PORTLAND, OR--(Marketwired - Nov 17, 2015) - Eastside Distilling, Inc. (OTCQB: ESDI), a producer of award-winning master-crafted spirits, reported financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Financial Highlights vs. Year-Ago Quarter

  • Gross Revenues up 65% to $492,000
  • Gross profit totaled $184,000 versus $93,000 in Q3 2014
  • Net loss totaled $1,412,612 (which included approximately $691,000 of non-cash expenses) versus a loss of $251,577 in Q3 2014
  • Adjusted EBITDA, less stock-based compensation, totaled a loss of approximately $702,000 

Third Quarter 2015 Operational Highlights

  • Case shipments increased 115% to 2,191 from 1,021 in the same year-ago quarter.
  • National rollout continues with expanded distribution and listing approval in major new markets, including New York, Texas, Illinois and Nevada.
  • Introduced the new Barrel Hitch American Whiskey and Barrel Hitch 'Oregon Oak' American Whiskey products. Strong sales start in first 3 months of launch.
  • New Barrel Hitch American Whiskey earned top honors in 2015 MicroLiquor Spirit Awards.

Third Quarter 2015 Financial Results
 Gross revenues in the Third quarter of 2015 increased 65% to $492,000 compared to $298,000 in the same year-ago period. The increase in revenue is primarily attributable to increased penetration in existing markets across the Pacific Northwest as well as increased distribution to additional states.

Gross margins in the third quarter of 2015 improved to 37.5% of revenue from 31% in the year-ago period. The change in gross margins is primarily attributable to a change in the sales-channel and product mix along with improved fixed-facility cost coverage.

Net loss in the third quarter of 2015 totaled approximately $1,412,000 or ($0.03) per diluted share, compared to a net loss of $251,000 or ($0.01) per diluted share in the year-ago quarter. The wider net loss is primarily due to a $697,000 increase in SG&A, including advertising, office personnel, rent, marketing, legal and accounting expenses all associated with the company's planned increase in infrastructure to support its national expansion plans. The higher net loss for the period also included approximately $691,000 in non-cash expenses associated with stock-based compensation to consultants and employees.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and change in fair value of derivative liabilities) less the stock-based compensation for the nine-month period ending September 2015 totaled a loss of $2,114,939 versus a loss of $260,709 in the year-ago period (see discussion about the company's presentation of adjusted EBITDA, a non-GAAP term, and its reconciliation to the nearest GAAP metric, below).

Cash at September 30, 2015, decreased to $85,000 compared to $1.0 million at December 31, 2014, with the decrease resulting from cash used in operations.

Further details about the company's results in fiscal third quarter 2015 are available in its quarterly report on Form 10-Q, which is available for download from the investor relations section of the company's website at www.eastsidedistilling.com.

Management Commentary
"We continued to experience strong growth during the third quarter as we expand both our local northwest presence as well our national footprint," said company CEO, Steven Earles. "Over the past year, the company has focused on rolling out its brand nationally and is now working with major distributors in key markets. We have begun shipping products to many of the new states recently announced and the company is extremely well positioned as we move forward. We also launched our latest product addition, labeled Barrel Hitch American Whiskey, during the quarter and have witnessed strong initial sales.

"Over the past year, the company also added costs to build the infrastructure in support of our national rollout strategy and multi-faceted marketing campaign. We believe these investments have been critical for our ability to take advantage of the overall industry trends and our brand development. Looking ahead, we expect our expenses to generally stabilize. Thus, as our sales volumes continue to increase, we expect to leverage the efficiencies associated with our operating model and improve bottom-line results," further commented Earles.

About Eastside Distilling
 Eastside Distilling, Inc. (OTCQB: ESDI) has been producing high-quality, master crafted spirits since 2008 and is located in Southeast Portland's Distillery Row. Makers of award winning spirits, the company is unique in the marketplace and is distinguished by its highly decorated product lineup that includes Burnside Bourbon, Below Deck Rums, Portland Potato Vodka and a distinctive line of infused whiskeys. All Eastside spirits are master crafted from natural ingredients for unparalleled quality and taste. The company is publicly traded under the symbol OTCQB: ESDI. For more information visit: www.eastsidedistilling.com or follow the company on: Twitter & Facebook.

Forward-Looking Statements 
 Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release may include statements related to our strategic focus, product verticals, anticipated revenue and profitability. The Company assumes no obligation to update the cautionary information in this release.

Fiscal Third quarter 2015 Financial Summary Tables

The following financial information should be read in conjunction with the unaudited financial statements and accompanying notes filed by the company with the Securities and Exchange Commission on November 16, 2015 on Form 10-Q for the period ended September 30, 2015, and which can be viewed at www.sec.gov and in the investor relations section of the company's website at www.eastsidedistilling.com.

Use of Non-GAAP Measures
 Eastside Distilling's management evaluates and makes operating decisions using various financial metrics. In addition to the company's GAAP results, management also considers the non-GAAP measure of adjusted EBITDA. Management believes this non-GAAP measure provides useful information about the company's operating results.

The company defines adjusted EBITDA as net income (loss), plus interest expense, provision for income taxes, depreciation and amortization, and loss from discontinued operations (goodwill impairment). The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

       
   Nine Months Ended
September 30,		  
   2015    2014  
Net (loss) income   $ (2,931,690 )   $ (267,088 )
  Add:                
    Interest expense     15,593       3,308  
    Gain on Spin-off     (52,890 )        
    Provision for income taxes     -       -  
    Depreciation and amortization     13,927       3,071  
Adjusted EBITDA   $ (2,955,060 )   $ (260,709 )
  Stock-based compensation     124,250       -  
  Stock issued for services     715,871       -  
EBITDA less stock-based expense  $(2,114,939)  $(260,709)
                 
                 
                 
Eastside Distilling, Inc. and Subsidiary  
Condensed Consolidated Balance Sheets  
September 30, 2015 and December 31, 2014  
             
   September 30,
2015
(unaudited)		    December 31,
2014
(1)		  
Assets                
Current assets:                
  Cash   $ 85,378     $ 1,082,290  
  Trade receivables     63,838       138,041  
  Inventories     813,585       377,020  
  Prepaid expenses     213,818       174,147  
Total current assets     1,176,619       1,771,498  
Property and equipment - net     110,135       81,206  
Other assets     64,375       193,750  
Total Assets   $ 1,351,129     $ 2,046,454  
                 
Liabilities and Stockholders' Equity                
Current liabilities:                
  Accounts payable   $ 988,823     $ 206,630  
  Accrued liabilities     400,510       72,610  
  Deferred revenue     6,554       8,275  
  Current portion of note payable     3,993       3,560  
  Convertible notes payable - net of debt discount     441,500       150,000  
Total current liabilities     1,841,380       441,075  
Note payable - less current portion     19,206       23,271  
Total liabilities     1,860,586       464,346  
                 
Commitments and contingencies (Note 10)                
                 
Stockholders' equity:                
  Preferred stock, $0.0001 par value; 100,000,000 shares authorized;                
    no shares issued and outstanding at September 30, 2015 and December 31, 2014     --       --  
  Common stock, $0.0001 par value; 900,000,000 shares authorized;                
    45,955,000 and 45,512,500 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively     4,596       4,551  
  Additional paid-in capital     6,378,322       5,538,242  
  Accumulated deficit     (6,892,375 )     (3,960,685 )
Total stockholders' equity     (509,457 )     1,582,108  
Total Liabilities and Stockholders' Equity   $ 1,351,129     $ 2,046,454  
(1) Derived from the Company's December 31, 2014 audited financial statements                
                 
                 
                 
Eastside Distilling, Inc. and Subsidiary  
Condensed Consolidated Statements of Operations  
For the three and nine months ended September 30, 2015 and 2014  
(unaudited)  
                         
   Three Months Ended    Nine Months Ended  
   September 30, 2015    September 30, 2014    September 30, 2015    September 30, 2014  
Sales   $ 492,380     $ 298,667     $ 1,344,881     $ 738,639  
Less excise taxes     140,299       42,917       363,316       127,936  
  Net sales     352,081       255,750       981,565       610,703  
Cost of sales     167,524       162,935       518,356       290,036  
  Gross profit     184,557       92,815       463,209       320,667  
Selling, general, and administrative expenses     1,587,260       341,942       3,431,143       584,447  
Income (loss) from operations     (1,402,703 )     (249,127 )     (2,967,934 )     (263,780 )
Other income (expense) - net     (9,909 )     (2,450 )     36,244       (3,308 )
Income (loss) before income taxes     (1,412,612 )     (251,577 )     (2,931,690 )     (267,088 )
Provision for income taxes     --       --       --       --  
Net income (loss)   $ (1,412,612 )   $ (251,577 )   $ (2,931,690 )   $ (267,088 )
                                 
                                 
Basic and diluted net income (loss) per common share   $ (0.03 )   $ (0.01 )   $ (0.06 )   $ (0.01 )
                                 
Basic and diluted weighted average common shares outstanding     45,829,783       32,000,000       45,630,962       32,000,000  
                                 

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