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Something made me go hmmm on the Eastside Distilling Call

I was listening to the Eastside third quarter call. I really like what I heard. The team seems very much on their way to turning around the ship. They are moving EBITDA to breakeven. Seem very focused on capital allocation and growth.

But there was one comment from management that really made me sit up and take notice:

I honestly don’t know if my math is wrong or I am missing something about the business. But… it seems to me that if they put 1,300 barrels towards the Burnside brand and 1,300 barrels towards this new Eastside Limited brand, and each 100 barrels generates $1 million of revenue and $500,000 of gross profit, then that is a lot of money for a company this size.

Eastside generated $4.7 million of revenue this quarter at 35% GMs. The numbers here are more than their annual revenue by some margin. It is a one time thing, but nevertheless.

Again, I don’t know if there is something about of the business here that I don’t understand or what. The market is moving the stock up enough to make me think that I might be thinking about this right, but not enough that I am sure I am thinking about it right. If that makes sense.

I guess we will see.

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