NYSE:SBEV
SPLASH BEVERAGE GROUP, INC.
A distressed beverage distributor facing severe revenue contraction and persistent net losses exceeding $23 million in 2024.
Key Metrics
Investment Thesis
Bull Case
The stock represents a potential turnaround play for investors willing to accept extreme volatility and risk of delisting. If the company can successfully pivot its product mix or secure new distribution contracts, the current distressed valuation could offer significant upside upon any stabilization of operations.
Bear Case
Investors should avoid this stock due to the fundamental breakdown in its financial model, evidenced by a $21.4M liability base against only $2.8M in assets. The persistent net loss trend and lack of positive cash flow from operations suggest a high probability of bankruptcy or forced liquidation in the near term.
About SPLASH BEVERAGE GROUP, INC.
Splash Beverage Group Inc. (SBEV) operates within the consumer packaged goods sector, focusing on the distribution and sale of beverage products across retail markets. The company has recently faced significant volatility, with revenue dropping from approximately $19M to $4.2M in 2024 while sustaining substantial operating losses.
Analysis
Management Discussion
Financial performance deteriorated sharply in 2024, with revenue collapsing by over 70% year-over-year to just $4.2M. Operating profit turned significantly negative at -$16M, driven by high marketing and operating expenses that outpaced the shrinking revenue stream. Cash flow from operations was deeply negative at -$8M, exacerbating the company's already precarious liquidity position.
Industry Overview
The beverage distribution industry is characterized by high volume, low margin dynamics where logistics efficiency and retailer relationships are paramount. Companies in this sector typically require substantial working capital to manage inventory cycles, which poses a severe challenge for firms with negative equity like SBEV.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $18.1M | $18.9M | $4.2M |
| Cost of Revenue | $12.2M | $13.3M | $3.8M |
| Gross Profit | $5.9M | $5.6M | $355.4K |
| Operating Expenses | $27.3M | $20.9M | $16.4M |
| Operating Income | $-21.4M | $-15.3M | $-16.0M |
| Marketing | $2.8M | $2.5M | $750.4K |
| Stock-Based Comp | $1.1M | $1.2M | $2.4M |
| D&A | $936.0K | $546.0K | $540.3K |
| Depreciation | $182.9K | $153.9K | $148.2K |
| Amortization | — | $392.1K | $392.1K |
| Other OpEx | $24.5M | $18.4M | $15.7M |
| Non-Operating Income | $-245.4K | $-5.7M | $-7.7M |
| Interest Expense | $251.5K | $1.9M | $3.7M |
| Interest Income | $6.1K | $2.6K | $2.0K |
| Pre-Tax Income | $-21.6M | $-21.0M | $-23.8M |
| Income Tax | $0 | $0 | $0 |
| Continuing Ops | $-21.6M | $-21.0M | $-23.8M |
| Discontinued Ops | $-199.2K | $0 | $0 |
| Net Income | $-21.7M | $-21.0M | $-23.8M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-21.7M | $-21.0M | $-23.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $10.7M | $4.0M | $1.9M |
| Cash & Equivalents | $4.4M | $380.0K | $15.3K |
| Accounts Receivable | $1.8M | $890.6K | $396.9K |
| Inventory | $3.7M | $2.3M | $893.1K |
| Other Current Assets | $692.4K | $454.2K | $598.9K |
| Long-Term Assets | $6.6M | $5.9M | $855.1K |
| PP&E (Net) | $489.6K | $349.8K | $204.8K |
| Goodwill | $256.8K | $256.8K | — |
| Operating Leases | $750.0K | $556.1K | $351.3K |
| Other LT Assets | $5.2M | $4.8M | $298.9K |
| Total Assets | $17.3M | $9.9M | $2.8M |
| Current Liabilities | $5.0M | $14.8M | $19.4M |
| Accounts Payable | $3.4M | $4.4M | $5.2M |
| Current Leases | $268.7K | $262.9K | $305.2K |
| Other Current Liab | $1.3M | $10.0M | $13.8M |
| Long-Term Liabilities | $3.0M | $753.8K | $2.0M |
| LT Operating Leases | $480.7K | $296.1K | $53.7K |
| Other LT Liab | $2.5M | $457.7K | $2.0M |
| Total Liabilities | $8.0M | $15.5M | $21.4M |
| Shareholders' Equity | $9.3M | $-5.6M | $-18.6M |
| Paid-In Capital | $121.6M | $127.7M | $137.1M |
| Retained Earnings | $-112.3M | $-133.3M | $-155.8M |
| AOCI | $-20.5K | $-16.6K | $81.2K |
| Total L&E | $17.3M | $9.9M | $2.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-21.7M | $-21.0M | $-23.8M |
| Non-Cash Adjustments | $3.3M | $10.8M | $14.3M |
| Working Capital Changes | $4.4M | $5.6K | $1.4M |
| Cash from Operations | $-14.1M | $-10.2M | $-8.0M |
| Cash from Investing | $-102.7K | $-14.1K | $-3.2K |
| Cash from Financing | $14.4M | $6.1M | $7.5M |
| FX Effect | $-32.8K | $3.9K | $97.8K |
| Net Change in Cash | $250.4K | $-4.1M | $-364.6K |
| Beginning Cash | $4.2M | $4.4M | $380.0K |
| Ending Cash | $4.4M | $380.0K | $15.3K |
Frequently Asked Questions
How does SPLASH BEVERAGE GROUP, INC. make money?
The company's operations are primarily derived from the wholesale distribution of non-alcoholic beverages, including energy drinks and functional waters. Revenue streams are heavily dependent on securing contracts with major retail chains and maintaining inventory turnover despite high operating expenses.
What are the main risks for SBEV?
Severe liquidity constraints are evident with current liabilities of $19.4M far exceeding total assets of $2.8M and a negative cash balance. The company faces an existential threat due to a massive debt burden relative to its minimal revenue base. Continued operational losses of roughly $24 million annually threaten the depletion of remaining equity reserves.
What is SBEV's competitive advantage?
The company possesses a specialized logistics network tailored for beverage distribution in specific regional markets. Additionally, its portfolio includes niche functional beverage brands that may offer higher margin potential if market conditions stabilize.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.