Eastside Distilling, Inc. (NASDAQ:EAST) Q4 2022 Earnings Call Transcript

Geoffrey Gwin: Well, there’s a couple of interesting things that we have going for us. On the one hand, we — EBITDA is not the same as free cash flow. We have a large barrel inventory, and we have more barrels today than we need. And so, when we sell a bottle of vodka, we don’t go and we have to rebuild that raw material. But in the case of bourbon, we’re selling it and we don’t actually have replacement to it. So free cash flow is a bigger number in spirits than EBITDA, unless we turn on the stick and spend a lot of money on CapEx, which we’re not doing. So, that helps the Company. And the other thing that you have to think about is how we survive today. We’ve rationalized things that really are high value, not reflected on the balance sheet.

And we did that throughout last year with taking advantage of very high whiskey prices in front of the Company as we executed our build-out of craft. So I think those are some ways we can do it. Now having said that, I’ll be the first to admit, last year, I was hoping that we would be in a position that we could accelerate growth at another machine move faster. And equity markets obviously haven’t helped us get there. Micro caps are not the beloved investment opportunities as they once were just a few years ago. So that window feels like it’s closed to some degree. But this is a situation where I really believe that if we perform here in the first and second quarter — and I just want to be crystal clear, the second quarter is going to be better than the first quarter.

And — but if we perform, then I’m hopeful that we’re going to have multiple avenues to pursue growing the Company.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Geoffrey Gwin for any closing remarks.

Geoffrey Gwin: Yes. So, thank you. I’m looking ahead and seeing both of our businesses heading in a much improved direction. I’m super excited about the team and what they’ve accomplished at craft. But I also am really excited to see how spirits is going to perform this year because I think we’ve made a tremendous amount of investment in architecting a plan that’s going to take us to a much better place on both sides of our business here, both the craft services, beverage — can printing business and our spirits business in Oregon. So, thank you for the time today, and we look forward to talking to you here shortly in the first quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may all now disconnect.