FORT LAUDERDALE, FL, Nov. 14, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire -Splash Beverage Group, Inc. (NYSE American: SBEV) ("Splash" or the "Company"), a portfolio company of leading beverage brands, today reported financial results for the third quarter period ended September 30, 2023. Investors are encouraged to read the Company's quarterly report on Form 10-Q which was filed with the Securities and Exchange Commissions (the "SEC"), contains additional information, and is posted at https://splashbeveragegroup.com/.
Third Quarter Financial Performance
- Net revenues for the third quarter period ending September 30, 2023, increased to $5.1 million compared to $4.9 million in the prior year period, an increase of 5% over the prior year period. For the nine-month period, revenues increased $2.9 million dollars or a 22% increase to $16.2 million compared to $13.3 million in the prior year period.
- Gross profit for the third quarter period ending September 30, 2023, was $1.3 million compared to $1.8 million in the prior year period as a result of inventory reserves and a one-time write down of old inventory raw materials. Gross margin YTD as of September 30th, 2023, was 25% vs 33.2% Without the one-time adjustment the year to date gross profit was 32.9% vs 33.2%.
- Operating Expenses improved 19%, to $5.6 million, down from $6.9 million during the prior year period.
- The third quarter loss from continuing operations improved 16% from $5.1 million prior year to $4.3 million in the current period. Net loss was $5.7 million compared to $5.1 million in the prior year period. This includes a reduction in Non-Cash items of $1.49M vs. $1.7M respectively. The inventory adjustment, increase in freight cost, amazon fees, and marketing expenses in 2023 to support the revenue growth impact losses in the quarter.
As of September 30, 2023, the company had total cash and cash equivalents of $96,121, compared with $4.4 million at December 31, 2022 primarily due to timing. Additional cash was raised early in October along with incoming AR.
Robert Nistico, Splash Beverage Group's Chairman and CEO, commented, "Our 2023 third quarter results reflect strengths and challenges that inevitably emerge in growth businesses such as ours. We will be scheduling a conference call before the end of the year in an effort to keep all informed and answer any questions. Please see my comments on the highlights above and other downstream topics:
- We're encouraged by continued growth in Net revenue against a strong prior year period. Q4 is off to a good start, and we anticipate another record finish to the year.
- As announced in Q2, we entered into an initial agreement with a funding group for working capital and acquisition funding. That has progressed as we now have executed agreements and have been contacted by their escrow group in NY and are awaiting further instructions. This is a non-dilutive facility.
- We are deep into the due diligence process with the previously announced Western Son acquisition and are enthusiastic about adding the brand to the portfolio and their talented leadership personnel to the Splash team. The addition offers us a host of benefits beyond the revenue and gross profit growth. We anticipate margin enhancement on our SALT, Pulpoloco and Copa di Vino brands as a result of our ability to build a centralized logistics hub in their North Texas facilities. The brands margins are accretive to our existing brands, and we expect this will help us as we march toward profitability. Our teams are meeting regularly working through closing details, projections, and synergies as we hope to close at the end of the year or early January.
- We successfully launched TapouT Energy and have received very positive feedback from both the consumers and the trade. TapouT Energy's strong gross margins will contribute well to the entire portfolio's blended gross margins as it becomes a larger part of the revenue.
- As we continue to build distribution and retail support (much more to come this year) we also at a point as we enter into the new year, we believe it is good management to break down the business in more detail and share with shareholders on quarterly conference calls.
- Our distribution footprint continued to expand for each of the brands during the quarter, including new distribution partnerships Northern California, Mississippi, Oklahoma, North Carolina, Georgia and Tennessee. Gaining these key distribution partnerships enhances our ability to reach the larger retailers and we're excited to announce some new and exciting authorizations in the coming months.
- In addition to tremendous freight in and out savings, our intention is to locate our first paper can roller there as we complete our dealings with CartoCan in Germany.
- Acquisition remains a key strategy for our long term growth, and we are currently in the early stages of evaluating additional potential targets.
"As you all know, this has been a challenging year in the capital markets. I want to thank all our shareholders personally and reiterate that we are very aware of this fact and also believe we are grossly undervalued, (myself as a large shareholder included) and are optimistic that our hard work to correct this will result in an improvement," continued Mr. Nistico.
"As I mentioned last quarter, we remain committed to executing a business plan that relies on 4 key pillars for success. We have a strong management team, we have a diverse portfolio of brands that match consumer trends, our marketing strategy continues to yield new distribution agreements and retail authorizations, and we have the financial flexibility we need. We look forward to the fourth quarter of 2023 and a fantastic 2024."
About Splash Beverage Group, Inc.
Splash Beverage Group, an innovator in the beverage industry, owns a growing portfolio of alcoholic and non-alcoholic beverage brands including Copa di Vino wine by the glass, SALT flavored tequilas, Pulpoloco sangria, and TapouT performance hydration and recovery drink. Splash's strategy is to rapidly develop early-stage brands already in its portfolio as well as acquire and then accelerate brands that have high visibility or are innovators in their categories. Led by a management team that has built and managed some of the top brands in the beverage industry and led sales from product launch into the billions, Splash is rapidly expanding its brand portfolio and global distribution.
For more information visit:
www.SplashBeverageGroup.com
www.copadivino.com
www.drinksalttequila.com
www.pulpo-loco.com
www.tapoutdrinks.com
Forward-Looking Statement
This press release includes "forward-looking statements" within the meaning of U.S. federal securities laws. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue" and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results and, consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements and factors that may cause such differences include, without limitation, the risks disclosed in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2022, and in the Company's other filings with the SEC. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.
Contact Information:
Splash Beverage Group
Info@SplashBeverageGroup.com
954-745-5815
| Splash Beverage Group, Inc. |
| Condensed Consolidated Balance Sheets |
| September 30, 2023 and December 31, 2022 |
| September 30, 2023 | December 31, 2022 | |||||||
| Assets | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 96,121 | $ | 4,431,745 | ||||
| Accounts receivable, net | 1,512,693 | 1,812,110 | ||||||
| Prepaid expenses | 225,446 | 348,036 | ||||||
| Inventory | 2,907,461 | 3,721,307 | ||||||
| Other receivables | 376,905 | 344,376 | ||||||
| Total current assets | 5,118,626 | 10,657,574 | ||||||
| Non-current assets: | ||||||||
| Deposit | $ | 49,398 | $ | 49,290 | ||||
| Goodwill | 256,823 | 256,823 | ||||||
| Intangible assets, net | 4,564,037 | 4,851,377 | ||||||
| Investment in Salt Tequila USA, LLC | 250,000 | 250,000 | ||||||
| Operating lease right of use asset | 619,559 | 750,042 | ||||||
| Property and equipment, net | 385,603 | 489,597 | ||||||
| Total non-current assets | 6,125,420 | 6,647,129 | ||||||
| Total assets | $ | 11,244,046 | $ | 17,304,703 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities: | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 4,199,476 | $ | 3,383,187 | ||||
| Liability to issue shares | - | 91,800 | ||||||
| Operating lease liabilities - current | 259,072 | 268,749 | ||||||
| Notes payable, current portion | 5,548,830 | 1,080,257 | ||||||
| Due to related party | 426,000 | - | ||||||
| Shareholder advance | 200,000 | - | ||||||
| Accrued interest payable | 496,384 | 141,591 | ||||||
| Total current liabilities | 11,129,762 | 4,965,584 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable | 408,801 | 2,536,319 | ||||||
| Operating lease liabilities - noncurrent | 363,313 | 480,666 | ||||||
| Total long-term liabilities | 772,114 | 3,016,985 | ||||||
| Total liabilities | 11,901,876 | 7,982,569 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued | - | - | ||||||
| Common Stock, $0.001 par, 300,000,000 shares authorized, 42,902,185 shares issued, 42,902,185 shares outstanding at September 30, 2023 and 41,085,520 shares issued, 41,085,520 shares outstanding at December 31, 2022 | 42,902 | 41,086 | ||||||
| Additional paid in capital | 126,648,371 | 121,632,547 | ||||||
| Accumulated other comprehensive loss | (8,448 | ) | (20,472 | ) | ||||
| Accumulated deficit | (127,340,655 | ) | (112,331,027 | ) | ||||
| Total stockholders' equity | (657,830 | ) | 9,322,134 | |||||
| Total liabilities and stockholders' equity | $ | 11,244,046 | $ | 17,304,703 | ||||
| Splash Beverage Group, Inc. |
| Condensed Consolidated Statements of Operations and Comprehensive Loss |
| For the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) |
| Three months ended September 30 | Nine months ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenues | 5,144,069 | 4,870,407 | 16,161,747 | 13,295,921 | ||||||||||||
| Cost of goods sold | (3,847,202 | ) | (3,101,807 | ) | (11,326,298 | ) | (8,886,508 | ) | ||||||||
| Gross profit | 1,296,867 | 1,768,600 | 4,835,449 | 4,409,413 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Contracted services | 382,096 | 438,004 | 1,094,398 | 1,196,852 | ||||||||||||
| Salary and wages | 1,195,916 | 1,262,935 | 3,794,179 | 3,180,198 | ||||||||||||
| Non-cash share-based compensation | 367,244 | 1,697,201 | 1,224,101 | 7,039,695 | ||||||||||||
| Other general and administrative | 3,048,779 | 2,734,377 | 8,617,013 | 7,698,231 | ||||||||||||
| Sales and marketing | 626,363 | 746,965 | 2,105,559 | 1,918,420 | ||||||||||||
| Total operating expenses | 5,620,398 | 6,879,482 | 16,835,250 | 21,033,396 | ||||||||||||
| Loss from continuing operations | (4,323,531 | ) | (5,110,882 | ) | (11,999,801 | ) | (16,623,983 | ) | ||||||||
| Other income/(expense): | ||||||||||||||||
| Interest income | 348 | 158 | 1,668 | 2,867 | ||||||||||||
| Interest expense | (221,488 | ) | (66,193 | ) | (561,249 | ) | (225,543 | ) | ||||||||
| Other Income | - | - | 49,819 | - | ||||||||||||
| Amortization of debt discount | (1,125,410 | ) | - | (2,500,065 | ) | - | ||||||||||
| Total other expense | (1,346,550 | ) | (66,035 | ) | (3,009,827 | ) | (222,676 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss from continuing operations, net of tax | (5,670,081 | ) | (5,176,917 | ) | (15,009,628 | ) | (16,846,659 | ) | ||||||||
| Net loss from discontinued operations, net of tax | - | - | - | (199,154 | ) | |||||||||||
| Gain on sale of discontinued operations | - | 33,116 | - | 148,748 | ||||||||||||
| Income (Loss) from discontinued operations | - | 33,116 | - | (50,406 | ) | |||||||||||
| Net loss | $ | (5,670,081 | ) | $ | (5,143,801 | ) | $ | (15,009,628 | ) | $ | (16,897,065 | ) | ||||
| Other Comprehensive Income | ||||||||||||||||
| Foreign currency translation Income | 29,406 | - | 12,024 | - | ||||||||||||
| Total Comprehensive Loss | $ | (5,640,675 | ) | $ | (5,143,801 | ) | $ | (14,997,604 | ) | $ | (16,897,065 | ) | ||||
| Loss per share - continuing operations | ||||||||||||||||
| Basic and diluted | $ | (0.13 | ) | $ | (0.14 | ) | $ | (0.36 | ) | $ | (0.46 | ) | ||||
| Weighted average number of common shares outstanding - continuing operations | ||||||||||||||||
| Basic and diluted | 42,812,058 | 37,364,031 | 41,991,259 | 36,417,222 | ||||||||||||
