Splash Beverage Group (SBEV) Q3 2024 earnings summary

Executive summary

• Focused on acquiring and building early-stage or undervalued beverage brands with growth potential in the U.S. and internationally.

• Qplash, the online resale business, was restarted in August and is ramping up, contributing to improved liquidity and margins.

• Revenue for Q3 2024 was $1.0 million, down from $5.1 million in Q3 2023, mainly due to a sharp decline in e-commerce sales from inventory shortages and limited liquidity.

• Net loss for Q3 2024 was $4.7 million, an improvement from $5.7 million in Q3 2023, primarily due to lower debt discount expense.

• The company continues to face liquidity challenges, with substantial doubt about its ability to continue as a going concern without additional funding.

Financial highlights

• Q3 2024 net sales were $1.0 million, down from $5.1 million in Q3 2023, mainly due to inventory constraints from liquidity issues.

• Gross margins improved to 30% in Q3, up from 23% in Q2 and 11% in Q1 2024.

• Q3 gross profit was $0.3 million, up from prior quarters, driven by lower wine costs and high-margin Qplash sales.

• EBITDA loss narrowed to $1.7 million from $2.2 million in Q2 and improved by $2 million year-over-year.

• Net loss for Q3 was $4.7 million, a $1 million improvement from Q3 2023.

Outlook and guidance

• Project White Hot aims for positive cash flow from operations and positive EBITDA on a run-rate basis by Q3 2025, excluding M&A.

• The company must raise additional equity or debt capital to fund operations; future financings may be dilutive and terms may favor new investors.

• There is substantial doubt about the company's ability to continue as a going concern for at least twelve months from the financial statement issuance date.

• Anticipates closing a transformative energy drink acquisition with over $30 million in top-line revenue, potentially in early 2025.

• Distribution and retail wins expected to set a higher floor for sustainable growth as liquidity normalizes.