SUMMARY
2Q Results. Splash delivered solid results, with net revenue of $4.5M up 36.8% y/y and 14.6% sequentially. This was driven by its online platform, Qplash as well as the continued rollout of TapOut. Gross margins of 15% contracted 610 bps from a quarter ago due to a handful of one-time items. However, we would expect margin to meaningfully rebounded through the remainder of the year. Earnings per share came in at a loss of $0.15 and the company ended the quarter with $4.2M of cash. During the quarter, Splash brought on Ron Wall as CFO, who we believe is an important strategic hire. Mr. Wall brings extensive expertise as a spirits executive, having spent the prior 13 years at privately held William Grant and Sons as CFO.
Outlook. Management is continuing its aggressive expansion into wholesale, having recently announced a plethora of new relationships, including 7-11 and Circle-K. We believe that the push into the convenience-store chains is a natural evolution of the strategy and bodes well across the Splash portfolio.
