Splash Beverage Group Reports Third Quarter 2023 Financial Results, Quarterly Revenues Rise 5%, Nine Month Revenues Rise 22%

Rhea-AI Summary

Splash Beverage Group, Inc. (NYSE American: SBEV) reported a 5% increase in net revenues for the third quarter ending September 30, 2023, reaching $5.1 million. However, the gross profit decreased to $1.3 million due to inventory reserves and a one-time write down of old inventory raw materials. Operating expenses improved by 19% to $5.6 million, and the third quarter loss from continuing operations improved by 16% to $4.3 million. The company's total cash and cash equivalents were $96,121 as of September 30, 2023, compared to $4.4 million at December 31, 2022.

Positive

• 5% increase in net revenues for the third quarter
• Operating expenses improved by 19%
• Third quarter loss from continuing operations improved by 16%

Negative

• Gross profit decreased due to inventory reserves and a one-time write down of old inventory raw materials
• Total cash and cash equivalents decreased to $96,121 as of September 30, 2023, compared to $4.4 million at December 31, 2022

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 30^th, 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

FAQ

What were Splash Beverage Group, Inc.'s net revenues for the third quarter ending September 30, 2023?

The net revenues for the third quarter were $5.1 million, representing a 5% increase.

How did the gross profit perform in the third quarter?

The gross profit decreased to $1.3 million due to inventory reserves and a one-time write down of old inventory raw materials.

What was the total cash and cash equivalents of the company 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.