Eastside Reports Third Quarter 2019 Financial Results

PORTLAND, Ore., Nov. 14, 2019 /PRNewswire/ -- Eastside Distilling, Inc. (NASDAQ: EAST) reported third quarter 2019 financial results for the period ended September 30, 2019.

Financial ResultsGross sales were $4.7 million, an increase of 179% compared to $1.7 million in Q3 2018, and up 12% sequentially compared to $4.3 million in Q2 2019.

The operations of Azuñia, which were acquired on September 12, 2019, contributed $232,571 in gross sales during the abbreviated quarter. 

Gross margins on net sales improved to 40% during Q3 2019 compared to 38% in Q2 2019, and flat compared to 40% in the year ago third quarter. Operating expenses of $5.2 million were up compared to $4.3 million in Q2 2019 and compared to $2.7 million in Q3 2018.

The Company incurred approximately $420,000 of expenses during Q3 2019 pertaining to legal and other acquisition related expenses associated with the Azuñia transaction and board-related matters.

Adjusted EBITDA (see attached table) during Q3 2019 was $(2.4) million, which compared to $(2.0) million in Q2 2019 and $(1.4) million in Q3 2018.  Excluding the one-time expenses pertaining to legal and other acquisition related expenses associated with the Azuñia transaction and board-related matters, Adjusted EBITDA would have been approximately $(2.0) million.

Net loss was $(3.5) million during Q3 2019 compared to a net loss of $(2.9) million in Q2 2019 and $(2.6) million in Q3 2018.

Case Volume (9-Liter Equivalent)

Management Commentary

"We delivered strong third quarter case count and revenues. Demand for our products in off-premise distribution channels is strong," said Lawrence Firestone CEO. "We closed the acquisition of Azuñia just before the quarter end and are excited to integrate these great organic tequila products into our lineup as this will continue to add to our growth story going forward."

Use of Non-GAAP MeasuresEastside Distilling's management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of adjusted EBITDA. Management believes this non-GAAP measure provides useful information about the Company's operating results.

The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation and the newly implemented lease accounting. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

Conference CallThe Company will hold a conference call today to discuss these results.

Date and Time: 5:00pm ET (2:00pm PT) on Thursday, November 14, 2019

Call-in Information: Interested parties can access the conference call by dialing (844) 889-4332 or (412) 717-9595.

Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available in the Investor Relations section of the Company's website at https://www.eastsidedistilling.com/investors/.

Replay: A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10136838. A webcast replay will be available in the Investor Relations section of the Company's website at https://www.eastsidedistilling.com/investors/ for 90 days.

About Eastside DistillingEastside Distilling, Inc. (NASDAQ: EAST), founded in 2008, has developed, matured, perfected or acquired, then launched many award-winning spirits, while evolving to meet the growing demand for quality products and services associated with the burgeoning craft and premium beverage trade. The Company's portfolio includes Redneck Riviera Whiskey, a partnership with John Rich, the multi-platinum country-music artist and one-half of the award-winning duo Big & Rich, the Quercus Garryana barrel-finished Burnside Whiskey family, Azuñia Organic Tequilas, Hue-Hue Cold Brewed Coffee Rum, Portland Mule canned cocktails, Outlandish CBD Seltzers and Tonics, and others. The Company is honored to give a percentage of sales proceeds on Redneck Riviera products to Folds of Honor, a charitable foundation that awards scholarships to spouses and children of fallen veterans. In addition to the Company's branded products, the Company has strategically enhanced its capabilities to bring new and trending products to the market, including its Craft Canning + Bottling subsidiary, which is one of the Northwest's leading independent spirit bottlers and ready-to-drink canners. For more information visit: www.eastsidedistilling.com or follow the Company on Twitter and Facebook.

Important Cautions Regarding Forward-Looking StatementsCertain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release may include statements related to release of new products and entering into RTD and CBD markets, growth prospects, receipt of future authorizations or anticipated revenues, our expected success in integrating acquired entities and assets, including expected co-packing sales momentum and production efficiencies associated with the acquisition of CC+B, and our strategic focus, product verticals, and expected financial performance and profitability. The Company assumes no obligation to update the cautionary information in this release.

Financial Summary TablesThe following financial information should be read in conjunction with the unaudited financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on November 14, 2019 on Form 10-Q for the period ended September 30, 2019, and which can be viewed at www.sec.gov and in the investor relations section of the Company's website at www.eastsidedistilling.com.

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SOURCE Eastside Distilling, Inc.