Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated sales increased by 11% in the second quarter.
- Gross margin showed notable improvement compared to the prior year.
- Craft segment saw a nearly 50% increase in digital printing revenue.
- Gross profits increased substantially by 84%, despite lower sales.
- Corporate expenses have decreased quarter-over-quarter for the last two years.
Negative Points
- Craft segment needs to improve its gross margins and reduce machine downtime.
- Spirit sales decreased by $100,000 due to changes in the go-to-market strategy.
- Net loss remained high at $1.5 million for Q2 2024.
- Adjusted EBITDA was flat at about negative $900,000 for both periods.
- The company did not sell any substantial barrels in the quarter, impacting revenue.
Q & A Highlights
Highlights from Eastside Distilling Inc (EAST, Financial) Q2 2024 Earnings Call
Q: Can you elaborate on the significant increase in digital printing revenue for Craft?
A: Geoffrey Gwin, CEO: Craft saw a nearly 50% increase in digital printing revenue, setting records for can sales. We are addressing the challenge of scaling up our digital can printing capacity and have a plan to significantly boost this capacity for the rest of the year.
Q: What are the key issues Craft needs to address to improve its gross margins?
A: Geoffrey Gwin, CEO: Craft needs to reduce machine downtime and minimize scrap, which impacted margins and operating cash flow in Q2. We are optimistic about seeing improvements in the second half of the year.
Q: How is the spirits business performing, particularly in terms of cash flow?
A: Geoffrey Gwin, CEO: The primary goal for the spirits business is to generate positive cash flow. While case funds were down 12%, driven by a reset of our tequila go-to-market strategy, gross profits increased substantially by 84%, and EBITDA improved with only a $53,000 loss reported for the quarter.
Q: Can you provide more details on the financial results for the quarter?
A: Tiffany Milton, Controller: Consolidated gross sales were $3.1 million for Q2 '24, up from $2.8 million in Q2 '23. Craft sales were $2.4 million, and Spirit sales were $700,000. Consolidated gross profit was $200,000, and gross margins were 5%. Operating expenses were $1.3 million, reflecting successful restructuring efforts.
Q: What are the future projections for the company's performance?
A: Geoffrey Gwin, CEO: We expect to see more progress in Q3, particularly in improving gross margins and operational efficiencies. We are focused on building a sustainable and growing company, and we believe we will continue to make progress in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
