Solo Brands, Inc., the parent of the Solo Stove, Oru Kayak, Isle, Chubbies, and TerraFlame brands, has disclosed in its 2024 Annual Report on Form 10-K filed with the SEC that there is substantial doubt about its ability to continue as a going concern.

“We are evaluating strategies to refinance our existing debt, and our plans are focused on improving our results and liquidity through a variety of operational improvements throughout 2025,” the company wrote in the filing.

In the Risk section of the 10-K filing, the company said:

  • We may be unable to realize expected benefits from our strategic plans, any restructuring and cost-reduction efforts, and operational improvement.
  • Our limited liquidity poses additional risks to our business and operations.
  • We depend on cash generated from our operations to support our business and our growth initiatives.
  • Our indebtedness limits our ability to invest in the ongoing needs of our business.

The company said it would discuss the issues during its Q4 conference call, and SGB Media will report on management’s plan as it becomes available.

Solo Brands, Inc.’s direct-to-consumers (DTC) shares were down nearly 50 percent in midday trading on Wednesday, March 12 after declining nearly 24 percent in pre-market activity.

“During the fourth quarter, the Board and management team engaged in developing an aggressive turnaround plan for 2025,” offered John Larson, interim president and CEO of Solo Brands, Inc. “As a part of our transformation plan, we hired external financial advisors to help us go through every line item of the business. Notwithstanding challenging results, Solo Brands has a solid foundation for success, including great ‘enthusiasts’ brands, a pipeline of new products and highly loyal customers.”

Larson said the company’s Board and management team are fully aligned and engaged in the turnaround plan and are taking appropriate steps to implement 30-plus value accretive initiatives identified in a turnaround plan.

Liz Vanzura, a Solo Brands Board of Directors member, has been appointed as the company’s interim chief marketing officer and will continue to serve as a member of the Board. Vanzura is said to have a successful track record as CMO and head of brand strategy for companies where she has worked, including Cadillac and Hummer.

Consolidated Fourth Quarter 2024 Highlights
Fourth quarter net sales decreased $21.8 million to $143.5 million, down 13.2 percent year-over-year, driven by declines in retail and DTC channels within the Solo Stove segment, partially offset by an increase in net sales in the Chubbies segment.

Gross profit was $87.8 million, or 61.1 percent of net sales, in Q4, an increase of 280 basis points versus the prior-year Q4 period. Adjusted gross profit was $87.6 million, or 61.0 percent of net sales, an increase of 170 basis points year-over-year.

Operating expenses decreased $194.2 million to $143.0 million, down 57.6 percent, primarily driven by the reduction in restructuring, contract termination and impairment charges of $192.2 million in the current period.

The fourth quarter net loss was $58.2 million, or a loss of 63 cents per Class A common share, improved over the prior-year period when the net loss came in at $210.9 million, or a loss of $2.14 per Class A common share.

The company reported an Adjusted net income of $2.3 million, or 3 cents per share, which declined from the prior year period.

Adjusted EBITDA of $6.3 million, or 4.4 percent of net sales, declined from the prior year period.

Fourth Quarter Brand Summary

  • Solo Stove net sales decreased $23.6 million to $116.6 million, down 16.8 percent, driven by declines in retail and DTC channel net sales due to the lack of significant new product launches. Segment EBITDA of $6.1 million, or 5.2 percent of net sales, declined from the prior year period.
  • Chubbies net sales increased $2.6 million to $24.2 million, up 12.2 percent, driven primarily by increased demand within the retail net sales channel. Segment EBITDA of $3.3 million, or 13.7 percent of net sales, improved over the prior year period.

Consolidated Full Year 2024 Highlights
Net sales decreased $40.2 million to $454.6 million, down 8.1 percent, driven by declines in both retail and DTC channel net sales within the Solo Stove segment, partially offset by an increase in net sales in the Chubbies segment.

Gross profit of $260.3 million, or 57.3 percent of net sales, a decrease of 390 basis points versus a year ago, includes a writedown of inventory resulting from the wind-down of IcyBreeze. Adjusted gross profit of $280.3 million, or 61.7 percent of net sales, an increase of 30 basis points versus the prior year.

Operating expenses decreased $95.1 million to $434.9 million, down 17.9 percent, primarily driven by the reduction in restructuring, contract termination and impairment charges of $112.9 million in 2024.

Net loss was $180.2 million, or a loss of $1.94 per Class A common share, improved from a net loss of $195.3 million, or a loss of $1.84 per Class A common share in the prior year.

Full-year Adjusted net income was $11.4 million, or 12 cents earnings per basic and diluted share, which declined from the prior year.

Adjusted EBITDA of $32.6 million, or 7.2 percent of net sales, declined from the prior year.

Full-Year Brand Summary

  • Solo Stove net sales decreased $54.2 million to $297.4 million, down 15.4 percent y/y, driven by declines in retail and DTC channel net sales, said to be a result of the lack of significant new product launches and a non-recurring retail channel transaction in the prior year. Segment EBITDA of $45.9 million, or 15.4 percent of net sales, declined from the prior year.
  • Chubbies net sales increased $11.1 million to $112.7 million, up 10.9 percent, reportedly driven by continued demand within the DTC net sales channel driven by both website and owned retail store performance, coupled with increases realized in the retail net sales channel as a result of continued growth within our retail strategic partnerships.Segment EBITDA was $15.8 million, or 14.0 percent of net sales, for the full year, which improved over the prior year.

Consolidated Balance Sheet Summary
Cash and cash equivalents were $12.0 million as of December 31, 2024, compared to $19.8 million at December 31, 2023.

Inventory was $108.6 million at year-end compared to $111.6 million at December 31, 2023.

Outstanding borrowings were $69.0 million under the Revolving Credit Facility and $83.0 million under the Term Loan as of December 31, 2024. Subsequent to December 31, 2024, Solo Brands drew an additional $277.3 million under its Revolving Credit Facility, which matures on May 12, 2026, together with the Term Loan.

Image courtesy Solo Brands, Inc./Oru Kayak