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Eastside Distilling Crafts Success: Record Craft Segment Growth in Q1 2024

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Benjamin Hughes

May 13, 2024 - 20:15 pm

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Eastside Distilling Reports First Quarter 2024 Results with Notable Increases in Craft Segment

Executive Summary

PORTLAND, Oregon, May 13, 2024 /PRNewswire/ -- A pioneer in the beverage industry, Eastside Distilling, Inc. (NASDAQ: EAST), has today disclosed an extensive summary of its financial outcomes for the first fiscal quarter concluding on March 31, 2024. The company, celebrated for its diverse portfolio including premium spirits and innovative craft can packaging solutions, showcased a range of fiscal enhancements and strategic decisions unveiling a promising future.

Amplified Craft Segment Performance Ignites Momentum

The first quarter was marked by exceptional success in the craft segment, with Eastside's digital can printing operations hitting a new quarterly record by producing 4.8 million cans, an astounding leap of +320% in comparison to the same period in the prior year. The operating improvements were evident across both the company's primary segments, in spite of barrel sales being extracted from the equation in the Spirits division.

Financial Performance at a Glance

In the reporting period, Eastside witnessed some financial fluctuations. Gross sales fell from $2.9 million last year to $2.5 million chiefly due to a drop in mobile canning and spirits sales which absorbed the increment in digital printing sales. Interestingly, spirits sales suffered mainly because of the prior year's strategic bulk sale of 250 barrels, netting $0.6 million during the first quarter of 2023.

The gross profit also witnessed a decrease from $0.6 million in Q1 2023 to $0.2 million in the same quarter of 2024. The consolidated gross margins contracted to 8% in 2024 from the preceding year's 22%. Nevertheless, Craft C+P gross margin welcomed improvement owing to robust printed can volumes. The Spirits segment, conversely, bore the brunt of the revenue stud from bulk barrel sales that happened in the previous year.

Forthcoming actions to realign the spirits division envisage investments diverting towards the most profitable spirits brands and regions. These actions are complemented by a reduction in operating expenses, dropping significantly to $0.2 million in contrast to the $0.6 million in the same timeframe of 2023. The slashing of operational costs was primarily attributed to reduced professional fees, sponsorship costs, and a leaner headcount.

Furthermore, the net loss for Q1 2024 declined to $1.3 million, down from $1.6 million in 2023, signaling controlled spending and enhanced EBITDA from $(0.9) million in 2023 to $(0.7) million in 2024.

Focus on Non-GAAP Measures

In evaluating and making operational decisions, management also considers the non-GAAP measure of adjusted EBITDA, which they believe furnishes a transparent understanding of the company’s core performance by sidelining non-operational items from the financial results. Worth noting is that adjusted EBITDA showcases earnings before an array of financial facets: interest, taxes, depreciation, amortization, stock-based compensation, and incidental one-time items.

Upcoming Corporate Communications

Eastside Distilling will further elucidate its earnings within an earnings conference call, as detailed below.

Investor Relations and Upcoming Conference Call

Date and Time: Monday, May 13, 2024, at 5:00 pm ET

Call-in Information: Interested parties can join the conference call by dialing (844) 889-4332 or (412) 717-9595.

Live Webcast: For those preferring the internet, a live webcast is available in the Conference Calls section of the company’s website at Eastside Distilling Conference Calls.

Replay: A replay of the call is available via dial-in at (877) 344-7529 or (412) 317-0088 using replay access code #10189029. Additionally, a webcast replay will be accessible for 90 days in the aforementioned section of the company's website.

A Brief About Eastside Distilling

Since 2008, Eastside Distilling Inc. has been crafting high-quality, award-winning spirits in Portland, Oregon. The company has received accolades for its exquisite product range, including Azuñia Tequilas®, Burnside Whiskeys®, Hue-Hue Coffee Rum®, and Portland Potato Vodkas®. Eastside’s spirits ingenuity is paralleled by its Craft Canning + Printing subsidiary, which is a dominant independent business offering mobile canning, co-packing, and digital can printing services in the Northwest.

Precautionary Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties which may cause actual developments to differ materially from those projected. The comprehensive "Risk Factors" section in the Company’s Annual Report on Form 10-K provides a detailed discussion of potential risks. All forward-looking information is furnished as of the press release date, and Eastside Distilling disclaims any obligation to update such information post-distribution.

Availability of Financial Data

The audited financial statements and accompanying notes are filed with the SEC on Form 10-K for the period ended December 31, 2023, and can be accessed at www.sec.gov and in the investor relations section of the company's website at www.eastsidedistilling.com/investors.

In conclusion, Eastside Distilling’s first quarter 2024 financial summary illuminates the fruits of their strategic realignment, operational efficiency, and the burgeoning digitized craft segment. The company remains committed to amplifying its market stance and enriching shareholder value through continued innovations and targeted marketing in the spirits industry.

Sources:

This Eastside Distilling news release is sourced from PRNewswire, and provides insights into the Company's first quarter 2024 financial performance and strategic initiatives.