Eastside Distilling(EAST) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Consolidated sales increased by 11% in Q2 2024, reaching $3.1 million compared to $2.8 million in Q2 2023 [6][10] - Gross profit for Q2 2024 was $200,000, significantly up from $26,000 in Q2 2023, leading to a gross margin improvement from 1% to 5% [10][11] - Net loss decreased slightly to $1.5 million in Q2 2024 from $1.6 million in Q2 2023, while adjusted EBITDA remained flat at approximately negative $900,000 for both periods [11] Business Line Data and Key Metrics Changes - Craft sales rose to $2.4 million in Q2 2024 from $1.9 million in Q2 2023, with a record production of 6 million printed cans [10] - Spirit sales declined to $700,000 in Q2 2024 from $800,000 in Q2 2023, attributed to lower volumes in tequila due to a revised go-to-market strategy [10][11] - Craft's gross margin was negative 3% in 2023 and reported no profit margin in 2024, while spirits achieved a gross margin of 26% in Q2 2024, up from 12% in Q2 2023 [11] Market Data and Key Metrics Changes - Performance in states like Oregon and Arizona improved, indicating a positive trend in market acceptance for spirits [8] - The digital can printing segment is gaining strong traction in the market, with significant revenue growth noted [6][7] Company Strategy and Development Direction - The company aims to boost digital can printing capacity and improve gross margins while addressing operational challenges such as machine downtime and scrap reduction [7] - A reset of the tequila go-to-market strategy is in place, focusing on new distribution and pricing adjustments to enhance gross margins [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2024, expecting improvements in gross margins and operating cash flow [7][9] - The company is focused on building a sustainable and growing business, with a commitment to reducing corporate expenses [9] Other Important Information - The company closed on a $1.1 million debt facility for working capital during Q2 2024 [11] Q&A Session Summary - The Q&A session did not contain specific questions or answers, as the call concluded with a statement of thanks from the CEO [12]