Eastside Distilling, Inc. (EAST) Misses Q2 EPS by 20c, Revenues Beat

Eastside Distilling, Inc. (NASDAQ: EAST) reported Q2 EPS of ($0.37), $0.20 worse than the analyst estimate of ($0.17). Revenue for the quarter came in at $1.68 million versus the consensus estimate of $1.44 million.

• Gross sales for Q2 2018 were $1,675,067, an increase of 90% compared to $883,522 in the Q2 2017, led by the continued launch of Redneck Riviera Whiskey, sales from our private label and wine canning operations, as well as resumption of growth within the Pacific Northwest of our rebranded Burnside lineup.
• Total shipments increased to 18,401 cases during Q2 2018 from 4,928 cases in Q2 2017, an increase of 273%.
• Branded product shipments increased 70% to 7,445 cases in Q2 2018 compared to 4,384 in the year ago quarter.
• Case shipments of Redneck Riviera Whiskey were approximately the same in Q2 2018 compared to the very strong Q1 initial launch shipments and we have already received orders in excess of this figure in the first 5 weeks of Q3 2018, reflecting an acceleration beginning to occur as a result of new states and strong reorders from many of the Q1-Q2 2018 initial launch states.
• Gross margins improved to 49.9% during Q2 2018 compared to 34.8% during Q2 2017.
• EBITDA during Q2 2018 was $(1,250,729), which compared to $(771,402) in Q2 2017 as the company continued to invest in laying the foundation for sustainable growth in the Redneck Riviera Whiskey brand.

Grover Wickersham, Chairman and CEO of Eastside Distilling, commented, “I am pleased with the second quarter results and excited by the opportunities in our immediate future. The quarter was highlighted by the expanding footprint of Redneck Riviera Whiskey, growth of our wine canning operations, and the continuing relaunch of our Burnside family of whiskeys. During Q2 and extending to Q3 we invested heavily in laying the foundation for sustainable growth in the Redneck Riviera Whiskey brand, and this is reflected in our EBITDA. Brand investment included hiring a sales team capable of creating a national brand, promotional budgets for supporting distributors as we opened up new states, spending on point of sale and sales promotions as key retailers began carrying product on their shelves, ramping production, and supporting the brand with marketing. These activities carry a major upfront cost, but we believe they will maximize the performance of the brand.

“Redneck Riviera Whiskey is off to a strong start and is accelerating, with shipments during Q3 2018 being particularly encouraging. We are constantly told that the rapid and accelerating adoption of the brand is highly unusual in the industry. This is a testament to the value of our partnership with John Rich and the capabilities of the entire Eastside team. We are excited by the prospects of having strong second half of the year,” concluded Wickersham.

For earnings history and earnings-related data on Eastside Distilling, Inc. (EAST) click here.

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