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Wildpack Beverage's CEO of past 4 months, the former Nor-Cal/Manna exec Travis Sarich, has made decision to drastically downsize copacker's production footprint, shuttering plants in Las Vegas and Grand Rapids, Mich, as he seeks to ease financial strains on Vancouver-based co. The downsizing would leave co's focus on operations in Baltimore and Austin, reversing at least for now initial strategy of opening or acquiring plants in every region to create comprehensive US network for brokering, decorating and filling cans. Wildpack, recall, was launched by group of young entrepreneurs with little direct experience in bevs but with a vision to offer a middle-market solution to marketers struggling to meet the steep minimums imposed by larger copackers, acquiring seasoned regional operators who might be coaxed to stay on via promise of rich stock appreciation. But shares have crashed as losses have continued and Sarich succeeded founding CEO Mitch Barnard this past summer (BBI, Jul 16). Context was release of Q3 earnings results that Q3 sales edged up 4.1% to $16.8 mil (Canadian). Gross profit was $1.9 mil in the red and net loss widened to $22.6 mil from $17 mil a year earlier, burdened by $11.2 mil impairment charge taken for eroded goodwill and customer relationships at acquired Land & Sea brokerage in Grand Rapids. The quarterly sales gain was considerably off the pace of 9-month tally, +24.7%, to $51.3 mil. For the 9 mos, net loss came to $37.3 mil vs $32.9 mil in year-earlier period. In other words, to generate topline of $51.3 mil co incurred net loss of $37.3 mil over first 9 mos of fiscal year. As Sarich seemed to acknowledge, that's not sustainable."I am pleased with the continued growth in topline revenue, driving from filling production volume growth," per statement from Sarich. "We continue to focus intently on cost containment and optimizing the company&#39;s physical footprint. The closure of the Las Vegas facility will better position the company to hone production and manage costs more closely, while continuing to service our core customer base." Last year, under Barnard, the co had exited operations dubbed Lucky Clover and Marietta.As has been the case lately, Wildpack unusually excludes the quarterly financials from earnings announcement or investor website, leaving it to the curious to seek them out on SEDAR site, in striking contrast to early days, when co would issue extensive suite of plant-by-plant performance metrics and host detailed quarterly investor calls. Last such call was in mid-2023.On financial side, CANS is continuing in discussions that might see it restructure its 8% public convertible debentures totaling C$45 mil but has nothing to report yet. At this point it has stopped making interest payments on the debt, nor has it paid the outstanding principal on tranches that were due on Jun 30 and Nov 23. So it's in precarious situation. Still, "the company has not received a waiver nor a notice of default and continues to work on the proposed debenture restructuring transaction," it reported today. More broadly, it's "actively engaged in discussions around strategic and financial alternatives and is focused on relieving the financial burden of the company&#39;s current debt structure and obtaining additional financing necessary to fund ongoing operations." Of course, there's no assurance it will succeed, it noted.

Wildpack Copacker Scores Modest Q3 Sales Gain but Losses Deepen as New CEO Sarich Shutters 2 Plants, Scrambles to Refinance Debt

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