Splash Beverage (SBEV) 25 Nov 242024 Q3 Earnings call transcript

Greetings. Welcome to the Splash Beverage Group Third Quarter Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Robert Nistico, CEO of Splash Beverage Group.

You may begin.

everyone. afternoon, Good Nistico, Robert Splash Group. Beverage This CEO is of our Bill Officer. Meissner, I also President and Ivancsits, Julius Marketing have our CFO; and Chief We call time on appreciate September the for everyone us joining XX, this XXXX. our the for morning earnings period ending quarterly taking

investment started, is the in focused or acquiring building behind we on Splash get why undervalued started Splash and International U.S. early-stage with the potential want identifying, both I Before the strong beverage reiterate business. to I and thesis Group growth brands Beverage and markets.

organization brands our Qplash, The Additionally, built have leveraging and shareholders. both operates of all its e-commerce to is its foundation the the a this customers, has company company which attractive solid, division markets business-to-consumer and but returns delivery. well-known for beverage proposition challenges to we direct generate had direct for value business-to-business creating

pivot Let a brand update; hope agenda acquisition a topics where during our be will On and mergers XXXX me hard good distribution call. forward look we QX we lot will session that now the course, have and of financing to about update; capital questions. structure results; we covered today: Q&A and that and talk of strategy; and

our our great. of million QX of of have down sourcing Directors, and XX% an stock, shares resale the XXXX. begin in 'XX. for the from of ABG regard in financial to cash. I'll period, for since process programs shareholders. Headwinds: lawsuit, decided tailwinds last of guys, we issue. at of in numerous on which this. liquidity our come the with XX%, been in Timing gross auditors a Board QX main continue margins let's we're restart expanded struggle since positive XXXX, starting at business, QX believe we've liquidity this inventory over supported by with since through Capital TapouT, a we our fashion. really CFO, XXXX network of a began performance of challenges funding we're on liquidity, Lower in update. August. can't quarter. up headwinds and the these spending year in little to ongoing of XXXX Qplash, an timing now of TapouT Strategic the Now XX% with QX we and With distribution approval we've delays very the restart of $X legal raise provide over SG&A from impact, but bit online Since our issued -- Splash Splash's not August to questions it tailwinds: control approximately which you're well It's is it turn been XXXX, territories. sales. will $XXX,XXX on -- that's end of The is in a to will inflow inflows, Julius, update the of difficult when the in and impacting and getting

Thank you, Robert.

from just wins million the 'XX. cash a improvement compared for at QX our from end a a had was was to lower month compensation. TapouT turn by limited the 'XX Liquidity President prior of were business, was the solid our controls, million As by Splash the headwind to were CMO, working Meissner, note and for and given in business cost di noted, liquidity it million over the higher our for strategy. at of the a and margins. inventory This fee flat and gross challenges key that in end 'XX. QX QX The due compared to Copa $X.X quarter, improvement spending. short XX% we as loss have from for increased restart the down were cash license quarter a elimination driven gross in $XXX,XXX EBITDA gross prior of is of a the period percentages its It and $XXX,XXX margins million OpEx 'XX, lower in is was period was resale to Collections $X and would expense discuss period, balance and like mentioned business, the the lower the is driven margin did business, important well. I loss Compared which distribution did August for previously. Bill to liquidity loss continues wine gross bank 'XX, XX%. but margin is to up. Qplash to This SG&A $XXX,XXX, ramp $X driven 'XX, prior as $X to $X.X net improvement 'XX. and quarter commercial declines trends from and the slightly $X.X performance. Sales conversion tripled liquidity $XXX,XXX QX capital, alluded Net million to QX. previously down very $XXX,XXX timing period. million. the in sales QX ] of driven little impacted QX lower period QX to, share-based of inflows by high brand Robert has nominal a loss $X tight previously QX QX margins Vino XX%. QX QX of was the from and almost by gross margins over [ to QX up Inventory million million. Qplash this in than on cycles including with for to compared to The versus $X.X

Thank you, Julius.

on lay Copa with importance network. Despite the expansion, shipping giving XX.X% backlog versus orders growth by we liquidity, our we state up versus driven have were past distribution and emphasized to While for and distribution Northwest full challenges significant in were the for expanded coverage ago. In key plus Texas. in year brands revenue shareholder Actual QX Pulpoloco. shipped of of orders was continue Washington from Pulpoloco wholesalers X.X% in distribution category Pulpoloco important state year the beyond. ago QX Northeast orders a up XXXX, in QX a the and shipped on the of Beverage X.X% on distribution success King communications, slightly in XXXX both Copa and the distribution foundation down state coverage We Southwest to had Eagle, our there. Olympic Massachusetts Vino Atlas coverage our for Pacific and X expand Distributing, with and expanded we our continue AB di QX

full Our coverage gives Texas, all Paso including new Lubbock of distributor all Splash there, for and Reed now partner Amarillo, in the brands. West El Beverage

are Sauvignon Circle Blanc that K Vino K one di has On and Blend, leading through in Copa the the more all has than C-store broker The Pennsylvania were XXX The franchise Red Control is Circle exciting of Board franchise Cabernet, chains our Chardonnay. authorized authorized win locations new for U.S. beverage stores. brand, authorized breakthrough Liquor our retail X front, SKUs tequila Chispo. and are there the

has team even challenges. relentless Our been the with

achievements Robert, As liquidity on now will capital set will normalizes, who over provide turn moving back higher an a floor these update will to for it success sustainable forward. I our structure.

the publicly dedication for for update, its I team a last Bill liquidity the in the and commercial environment. thank you Thank over want tough year to Bill.

legacy or very the much business quarter thank confidence team an support update vision to Splash the the is the investors the of our capital I and leadership who last on provide in appreciated. I want also continue so, Beverage. over raise Before to The

Okay.

to through in Splash On pending the company to anticipated capital year, The Beverage August placement of October I and convertible say, operational for the we Group essential will the legacy expand while press the on efficiencies. of or provide the strategic of first capital very it of product its XX, Now to capital The of fundraising along of to with year, capital raise with to this Since was support release is did $X enhance pursue should capital. has for offerings This XXXX raise a acquisition complementary achieved equity important. us company's this its business presence acquisition. and private completion working pursue enabling the notes working and of structure. our XXXX, markets of release tranche capital commitments roughly secured acquisition. million

We ensure the our recruit liquidity support investors necessary we to continue growth. to actively have to

individuals To been funds X receipt $XX While with actively significant has institutions the million. parties level of keep capital need and we're We fundraising, the those raise of currently. been do $X of working from additional fantastic, challenge. retail to has family office confidential our amounts and million with response to between a complete timing of targets names

to are significant make However, engaged, Splash we Beverage. look funding investments engagement with do X -- into have institutions me, excuse we formally

creates retail definitive capital who with agreement base. Once for and deal We a are returns the from the appropriate complete look allow the portfolio. investor forward into with and to this process closing We providers, raise our institutional diligence if our generate having the before will both, investors, to in for due not the our us early we which with X on in our documents company, anticipate both move both middle aligns of the and X drink January. fits financing forward fantastically vision to energy with long-term organizations best holidays signed of structure the

the with audit, However, slightly financial necessary holiday pending it season could be and longer. the

to committed deal. the highly transacting are organizations both However,

to we acquisitions. over it [ turn ] strategic to and before Splash's with White on discuss Hot me Julius Let mergers update an back Project continue plan

Thank Robert. you,

growth; our for basis on to liquidity Hot run our gross on we X operations with the serves be one, talked, strategic the we've guiding limited White structure. Project M&A. And Project headwinds in from EBITDA the rate Just and is several move with and QX principles profitable to Since QX three, capital Hot pillars: excluding positive our has flow in the bolt-on four, two, a expected results can positive operational earnings seen cash 'XX, even fronts, by of e-commerce; margins. excellence; acquisitions; been recap, last and to any uptick successful sustainable White as Splash's strategic project decision-making. five, company

has looking and activity very for January growth, we've our So August 'XX. network, expanded previously sustainable after business recent at profitable pillars distribution our Bill successes Qplash, and resale in just restarted as limited we since the discussed. E-commerce, the

to spirits hitting options. From provider company wine forward had executing also excellence we Son. standpoint, And a of out our to have concludes -- acquisition and work alternative and perspective, continue continue well. From On the $X bolt-on Western for with for ready-to-drink to a to continue capital move Texas. cost some initiative will early for pipeline identified third-party side, stage with mergers we energy the the with have have milestones plan we our million the operational M&A existing alluded And for on suppliers -- provide Robert on the drink as either million we've lower LOI sourcing. work update company and and a update. dual in or our sourcing financing. This I have that institutions [ now we very commitments strategic capital, a to to logistics raw working do success over roughly for at lower $X a an capital to we've and materials acquisition-related it capital our for we acquisitions. business cost the ] structure turn on strategic discussions in and key of We're

Julius. I you, the appreciate Thank update.

I can future. everything we very around think Thank the hit the update. message is for prepare near not liquidity. and key waiting we're the sitting the does doing for in the final organization folks to -- for funding when fine-tune us you here, here We're

Coors space energy weeks. while Western over confirm energy KDP, category, I X space, in taken Molson was recent Zoa, I'd in gets the stake they us of M&A, majority growing. provide drink extremely Before both this Dr. still pending announcements broader our than some market outperforms update may on more belief acquisition Rock's and provide in some better-for-you GHOST and has transactions billion which energy the for drink insight think about on are know, This their The really which darn purchase the you a like excited other exciting. Keurig maker, Both -- I $X start-up. acquisition drink segment. drink Pepper, to of pretty the in announced the It's last Son energy of an

to of and It's right via time. fair acquisition, margins drink competitive north at can't nicely capture at under name or highly Qplash, fair and our are to pending with say, a which will Intent, of network. with this the disclose attractive valuation, a share but Apologies XX% will in with great we energy Letter us Our voice. our the a we excitement the I business our and provide resale This my our allow partners structure. unfair product like share dovetails distribution the overhead of growth segment, for

opportunity. for this institutions secured gating is retail investors transaction, top. As to take and excited very through financing a will good to and definitive item The can the tell, is the we're about us you slug we securing move us agreements, finish to help over the the

provide We're of by and Newsweek on publicly is raising your attention. Son. group. Thank to amazing questions. quite it. We'll everyone, is everyone been you, we'll for you've In we up cost process Western now related the solving in vodka, aware, XX% the as periodic the As an our Son updates ranked announced tasting vodka do recently Western to heard, to was Intent ownership liquidity. a have their circled, that, issues the We're very Magazine. with Letter about open excited quickly. summary, funds We're ] working of call #X XXX% of with [ as

as are coming as by Stand we speak. questions in

bulk are of questions like Okay. our and All the liquidity Looks acquisitions. regarding right.

to and also have Bill help of I going and I'm a general specific make I'll us here. couple statements before So Julius questions, answer

X issues ago, I again, a mentioned liquidity, Regarding been X about have times XXX% liquidity. or minute our

One over the questions of on acquisitions lines funding. here Fair and question. is missing time raising concern

different I important the impatient a more am. than anyone mentioned it to types on that we're make time I We options, the Julius is working one But than sit we minute someone super of cetera, beautifully hands -- than positioned And liquidity don't said lines. lot in cetera, to we on et I planet all what's a us the on there spent challenges, this I margins. out to et ago, with corner. We're close sure I described, earlier on affects working as think time is of no our today, to am liquidity. high production

team us is We with -- with. have to fabulous long-term the that I'll work mentioned with excited release acquisitions but what like One extremely to equity of that this and there fabulously people group really I group to -- very are flow. we're can a we and partners just additional, especially that we not out us. private future that like to Midwest We're we be with backups, working of help names. will just close. X stop point, We deal call very a Upper at because ultimately elected excited

So been liquidity has it.

Regarding our it's X yes, dollars. brought raise, -- on we current

change brought then. on You've think another in seen that the $X I million and X-Ks and we since

the have on balance. do getting we're So close we very that. And signed documents for

Somebody mentioned, It's to as never they million. thought million. million. and I million. mentioned It just have $X $X $XX $XX wrote it recently, here was been was Julius commitments up $XX million we to have, And we earlier

So we that we're expect happen documents here time. that, any but do just and signed shy literally have of to

forward. Yes. via slow posted holidays, it the Everything but keep to X-Ks down, tends press and you things With is moving we'll releases.

that a we've So on our technology. question Sangria paper imported the Pulpoloco, in can

Sorry, I'm reading the question.

Yes. Okay.

on percentage that changed. like you brand? anticipate capital to Western scanning where fabulous this The have time publicly Son, transaction? complete is it's just country. are It's Nothing's when for said times. slowly but we've across key transaction. you'd small know because thing. So that liquidity. Son. brand. there, We It's load those is, there. will this has on liquidity. Bill, Bill a progress liquidity. Meissner, of changed a We're It's convey many same where I Western there's accounts to function factor -- just the been made [indiscernible] -- and completing now go that a we again, raise I some number, question do still to of Nothing ahead. absolutely answer? approximately on nothing a X-Eleven And closing taken of

At great we're been both ready diligence due go it finalize the perspective, on perspective, to progress essentially trying and a From excellent a has -- from are raise. made We've point, we're and on completed. we've teams raise. equity debt equity everything the progress to raise, an made this there. operating are And between dividing

to marry time. have same You elements the at both

good and is think speculating, extension. holidays, on presuming just But could that's to believe trying back that go I with but at I circling QX. And Son It assume to done. we with team that continue by correct get on into would. debt it -- completed. me us is front this they the year-end, leak work this is once an it will make that fast the that we're So progress Western will to point, But

the debt side. debt there basically Okay. Thanks, sure folks to of really But that's is it like until folks to looks a commit Bill. And we're just important blend equity chicken and egg situation. committed make want news. and clear, now vice The and on debt, it's a the This the have and equity it's don't versa.

excuse -- debt to the right. now folks again. in are the now the So is side, equity dig Bill on me, starting But

some could. the will we've I think the this challenges it unnamed got acquisition things for of slowing down. The energy course, drink happen with space, holidays, still year? Unlikely,

target like Letter we'd forward. And to that's SEC put to and the annual days remain need our nice engaged those audits folks, that allows have under of The it then revenue because have, the Intent report. day, XX at we have. once on audited. Our a to not end we raise, be has always been the that to and close consolidated XX and to don't financials. again, rest But the December capture fully completely But triggers with out of we capital produce the remember, move we and of a

is It the amount quickly The is line pretty we're ballpark on playing We're as It's more significant you'll top it. to -- one of question so So in for number that if energy there. really for the pay about much we'll stuff. How And attention you and quite Yes. a liquidity. a we It's close the cool transformative gross no, acquisition fantastic million. about understand excited line really, top company. revenue. can. as us, a $XX space, drink

typically, $X been So money our last raised much around release? I that press handy? have number right million, Julius. it's how since has you Do believe

the date various we're I exact but little like the bit don't PR, over commitments a since have stakeholders. from kind $X million of on

our or was will are about a back? note We keep in should Great. default on, reading When Those on in -- Okay. our be that hang paid default, report. the this. had that that was Q on question -- technical I say,

hard everybody. that to When the just paid be It's screen. Okay. back? will Sorry, Yes. read

of week we equity been the see that has course, and We'll that share challenge got to that. a So raising with money difficult in waiting year us, our couple of caps I in, additional there doesn't I that. our in with so questions organization you, plenty I'll or so. All this help I have second a capital intention and guys a right. the we're another micros to Yes. challenge. you raise how said, while to we Son another that just coming of There's price appreciate tell small I load. and be raises. back speak of enough fixing -- do cash in for just next much Western like everybody's understand thank it's a them for for to the pay can't the us. And And with is there that's while am, as goes shareholders liquidity happening. as question. had hanging heck in I for just impatient, There'll current hanging look,

exactly terms? are debt information are, Son, of timing. Okay. you the but is mentioned. Meissner basically, ] just What can't equity, debt, blend the what we Western and [ on the Bill for thank they it as yet terms a So disclose Yes, the

drink a information, information, -- won't of of confidentiality corporate for Shared we're why is as also is name There Next Remember, inside different well. types release energy there's question, model. the confidentiality. the Service target? There's model Splash public you but the

itself. is find that being idea target We pull proven and acquire reduction done of a that through that our the organization, the into So that's we target headcount. and

at any questions bring people, So reason point. to for name be seeing That's main we're and careful the to to those want are this out being sensitive we I that that. Julius, you Bill, missed? not

No.

No.

quarterly I All conference This thank long-term support. mentioned us. I results. a concludes minute our We that, everyone's call want for for QX appreciate, ago, as right. to With everybody joining

We for support, the Our past about future. liquidity fantastic. have legacy year. issue extremely, your in thank powered been investors difficult excited there. absolutely long-term support, remain about the everybody the for to we've We hang just Thanks. I extremely want believe

of We forget, the close. shareholders are myself. so And [indiscernible] don't largest one I'm

and the QX I just much. This fantastic I we a week. about future. all you conference wish our very want great Thank you concludes appreciate personally one quarterly report am excited support And holidays. Thanksgiving your time, We to everybody and So a happy call. wish last

and disconnect may your conference, today's you Thank time. lines concludes for at This you your this participation.