A Closer Look at Seven Stills' Financials
Published 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.
- 2017 Financials
- 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
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 [email protected] 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