Solo Brands, Inc. (NYSE:DTC) Q4 2024 Earnings Conference Call March 12, 2025 9:00 AM ET Company Participants Mark Anderson - Senior Director, Treasury and IR John Larson - Interim President and CEO Laura Coffey - CFO Conference Call Participants Operator Good morning, and welcome to the Solo Brands Fourth Quarter and Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mark Anderson, Senior Dire ...

Financial Performance - Net sales decreased to $454.55 million in 2024 from $494.78 million in 2023, representing a decline of approximately 8.1%[369] - Gross profit fell to $260.26 million in 2024, down from $302.15 million in 2023, a decrease of about 13.9%[369] - Total operating expenses were $434.88 million in 2024, compared to $530.00 million in 2023, reflecting a reduction of approximately 17.9%[369] - The net loss attributable to Solo Brands, Inc. was $113.36 million in 2024, slightly higher than the loss of $111.35 million in 2023[369] - Cash and cash equivalents decreased to $11.98 million at the end of 2024 from $19.84 million at the end of 2023, a decline of about 39.8%[371] - Total assets decreased to $495.06 million in 2024 from $659.32 million in 2023, a reduction of approximately 25%[367] - Total current liabilities increased to $121.71 million in 2024 from $88.56 million in 2023, an increase of about 37.4%[367] - Long-term debt remained relatively stable at $142.06 million in 2024 compared to $142.99 million in 2023[367] - The company reported cash flows from operating activities of $10.52 million in 2024, down from $62.42 million in 2023[371] - The basic and diluted net income (loss) per Class A common stock was $(1.94) in 2024, compared to $(1.84) in 2023[369] Debt and Interest Rates - The company had indebtedness of $69.0 million and $83.0 million under its Revolving Credit Facility and Term Loan, respectively, with annualized interest rates of 7.03% and 7.08% as of December 31, 2024[350] - A 100 basis points increase in SOFR would increase the company's interest expense by approximately $1.5 million in any given year[350] - The company has not entered into any interest rate swap contracts to mitigate interest rate fluctuations as of December 31, 2024[350] - The Company is evaluating strategies to refinance its existing debt, which may include restructuring or issuing new debt[389] Compliance and ESG - The company expects to incur significant additional costs for compliance with new ESG regulations, including the California Climate Corporate Data Accountability Act and the European Union Corporate Sustainability Reporting Directive, which will require expansive disclosures on sustainability topics[247][248] - The company may face reputational damage and financial impacts if it fails to meet evolving stakeholder expectations regarding ESG practices[246] International Operations - International sales accounted for 6.9% of consolidated revenues in 2024, up from 6.0% in 2023[353] - The company is exposed to risks from international geopolitical conflicts, which may negatively impact its operations and supply chain[250] - A 100 basis points unfavorable change in foreign currency exchange rates would increase operating expenses by approximately $0.3 million and decrease net sales by approximately $0.3 million for the year ended December 31, 2024[353] Acquisitions and Market Strategy - The acquisition of TerraFlame on May 1, 2023, was for a total purchase consideration of $13.2 million, aimed at increasing brand and market share in the outdoor activities industry[468] - The acquisition of IcyBreeze on July 1, 2023, totaled $52.1 million, with cash paid at closing amounting to $29.4 million, intended to complement the Company's product portfolio[473] - IcyBreeze generated net sales of $14.8 million in 2024, but incurred a net loss of $61.7 million for the same period[477] Impairments and Restructuring - The Company recognized total impairment charges of $136.1 million in 2024, including $76.0 million related to goodwill impairment within the Solo Stove reporting unit[464] - The Company underwent significant restructuring and contract termination charges in 2024 due to management changes[460] - The Company identified goodwill impairment indicators as of September 30, 2024, leading to impairment charges of $19.9 million and $25.0 million for the IcyBreeze and Solo Stove reporting units, respectively[498] Inventory and Expenses - Inventory obsolescence expense increased to $18.0 million in 2024 from $2.0 million in 2023, primarily due to a write-down of inventory associated with IcyBreeze[478] - Total sales returns and allowances were $19.3 million and $14.7 million for the years ended December 31, 2024 and 2023, respectively[434] - Total sales rebates were $6.3 million and $5.8 million for the years ended December 31, 2024 and 2023, respectively[434] - Research and development expense was $1.7 million and $0.7 million for the years ended December 31, 2024 and 2023, respectively[441] - Advertising expense was $96.0 million and $96.9 million for the years ended December 31, 2024 and 2023, respectively[439] Stock and Compensation - The total unrecognized equity-based compensation as of December 31, 2024, was $11,944,000, down from $15,118,000 in 2023[514] - The total weighted average grant date fair value of restricted stock units vested in 2024 was $4.1 million, compared to $4.4 million in 2023[522] - The Company granted 3,017,000 restricted stock units in 2024 at a weighted average grant date fair value of $2.02[522] - The Company granted 1,468 Executive Performance Stock Units (EPSUs) in 2024, with a weighted-average grant date fair value of $2.36[526] Tax and Income - The Company recognized a total income tax benefit of $8.96 million for the year ended December 31, 2024, compared to a benefit of $36.23 million in 2023, resulting in effective tax rates of 4.7% and 15.6%, respectively[540] - The total income (loss) before income taxes for 2024 was $(189.15) million, an improvement from $(231.56) million in 2023[539]

Financial Performance - Net sales for Q4 2024 decreased by $21.8 million to $143.5 million, down 13.2%, primarily due to declines in both retail and direct-to-consumer channels within the Solo Stove segment[6]. - Gross profit for Q4 2024 was $87.8 million, or 61.1% of net sales, an increase of 280 basis points compared to the previous year[6]. - The net loss for Q4 2024 was $58.2 million, or (40.6)% of net sales, which improved compared to the prior year[6]. - For the full year 2024, net sales decreased by $40.2 million to $454.6 million, down 8.1%, driven by declines in both retail and DTC channels within the Solo Stove segment[6]. - Adjusted EBITDA for the full year 2024 was $32.6 million, or 7.2% of net sales, which declined from the prior year[6]. - Net loss attributable to Solo Brands, Inc. for the year ended December 31, 2024, was $113.4 million, compared to a loss of $111.3 million in 2023[19]. - Year-end 2024 net loss was $180,192 thousand, compared to a net loss of $195,332 thousand for the year 2023[51]. - The adjusted EBITDA margin for the year 2024 was 7.2%, down from 14.2% in 2023[51]. Operating Expenses - Operating expenses decreased by $194.2 million to $143.0 million, down 57.6%, mainly due to a reduction in restructuring and impairment charges[6]. - Total operating expenses in Q4 2024 were $143.0 million, significantly reduced from $337.2 million in Q4 2023[19]. - Restructuring and related charges for Q4 2024 amounted to $52,048 thousand, compared to $244,650 thousand in Q4 2023[51]. - The company incurred restructuring, contract termination, impairment, and related charges of $154,408,000 for the year ended December 31, 2024[49]. Cash and Liquidity - Cash and cash equivalents were $12.0 million as of December 31, 2024, compared to $19.8 million at the end of 2023[7]. - The company reported a net cash provided by operating activities of $10.5 million for the year ended December 31, 2024, down from $62.4 million in 2023[28]. - The company is evaluating strategies to refinance existing debt and improve liquidity through operational improvements in 2025[9]. Inventory and Assets - Inventory as of December 31, 2024, was $108.6 million, a slight decrease from $111.6 million at the end of 2023[8]. - Total assets decreased to $495.1 million in 2024, down from $659.3 million in 2023[26]. - Long-term debt remained relatively stable at $142.1 million in 2024 compared to $143.0 million in 2023[26]. Marketing and Business Initiatives - Marketing expenses for Solo Stove in 2024 were $67.7 million, a decrease from $71.8 million in 2023[24]. - The company has identified 30+ value accretive initiatives as part of its turnaround plan for 2025[3]. - The company reported a significant increase in business optimization and expansion expenses, totaling $8,108,000 for the year ended December 31, 2024[48]. - Business optimization and expansion expenses for Q4 2024 were $1,852 thousand, compared to $6 thousand in Q4 2023[51]. Profit Margins and Adjustments - For the year ended December 31, 2024, the adjusted gross profit was $280,305,000, with an adjusted gross profit margin of 61.7%[47]. - The company reported a gross profit of $260,264,000 for the year ended December 31, 2024, with a gross profit margin of 57.3%[47]. - The adjusted net income (loss) per Class A common stock for the year ended December 31, 2024, was $0.12, compared to $(1.94) for the net income (loss) per Class A common stock[49]. - The company plans to present adjusted net income (loss) per Class A common stock excluding noncontrolling interests going forward, enhancing comparability[37].

Group 1 - The article discusses the investment positions held by the analyst in DIS and ROKU, indicating a beneficial long position in these shares [1] - It emphasizes that the opinions expressed are personal and not influenced by any compensation from companies mentioned [1] - The article clarifies that there is no business relationship with any company whose stock is mentioned, ensuring independence in analysis [1] Group 2 - The disclosure from Seeking Alpha states that past performance does not guarantee future results, highlighting the inherent uncertainty in investment [2] - It notes that no specific investment recommendations are provided, indicating a neutral stance on investment suitability for individual investors [2] - The article mentions that the analysts contributing to Seeking Alpha may not be licensed or certified, which could affect the credibility of the analysis [2]

Core Points - PTX Metals Inc. has received final listing approval and will begin trading on the TSX Venture Exchange (TSXV) on March 11, 2025 [1] - The company will continue to trade under the same ticker symbol (PTX) and will voluntarily delist from the Canadian Securities Exchange (CSE) [2] - PTX's common shares are now eligible for electronic clearing and settlement in the United States through the Depository Trust Company (DTC), enhancing liquidity [3] Company Overview - PTX Metals Inc. is focused on high-quality critical minerals projects, including the W2 Cu-Ni-PGE and Gold Project and the South Timmins Gold Joint Venture Project, located in northern Ontario [4] - The company's portfolio includes valuable metals such as gold, copper, nickel, PGE, and uranium, strategically acquired for their geological advantages [5] - PTX is based in Toronto, Canada, and is also listed in Frankfurt and on the OTCQB in the United States [6]

Core Viewpoint - Solo Brands, Inc. plans to report its fourth quarter and fiscal year 2024 financial results on March 12, 2025, before the market opens, followed by a conference call to discuss strategy and results [1]. Group 1: Financial Reporting - The financial results announcement is scheduled for March 12, 2025, before market opening [1]. - A conference call will take place at 9:00 a.m. ET to discuss the financial results and company strategy [1]. Group 2: Participation Details - Investors and analysts can join the call by dialing 1-866-652-5200 or 1-412-317-6060 for international callers, at least 10 minutes prior to the start [2]. - A live webcast will be available on the investor relations section of the company's website [2]. Group 3: Replay Information - A recorded replay of the call will be available shortly after the conclusion and will remain accessible until March 19, 2025 [3]. - The access code for the replay is 1021839, and a replay of the webcast will be available for one year [3]. Group 4: Company Overview - Solo Brands is headquartered in Grapevine, TX, and operates as an omnichannel lifestyle brand company [4]. - The company offers products through five lifestyle brands: Solo Stove, TerraFlame, Chubbies, ISLE, and Oru Kayak [4].

Group 1 - The article emphasizes that the market perception of Warner Bros. Discovery (NASDAQ: WBD) is overly focused on its Direct-to-Consumer (DTC) business, suggesting that other aspects of the company are being undervalued or overlooked [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis provided in the article includes a comprehensive breakdown of oil and gas companies, focusing on their balance sheets, competitive positions, and development prospects [1]

Core Viewpoint - ESGold Corp. has announced that its common shares are now eligible for electronic clearing and settlement through the Depository Trust Company (DTC), enhancing trading efficiency and liquidity for U.S. investors following its uplisting to the OTCQB Venture Market [1][2][4]. Group 1: DTC Eligibility and Trading Efficiency - DTC eligibility allows for faster and more cost-effective electronic clearing of ESGold's shares in the U.S., reducing settlement risks and enhancing ease of trading for both institutional and retail investors [2]. - This upgrade is expected to improve the Company's market visibility and attractiveness, aligning with its strategic growth initiatives [2][4]. Group 2: Uplisting to OTCQB - The recent uplisting to the OTCQB Venture Market is a critical milestone for ESGold, providing increased exposure and transparency for U.S. investors [4]. - The OTCQB requires regular financial disclosures and compliance with high-quality reporting standards, positioning ESGold to attract new institutional and retail investors as it approaches production at the Montauban Project [4]. Group 3: Company Overview - ESGold Corp. is a fully permitted, pre-production resource company focused on clean mining and exploration innovation, with proven expertise in Quebec [5]. - The Company is advancing its projects toward production and feasibility while delivering long-term value through sustainable resource recovery and exploration [5].

Core Viewpoint - ProPhase Labs is implementing strategic cost-cutting measures to focus on direct-to-consumer (DTC) marketing initiatives aimed at driving growth and profitability, while dispelling rumors of an investment bank initiating a capital raise [1][5]. Group 1: Strategic Initiatives - The hiring of Stu Hollenshead has opened new strategic opportunities for ProPhase to leverage its DTC multi-media expertise and infrastructure, particularly in selling healthcare OTC dietary supplements and genomics testing directly to consumers [2]. - ProPhase is exploring partnerships and potential acquisitions of telehealth companies that offer DTC prescription drugs, which could significantly enhance growth through existing physician networks [2]. - The company is focusing resources on high-growth core businesses, including BE-Smart esophageal cancer diagnostics, Nebula Genomics, DNA Complete, TK Supplements, and the upcoming launch of Equivir, an antiviral targeting the next cold and flu season [4]. Group 2: Financial Position - The sale of Pharmaloz Manufacturing has materially strengthened ProPhase's balance sheet, while operational efficiencies have been enhanced at Nebula Genomics through overhead reductions [3]. - ProPhase is working to secure a revolving line of credit as interim financing until the potential sale of Nebula Genomics or the commencement of cash flow from a new litigation initiative, which could yield $50 million or more [5]. - The company anticipates inflows totaling tens of millions of dollars in the latter half of 2025, which could help maintain its NASDAQ listing and potentially increase stock value above $1 per share [6]. Group 3: Leadership and Vision - CEO Ted Karkus emphasized the importance of transitioning ProPhase from a development stage company to a profit-generating entity, focusing on optimizing operations and building a strong marketing presence [9]. - The leadership team, including COO Stu Hollenshead, is committed to driving immediate impact through streamlined operations and effective DTC marketing efforts [8][9]. - The company is positioning itself to attract other businesses that wish to leverage its marketing and distribution infrastructure [9].

Group 1 - The articles express that the opinions shared are personal and do not constitute investment advice [1][2][3] - There is a disclosure of a beneficial long position in the shares of Disney (DIS) by the author [2] - The content emphasizes the importance of conducting personal research and analysis before making investment decisions [1][3][4] Group 2 - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment recommendations are provided [4] - The platform highlights that its analysts are third-party authors, which may include both professional and individual investors [4]