Splash Beverage (SBEV) Q3 Earnings call transcript Nov 25, 2024
1min read Splash Beverage Group, a beverage company specializing in identifying, acquiring, and building undervalued brands, recently held its third-quarter conference call for 2024. The call, led by CEO Robert Nistico, provided insights into the company's financial performance, strategic initiatives, and future plans. Here are the key takeaways from the call.
Financial Performance and Challenges
Splash Beverage Group reported a net loss of $4.6 million for Q3 2024, an improvement from the previous quarter and the year before. Despite the improvement, the company faced challenges with liquidity and timing of inflows, which impacted inventory and sales. The company has restarted its online resale business, Qplash, and has seen improvements in gross margins, which have almost tripled from 11% in Q1 2024 to 30% in Q3 2024.
Distribution and Brand Strategy
The company has made significant strides in expanding its distribution network, securing key partnerships in the Pacific Northwest, Northeast, and Southwest regions. Circle K has authorized Splash Beverage to sell four SKUs of Copa di Vino in all of its franchise stores, and the Pennsylvania Liquor Control Board has authorized the sale of the company's tequila brand, Chispo. These strategic moves are expected to set a higher floor for sustainable success moving forward.
Capital Structure and Financing Update
Splash Beverage Group has secured commitments for approximately $8 million in capital raise since August 2024. The company is actively recruiting investors to ensure it has the necessary liquidity to support its growth. The capital will provide essential working capital for the legacy business and support the anticipated acquisition of a complementary energy drink company.
Mergers and Acquisitions
The company has identified a target in the energy drink space and is under a Letter of Intent. The pending acquisition is expected to provide significant growth opportunities and attractive margins. The company is in the process of securing financing for the transaction, with a target of closing in early January 2025.
Looking Ahead
Splash Beverage Group remains optimistic about its future, despite the challenges faced in the past year. The company is positioning itself for sustainable and profitable growth, operational excellence, and e-commerce expansion. With a strategic plan in place, Splash Beverage Group is confident in its ability to move towards positive cash flow from operations and positive EBITDA on a run rate basis by Q3 2025.
In conclusion, Splash Beverage Group's third-quarter earnings call provided a comprehensive overview of the company's financial performance, strategic initiatives, and future plans. With a focus on sustainable growth and operational excellence, the company is poised to capitalize on opportunities in the beverage industry. Despite the challenges faced, Splash Beverage Group remains committed to its long-term vision and is eager to move forward with its acquisition plans and capital raise.