Eastside Distilling, Inc. (EAST) Misses Q1 EPS by 14c, Revenues Beat; Grover Wickersham to Step Down from Chairman/CEO Position, Appoints CFOSteve Shum as Interim CEO

Eastside Distilling, Inc. (NASDAQ: EAST) reported Q1 EPS of ($0.32), $0.14 worse than the analyst estimate of ($0.18). Revenue for the quarter came in at $3.69 million versus the consensus estimate of $3.04 million.

Management Commentary

Grover Wickersham, Executive Chairman of Eastside Distilling, commented, “During the first quarter of 2019 we increased our revenues 161% versus last year, boosted by our acquisition of Craft Canning + Bottling, which is well on the way to being successfully integrated. I fully expect we will see increased manufacturing efficiencies, a corresponding benefit to COGs in Q2 and Q3 and continued co-packing sales momentum. We also accelerated authorizations of Redneck Riviera Whiskey into some of the country’s largest retailers, maintained 50% organic growth in Oregon of our branded products, and expanded our operations into high growth categories such as RTD cocktails and CBD beverages.”

Robert Manfredonia, President of Eastside Distilling, commented, “We started off 2019 with a very strong start for our Redneck Riviera Whiskey. The addition of new product extensions, including the 1.75 liter bottles and Granny Rich Reserve, and authorizations by a number of tier one retailers, including Walmart, Albertson’s, Safeway, and Kroger, helped us drive over 6,300 cases during the seasonally slow first quarter. Looking forward, we are scheduled to release a Redneck Riviera RTD mid-year, which should drive continued growth in the brand and are set to receive a number of new authorizations later this month for the annual June resets. Historically, the grocery sector takes a minimum of three to four years for brand entry based upon development, however, Redneck Riviera has entered the grocery sector in less than a year, reflecting tremendous retail confidence in the brand as a whole.”

Steve Shum, Interim Chief Executive Officer and Chief Financial Officer of Eastside Distilling, added, “Eastside Distilling is in a strong position to build upon the significant investments and strategic initiatives over the last three years. The integration of our newly acquired Craft Canning + Bottling operations has exceeded our original expectations, contributing more than $1.4 million of revenue in the first quarter. The platform we have now created at Eastside allows for us to quickly move product from concept to store shelves and into customers hands in an expedited format. We look forward to leveraging this platform and drive improved efficiencies in the quarters and years to come.”

Executive Management Transition

Effective May 10, 2019, Grover Wickersham announced his transition to Executive Chairman, stepping down from his dual role as Chairman and Chief Executive Officer. The Company’s Chief Financial Officer, Steve Shum, has been given the additional title of Interim Chief Executive Officer. The Company has commenced a search for a spirit’s industry veteran. Wickersham’s transition follows the recent appointment of 25-year spirits industry veteran Robert Manfredonia as Eastside’s President in December 2018. Steve Shum will also maintain his current role as Chief Financial Officer and expects to work closely with Robert Manfredonia with respect to managing daily operations, as well as working closely with the board of directors and Grover Wickersham.

Since 2016, Wickersham has helped to transition Eastside Distilling to one of the leading craft spirits companies in the United States. During the last two years, Eastside has rebranded its product portfolio lead by Sandstrom Partners, significantly expanded its production capacity through the acquisition of Motherlode and Craft Canning + Bottling, launched the highly successful Redneck Riviera Whiskey, and expanded into the high growth Ready-to-Drink and CBD markets. Since 2016, revenues have increased from $3.1 million for the year 2016 to $3.7 million in the just completed first quarter.

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

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