EAST - Earnings call transcript Q1 2022 | Eastside Distilling, Inc.

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Operator

Good day and welcome to the Eastside Distilling Reports First Quarter 2022 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Amy Brassard, Eastside’s Corporate Affairs Director and Corporate Secretary. Please go ahead.

Amy Brassard

Thank you. thank financial joining quarter results and discuss today XXXX. everyone Distilling’s Eastside for afternoon, you us for to Good the first Secretary I Director your Eastside’s Brassard, for and Corporate moderator am be I call. Corporate today’s will Amy and Affairs

call Executive Lancer, Officer. us Chief company’s results are company’s and Controller; Milton, the the Chief Commercial Financial and discuss Mr. Joining to these Amy Gwin, company’s Geoffrey Chief today’s the Tiffany Ms. on Officer Interim Officer; Ms.

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

statements Now are Exchange XXA planned, meaning The Act risks the on of to are should, by provisions will amended draft, statements Harbor anticipates, XXXX as differ in or Securities may a or before from product Listeners the as strategies the execute remarks, not market, management submit company’s risks amended, matters are cause Act words success call integrating plans, products may, materially company’s acquired are we forward-looking begin obtaining assets, and ability and success results and generally including in with and XXXX. we XX-K statements. financial risks ended in the and to and Such Private describe of and preceded development, and to limited such its Litigation XX, involve Reform future expectations, from in the in maybe going the plan results include, future, related circumstances, such of or are strategic forward-looking the Securities the pertaining for of Commission, customers, prepared following could to but forward-looking such Securities the pursuant Act annual that company’s the multitude year statements success results forward-looking of with time-to-time the uncertainties those concern Certain the expected, with XXXX ability the projected. the Safe company’s the of to within of and projected of Securities on cause that and the the plans, cautioned by or model filed uncertainties the eventually all capital, materially entities continue statements ability future XXXX Section or Section Form this as Exchange information acceptance the filings subject to, information December record new to to business events to Eastside obtain Exchange in Distilling that made matters statements. related described report the the Commission. and actual Securities XXE and discussed of for conference statements differ

Now like Gwin. to with Geoffrey that please I’d to the call proceed. Geoffrey, turn said, over

Geoffrey Gwin

call first conference of Thank to add And my welcome me Amy. our quarter you, XXXX. let

the for spirits, important first the was quarter looking And and what our foundation reflect very fully believe The are we don’t quarter the the was year. for and the full revenue need of And we QX in the company in to laid results upon improve for accomplished canning of performance, today at quarter. printing growth we have businesses. I balance a this the our still presenting impact

how taken houses as remind our at Craft business and new to stores help our XX,XXX everyone Let’s In the In retail. to QX, beverage strategy. like of magazines. also be we with graphics Canning installation team. us impact we Portland sizes the was quarter, went business. a and our toward refer intent foot model. up this graphic implementing machine mobile the digital and home home win we a square it business, new And our with through printer. many in after in printing multiple new transformation a I and our high of digital towards April in The of length can believe Argyle. And cans planning We any have driven base would a which Printing warehouse everyday technology and to facility of print scene not has cans delivery print our summary, brand our the at Hinterkopf have steps Craft customers disposables, will Craft customers this mobile we did of we took This This sell rival moved digitally operation. into start proud in began cans. can more prior facility now production be calls. I aluminum about we the vision QX In couldn’t DXXX and the can Craft is largest transformational that huge and to the to I the with finished spoken to investment, that first first I beverage Craft lot our wake customers installation and this

production which started effort, to fell incur tough first for highly as business mobile first Craft a our that first was in our We huge plant that and am the – Our digital had building that April COVID comparison impacted business. year impact and our out The Volatile printing can printed excited we printing yet where the into run, quarter automated results. announce feat year, Substance no impacted Ebert’s to run helped revenue I production beer digital Von that and of a costly results. a installing last to last had QX expenses

last our up involve doesn’t keep customer quarter And customers to distribution This beer a on-premise dining racing were on-premise that was of typically Craft with still shutdown. cans. largely – year this year, core majority

digital as move ramp year we through the and We for printing. better expect up results Craft

now are We results. out breaking Craft

see mark So you this able progress will to be yourself. our and transformation

spirits, we achieved in wholesale very brown were prices barrels like sale excess not Now I’d we in out XXX the point sold. made spirits are approximately needed barrels also product for We that impacted that in spirits our progress high QX these spirits, had turning pipeline where and of currently positively to to our the quarter. strong results. sales, in

prior brands this of X,XXX difference mix. our Tequila, X,XXX versus impacted year. revenue key case Azuñia sales the of negatively in were X-liter shipments which lower was also majority for Now, The our

we walking are our low products. tequila As away from quarters, said we placements few premium of in purposefully legacy very taking have advantage the tequila margin last and full

objectives. XX%, Now are levels. but product Tiffany margins the for margins will moment, we in results branded This whiskey XX% how important in highlight critical while gross achieved get improving. quarter, in spirits quarter a that like our into the healthy I’d were an margins were was to Wholesale two

in California Arizona. Oregon, and First, we partners reengaged our distribution

progress made the supply an costs our company. chain tequila, in has long we improving tangible been Second, which issue for

also saw We to deliverables of our marketing spirits decline. turning and we spend. will improve this quarter, but am about to year, volume two a I to these which third, the today, which the talk to In push are both going mix continue is effectiveness in improving retail

to sell the make around believe velocity of not However, price. wholesale price drive I gains. improved will We spirits on think and And products. outstanding see our pressures worth both marketing it’s mentioning I key turn achieve price brands happening advantage what into in taken eventually you utilizing retail. to this have we way its inflationary and market spend are we

product. of have the I yet fair Bourbon this would Buckman of to than we what in call XX% Yet better comes achieve for price out is opinion. what Our Kentucky my

to to make unlock We gross will opportunity to dollars. continue margin this up investments drive

in Now to and how have to in to data performing. gain systems we into visibility there, we to year, are results. market very to need insights people order improve past our better investments made is And get the now brands have the and spirits have Oregon a to how us. important over necessary

broker more there we we I have strike too. In distribution is our gaps in critical. where Our quickly core to XX high we retail close implemented plan made are this in performance built progress accounts SKUs. quarter, our have in with velocity market working on Oregon, a And believe current our

have Our drive year executing calendars be with throughout will growth. our and we initiatives program that we key the align to positive brokers

X me, calendar of states in includes our this top Now, in also place, – outside is excuse Azuñia program Oregon.

have quarters. Here past to plan sales with that the replace the margin talking for few higher we been sales we margin low about

more been in So, to a accomplished lot will report. progress spirits. make we And has

I have to in second report quarter. the progress think more we will

and year-over-year. looking improve results continues and pulling at back consolidated out Now, taking to G&A our one-time charges, restructuring

year. sheet, should balance you we if capital should the see see also cash the cycle flow On you free times improve back and of working our half generate plans in the us hit

as expect For off this coming at printing. along on improvements methodical customers of bring base of ramp-up to a Craft journey. well as zero and Remember, QX, are we see a

in improvements initial the we you So see it finally, year. are volume will to through by as a very take the should but while, And we go expect results. encouraged spirits

some it that, we I Now to detail walk through over Tiffany results questions. turn all to with in your and you will more take Tiffany? of then now will our

Tiffany Milton

Thank you, Geoff.

review were technology, results. a our million customers, bulk is million first the to are for not had which competition, $X.X compared QX to XXXX. to current about compared million in printer $X.X QX basis, is Craft year yet that available year significant installation. million consolidated sales. news million to the last for $X.X past last customers this and The million this our sales the in-sourcing the Northwest. and by our sales the sales $X.X by Spirits new encouraging gross operational year reflecting excited $X.X Let’s On quarter increased XXXX devoted $X.X compared year printer resources for and were driven been mobile Pacific fully

to partially $XXX,XXX QX driven XXXX, Our by compared for Craft. spirits to $XXX,XXX consolidated XXXX bulk and QX sales increased profit by gross again the offset for

XX% consolidated challenges margins this XXXX margins Spirits above. reflect I were year. XX% to and down and Craft gross X% were Craft for this XXXX. for XX% gross and the versus margins year margins XX% Our year XX% last year referred last that were

Redneck headcount, XXXX. operating have continue improved XXXX continued $X.X saw improved from to Without occurred that from excludes forgiveness last to to restructuring our other was new $XXX,XXX. versus million higher improve EBITDA the in profit $X.X reduce expense. to EBITDA XXXX, and marketing million reduce in overheads. Craft expenses million fees representing PPP by had non-cash and XXXX Spokane We efforts and slightly Spirits proceeds for lower due year. our million items the to significant operating warehouses. one-time in Argyle decrease almost our loan to charge, operating operating Adjusted $X would down expense our due professional expenses down and Adjusted expense gross $X.X for

have Turning sheet, for capital. to purchase prepaid note the digital in that and change printer reflected the the and working accounted the we balance of

key our support year. versus adequate ended are to enter liabilities of as excited levels the can in with printer cash selling we we Our million Azuñia about the We ensure balance of inventory the as season. the have our $X.X and increased quarter investment well as balance the last on of year reflecting to we sheet

now will floor questions. Operator? the open for We

Operator

first today McGowan Partners. The ahead. comes Please [Operator from Instructions] question Capital with Sean go ROTH

Sean McGowan

thanks for Guys the start with…. taking to I want questions.

Geoffrey Gwin

Hey, Sean.

Sean McGowan

of I programs, indicative going that want start what’s like on talk with that there low. to unusually be would bit the future? you little it looks spirits, what in expect on Can Hey, we how about and is tax Geoff. customer line a can excise and

Geoffrey Gwin

Amy, Well, maybe you want Sure. to…

Amy Lancer

take one. that I can Yes,

year So we are in pretty last Azuñia deep from each some one. cycling discount

they the and reduction since bit come the continue discounts customer of see as discounts said, a That a reduction year the So, but versus for definitely the year. a distributor line. or expecting being we we in last full is through lag processing a will in there were those chargeback, programs

Sean McGowan

someone look Okay, it’s we or about you of couple a Geoff for Is And to on thank more sheet? how at else could a different the right? sounds you. that like bit balance lines. do little the talk It printer hitting –

Geoffrey Gwin

Yes.

she wasn’t and quarter. the QX the start So, if counted to, in is but that will maybe way in we we it installed it, printer add wants wasn’t but service for I Tiffany the we it in – received can

So payments on we making have it. been

will you will in prepaid. in PP&E. quarter, So then And to you it the move see see it second

the want and or it And off finance or of leaseback think Now, about decide But something can now, we we if balance how opportunity kind will sale if an come to right it we sheet. that, have like just…. you to it do that’s not. a will

Sean McGowan

shift it it shift shifting of thing a a to like use Would would like of wouldn’t like to right – right or…

Geoffrey Gwin

dramatically. And changed this Yes, accounting right. on than has me Lease has one-time. schooled Tiffany more

will if addressed it want that get let I kind it her So we explain topic. of But into really way. will that to be yes,

Sean McGowan

can on inventory or sale because affecting of kind it’s are then And also you Okay. lease loading the tenant?

Geoffrey Gwin

right. Right,

this I on but talked digital we with one position the different XXX% year, and think we people which struggled year, were into were year are about for about affected for cans, And recyclable. Last our talked a cans. entrants it going were strategy the is customers. unfortunate, are cans. Portland because calls digital calls. of we in short into recyclable. much key have with This where is retail past are we frankly, We relationship not super of I competitive So, the year, is really the of last margins we caught talked because and in the position, is looking was that it different. a that printing huge, things We in full cans putting printing evolution And couple allowed market, affected about

you like to are moving going people going to Canada, be in think printing. saw where a see transformation, to to very aggressively you quick start much So are digital I

have large with in preparation in cans and a for so And we plenty supplier this, it of improves can to work done our cans and with. dramatically we have contract a position

So, our of building inventory quarter, money in the first we spent some cans.

slowing So, printing issues down process. any have we wouldn’t with the

Sean McGowan

one-time color my question plus that? going of is we margin on of more little the some you What gross can then were a items what And can last give hit us that Okay. kind the forward? expect bit bottling Craft

Geoffrey Gwin

Yes. Yes.

to So honest through have thinking lot. walk to margins out printing that through expect. here. business with Sean, pieces that’s pull what trying I margin directions because us process a is Craft gross we people didn’t already you not went there about in But perfectly – our of this many The hard we like, has what look to be a on, am because sure and some about are is. led moving normalized the talked We going can so to one

and than amount when facility through moved delivery then So the than prepared standpoint. I the because of expected. it through larger year where in this operating think at medium facility, different, started go printing quarter nothing of we of space, can look pretty we back have from warehouse the the moved year, quarter into opportunities built the that beginning a printing plan April. about The the going small-sized are quarter in Portland of this taking for balance in and all different we margins of you large the early then our a the mean actually look end tremendous and to to was was and the up the we are for we But as components to the of very into in ourselves, plant are

quarter. of And expenses company and transition impacted lot so, that the in are the there

are And yourself I see to separately, and develop. going out encouraged will spend, margin specifics. able we be so, quarter and be let’s both better as But And numbers, towards able hard some will that normalized because see pull get second suggest it’s out I I I But to can see to we have the guide Craft we revenue a to what to you you that expense reporting in think you think am start be into broken are much would performance that printing. numbers the will year. is going we get to into to

Sean McGowan

Okay, you thank very much.

Operator

ahead. Seetoh comes The Lake. next from question with Please Kelvin Crater go

Geoffrey Gwin

Kelvin. Hi,

Kelvin Seetoh

Hi, the Geoffrey. Thanks updated Yes. commentary Hi, the on for spirits. so much

I meeting updated about great think And will a the also, turnaround boost. business. time learning the we be people had the a this this company, extra seeing behind strategy and

for thanks So us. hosting

find on adverse our want to these now days. business. we the think inflation to milk, the the the you quicker is down has prices I everything a cost up I how like effects of And going cost pass comment the bit affected recall because our to could of the eggs ways customers. are just I are mitigating to we of out So from

our our how wonder just to So are request. responding customers Thanks.

Geoffrey Gwin

Yes.

a in does. which and prices – everyone us, I and we And it where form see is inbound question. form see there impact also the the of getting and you lead out good this things in inflation it with super struggled things of the and availability and and are logistics So is to like can times. the else last is in up of things significantly into we other freight really Azuñia Portland. from very places mean, stocks, But supply what year with very, it’s glass to long lead which and

think thing, I facing question, the I that about because one same I you when also the is tell So challenges. can think everybody about opportunity

next and super we label able because Our be long cycles, dramatically they going to have a supply able capital has values is capital of continue It’s a it barrel a to to their going it to advantage that’s working we’re But age want invested on up. we’re customers, the working to huge one customers the lot those in going on cut there. to have put off to past Canning to be shorten and barreled through the that seeing dramatically. deliver sit our price going decade, haven’t day. out we’re we’re to end, pushed we of Their Craft we’re what company the of cost reflect whatever chain. amount And going pretty is go competitive drop to a lot benefit a increases just spirits of really that and seeing huge inventory,

And so big opportunity. it’s another

long-term selling broker, pay take customers. make our to fees shareholders for value not wholesale when you but want go much your is distribution retail, than and it build can to to that challenge almost hard something the it money it’s X-tier for rather So as doesn’t through our direction,

here than price wholesale out to there. raced of other one-off barrel advantage increases in the haven’t sales we and So take

take us to of to you price look think see should I increases. advantage expect

think see to I out X urban old, a there. are up. I be prices years tells we just wholesale stuff, shortage mean, that’s buy bourbon aged that for there premium people demand bourbon craft, moving over going is that to clamoring of the the me

you store But bourbons of if so there. can places. some And getting price craft And all like grocery a buy walk that product. around for and that’s can a point, fight you’re Buckman, it $XX nice our you you a deal. or most in mean, a for $XXX age I $XX are bourbon

us for room of lot a is there to move. So

We do So could and we that. could changes. make push

Some markets, the move overnight. price can’t you

a consider. we You have to But have change. that through price go

side, the Craft we’re for services, can product, the got just a at our outstanding in doing a On printing now, really a great a right an that markets job great lot of think, benefiting sales, We that product really of from benefit from bundling that. people deliver, complete I on we offering group Craft. cans. And would does to

got sold. right from Lower line, hit in get And us of the cost So the bottom every but we’ve income nothing out contribution when capturing by and inflation headed aspect watch, margin I’d that’s do turnaround we And on it a moving structural better that else seen we’re in to in our that just in changes. the of direction. is the price, already of the really up looking that going this it will the is get we’re of reductions $X assuming race that haven’t immediately is built to you rather advantage to promise the But – you business, volume The of to something statement. it’s with for. margins mean goods taken you’re and I’m G&A, I right. and margins we’ve that because not $X changes. about we’ve volume start business going going there gross drive structural in that

eyes keep that to So what this year. going happens see our and we’re on

Kelvin Seetoh

Thanks Got so Got it. it. much.

lot I thing There are of potential rates analysts a in the year. lot these a question, about think asking the noticed one increasing recession. this earnings a of throughout if talk result So is calls is I is days a better interest

I think or not. it’s to nobody knows going happen whether

one. broad a is this So

in that really Just Because I be that we business How that tends because on of to to our get products business? want nature does also selling. this. the your are know our perspective resilient quite affect

to get wanted on view So it. your

Geoffrey Gwin

Right.

will that she So spirits be really the to challenges impacted And going might I been be on her to mean in spot. There in of is particularly deliver by industry But consumer. side I Lancer views, to spirits a and Amy able the we’re recession. on some think challenges don’t for great dramatically a we premise. will there We be a But certainly, the years. has be that share sweet product.

expensive on various shelves in not the the most our We’re categories. product

for elevating aren’t to them Azuñia and is Black on focused tequila yet. become as like big expensive. company road. product, as down these have talked I’d an We the I about, workforces But so expensive Buckman the see

foresee don’t that. So I

challenge interest our I most think going pretty mean I we that don’t side, mentioned, floating fixed to you exposure be really have debt. to as rate of is are the much on rate. situations rate our

people us that bag is using I as capital other going existing think Craft in plan out place. other good what confident and saying external road, pretty we’re for the But our than not I plan the from I’m debt plays can, the remarks, in projects. feel but big any be I growth to my said a refinance or plays to on And if in demand out, yet. happens Spirits, in the really we’re more our not if question down and it’s to do

losses. We’re not operating year using external to capital the of back fund in half the

generating be working results. towards to cash going free moving from releasing from flow and We’re positive improved capital

in market aspect small not this that if I of burn that company to or So down environment. a the X-year burn a had road I’m as as this was worried a I would finance X-year be, about

that, component, business to starting and feeling as big said have everybody, brand-new we really like a bigger a not if mean, up going big, near-term capital business. good. that’s have Having be existing we’re our I’m challenges I So working than

is this off. but not drill I’m us execution capital got keep on challenge that working a environment going top that’s encouraged of, we’ve So to to

Kelvin Seetoh

much. Alright. Thank so you

Operator

Ross The ARS Investment ahead. Taylor Please with next go comes Partners. from question

Ross Taylor

to with to you capital. great Thank you. it’s need Geoff, Well, external say that we’re basically the raise hear done

long alone survival that it’s run, stage to again. you transitioning road, think market that would that, and growth I stage the a a but hope I is from been will a a recognize home huge be

whether Second, in revenues it’s cans yes, expect printing whether rate, kind that whether end the talk run at EBITDA, can in or in to it’s you about the with it’s of and at the volumes of you year? be

Geoffrey Gwin

to I you challenge at think it’s this – to company for sitting because a have, staring the good model. be changes waiting see And has we for in go for progress as I’m move the my could for to happen can forever. We’ve it’s turnaround. to you a waiting going here to that we something tell what business. Ross, then And easier I know, in start we But been the me point is I finally mean you go been as the forward. the

confidence to you going quarter get a going I’m to lot I numbers start quarter, I just than third more positive free to I’d a we’re the you and give the telling cash flow. and And into in to speak, position being the second have focus in so better to think eyeglasses, end. like As where

printing printed. printed what ridiculous will installed them say, yet, able the but but we will have about on coming weeks, of EBITDA going a part. I right? of we they books have more sweep a over to this are Already to end we generate can be the our business Digital it’s for But that. the print me how expect statement, think year you as is can that this So we have the of because landmarks this and year into year over changes. XX the frankly, easily. But we’re that’s what by just machine cans for visibility, year. the be to we I’m queued – in the where my from kind all we’re them cans up, been date, as XXX,XXX and we transforms run to excited let – at highlighting Not going end be backwards the the will walk rate million company and

think not of when label, the think incremental you tell of you right. and is, what cost not going I’m to that cost about about the and cost you the about you tell can, I’m you So which it. that cost what a going think to our

revenue overhead like the because and we’ve that are the to one going average – more the the you to than like. be margins be research it’s can in your more leverage fixed revenue gross to margins business better controlling improve looks and see And gross but reason in they been number what with do working this multiply think it call, case. of million, we facility going that’s margin that then And to can the why funnel see I is about. will we capturing do the to the start industry be be better we we’re talked we’re have $XX able that You the will where nothing would of doing from more customer we for the going to and And this I here, will them. what into are – a see by going

at am about was could on two, for getting I maybe we’re see point business volume to to to that in Eastside completely getting I the encouraged different on quarter, better in reengage was year, ever Riviera. to I this had if have and that then X you’ve structure, we going challenges patience partner. even one talked our one what in really a to look is expense just have ask this your So from bear moving plans sides at you one also both we Spirits we days to for going good precise least, of can start because we another of transformed think if do. X, gains on And we before, getting – reaction seen important key we the and gains partner you’re than that the ago, more going Oregon. today volume in business, former partner alienated weeks And that’s a we’ve and where you even Redneck about is markets, Coast we’re things the West these distribution our that last of had what

Ross Taylor

Okay.

end XX can if a are heroic, full next doing that we at certainly that you not at rate you expect but to do million year run So to be going cans rate, reasonably year? full run look kind at the or run close of rate, of

Geoffrey Gwin

Yes.

Ross Taylor

you. Okay. only issue I want to be that that patient me clearly is patient. market understand not And you is with My the

your just discount costs would [indiscernible] call think share me Friday. that to to XX/XX expires cost get a I for sells just an what to – idea, an it buy it Amazon

some So level create That’s satisfy. we market need excitement here. you need of to satisfy. me to It’s you the need not to

Geoffrey Gwin

he And call – the I’ll on investor visit. investors come of a Kelvin while. fact large every this come We had call with after us those he weren’t and offer. want that that to our from so – already mentioned, had visit. able strategic the large come hear in other Asia, live came single was the chance a and to some answer to and here on and for We

believe help to the facility. it campaigning And I of Brassard take to have you team. and we May, organize Xst, that and month, The Portland, to the starting of this. will be a investing of and on at meet going will Amy And our can a chance stakeholders the end this through digital XXst is. some we XXst hosting is get anybody so us

how going works. to a see to this have You’re chance

will a direction you’ll important have of for talking little information that, well, to investment see in – Eastside company. to spirits better And spend on some And the why what enough that we addition time think an from as will understand the we your that really for bit it’s talk about yourself of and is. You’ll the those side business. I about

that would talk Q. So people business. me agree hedge, again, days anybody set But a you you it, business I in it start what to read the to show hear the can you strategy the you, understand about you for being can in as few to with is a guys interested Portland happy and up, can that we look host be in to weeks, few in we

us go understand more for that it describe touch when can me, have from business a we works our it they they been getting and years product You see go it But beer Craft and why the are you than of offering have with intangibly can and customers over. breadth in that where the that just with now hear what customers. beyond people change. It’s have – the it, Canning and can big

Ross Taylor

you We need create to things. someone people to this an we these that need create put a I to policy, and we offer. an we energy create to of appreciate of But aren’t experience, and a decades fly going need on of bluntly, I’ll to sense attract as get to to of actually to therefore, argue and airplane say Portland. who And with need need kind start market. do out I greed in some the

worried more are the You literally Street about don’t achieve. want it pretty to some as a like got sounds growing than you now, going you’ve high a business. they concern us. you you is as Right about But talk numbers think you can to

need they be talk end you expectations? start us in. are to the to people end my you a lot pricing is the low are to bet see consider yourself on achieved Because about low your better than actually So to having of where

As I’m off will we that because literally, to this you create I well. I speaking said, it’s know call me, never make this other need stock think and own But warrant. to. It’s I expire. say, Well, call option. need greed. We I I to think It and that to people to come want a a each

broke, don’t you spend or because about it $X.XX $X.XX you’re $X or or a here will share of to better talking And way think expire. in a I that. $X.XX can’t never If go

who I I to want And premium the a you that. can? pricing? in care it create or anyone has whether recycle and can’t you about They the I thing looked do ever they into can How know don’t drives tend live to their of Second I and the that’s ask about think about I line of the the as the a positive recyclability get recyclability top even said, pass that not. can. recycle do most revenue to of that can’t you think I how on Northeast, bin but maybe because is people at you can mean people get

Geoffrey Gwin

to in about of unique – the another one help are understand country. distinctly And people they of said, of the that say really I that find I’m are as in you the the things to to you wanting ways. for can that’s who of environment. the in have they not that they how special parts have is someone to it’s that’s direction. unique they that Portland And – the lot One different, run information buy is Portland mean, is a hard it obviously, things people when about I

important people just care think And understand way I are very will the start of I cans care outstanding our is to talking will to because pushed on see they about plastic. environment. tired are when you is progressive And mean understand people also people so Portland of care. everywhere they about why exploding. it’s aluminum that. And And this when direction. might get people what to that think for not why do the them And that care I the is taking we’re call in reason

has a exploded. bright basically it’s the buy and in day, I something and was than store silver water other and death. a water. just Just can the tap packaging can instrumental I It’s brand water saw you been $X.XX But It’s more for the in it instant nothing It’s just that or a that’s marketing can. in story. grocery the

with don’t you challenge get throughout know that is recycling – if it you the sit loss the And are that’s up will there the in label And shrink beer my recycling a that in and so usually a put to off. they play I is then you stick bin you can, see time shrink that go companies decorating and exploding get consuming. sometimes when off process. or it, I label, or there pick it not which through cans or We is XXX% cans are take any what if the while and out take thing kicked with have wrap. are But to a of you the you aluminum he recyclable. of with they the you like me, because lot

part hard about it’s that’s So is recycling. the not other just that

you to you have you’ve get a wrap can, messed and and decorated up, label heat up. need If you it it can pasteurize with that a can the then shrink

a carefully harder. you obviously, it’s any one non-beer to challenging And it so can excited this because think, can. about get consider. And about that customers put people going a more only of so have is event, label And aspect aspect I aspect. and we’re digital one to that’s people the one in there beer make in why It’s the product an But for make can this that to levers many small lever this get is exciting. to printing important of Ross, transformation

Ross Taylor

you’ve be Don’t like It be afraid sounds bold. to crossed you feel the Rubicon.

out have, you you guys. I of your appreciate as if little So a shareholders boldness would think said, of bit I

confidence. the have clearly You

voice. in can hear your You it

it in words the hear You you’re choice of using.

it it wait year to out the actually but get if a nice it. are to would there money right, till have so be that some of transform let’s and make with we transforming, saying on Because to just I’m in this. be way this to the bold company don’t have you try is end So

Geoffrey Gwin

Great.

it. We are working on it, Ross. Appreciate

Ross Taylor

you, Thank sir.

Operator

Please Bjorn comes with Capital. next XXx go The Ng from question ahead.

Bjorn Ng

Portland few you for so back. much us thank Geoffrey, weeks Hi in a hosting

facility so learned about Distilling have mountains much with the the of looks cans. incredible Eastside and We

a be So, certainty going the this I about is end. Eastside it fair to remember cash our flow quarter’s my So, XXXX, would this we of I the say for few correctly, the you Is and in on remaining say year. in low we that generating If questions on year? should this watermark example, even for have free second half break improved talked that it will have be see results year? to to fair end of that this results

Geoffrey Gwin

Right.

Bjorn. guys to you I facility. the it have thanks have appreciate great and you was So, see

you I what a about. sense think have got we been of talking better

about on flow. question, to I when a just So, I – let’s refer cash minute when talk that free

income about statement obviously, EBITDA, think have think things the of we of flow then typically capital, So, like assign cash already you amount sheet And cash categories it, so in it’s number. capital, you EBITDA, loaded to balance of free it up tremendous you get working flow. we generation as or are because the CapEx, that When about working I the cans.

here. gone much pretty have We through CapEx our cycle

and Burnside am a while. been material don’t on – in for sorry, basically we pay sitting that. in invested I raw for to that have have have We We

working shrink would generates that we – when So, cash. capital

that’s back point, But to can there. see the how year, I the sequentially, think to going and at absolutely, for we looking it So, of you get your yes, am half I improved are results.

started So, April, we can printing.

speed. pretty printing a start then it and with but and issues. some to We that, off into got saw have We get digital wasn’t lightning others off good immediately like have race

to build took methodical get some are now over our we and customers starting didn’t that, a up, in, with to ramp try and went we only pretty skis to slow, So, grow.

see pan we going that’s with about Now to ability the we we are of should And the are to a we to to pace take shifts And going think have. load the us that up out, to how going as where up one the and of inform going customers the is to of like see. we add pace a point improvement to the have that things growth. have here to how more get much second expect is we better of quarter we machinery,

are see yes, So, to better second half. I think we a going

to growing This pretty Like are to in a are I have to am than good position. of off have we we have think quarter a is is different But new manage going pretty you the because ever going looks low I going company refinancings. said, that still base. to here, before be revenues that seen be encouraged. one and We I

manage as transition we to month next super in spike from over here our continued working the have to capital the so. We Q, we need a or And say peak lending. away traditional bank we have

interested they not to partners is here Live tiny them the staying – down continue couldn’t out in we are they gotten have them partners in FIB refinance have bit paid Our But been them. to involved and work now pay have we And little quarter. a facility, and partners. Oak a in will – Live Oak and and at without We help. their our at outstanding

will do FIB. the with We same

out So, but that optimistic with to into as talked a just we better have to get going are we position we I here. where to got results going to that are move be we about see Ross, as work do, start am you

Bjorn Ng

it. Got

printer. I believe, And So, truly the Canning this more lot key see do is Craft is I there see towards story. I digital turnaround this sense a in makes towards focus this as why

the about of movement terms you more hire as to people could to we expected employees, talk the expenses, Craft such our support So, are in Canning operational of optimizing side?

Geoffrey Gwin

Right.

point a question. I So, good different we about dramatic And redirected when as to have, – businesses strategy. far that’s both company went downsizing. say, we as would a think very The a through pretty been

covering make our going going to about need need definitely are to they to are and meet of more help And people there, that areas in for a work sure talent I so to end. to products mean have and some if more investment Craft people areas do. you the that’s to it, partners their to growing up growth. we process been I more we demand think some have services were and think we line And to for difficult and the we and need is

things my in year. will type line need to the that. for, a a smoothly. control little to going doing account to So, work for on the past underneath have going there, you it we to be are business new that then bit spirit there are be making you the And are said runs I And think been sure behind that collect we you make investments script, I of made you if going to there. is mean about

gone transformation much side, spirits the on One we of pretty understand did a investors really what that’s we through have for caused significant we really things the knowing how things money not hard when or things. is made to

to to stored. a to how much how without Amy we when money. is go discount cost produce is how can of much having credit Lancer what produce, into cost lot give transparency losing the have we of mean, when And much who to retail, she Heineken What a And and behave spirit us job. tremendous comes the me So, happens margins. to have with call from it the amount the a to has Coming fabulous stewardship that’s that managing of more things on starting and is I lot confidence. gives of one done absolute today. we

sides in need to change time We investments direction right to to there are But there. year. a last heading lot we There be than we be I the of where this is more made. is both we more made on think closer business. be to the But are were

Bjorn Ng

it. Got

to follow-up just what So, shared. a you

I think and motivated joint all is aligned also in the ensuring an that important too. employees part are this effort

for side business So, segments, the how especially more of do we high ensure of spirit the a both things? that employees

Geoffrey Gwin

Right.

really people both would target, it going sides the also then – employee employing are they plan we to actually identify another even business, more that and that plan few we year. to we to join action involves the spend summer. quarters success I next changing have together investments worked pretty for updating survey, this, of key have it And we of the strategy are next a the going time year motivate an we couple lot the and teams temperature building put to in we process we some of into And culture how be through are elaborate we a say, where in the our ago, over of on took X-year of the could are of employee the did where company. organization. months benefit We a been the making, of then So, a encourage the went really and

go and more that making is companies it. days and of an through work you XX-K. about at also us Board each makes nothing will there, a as So, But call, is service day come to I able great think about people I of call. will the for we it have that here important we internally be and dedication outstanding report what talked hope filings to topic day the in and every but have our then be will we more the being size. conference up that every business like than certainly outstanding people certainly, and on beverage the people much about Craft of both offering, spend learn And it’s and as sides more that a we that at show it product products at enjoy able Board, you note on there we talk bigger every I provider the at pretty spirits Craft, working the their the Craft’s mean and

focus So, key that’s a the of company.

Bjorn Ng

Got it.

And market just to to what got is does stock the So, I question. final control difficult price. one one

the below requirement Our stock trading $X $X NASDAQ of minimum now, is below price. price and SD right that’s

So, we to this fall do exchange? OTC over criteria, if what we move the below happens actually

Geoffrey Gwin

a to of opportunity them is important, a – net shares number No. The NASDAQ, And of And company all of there compliance. that some cap changes requirements. tangible other changed to functional this on long that as here. a decide by becomes opinion, it. stay obviously. positive no we can the in in company and necessary. listing difference we number gives stock I have don’t listed or meet of be we just the with that make a problem will And to as I the you and and requirements however compliance my term in is – It’s worth stay are an with you make on have foresee NASDAQ occasions adjust market in worked prices, of their requirements, mean is sure with that stay NASDAQ

much keep So, when you stock, and that it it’s we around, look we day. And reflect more have will know if address will stock need we out, once the think every mean we see prices near-term. without normal we start well. environment it probably we in the This with our it help volatile. the extremely to we then as us, people’s are I informed to where are. not Rob that. with we in around – so balance, And at settle will says, look all turmoil, as I address where then in don’t foresee is to just to a probably you other guys and and And deal that as to stocks to are probably it’s values start people need going market stock

Bjorn Ng

Thanks it. looking how quarters with a question to I Got only are a it’s and also and we think Geoff. coaster forward roller on exciting have, been the see I look and together is the There Eastside ahead. QX subsequent

we thank So, support continue work, you Thank for you wherever can. will we guys the hard to you. and

Geoffrey Gwin

Okay. it. Thanks Bjorn. Appreciate

Operator

question-and-answer I over back turn Gwin to would conference closing This to Geoffrey concludes remarks. our the session. any for like

Geoffrey Gwin

excited Thank the in the Eastside. thank put to investment of an the I year. am about the company today for just want Again, call joined has coming and Great. the and that everybody for prospects here the you. following balance that I for quarter

now company question-and-answer, I And think the been the about have position we been said over X years, a in better in that last have transformations my made is in we it’s have as made I earlier and As basically what investments we and and to much really results. about the the remarks have talked about improve talking do the execution.

to those happen. will year. see that teammates through for working I am hopefully, I the as have you are So, the I get go encouraged to develop. that pleased And excited of we results And be diligently this the to balance here am

next we talk will listening, for and again you thanks to So, time.

Operator

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

disconnect. may You now

Eastside Distilling (BLNE) 17 May 222022 Q1 Earnings call transcript