at www.eastsidedistilling.com.
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. Management believes this non-GAAP measure provides useful information about the company's operating results.
The company defines adjusted EBITDA as net income (loss), plus interest expense, provision for income taxes, depreciation and amortization, loss from discontinued operations (goodwill impairment), and stock-based compensation. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.
Three Months Ended
December 31, Year Ended December 31,
2015 2014 2015 2014
----------- ----------- ----------- -----------
Net (loss) income $ (669,376) $(3,790,083) $(3,601,066) $(4,057,171)
Interest expense 95,792 666 59,548 3,974
Provision for income
taxes - 1,500 - 1,500
Depreciation and
amortization 22,100 2,818 36,027 5,889
Goodwill impairment - 3,246,149 - 3,246,149
Stock-based
compensation 115,156 10,000 955,277 10,000
----------- ----------- ----------- -----------
Adjusted EBITDA $ (436,328) $ (528,950) $(2,550,214) $ (789,659)
=========== =========== =========== ===========
Eastside Distilling, Inc. and Subsidiary
Consolidated Balance Sheets
December 31, 2015 and 2014
December December
31, 2015 31, 2014
----------- -----------
Assets
Current assets:
Cash $ 141,317 $ 1,082,290
Trade receivables 142,206 138,041
Inventories 683,824 377,020
Prepaid expenses 163,506 174,147
----------- -----------
Total current assets 1,130,853 1,771,498
Property and equipment - net 112,005 81,206
Other assets 49,000 193,750
----------- -----------
Total Assets $ 1,291,858 $ 2,046,454
----------- -----------
Liabilities and Stockholders' (Deficit) Equity
Current liabilities:
Accounts payable $ 1,300,532 $ 206,630
Accrued liabilities 563,814 72,610
Deferred revenue 727 8,275
Current portion of note payable 4,098 3,560
Related party note payable 12,500 -
Convertible notes payable - net of debt discount 455,958 150,000
----------- -----------
Total current liabilities 2,337,629 441,075
Note payable - less current portion 17,842 23,271
----------- -----------
Total liabilities 2,355,471 464,346
----------- -----------
Commitments and contingencies (Note 9)
Stockholders' (deficit) equity:
Preferred stock, $0.0001 par value; 100,000,000
shares authorized; no shares issued and
outstanding at December 31, 2015 and 2014 - -
Common stock, $0.0001 par value; 900,000,000
shares authorized; 46,195,000 and 45,512,500
shares issued and outstanding atDecember 31,
2015 and 2014, respectively 4,620 4,551
Additional paid-in capital 6,493,518 5,538,242
Accumulated deficit (7,561,751) (3,960,685)
----------- -----------
Total stockholders' (deficit) equity (1,063,613) 1,582,108
----------- -----------
Total Liabilities and Stockholders' (Deficit)
Equity $ 1,291,858 $ 2,046,454
----------- -----------
Eastside Distilling, Inc. and Subsidiary
Consolidated Statements of Operations
Three Months Ended
December 31, Year Ended December 31,
2015 2014 2015 2014
----------- ----------- ----------- -----------
Sales $ 981,783 $ 696,777 $ 2,326,664 $ 1,435,416
Less excise taxes 260,730 252,036 624,046 379,972
----------- ----------- ----------- -----------
Net sales 721,053 444,741 1,702,618 1,055,444
Cost of sales 352,034 204,853 870,390 494,889
----------- ----------- ----------- -----------
Gross profit 369,019 239,888 832,228 560,555
Selling, general, and
administrative expenses 942,603 781,894 4,373,746 1,366,341
Goodwill impairment - 3,246,149 - 3,246,149
----------- ----------- ----------- -----------
(Loss) income from
operations (573,584) (3,788,155) (3,541,518) (4,051,935)
Other expenses - net (95,792) 428 (59,548) 3,736
----------- ----------- ----------- -----------
(Loss) income before
income taxes (669,376) (3,788,583) (3,601,066) (4,055,671)
Provision for income
taxes - 1,500 - 1,500
----------- ----------- ----------- -----------
Net (loss) income $ (669,376) $(3,790,083) $(3,601,066) $(4,057,171)
----------- ----------- ----------- -----------
Basic and diluted net
(loss) income per
common share:
$ (0.02) $ (0.10) $ (0.08) $ (0.12)
----------- ----------- ----------- -----------
Basic and diluted
weighted average shares
outstanding:
46,104,674 37,451,223 45,750,363 33,374,007
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2992288
Company Contact:
Eastside Distilling Investor Relations
Tel 971-888-4264
inquiries@eastsidedistilling.com
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
