solo stove(US:DTC)2025-11-06 13:00Financial Performance - Net sales for Q3 2025 decreased to $222.5 million, down 28.4% compared to Q3 2024, driven by declines in both retail and DTC sales within the Solo Stove segment [6]. - Gross profit for Q3 2025 was $31.8 million, or 60.0% of net sales, a decrease of 19.0% compared to the prior year [7]. - The net loss for Q3 2025 was $22.9 million, improving from a net loss of $111.5 million in the prior year [7]. - Adjusted EBITDA for Q3 2025 was $(5.1) million, compared to $6.5 million in the prior year period [7]. - Net sales for Q3 2025 were $53,038,000, a decrease of 43.7% compared to $94,139,000 in Q3 2024 [21]. - Gross profit for Q3 2025 was $31,846,000, down 19% from $39,319,000 in Q3 2024 [21]. - Net loss attributable to Solo Brands for Q3 2025 was $15,026,000, compared to a net loss of $69,864,000 in Q3 2024 [21]. - Total operating expenses for Q3 2025 were $48,023,000, significantly reduced from $154,605,000 in Q3 2024 [21]. - Segment EBITDA for Solo Stove in Q3 2025 was $1,363,000, a decline from $14,585,000 in Q3 2024 [23]. - The company reported a comprehensive loss of $22,919,000 for Q3 2025, compared to a comprehensive loss of $111,371,000 in Q3 2024 [21]. Cash Flow and Liquidity - Operating cash flow was $11 million in Q3 2025, marking the second consecutive quarter of positive cash generation [2]. - Cash and cash equivalents increased to $16.3 million as of September 30, 2025, up from $12.0 million at the end of 2024 [8]. - Cash and cash equivalents increased to $16,334,000 as of September 30, 2025, up from $11,980,000 at the end of 2024 [25]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(53,019), significantly higher than $(2,470) in 2024 [27]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $66,775, compared to $6,812 in 2024, indicating a significant increase [27]. - The cash and cash equivalents balance at the end of the period for September 30, 2025, was $16,334, up from $12,494 in 2024, representing an increase of approximately 30.4% [27]. Inventory and Assets - Inventory was reduced to $84.8 million as of September 30, 2025, down from $108.6 million at the end of 2024 [9]. - Total assets decreased to $431,045,000 as of September 30, 2025, down from $495,060,000 at the end of 2024 [25]. - Inventory as of September 30, 2025, was $84,831,000, down from $108,575,000 at the end of 2024 [25]. Debt and Expenses - Long-term debt increased to $233,966,000 as of September 30, 2025, compared to $142,060,000 at the end of 2024 [25]. - SG&A expenses were reduced by 35.4% year-over-year, reflecting ongoing efficiency efforts [3]. - Interest expense for Q3 2025 was $7,556 thousand, up from $3,683 thousand in Q3 2024, indicating increased borrowing costs [44]. - Depreciation and amortization expense for Q3 2025 was $7,152 thousand, compared to $6,815 thousand in Q3 2024, reflecting higher asset depreciation [44]. - Business optimization and expansion expenses for Q3 2025 were $788 thousand, down from $2,776 thousand in Q3 2024, suggesting reduced spending in this area [44]. - Equity-based compensation expense for Q3 2025 was $861 thousand, compared to $1,859 thousand in Q3 2024, indicating a decrease in compensation-related costs [44]. Product Performance and Strategy - The initial response to new products, including the Summit 24" and Infinity Flame firepits, has been favorable, improving sales trends in October [4]. - The company aims to stabilize the business and strengthen its balance sheet for sustainable, profitable growth over time [4]. Year-to-Date Performance - Net income for the nine months ended September 30, 2025, was a loss of $62,270, compared to a loss of $121,974 in 2024, indicating an improvement of approximately 48.9% [27]. - Adjusted gross profit for the nine months ended September 30, 2025, was $131,870, down from $192,734 in 2024, reflecting a decrease of about 31.6% [42]. - Adjusted gross profit margin for the nine months ended September 30, 2025, was 59.3%, compared to 62.0% in 2024, showing a decline of 2.7 percentage points [42]. - Adjusted net income for Q3 2025 was $(11,862) thousand, compared to $1,449 thousand in Q3 2024, indicating a significant decline [43]. - Adjusted EBITDA for Q3 2025 was $(5,118) thousand, down from $6,499 thousand in Q3 2024, reflecting a decrease in operational performance [44]. - Net income margin for Q3 2025 was (43.2)%, compared to (118.4)% in Q3 2024, showing an improvement in loss percentage relative to net sales [44]. - Adjusted EBITDA margin for Q3 2025 was (9.6)%, down from 6.9% in Q3 2024, indicating a decline in profitability [44]. - Net income (loss) for the nine months ended September 30, 2025, was $(121,974) thousand, compared to $(62,270) thousand for the same period in 2024 [43]. - Adjusted net income (loss) attributable to Solo Brands, Inc. for Q3 2025 was $(7,058) thousand, compared to $1,063 thousand in Q3 2024 [43]. - Capital expenditures for patents, property, and equipment in the nine months ended September 30, 2025, totaled $(4,600), compared to $(6,898) in 2024, a decrease of approximately 33.3% [27]. - Inventory charges associated with restructuring and consolidation activities were $18,742 for the nine months ended September 30, 2024, with no such charges reported in 2025 [42]. - The company reported a loss on the disposition of the TerraFlame manufacturing operations amounting to $1,516 in the nine months ended September 30, 2025 [27].