Splash(US:SBEV)2023-04-11 18:08Financial Data and Key Metrics Changes - Net revenues for the full year increased to $18.1 million, up from $11.3 million in 2021, representing a 60% increase [16] - Fourth quarter revenues rose to $4.8 million, up from $3.1 million in the prior year, marking a 56% increase [16] - Gross margins for the year were 32.7%, a decline of 2 percentage points from 2021's 36.6% due to inflationary pressures [17] - Net losses decreased to $21.7 million in 2022 from $29.1 million in 2021 [18] - Cash operating expenses increased by 36% in 2022, with marketing expenses, freight-to-customers, and Amazon fees being the primary drivers [18] Business Line Data and Key Metrics Changes - The increase in revenues was primarily attributed to sales growth from the company's e-commerce division and distribution platform, Qplash [16] Market Data and Key Metrics Changes - The company has signed significant distribution agreements, primarily with Bud Network and MillerCoors, enhancing its distribution capabilities [20][21] Company Strategy and Development Direction - The company is focused on growing its legacy brands and evaluating potential acquisitions, with a strong emphasis on distribution as a key to future success [11][12] - The management team is committed to expanding beyond the current revenue levels and is actively pursuing acquisition targets [12][41] - The company is working on the exclusive rights to CartoCan, which is expected to help reduce costs and create additional revenue opportunities [13][44] Management's Comments on Operating Environment and Future Outlook - Management believes the company is at an inflection point where brands will start to gain traction and accelerate growth [74] - There is an expectation for continued momentum and growth quarter-to-quarter and year-over-year, with a focus on increasing product placements [35][36] Other Important Information - The company is optimistic about the rollout of TapouT energy drinks, with production expected to begin soon [26] - Management is exploring various options for financing acquisitions, depending on the specific brand and market conditions [42] Q&A Session Summary Question: What does the pipeline look like for additional distribution agreements? - Management confirmed that they have signed significant agreements and are building out their distribution network, primarily through direct store delivery agreements [20][21] Question: Can you discuss the rollout of Tapout energy? - The production of TapouT cans is in progress, with an expected rollout by the end of April or early May [26] Question: What growth metrics are being seen in Q1? - Management refrained from providing specific guidance but indicated that they expect continued growth momentum [35][36] Question: Can you provide clarity on the exclusivity of CartoCan? - The company has exclusive rights in the U.S. for CartoCan, but does not hold global exclusive rights [63][64] Question: How have market conditions affected acquisition multiples? - Management noted that challenging capital market conditions could compress multiples, but they remain focused on acquisitions [50][52] Question: What geographic areas are being targeted for growth? - The company is focusing on the Southwest and Southeast regions for expansion, with specific chain-driven strategies [56][57]