On the heels of its CEO departing, Solo Brands warned that the company is looking for solutions after it cautioned investors that it may not be able to continue as a going concern in its fourth-quarter and full-year financial results.
“We are evaluating strategies to refinance our existing debt and our plans are focused on improving our results and liquidity as we are discussing today,” Coffey said on the company’s earnings call on Wednesday, pointing towards the risk factors outlined in its 10-K filing. The Solo Brands umbrella includes Solo Stove, Oru Kayak, Chubbies, and Isle.
“Our financial condition raises substantial doubt as to our ability to continue as a going concern,” reads the 10-K.
Former CEO Chris Metz stepped down in February and John Larson took over as interim CEO.
Solo’s total net sales for the year were $455 million, down 8% from the prior year. In the fourth quarter, net sales were $143.5 million, a year-over-year decline of 13.2%.
Solo’s net loss was $58.2 million in the fourth quarter and the company incurred a net loss of $113.4 million through the year ended Dec. 31. Solo’s accumulated deficit is $228.8 million and it has cash and equivalents of $12 million. Its debt is $150.7 million, and it drew an additional $277.4 million on its revolving credit facility, which matures in May 2026.
Solo has a few options to refinance its existing debt, such as restructuring it, issuing new debt or entering into other financing arrangements, according to the 10-K. It will also look at cutting costs through a workforce reduction and closing distribution centers.
“We recognize the challenges ahead and we are committed to transforming our business by stabilizing operations, optimizing efficiencies, and building scalable processes and platforms to drive sustainable growth,” Coffey said.
