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Seven Stills

A Closer Look at Seven Stills' Financials

on Aug 22 2018

Hey everyone, we've been receiving several common questions regarding the financials of our company.  I wanted to take the opportunity to shed some light on our current, past and projected financials as well as how they impact the valuation of our business.  

  1. 2017 Financials
  2. For the majority of 2017 we had three sources of income. 
    1) Direct to consumer (DTC) sales - Distillery - $563,637.68
    2) DTC sales - Outer Sunset Taproom - $389,668.39
    3) Distributed Whiskey Sales - $199,392.23

  3. In October of 2017 we expanded our portfolio to add a fourth source of income:
    4) Distributed Beer Sales - $26,955.75

2018 Financials
Using our interim financials we projected our 2018 revenues to be: 
1) Direct to consumer (DTC) sales - Distillery - $870,368.86 (Growth of 54.42%)
2) DTC sales - Outer Sunset Taproom - $808,439.12 (Growth of 107.47%)
3) Distributed Whiskey Sales - $334,097.68 (Growth of 67.57%)
4) Distributed Beer Sales - $1,372,694.76 (Growth of 4,992.4%)

Earnings Forecasting


Valuation
The majority of recent brewery acquisitions have been valued using the following calculations: 

Gross Earnings * Multiple Valuation = Implied Enterprise Valuation
Implied Enterprise Valuation - Debt = Pre-Money Valuation

A 6x multiple valuation is the lowest valuation we would entertain when considering a strategic partnership.  Using this number we would calculate our valuation as: 

2017: $1,179,654.05 * 6x = $7,077,924.30 - $580,609 
Implied Enterprise Valuation = $6,497,315.3 + Kilroy Contribution ($1,210,090) = $7,707,405.30 Pre-Money Valuation

2018: $3,529,600.42 * 6x = $21,177,602.52 - $580,609
Implied Enterprise Valuation = $20,596,993.52 + $1,210,090 = $21,807,083.52 Pre-Money Valuation

2019: $13,260,208.85 * 6x = $79,561,253.10 - $580,609
Implied Enterprise Value = $78,980,644.10 + $1,210,090 = $80,190,734.10 Pre-Money Valuation


*Please note that EBITDA is not commonly used in determining valuation for the brewing industry
**Kilroy Contribution denotes the Tenant Improvement Allowance provided for 100 Hooper
***Assets, including aging inventory are not reflected in this calculation

If you are considering investing please feel free to contact me at tim@sevenstillsofsf.com with any additional questions.  If you have already invested thank you for your support and please continue to send us your referrals!

Thank you,
Tim Obert
CEO, Seven Stills