EAST - Earnings call transcript Q3 2019 | Eastside Distilling, Inc.

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Operator

Good day, and welcome to the Eastside Distilling Reports Third Quarter Fiscal Year 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Joe Dorame of Lytham Partners. sir. ahead, go Please

Joe Dorame

afternoon Eastside you the Distilling’s XXXX. September Good today quarter joining to XX, discuss financial and Jack. for thank us ended Thanks, results for

are call Executive Chief Robert Chief Manfredonia, Steve discuss Joining Financial company’s and Officer; today President; the on the new the these us results Shum, Lawrence Eastside's Officer. Firestone, appointed to company’s

Following your questions. their remarks, we will open the call to

Safe by the the Securities Exchange remarks, provisions Section following with of Securities the Private Reform we prepared we this amended, Act submit as conference the such within on of and begin Act may Securities as call Litigation of XXXX, Certain of the amended, and statements. XXA Distilling the made Act record Harbor management matters Eastside of statements be discussed Before of are forward-looking for of the forward-looking Section XXXX, the statements XXXX. of meaning XXE to pursuant

are plans, forward-looking anticipate, Forward-looking by to draft, statements expects, to results cautioned expectations, projected. as future eventually should, from that words materially that projected describe strategies those or results, uncertainties are cause Listeners could generally future, will, risks subject the statements such differ future are preceded may, plans, such in and and or statements.

ended in Company's Report the XX, Commission, the and XXXX. and risks plans, product success these model Securities described success business its involves as in to customers, filings market, a to uncertainties year include, entities matters the strategic information to new and with December on for to including results concern, Company's ability the acquired ability the time-to-time materially related actual in and acceptance in and ability Such in execute but that continue and the XX-K limited to differ Annual and assets, cause the from are risks not Form Company's development, success all obtain integrating its obtaining capital, Exchange growing

to over proceed. the like Now, I turn Lawrence please Firestone. would call to Larry,

Lawrence Firestone

Thank and you for thank joining everyone us Joe, today. you,

I have been first Distilling Let me leading the say Chief new the transformational as and months, that market enhance for Officer been this all our Eastside we slow forward team Having as play the Executive appointed member have of board we looking will foundation for in on a that to I'm excited to very couple going forward. the the going and understand involved the position shareholders I'm opportunities last fire forward. of and execute the strategies value to

for the created the high brands, national the our spirits presence Walmart, previously national overall It's Eastside been like developed combined one This has branding. but proven Eastsides companies, distillers Tequila years, culture the fully Redneck like more best-in-class by in spirits extraordinary and and marketplace relationships multinational and Tier from regional past master Riviera Kroger you'd at and have Whiskey platform every a with develop of are off-premise leadership, of vertical and and Riviera Eastside’s mentioned a platform integrated portfolio strong normally two large rapidly Azuñia efficiencies. established world-class blenders Albertsons, brand. accounts with makes that couple see in and Redneck distribution growth the team over with the quality products our expanding localized

annually drive working XX,XXX national of The improvement, and the name to Street company’s in in growing on the one many spirits on-premise accounts Eastside's Hotels established segments the conversation lineup of already acquisitions the value. large recent channels with as established be of reach, Landry's to exploring the fastest capital a forming the complement acquisition near-term distribution primary of Graduate bringing cases industry. XX,XXX My Hospitality, Tequila focus the perfect to Azuñia and will the strategies and Wall in integration driving get working a of Aimbridge is ultra-premium concepts such many and shareholder

With the we've amount have Working built capital can currently greater drive growth is much of on meteoric we put rates will the have. chassis than support based beauty we opportunity market growth. fuel we've we the in the tank. The achieved, we of growth this continued

our As we the the we forward. a we for company, will position. high term our as the continue explore need working to is urgent value near value shareholders in that will going rate item address strategy brand exits burn to grow Clearly, such enhance and capital most

$XX accounts we or credit barreled receivable We bank finance institution an against it of also an inventory leveraged line. in and of that for raw with against have line will just lend inventory $X discussions we're with inventory discussions are million a our over currently with million in spirits a

lines We six the place expect to have over of both next these to weeks. in four

strategies As deeper been little expanding a the I'll in since yesterday, I've for seat when into my specific in but to months only these the thoughts this I get come. I look to reserve forward upon organization,

to Steve the comments. over it turn for now I'll financial

Steve Shum

increased Thanks, Gross Larry, sales year. an up million over the increase $X.X Net and in million, last XXX%. quarter, $X.X sales XXX% topped of aboard. welcome

approximately As worth during new period. sales addition three roughly so press acquired the results. in we in contributed stated We the Azuñia of brand on XX, weeks this release, $XXX,XXX Azuñia contributed September gross

remain not about we Our XXXX have excited expectations for changed addition. this Azuñia and operations

for gross net quarter we quarter also versus did revenue growth, unusual the second to XX% related matters. related the key two sales call, and aside XX% slightly this of even out margin worth XX% the of remainder in of improvement on our sequentially EBITDA The on margin board and other of backing in when $XXX,XXX stated and of goals reduction some second expecting in loss other the loss. sequential transaction Azuñia we expenses in roughly the Gross improved the quarter As the had first from higher year this year. come year: EBITDA

year services XX,XXX of as and in came at was the result last of at year cases. Co-packing this XXX% the this year. over grew a of over of Craft as year's acquisition up Redneck of last volume beginning an all-time Canning high XX% the including XX% quarter Riviera revenue second over sales wholesale the case Branded from retail quarter third sequentially increased and

However, time did The their working and sequentially. meet which targets is add not a additional Craft the customers allocated operations the it original team was in production to those availabilities. to quarter had XX% during large down open into customer,

$XX quarter working the cash closed and compared overall and accounts with $XXX,XXX position the $XXX,XXX includes million, in in quarter $XX at in of cash receivables which We approximately end inventory. the million the an in $X.X second of million capital approximately to

capital provide few place. inventory and our is, taken plan a to and sufficient utilize to complete in have longer mentioned working times, Although the put we've assets receivable to

As those in Larry are mentioned, process.

are details has now available been Additional filed. in the which XX-Q,

the Let additional call Robert Robert? detail. for me turn over to

Robert Manfredonia

afternoon evening everyone. and Good Thank Okay. you, good Steve.

Let's get started.

two Third XXXX quarter to increase of Riviera cases quarter XXX%. quarter an of three XX,XXX XX,XXX, follows. XX,XXX; cases, control cases, liter of X,XXX and nine increase invoice of increase Redneck for are as X,XXX shipped Whiskey, the quarter an XXXX three States; breakdown cases, XXX%; X,XXX X,XXX results quarter with XXX three cases XXXX X,XXX increase for an X,XXX an

$X,XXX,XXX, sales of XXX%. increase XXXX quarter increase $XXX,XXX, gross sales, gross an quarter for an $XXX,XXX Third three of

of of distribution Redneck an an of distribution, quarter distribution, X,XXX increase X,XXX Riviera three: points XXXX points total increase XX%. quarter X,XXX of year-to-date through for three

in gear. is locations corporate to XXXX country. per to increase objective Riviera account feature dollar Roadhouse and contribution. in in has restaurants a On-premise announce full is Our tactical point Logan’s account the have of XXX increased now all Logan’s Redneck we focus is activation XX Roadhouse depth mandated distribution proud drinks distribution with at States. across

this execution The alone appearances, the third leadership has I XX whiskey in done the brand. entire work and and signed live in planning, interviews John large excess team. dedication focus, attributed and detailed to of his the plus XX store quarter Special as success goes year tireless thanks, XX,XXX John about of through personally radio Rich. on year-to-date and plus the bottles. always, say enough is can't part

with with Xth that November VAP got in entered market early display three to survival mid-October the John focus Quarter sued. inventory highlights heavy We retail in initial momentum are the Fox sales This press November value-added incidentally and delivered the now Redneck holiday the following. on search allow follows. reloaded. up quarter fully immediate timing display pack kit Xst will sales The VAP on before additional in is air include Fox nationwide. John VAP four transactional focus, to year be cases. followed enhance second his data and exit as and deployed down is November will for Redneck The XX,XXX Shipments Awards heavy News Patriot Thanksgiving fourth date quarter a Riviera information. plan XXth. will national top day with Riviera on this execution builds. and promotional brand the at

entrance purchase States wine-based review an RTD K, Whiskey, three had eight beer-and-wine Redneck beer new the Pm wine, distribution of cases and to of the first will approach quarter extensive initial To part to into build in now - will Eastside second stores license Arco States take another Also we and X,XXX shipped Dew, base. will and coming provides we plan Howdy which shipments Redneck only X-Eleven, Am spirits-based QuikTrip, In sell potential total orders as license of Riviera Howdy Riviera size, approach in has This package placing beverage deployed. the distribution. with is X we is distributional with the most universe, cases months. X,XXX Circle alcohol pedal space the products. specifically tripled extensions RTD like order. November, already the fourth quarter the that a down flavor malt-based Same Dew a the a universe. for we shipments new provide entity,

rationalization, early we been and Howdy from reduction. feedback retailers, wholesalers has a exceptional completed on consumers. Dew The have XX% SKU SKU

to volume brands aligned Distilling Eastside ensure they will delivery review to continue strategy. expectations to meet the the We

of target brand onboarding on national X. Our is brands Eastside January commence strategy to legacy platform on

that was Hue-Hue Whiskey We possible Azuñia Burnside made nationally. Hue-Hue. sales to six to on-premise capabilities opportunity part brands drive will new traditional Burnside route the expertise rum States by market in The team's to in and like provides brands add

is extremely and these again, family new Blanco, and Eastside provide I and enormous year impressed are integration and through licensing and moving brand sales, is process, up sales we're process The and Azuñia by gear, know passion, made two transition. team of inclusive marketing we Añejo will their assignments capabilities forward. this to getting or Lastly, integration value logistics, of wholesale expertise brand. the in mention like Black, Azuñia to the a age Reposado, Tequila, full

limited to Wholesaler and no portfolios our reaction able wholesalers premium wholesalers spirits. organic of the Azuñia Eastside is Many tequila to no have segment wholesaler have within many with in highest tequila. fill luxury a void or is favorable. growth position

a the just remain position same is one, sought-after We Black in are Star Redneck in currently the not Azuñia. at aware, retailers have position, will exponential or new on-premise corporate build Star to directly Azuñia two, awarded Riviera. have because allow position. the engaging wholesalers and our next Burger. called Number as They Number account Azuñia the corporate it cocktails if access. The come will the confirmed distribution. to the well locations Also, most major well and the well and years. not United we two introducing to you're States volume Black expedited retail control week core objective speed because this provides from XXX and deliver brand pace our approach

contribution year is the Worth the predominantly the in platform one strategy commercial in positioned the luxury independent of within is Azuñia within fastest incredible the national positioned mentioning Redneck perfectly are To success, with dollar that segment tequila price we in brand growing total started fastest growing full brands spirits. one with space. XXXX conclude, Eastside spirits because first and space again,

brand We nationally starting to in from expand brands XXXX XX will one in XXXX.

and more will the We that massive premium business brands national participation. our take in portfolio focused three highest the and above are the couldn't RTD whiskey, luxury with we forward. have Also growth about segments excited in Eastside be the future. position in the approach will price action We entire market tequila beverage now moving the strong platform, same position

up Steve forward. for company’s an Eastside Shum Q&A, years. plus moment to Steve's Before with over moving have thank especially dedication stewardship provided to a four contribution, leadership, platform and invaluable we focus the I and open national it take want the his skills past

capital want roles Larry. navigation public Steve. markets leadership various So the thank I the his to our again I strategies. experience companies believe further welcome support develop in in financial will Eastside small Also, and through you

let's Q&A. it So up open Thank to you.

Operator

you. Thank

Research. will Please Gilson [Operator the We now first Investment session. Instructions] come our go begin question sir. question-and-answer And Zacks ahead, from of will Ian

Ian Gilson

afternoon. Good

small of that they The Eastside couple within Or Co-packing growth business? And maxed basically questions. So for got there a slightly. services is out? are I’ve a business for down room

Lawrence Firestone

nice you. and running of – lot This one. go is we're the a business to running Ian, that Eastside take brands now for VAP We're as ahead I'll the the kind excess packing Larry. the meet whatnot. capacity We've company. that so of of that look consumed as internally, at and integration we such packs packing inside of line their can the vertical

Ian Gilson

consumed you and that their means… But all of capacity

Lawrence Firestone

their No, but it, of have – in Portland that not all there's of now. the right growth still remote generate we’re capacity for But based. we revenue. States lines – all other We're taking But a room the there.

Ian Gilson

Okay.

Is internal… that always a is there price that is moment? how So an

Lawrence Firestone

actually in There's just shows cost eliminated. goods up sold. of a – be the our pricing It would

Ian Gilson

Okay.

in little days, plus a, you some million we do dollar that the are say to Am Okay. simple contributed arithmetic I XXX,XXX if note, which annual rate. is apart at let’s The looking business this a it’s from correctly XX really $X.X run Or what seasonality? Azuñia it, tequila according big?

Lawrence Firestone

that throw over to I'll one Robert.

Robert Manfredonia

I very in really to product bulk, hard XX-day to decipher the right, a anything I caution wholesalers run that week. it's they that that changes and Ian, and because distributors way week it order to buy week because from think from would

would you're had once able results, fourth you're the business. on you, their and we're XX-days be of think feel what we but a couldn't we'll more of you doing I information more be and comfortable to We growth. They've able year-to-date, bullish we're give transactional quarter going giving to a be to is healthiness know we it's to the year Azuñia see decipher as really hard business. provide the have we'll when I more going – you looking bit But – little tremendous forward. that at move to

Ian Gilson

it's very, know But compared large hand, Yes, very the on a I I know. know. okay. number I to business. rest the the other of

Robert Manfredonia

of – They little basically of that cycle they're period than lower large State that. and the could state. for it's that let's the a it right. There's order the that quarter. cycle incremental. of in the be California, a There's be setting bought given state a of bit why call lot definitely as order up very during It's way. in and down the reasons It's large fourth large a that distributor, could really the that just comes of to it not bulks ordering It's and size ordered the

Ian Gilson

an Okay. on are year-over-year selling the increase year next of the Advertising, similar a promotional and expenses, showed for they’re, rest and at significant Is we fact, very basis. both a or number year? just a into sequential looking in odd increases and

Robert Manfredonia

going of quarter, the those headcount is And But of that forward. I fourth think, think team. Ian. sales is that seasonal, – see of and you third supporting that increases that VAP the I in would some part the of happened in a some kinds is don't a packs that part additions

Ian Gilson

Okay.

we the increase and almost XX% and peak would the seen the a third in over advertising in the of at the have marketing quarter. a quarter over last put quarter the for second That order On a and million. line XX% two $X.X fourth years, fourth quarter the above above increase basically,

Robert Manfredonia

I increases see year. third those going Yes. sequential fourth from to And to don't kinds again, think in this you're of

Ian Gilson

Okay.

number, the again that points numbers for distribution, quickly came that had could of The run we through you those rather on Okay. out me?

Robert Manfredonia

Yes, Ian.

the XXXX, numbers, And me X,XXX just here We X,XXX distribution process we that we through quarter three Redneck quarter we – had let third at distribution, XX%. and just – for points we of referring an had have because to through find have of increase my of year in Riviera. for excess year-to-date the of way

Ian Gilson

right. very Thank Okay. much. All you

Robert Manfredonia

You’re welcome.

Operator

will [Operator Instructions] Our Please question Ross next Investment ARS go come Partners. ahead, from Taylor of sir.

Ross Taylor

growth rolling you give of Okay, see expect thank there see like. next of the substantially those kind we on out? the you that combination? are a How should seeing those drive a you. of the growth, of retail. guys that a guys synergies little and year? you Azuñia, bit basically case of color on-premise which give to bit that how Redneck What little higher is I think more integration Can synergies which would is early revenue you would Can growth be and and understanding tremendous days should us

Robert Manfredonia

an Redneck great And really, a Eastside why And to driven it the it's at Ross. on-premise. let's a off-premise, in capabilities the question, give and this really as the was off-premise. conversely, National the business Yes, Yes. XX% national their really really the that entity Team that you really the on the is on you – Azuñia in so driven of it bullish in platform call distribution off-premise was, is little was look of perspective, XX% acquisition we're of just if done because the expertise the

So we've the what set and operators we between have skill quickly off-trade. a different the done very in on-premise

we start So Hue-Hue here conversely out quarter on-premise. is really the Riviera, in bit the take to really national where distribution on-premise traditional like line-up balance drive in have first with the exponential accounts out is Azuñia longer start the to and start with market the legacy selling bring little to to off-trade goal as route as to a in the corporate build and a cycle Redneck to importantly that brands Burnside but the

pre-acquisition So for the perfect of it old like the and is brands skill Burnside call Azuñia sets – team, Hue-Hue. I'll

that forward. we're expertise off drive of have in the moving excited how to a and sort we this with on platform we're going and So comprehensive really that's

So correct. aggressive half first see That growth the is we volume the of some in very should year.

Ross Taylor

as line, to asset-back that capital the strategy out? receivable see the that you working laying provide capital you – execute line will two back the Okay. the they need and And well, or your these accounts

Lawrence Firestone

is – big That’s a big of Larry. putting this a piece QX. QX and together heading into that's Yes,

the As million around side sitting I million $X $XX of with million, on against $X mentioned, as million $X.X we've worth collateralization probably leveraged we're got and inventory over inventory in it.

get about against of end quite That we'll will us percentages closer receivable $X the And payback AR the that the of fund give and that over of cyclicality house. million that side readdress but capability line up of and we'll end and capital. the then you accounts rates, what the line will QX we'll we on bit is free grow be think So and up quarter, a AR liquidation we'll doing the some if see financing the to take line, will as quarter start the to and in-quarter our there. that

Ross Taylor

Okay.

assurance So it need, it's than point calls, this you equity no no time in need company prices, in previous but which call access hasn't Can particularly been well? been the are higher prices to us current prior – that time, mentioned stated would that as at at this in see this at give saw markets. to the

Lawrence Firestone

I burning in that the Well, a the growing growth of still it's rate cash company. – is think the funding company with and really burn and there,

certainly on business XXXX, a not have through price capital dependent. and I going the to going and with a QX going not think assurances, be capital working company be with think And the when it's an what but responsible we to really I and bringing we're to do into going would a we'll we're to or what growth stock to give position drive of polarize I'm the in but on that eye timeframe I'm in. we're markets,

Ross Taylor

do think equity, I you’re is being to that fear part that an a its equity actually an that you large half contributor that I a going big happy is combination not you're to is a stock as the would of or part do a fall stock as know – free so of offering. a why Okay. price that I less. be consider your would value giving here holder I particularly away in see – these

brand There's could about I a haven't offering. talk on a the from potential basis. And so – national here. major Hue-Hue to to you us that some exception type we has of any mentioned heard would take to become great Hue-Hue that much thought equity Away

Robert Manfredonia

Hue-Hue Ross. too. Yes, very We on were bullish

we're on-premise the plan the have six X, reason it going had and It market. January brand. we it as the start the that very We almost have off-trade. the stands up expertise. it's today we here within is bit come we in Rum, we're in to very to we predominantly of on-premise So where Hue-Hue think have say has I – with it in unique our sit now a developing campaigns we marketing a it's more And limited really to will some high-end States to and going overlap really will a position unique as high Coffee think support because little with When spotting cordial.

other a going across RTD to that big the California can and has to very the we're an of line extremely also we capability we into area that extension But outside U.S., That kicking think around, which being as have do another South use especially almost think to way ride splash, we’re we markets We it. have and Florida call can a well. in-build. unique in the I'll in then an start RTD, a brand

done, many there, wait the splash didn't there's So thoughtfully and a with elasticity initial six there big like the there. lot had is to plan. not so we that really make Azuñia it's start states. it. integration until to expand brands we wanted we We really And a out will we it from and and That's rush the then brand impactful from of

Ross Taylor

attraction the to fit given area a recent that's people my the bottom natural past or very is then past last the that call an high about to the And Okay. briefcases questioning they talk of to you when as put with seem and force area seen Can Azuñia that? the like, lot transactional be in well, given me regard else has to a their – activity to of of in space. something sales us It probably big at on single valuation. the the

Robert Manfredonia

we malt And have because what of market we and distillers. capabilities of We think and Sure. think – doing dynamics the something we're is It's single our there. a statement. fair the

the of However, think of brand a in name bottom way. a to I the – a would from and only caution be and well gotten We sort in been bit platform. wholesalers, retailers little a input of with And has we've challenging a makeover has has national major the on little the there been Oregon. up there But brand. plays It it this when identity bit of pushback little name. served a bit big

identity and the we're the company our in So correct and how We having that is we see look at fantastic, brand because brands identity just it have sure is we to can is make market portfolio. can right. that liquid brand it so the scale-up make

Ross Taylor

a Okay. always as It name odd with. to little of stuck sense. makes an bit begin It's been

Robert Manfredonia

It odd the only liquor name. isn't with an

Ross Taylor

in good that more get against. us can yards good luck. well And can which driving you luck top-line, borrow Okay, therefore

Robert Manfredonia

Thank great. you, Sounds Ross.

Ross Taylor

Thank you. Take care.

Operator

[Operator ahead, will Instructions] of Our Weber next come Capital. Please sir. go question Aegis Harold from

Harold Weber

guys. A questions. afternoon of evening good and couple Good Hi.

seems very we understand fulfill it to in Azuñia, this capability how going fact to would First What much growing that orders? the looking have to in OE capacity – well. regards grow and capability

Robert Manfredonia

and did a because plant, as great question. valuation, uniqueness there's right. a when when to harvest, a of a other agave seven-year a plant We probably know plant, build-out an with from you right, research you're you Yes, it, lot there's talking about capabilities a the of – lot

what very fulfill very that can't believe the robust, can plan. at have all we And concerns we a we So on we We do of together five five did year in robust next years. a no put lot we research it.

we the work have our capacity In of and fact it, we on we years. did did projecting doubled next the can what all almost we're the accounting almost when for research five –

that. with comfortable feel we So

Harold Weber

the it's reasonable So as say can at can Is orders we much. fill we current then status much that reasonable to say? as to pretty get that

Robert Manfredonia

yes. Absolutely,

Harold Weber

Okay.

I deal to… would think big – I be because that's a that have

Robert Manfredonia

Absolutely…

Harold Weber

able Again, that's just to nice to fulfill to we can't if it’s but very be a Be able to demand, have – problem. sell. supply,

Okay.

issue. little level been give about a that with update see you different that's discussion an you Very that, could completely. on not good hasn't on so the There So Outlandish, what's please? don't a any been

Robert Manfredonia

know, been Yes. in you as Well Oregon… has only Outlandish

Harold Weber

Yes.

Robert Manfredonia

lot – also it you our two And a it testing, it. only not us. We is line what Oregon extensions for of test it's home – is aware of us, for just but market our for put are it's a modeling a base as together

a added brought We've tactic it where we We to ginger and have bars to start ginger. we're small we're and restaurants putting in we're as just refrigerators – in just one going and them going in Oregon to understand of retailer Pantry, really also trying brand, and very to XXX the start the to a just the large Plaid capabilities push in which presented state. it called locations

feel we that going very to comfortable that into we're be going And chain.

of really Outlandish. Plaid information we think and we So a I of mixture like going a if type acceptance because tell and the into capabilities you that granular to go the Pantry understand CBD I account, have second third We're locations.

do we time a more market the where we'll testing more exactly do are. provide we then stand bit what So an a – on need update to little bit little the to and steps next to and

Harold Weber

location had to stuff who new trying any have actual and from to okay which feedback what further nature, mobile of of off Washington, stuff customers, the Previously type is that Okay. that [indiscernible] concept you have things been Has California, and stuff? been can contemplation being getting the able sell. of is units there we discussed on been which and the

Robert Manfredonia

outlandish? referencing you Are

Harold Weber

you to the raise… the moment, don't know just how now, in have have I have you at I flavors. right yes. mean, many market Yes, three you Yes,

Robert Manfredonia

you’re correct. no, No,

Harold Weber

have two You only now.

Robert Manfredonia

Well mean, Yes. say – three. we when I we have I three, we are launching

Harold Weber

Right.

Robert Manfredonia

by week. and they're up being already distributed being picked into They're wholesalers market The made the now, two out. they're are next going for Right distribution.

like first they the and on the new correct acceptance brand fantastic. two. size, has the packaging, against marketplace like place point is been they it's the It's The a the one was price in competition. – the the So seltzer

then we good in-depth standpoint. scale be interesting We really be. we believe think information it's some more about are bit what captured we say data that but of take brand the it. investment drive an obviously, become next going is feel support we're it consumer, fast CBDs imagination the if And on to So really, going And steps little really we a from don't what to to will the it. that for work the necessary right, U.S. have we just as test But I to make have can have something. we a have the to financial and it a up And idea. sure And and want it investment – it's space to the across thoughtfully as hot can

Harold Weber

Okay.

no want to he I to here, which that. can the here you labeling should Just use great who names comment I you the products so offering two echo from credit guys other I'm a I take you we guys thing any especially thing wanted beginning. things to feel the the way with this giving large continue job at kind and price. from say, or equity hope he's but a fine, and important. to forth store doing the is away are guys, that's put you dollars And line I the holder do that and appreciate quite to believe in who I that. want you And to in done not and the the you receivable, previously of twice since millions from about of support be And thinking people other and helping second

some of type company or the whole. to along a for need logo identity those up for you come as a believe something with lines I

that send emails. You

or should have type stuff. nothing. to some it's that completely, completely product of a of It's group And products, type I've whether take stuff, just send not look year. something, identity, this identify been blend. at our of that's an You this we it's some company are. it's completely a talking for some and a out, sticks logos blend, We something And a about a you not states – who [indiscernible]

people remember say when would When at there. spend that you brightening I up that retention. should we there. look nothing think and that There's on should some see time zero because it I So like there's that, to nothing they there's

Robert Manfredonia

is, that you just valid. we've your past we've a very and these continuity the just provide two had also the added on that point brand to people just think significant understand I because I Understand. is Eastside of marketed the think important over Distilling tell Understand. to the internal what person And brands is conversations can what things mentioned I but you marketing understand weeks what portfolio, they for we you like work that themselves. and correctly of mentioned for the critically whole it halo

heard. message So

Harold Weber

doing. they try that is guys So answer And to glad invisible. stand three are, mean able don't is say see are it and for. should Where and we we need – it's we realize people to the I – there's them. I who that and there's find. People what trading we have it? to explain they be be you that – I I'm thing no seem what on to some And all it, remember times the at this two no stickiness. where worth people a And Okay. we're based big or I should it efforts growth problem that's

appreciate Thank you. I So that.

Robert Manfredonia

You're welcome.

Operator

Our will Please ahead, question come from go sir. of Chris Leshock Ballast Equity. next

Chris Leshock

working. follow-up Rich with you he's several John today other over last Steve between thank to that – years up short have just absolute all board and have of revenue the results there. Robert company points XXX%. and I every given products impressive. growing are new The distribution the on that Good to that new the The wanted coming. stewardship and from comment is to way the is nothing Shum. year in the why are top-line really the issues and should. see model Steve board company the clouded put prior to of business afternoon been The this gentlemen. it been reason They're the The members, we last board work executives clearing it's and the working the stock And meet he's gem the to an board delayed on over and the that members I implore would are

could the to in It's no all here then at Chicago. personal my prominently are completely value placed widely because And are the here to I support on so comments cordial get quite give everyone just packs the market there, Hue-Hue I aspect places I in Redneck They're pieces limited right equity Also RTD accepted. I looked And the to and in you the that's comments selling on hand. Chicago, agree they’re needed that to an experience off in implore right everything everyone the the kudos three that. report the not It's so I growing can on friends with price all. And the it that just little wanted Also briskly, sell. Robert's based sliver the that products is comments, direction want a great is update, to echo in is of here. of amazing. the

previously at some or here XX% it the some three has management company either been the XX%. have down. to What's route? higher. and outlook? number they the range I mishears What That's get targets We've does that past that had changes gross two that have We're had now can about of question longer The and the talked kind to is one. of to kind margin targets Steve think or year question brought in aspirationally

Lawrence Firestone

Yes, this I'll is that take I one. Larry. guess,

I as mixed – it's in the a think product really we're question.

as an towards of as to Azuñia in margins. up But lower look market. would you the product move part one product that's you healthy just a and from product Black, market, the be are example going Robert really look penetrating you super So the described product, as saturated a Blanco to then lines, when what at margin the XX those more

those goods, margins. to carry like just really those we like and expect things would be canned add then XX% Dew kinds range, products. similar I that range the products running to as that, you've But more RTDs, Howdy of like be will XX% They So volume may seen. some based we'll of not what in

achievable based that on on So stay – range blended it's I've think I but in a basis. – the that be to seen numbers still

Robert Manfredonia

I'll to a onto comments, little bit your Larry. add more

Lawrence Firestone

good. Yes,

Robert Manfredonia

we luxury where and position premium above The are is going.

deviate will that. from We not

That's the and where the that's is my from growth that. we won't word, You where have deviate profitability and is. margin

a the is less. because more of So focus a lot because that profitable the on-premise, off-premise lot company. support The off-premise the is balances is a

to the help. So going net brands the overall it helps is of

when aren't premium the low portfolio. part with better And national have focus we're to then that luxury else we above platform remove to on start balance that we of brands, start doing. everything that So margin lastly, enhance will position brands the we

So and focused for company. me, the it's a three margin to balance pronged items don't then requirements on approach the and going having of then of removal where fit of that be we're

the things. and task. the we is that And those do objective So that's all

reposition We that that we line need to increase. to start will

Chris Leshock

a Just per or going that six revenue Or line you. or been Thank could one quarters? to line four any start does particular get line sustainable if discussion, Great. could difficult. to we fair seemed that work, need go but growth, would some is margin say for rate, run next that's the make Steve is And – that if to is slowing restraint the growth little higher? type some on quarter just SG&A comments in Larry a that to of that give very of is but a X million to spend, the be bit level

Lawrence Firestone

one? take that you want that to to Yes. one or you want Steve, do take me

Steve Shum

Chris. some we quarter. not to Yes, That I yes, the an we'd unusual take continue like had cash at are shot initial mean, again, Cool. onetime repeat. going to I'll in to expenses think sure.

we've So non-cash the but are that think control Azuñia ongoing Azuñia added higher start we get unusual little like well have items. so maybe some some to the amortization, these be of come to especially But will transaction expenses forward. bit course we we team, from the moving going down a we as higher a experiencing type past we also But on of extracting adding expenses that. with costs our or depreciation done going bit are although as added will onetime, neutral, but But little the basis, cash – it's actually that here. and around it depreciation counterbalance, now the and amortization from will a that's with have to normalized non-cash expenses the come trend expenses amortization under hopefully again, I'd a some incurring net better up

Chris Leshock

Thank you

Robert Manfredonia

again more you team point one we've on They've I but Sales mentioned like say appreciate of to to leadership put been dynamic con inclusive to thing. was sales, I outstanding. that platform. wanted the Senior job. that me, the I about President the Vice together an outstanding Chris, has words of sales The really national done a which

existing. very, we're I'm the with top moving team forward. think just already is on So bright I incredible integration where going to we're the put think credit that to very what going We've And me, really to But part assembled a of the what I team, is and team. not future do be going. I have Azuñia we our to

Operator

I Mr. any session. the turn question-and-answer to would to conference our closing back concludes ahead, remarks. over This Firestone Please for like go sir.

Lawrence Firestone

like looks and in rapid for the platform where again the Canning – whole of also Robert it's we've portfolio to thanks rallying growth together Steve the for a company and for efforts and a the of the putting the really, that Craft first, we marshaling leading the Azuñia acquisitions team closing, to with also In product are you. none Thank company that's pretty, and to to integrations. point today a that's team in tail pretty second really rest got to by team. the And the tiger

the of to a great company. I there got the company work of us lot inside of a optimism we've and the So growth of great on deal the and believe feel are for the things company for in ahead But shareholders. ahead

to got the look And we board around at step. board issues going is and the next unlocking these comment we're with shareholder settling everything in at the but prices, within. the we selling the that absolutely we've the as a then and that the business. hand shares and the company was in echo focus And real made And needs the work management down forward. and commentary think taking growing all comments to team, value that the I to about business on And and continually the moving to as resides forward line certainly of and the it

So with quarter. you. thank we'll joining call to again Thank I'll everybody talk the and next for that you

Operator

you concluded. now has attending presentation. today's conference The for Thank

disconnect. now may You

Eastside Distilling (BLNE) 14 Nov 192019 Q3 Earnings call transcript