Unidentified Analyst: Just a follow-up, you’re talking about adding a machine. Is that going to be — are you going to get the funds for that for through growth? Or are you going to have to go…
Geoffrey Gwin: Yes, we’ve been working on a financing package that we think will take serous and inform an operating lease.
Operator: [Operator Instructions] The next question comes from Matthew Campbell with Laridae Capital.
Matthew Campbell: Geoff, I’ll be quick here. You guys have done a lot of restructuring work and it’s apparent that the business is stronger today than it’s ever been. But when you look at the income statement, you see the numbers the way they are, it tells a different story. So just really quick, tequila, the spirits business is been not growing, but tequila has been a big weight — that acquisition done 2 or 3 years ago, a big weight on the business. Have we seen a bottoming of the spirit side. I know you said Portland Potato Vodka is starting to grow in your markets now that you’re focused on. I’d like to just get a better handle of that. And the loss that you reported Q4, are you starting to see it get closer to breakeven on the Spirit side?
Geoffrey Gwin: Yes. Like I was — thanks, Matt, for those questions. Like I said, on the spirit side, I mean, last year, I was optimistic that we were going to be able to actually hit EBITDA maybe in the fourth quarter. That was kind of my own personal stretch goal of seeing that happened. And our adjusted EBITDA for the fourth quarter in spirits was $75,000 loss. Now to your question, a lot of things are working in spirits. You got Portland Potato Vodka down to a price point where it moves and moves well. We still need to lower some of our overhead costs, but that — expanding that margin will help push us closer to the EBITDA number that I’m talking about because it brought is such a big piece of our business. The bourbon side has not really grown because we just don’t have the money to invest in marketing with that product right now.
And then the last piece that you referred to, you’re right, the tequila acquisition really was a hard go since we acquired it. We didn’t have the capital to continue to push and grow volume at such rates and margins where gave was at peak price points, but agave has come down dramatically. And so we moved our price points in tequila up dramatically to try to rightsize that business. And with that, alienated obviously, a lot of distribution because they were seeing volumes come down distribution and spirits is in a different game than they’re not motivated the same way we are. That’s a huge challenge for any spirits brand unless you are a major. So that’s been 1 of the hard things that we have stuck with is we’re not going to sell spears. We’re not going to incentivize distribution for us to lose money and that has not been well received by them.
And in some markets, they’ve backed off of pushing our brand, right? And I think that’s fair to say. But at this point with the margins that we now have to, particularly with the game of the prices that is now, this brand makes money. And it could be on course to be 1 of the more profitable ones, believe it or not. So I think the thing that I would say in spirits is staying disciplined and not letting this side of the house consumes so much capital that we can’t see it. until people see the growth opportunity that’s in this company, we have to be on a capital guide. We got to — when you look at the stock price and we look at it together. And we’ve got 2 businesses that I think are — I think the digital camping business is unique and as people wake up to what’s happening in the marketplace.
It’s going to be a very valuable business. And I also think that our spirits business, particularly profitable spirits business is going to prove to be a lot more valuable. We attempted to sell 1 or more brands over a year ago, and there was, I think, because of where we are on profitability, right? So let’s see where we go from here.
Matthew Campbell: Okay. And then on mobile canning, is that business in your view, has that hit a low? Or is that still going to be a headwind when we look at the canning side of the business.
Geoffrey Gwin: That has been a drag. Yes. So we — so it feels like every corner of this company had a problem. Mobile canning was coming through COVID and it has a structural problem for some of the customers start to in-source their own production capability. There’s a number of challenges and inflation in there, labor inflation and others. There’s challenges across the board, we talked about already in spirits. So what we’ve done in mobile is to pull back from places where we know that we aren’t getting the return on capital that we’re looking for Seattle was one. Denver was another. In Portland we have such a strong embedded customer base there. It’s a place where we learn about our customers. It’s I think it’s instrumental in the DNA of Craft or not.
But for now, it’s a profitable segment of the company. It’s going to continue to contribute cash. And I think that’s an important part of who Craft is. So in the fourth quarter and last year, we had some costs associated with closing elements of that business. And we still have some lingering costs like leases here or there that we have to work out of. But once that’s cleaned up and we get ourselves organized for the footprint that we’re working with, that I don’t foresee it as a headwind going forward. The bigger opportunity that, as we’ve talked about, is getting the second printer online because the important thing that people have to understand about digital printing is 1 machine is carrying the way of that whole facility. Rent, operating labor overhead, finance function, so on and so forth.
And when you add a second machine, every dollar of revenue added by that second machine is leveraging all that fixed cost and so the profitability of machine 2 is twice that machine 1. So that’s a really significant step — it’s critical for the company to make to really show people how profitable that business can be.
Matthew Campbell: And when do you think you’ll get that second printer.
Geoffrey Gwin: This is on top of the priority other than enough cans to go to the machine for working capital in Q2. So we’re working on it. Everybody wants these machines now, obviously, because they’re seeing it happen. I mean the PGAs printing with digital print, Budweiser did it, has been doing it. It’s kind of line on the radar screen. But as some of these small brands start to eat other people launch everybody seems to be sterling and trying to get into schedule.
Matthew Campbell: One of these days, it will be apparent and we’ll start to — I’ll be able to celebrate. But thanks for the hard work in. Appreciate it.
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. Thank you. I appreciate it. Thank you, everyone, for the time today. I know we’re again sitting here in April talking about last year, but I think the story here and the private reporters is that we’re still seeing good growth in this new technology, great adoption and get things ahead. We need to put a few more pieces in place for people to get super excited about it and see it really, frankly, on paper, and I think we’re going to do that this year. So please feel free to reach out to us, myself and certainly others in the organization, and we’d be happy to keep you abreast development. And then if not, we don’t between now and then we’ll be reporting here shortly on the first quarter soon. All right. So thanks.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
