- For the first quarter of 2021, Splash Beverage Group reported revenue of $2.42 million, up 95% from Q4
- Splash ended quarter with $1.23 million in cash, cash equivalents
- Splash filed Form S-1 with SEC seeking to raise $69 million, a capital raise that will only consummate upon Splash meeting all NYSE American listing requirements
Earnings season is almost over, with about 90% of the S&P 500 companies already filing their results from the recent quarter, that being the three-months ended March 31 for most. Normally, a look back at the year prior quarter is instrumental to analysts and retail investors alike as a measure to what the future may hold. A year ago, however, the world was enthralled in the outset of the COVID-19 pandemic, which makes the year-prior comparisons more moot than typical. For instance, a look at upstart Splash Beverage Group (OTCQB: SBEV) shows a demonstrative crushing of Q1 sales year-over-year. A fairer assessment of the growth trajectory is to look at sequential quarter performance, for which Splash didn’t disappoint either. On the back of its explosive growth, Splash has set the stage to graduate to a national exchange, as evidenced by documents filed with the Securities and Exchange Commission.
Splash is focused on manufacturing, distribution, sales, and marketing of both alcoholic and non-alcoholic beverages. The specialization of the company as an accelerator of emerging brands is rooted in its heavily experienced leadership led by CEO Robert Nistico. Among his long list of accomplishments, Nistico was the fifth employee of Red Bull North America, where he and his team grew sales from zilch to over $1.6 billion annually. The SBEV board is littered with industry pros to the point that Nistico, even with his incredible success in the beverage market, recently quipped that he’s “the only no-name” amongst the directors (https://ibn.fm/JfQEX).
Florida-based Splash is putting that experience on display as it carves out shares in diverse market segments with its portfolio, including sports drinks, wine-by-the-glass, naturally flavored tequila, and sangria. Despite the diversity, the company utilizes all synergies possible (bottling, distribution, etc.) to contain costs and expand sales while still allowing the local flavor to shine. To that point, Splash’s Salt brand tequila comes from a region in Mexico world renowned for its agaves, while its Pulpoloco Sangria is imported from Spain.
During the first quarter, Splash sales surged to $2.42 million (https://ibn.fm/Ca6AM). That was a 2,058% increase in sales from the year prior quarter. In fairness, that period marked the peak of pandemic panic, and Splash was just completing a reverse merger to become a public entity. In the fourth quarter of 2020, sales came in at a record $1.24 million. In Q1 2021, sales tallied $2.42 million, smashing the Q4 record by 95% while coming up only about $500,000 short of the $2.98 reported for the full year of 2020.
A single image succinctly summarizes the improving sales:
Splash ended the quarter with $1.23 million in cash and cash equivalents. Not surprisingly, the young company posted a net loss of $4.44 million for the first quarter as it spends on expansion.
While continuing to explore potential accretive acquisitions and execute organic growth, Splash is planning to exit the OTC marketplace in favor of the New York Stock Exchange American. The NYSE American is the old American Stock Exchange (“AMEX”), which showcases mostly small cap (<$500 million market capitalization) NYSE companies. Moving to a national exchange provides additional transparency and attracts investors that are biased against OTC-listed companies.
In the process, Splash has filed a Form S-1 with the SEC seeking to raise $69 million (https://ibn.fm/LqeuJ). Management believes it will meet all requisite criteria to uplist and, per the prospectus, “will not consummate this offering unless our common stock will be listed on the NYSE American.”
Splash reported that it didn’t have any commitments in place at the time of the S-1 but did note that it may use a portion of the net proceeds from the offering “to in-license, acquire or invest in complementary businesses, technologies, products or assets.” Management estimates that net proceeds from the raise will fund the company for at least 24 months, giving it ample time to execute on building more revenue, moving towards breakeven and, as Nistico told the Big Biz Show, start working on the exit strategy as a multiple of revenue.
For more information, visit the company’s website at www.SplashBeverageGroup.com.
NOTE TO INVESTORS: The latest news and updates relating to SBEV are available in the company’s newsroom at https://ibn.fm/SBEV
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