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spk00: Good evening, and welcome to the Eastside Distilling third quarter 2024 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note, this event is being recorded. I would now like to turn the conference over to Tiffany Milton. Please go ahead.
spk02: Good evening, everyone. Thank you for joining us today to discuss Eastside Distilling's financial results for the third quarter of 2024. I'm Tiffany Milton, Eastside's Chief Accounting Officer, and joining us on today's call to discuss these results is Jeffrey Quinn, the company's Chief Executive Officer. Certain matters discussed on this conference call by the management of Eastside Distilling may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 21E of the Securities Exchange Act of 1934 is amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements describe future expectations, plans, results, or strategies, and are generally preceded by words such as may, future, plan or planned, will or should, expected, anticipates, draft, eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially include, but are not limited to, the company's acceptance and the company's products in the market, success in obtaining new customers, success in product development, ability to execute the business model and strategic plans, success in integrating acquired entities and assets, ability to obtain capital, ability to continue its going concern, and all the risks and related information described from time to time in the company's filings with the Securities and Exchange Commission, including the financial statements and related information pertaining to the company's annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission. Now, with that said, I welcome you all to our third quarter conference call. The agenda for our call today is to review the third quarter numbers, and then Jeffrey Gwynn, our CEO, will discuss the results for the third quarter and the recently announced Beeline transaction. Now let's discuss our third quarter performance. We have classified Kraft as a business held for sale, so today's results reflect only our spirits and corporate segments. For the quarter, we reported sales of 783,000 and an improvement in gross profits. Our spirits division generated 46,000 in positive EBITDA before corporate expenses, a notable turnaround from a loss in the previous year. This improvement highlights the progress we've made in restructuring our spirits business, despite facing challenges in the broader spirits market. Our vodka sales performed well, while our tequila brand, Azunia, continues to struggle due to distribution changes we've previously mentioned. We did see an increase in corporate expenses due to significant professional fees related to the merger transaction. Additionally, we raised $440,000 to a direct equity placement. For a detailed discussion on the merger and debt exchange, please refer to the subsequent events section of our Form 10-Q. Now I'd like to turn the call over to Jeffrey Gwinn. Jeffrey, please proceed.
spk01: Thank you, Tiffany. As previously disclosed in our SEC funds, we recently acquired Beeline Financial Holdings, Inc., a digital mortgage technology company. Since we are in the process of consolidating Beeline's operations with our own, we believe it would be premature to provide incomplete information about Beeline until the consolidation is complete. We intend to file additional information concerning Beeline in the future, including audited financial statements, which will be included in a current report on Form 8K and will be filed here shortly. That said, I'm delighted to welcome the Beeline management team, Nick Louisa, Chris Moe, and Jess Kennedy, as well as all the Beeline employees. This is an exceptional team of people, exceptional leadership group that brings a unique vision and extensive experience that we are thrilled to have them on board here at Eastside. Nearly two years ago, Eastside's board initiated a strategic review to explore avenues for enhancing shareholder value. Initially, we considered focusing on our spirits business, including the potential sale of one or more brands. Our immediate objective was to restructure the spirits division to achieve profitability. During this period, we successfully transformed craft, too, from a small regional mobile canning operation into a digital can printing operation in the Pacific Northwest. Earlier this year, it became clear that to meet our business objectives for both companies and maintain our status as a public company, we needed to reassess the opportunities available to each of these businesses, particularly in the light of the constraints, which are not unique just to Eastside, but also more broadly affecting all small public companies these days. This led us to pursue a potential sale of Kraft and to reduce our debt, ultimately creating the opportunity to acquire Beeline. As you will learn in the coming days, Beeline is a great opportunity in my view. In summary, it's a dynamic company focused on innovating the mortgage origination sector through advanced technology. Beeline is well positioned for significant growth, aligning seamlessly with our public company objectives, especially in the context of favorable market conditions such as those that we expect going forward with lower interest rates and a thriving mortgage origination business. I firmly believe that the mortgage opportunity we are pursuing is extraordinary. The annual mortgage origination market in the U.S. exceeds $1.5 trillion. It represents one of the last segments of personal finance yet to be fully transformed by modern technology. The Beeline team has a proven track record of innovation in this field. With lower rates, pent-up demand, and new technologies designed to enhance sales and reduce costs, Beeline's business model is particularly compelling. Now, turning to our spirits business, I'm very pleased to report that we did achieve positive EBITDA in the quarter, a milestone for the company. while we still face a number of challenges in the business, including substantial headwinds, which we are on the right path, I think. And I expect continued improvement in spirits through the year, with most of the restructuring activities now behind us. In conclusion, I'm very excited about the future and encourage you to review our public funds as we approach the end of the year. At the appropriate time, we'll outline our plans for the upcoming year, including B-Line's contributions, given that we are in the process of finalizing this transaction, as I said earlier, and maintaining best practices of corporate governance and fair disclosure will forego our traditional Q&A session this quarter. And we will obviously resume that at our next meeting. Thank you for your continued interest in ESOT, and we look forward to sharing more of our vision with you soon.
spk00: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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