Solo Brands, Inc. (NYSE:DTC) Q4 2022 Earnings Call Transcript

Page 8 of 8

But generally, it takes 12 to 14 months or so for us to really realize the ramp up cycle of a new product. And so again, Mesa launched September, we haven’t even last a year yet on Pi. So those are going to be continued continual momentous. Products from a growth standpoint for us as we continue to launch the newness of 2023 on top of that. So overall, the core business is solid. And we’re continuing to see adopters, and we’re very early in our stores. The runway in front of us for our core firepit product is still very strong.

Unidentified Analyst: Great, thanks for that color. And then just on the M&A side. The stock obviously, is where it is. And you’ve talked about that in the past and how you think about that, as a funding source. But given the borrowing capacity you have and you sounded perhaps a little bit more open to exploring acquisitions here. I just wanted an update on, how your thinking has evolved, if at all?

John Merris : Yeah, I really appreciate the question. First off, I’d say we’ve continued to have conversations and to keep our eyes peeled. When there’s an opportunity, we want it to be in front of us and at least have some optionality for great brands out there. And I think in this environment, we have expected and are expecting and continue to have conversations with great brands that are in a position where they may be looking a little bit harder than maybe they were a year ago. And so we think that there are going to be great opportunities in the coming months or four years, for potential acquisitions that really fit nicely into Solo Brands. And I just reiterate, what Somer was just talking about around cash generation and how we’re viewing 2023, particularly with our inventory position, our ability to turn that inventory to cash.

You alluded to our credit line or access to cash through our facility. So we’re in a strong position, from a liquidity standpoint, a cash position to take advantage of and be opportunistic to acquire potentially great brands. I’d reiterate we’re not in a position with where the stock is right now where we considered seizing using stock or equity for acquisition. So just to be super clear, in case there’s any question marks around that. But again, our cash position in our overall access to our facility and where we’re at from a debt standpoint on the business we think is a really strong place to be in this environment with how many companies are probably going to be available on the market.

Unidentified Analyst: Super, thanks so much.

Operator: We currently have no further questions. I will now hand over back to John Merris for final remarks. Please go ahead.

John Merris : Great. Well, thank you all for being with us this morning. And we look forward to completing our Q1 and obviously being back with everyone here in a couple of months to report on first quarter. So thank you all and have a great week.

Operator: Ladies and gentleman, this concludes today’s call. Thank you for joining. You may now disconnect your lines. Thank you.

Follow Solo Brands Inc.

Page 8 of 8