Solo Brands at 16th Annual Midwest Ideas Conference: Strategic Turnaround

On Wednesday, 27 August 2025, Solo Brands (LON:DTC) presented its strategic turnaround plan at the 16th Annual Midwest Ideas Conference. Led by CEO John Merris, the company addressed both challenges and achievements, focusing on debt refinancing, marketing efficiency, and product innovation. Despite a challenging year, Solo Brands aims to strengthen its market position.

Key Takeaways

• Solo Brands implemented a 20% reduction in headcount and renegotiated contracts, including a new deal with FedEx.
• Marketing expenses have been reduced from over 20% of revenue to the mid-teens.
• The company has successfully refinanced its debt and relisted on the NYSE under the ticker SBDS.
• Q2 2025 sales were $92 million, down from $132 million the previous year, but gross margins remained above 60%.
• New product launches are planned, including innovations in the smokeless fire pit and outdoor cooking markets.

Financial Results

• Q2 2025 sales were $92 million, a decrease from $132 million in Q2 2024.
• EBITDA decreased by $4 million, despite a $40 million revenue drop, due to significant SG&A cost reductions of $23 million.
• Gross margins remained strong, exceeding 60%.
• Operating cash flow was $11 million in Q2 2025.
• Retailer orders decreased significantly, but consumer sell-through only declined by $1 million.

Operational Updates

• A 20% reduction in headcount was achieved through organizational restructuring.
• A project management office oversees 38 cost-saving initiatives.
• New enterprise-wide centers of expertise have been established to enhance efficiency.
• The company has diversified its supply chain and mitigated tariff impacts.
• Debt refinancing provides a financial runway through 2028, and trading on the NYSE has resumed under the SBDS ticker.

Future Outlook

• Solo Brands plans aggressive product innovation, focusing on outdoor cooking, cooling, and the smokeless fire pit market.
• A new product launch in the water sports sector is anticipated in Q4.
• The company aims for a more aggressive product rollout strategy in 2026.

Q&A Highlights

• Key retail partners include Home Depot, Bass Pro Shops, Dick’s Sporting Goods, and Shields.
• Manufacturing is shifting to various parts of Asia, including Vietnam, Cambodia, and Mexico, with near-shoring options under evaluation.
• New iterations of the tabletop Solo Stove are expected.

Readers are encouraged to refer to the full transcript for a detailed understanding of Solo Brands’ strategic plans and financial performance.

Full transcript - 16th Annual Midwest Ideas Conference:

John Merris, CEO, Solo Brands: Thanks very much. Good morning, everybody. You know, go back to my universities and lecture every once in a while and I make the kids come to the front of the class. I won’t bite, but I won’t do that here. Appreciate you guys taking the time to learn a little bit more about Solo Brands and where we are in our turnaround and some of the outlook for the future.

Let’s see if I get the technology right. A little background on me, I joined Solo Brands Board in December. I had a friend who was on the board, had been on public company boards the previous eight years. The majority of that in a chairman role and had retired from a day to day CEO role in 02/2022. But thought, what a cool bunch of brands and what opportunity, and I thought the stock price was really low, and I’m excited to join the Board, and I joined in December.

And as many of you know, if you followed us before, had a little bit of a tough fourth quarter. My first official Board meeting was in February. And we had realized as a Board and as a management team, we were working on a turnaround plan at that point in time. And then the previous CEO elected to leave at that point in the Board meeting, and I came in as interim. And because I like the brands and the challenge and the people so much that the company agreed to stay on.

Laura is here as CFO. Laura has been with Solo Brands for eighteen months. So she came with the change eighteen months ago. She’s lived through very briefly one CEO, then a second CEO, and now I’m her third. So I don’t know if they say she’s a CEO grinder or what.

I don’t know what’s going on here. But no, Laura is a great partner, a great teammate. And honestly, I wouldn’t have stayed to work through the challenges we had to if the team wasn’t that great. And Mark is here as well, who runs Investor Relations for us. Solo brands a little bit.

You guys have seen a million vision statements and so have I because I’m old. I’ve run enthusiast brands for the last fifteen years of my career as CEOs. But we’re a leading portfolio of lifestyle brands, really built for communities to be involved with, trust us, love us and rave about us. And that’s the cool thing about the category. You know, I’ve had opportunities to run bigger companies.

And when I found out their main product was a toilet seat, I’m like, this really isn’t too exciting to me. But I’ve always worked whether it was the auto industry running Buick and GMC truck, whether it was in the aftermarket in the Jeep space, running Bestop with a lot of the top brands in the Jeep aftermarket industry. This is what enthuses me and this is what this company is about. Just to give you a quick high level overview for those who don’t know, we’re at about 400,000,000 of revenue and about $27,000,000 of EBITDA if you look at our last twelve months. The key brands are really Solo Stove and Chubbies that makes up roughly 90% of our revenue.

Now we have a water sports division that’s the remaining 10 that has some very unique products as well. But the majority of our business really falls within those two key brands, both solo brands and Chubbies. And I apologize, have a bit of a cold. So if I start losing my voice, I will drink a lot of water. You know, these just aren’t normal brands.

When you look at NPS scores like this, you know, previous companies I’ve run, we had an NPS score of 52 and I thought we were we were the absolute top of the top and I never saw a score higher than that that I worked on actively. When I saw Solo Stove at 73, that’s a crazy NPS score. That’s top one percentile, highest in the industry. Our customers just love our product. And the community, I mean, they are huge advocates for our product.

That gives you the basis for doing something great. Chubby’s equally. Well, fifty four fifty four is almost unheard of as well. It’s just funny that it’s 19 points below solo stove. But I guess the point here is it’s the reason I’m standing here today.

I looked at the company, joined the board for this reason, looked at the challenge ahead, but said, quite frankly, we have great brands and we have consumers that love us. And it’s just up to us to run the business the right way to be successful going forward. By the way, you can ask me questions throughout this whole thing at any time if you’d like. Coming into 2025 was a real challenge. Fourth quarter results were far below our expectation.

We have a company that’s really skewed towards fourth quarter results, close to 40% of our results come in the fourth quarter. And you had a company that was building to be a $1,000,000,000 company at somewhere between 400 and $500,000,000 of revenue, putting infrastructure in place, putting people, distribution centers, heavy investments in brands. And the issue was that kind of hit a freight train with a tough fourth quarter with sales demand dropping at the same time. So when those two things hit, we had a fourth quarter that really under delivered from expectations. And we got put in an immediate situation of we need to look at our debt refinancing.

Then tariffs popped into the game and became much more apparent as we started ’25. We had a going concern disclaimer put on by our auditors, not surprising after our fourth quarter results, the leverage that we did have and with tariffs being uncertain. New York Stock Exchange traded suspended trading of our account at that point in time. Key partner challenges, there is a bit. You’re talking to some key retailers and you want to be the cornerstone because you have a great brand and they’re saying, wait a minute, you got a going concern, they just canceled trading on your stock.

Are you going to be around to make sure we plan our future around you as a brand? A bit of an uncertain consumer environment, but I’m not going to use that as an excuse. We say operating in tough consumer climate. I just look at SharkNinja and I go, I don’t want to hear about a tough consumer environment, do great products, do the right thing for your consumer and you’re going to win. You need to overwhelm it out there.

So other than this, everything was great, Mrs. Lincoln. And it was a little bit of a challenge for sure that we are working through. So it was obvious that we need to reset and refocus. And we needed to think about us as a little bit of a smaller company right now and set ourselves up for future success, how you can deliver revenue to the bottom line for your shareholders, in the end make this a worthwhile company for the shareholders and with our current trend rate that wasn’t going to happen.

So what do we do? We had started this end of fourth quarter in January, had the change in CEO. I came in, I was aware of the initiatives in place and so we tried not to lose stride and we tried to focus more aggressively on each of these four categories. I call them surge teams, that’s just something I like to use. And we said what are the four things we’re going to focus on first.

So immediately it was on organizational design. Our goal was simply to deliver a structurally smaller profit driven business model period. I’m a recovered finance guy. Finance degree, I was finance guy at General Motors before I moved into general management. And so I’m a numbers person, I’m an analytics person and in the end, we needed to set up a structure that could actually deliver bottom line profitability and the trends were really not so favorable at point in time.

Because I used to be a finance guy or, you know, General Motors, they’d yell at me in a meeting when I was running divisions like, you’re just a finance guy. And I just said, no, I’m a marketing guy who can count. And so the second surge team we set up was marketing effectiveness. We spent almost a $100,000,000 on marketing with a little over 400,000,000 in revenue. The single biggest line item of spend in the company.

And maybe that was right and maybe it was wrong. But I was going to make sure we looked at every dollar of that and said, let’s look at that clearly and decide is that the best place to put capital in the company and what is the return on each dollar that we’re spending. The third team we set up was pricing and promotion strategies. Every PE firm comes in and looks at pricing, the first thing you do with the company, but it was more than that. It was how do you align with your retailers, how do you work with promotional strategies that are set up, that are coordinated, that makes sense for a premium brand and is there some potential pricing opportunities that do exist for us out there to deliver more for our shareholders.

And last is product innovation. The reality is you can never cut your way to success. You aren’t going to be a successful company just getting leaner, leaner, leaner and getting smaller. And so I’m all about product. I’m a I wish I was an engineer.

My product team wishes I was an engineer because the things I request maybe aren’t engineering feasible, but I’m always on top of looking for innovative new products that we need to deliver as a company. And so that’s the excitement in us and that’s where I think the real growth opportunity is, we’ll get into that. Let me take you through the first three boxes quickly, talk a little bit about results year to date, if you have questions. And then I’m going to end talking about product innovation to let you know kind of where we’re moving. So with that org design, meaningful strides from the beginning.

We’ve taken a significant amount of cost out. We’ve got a project management office that we meet every week on a list of about 38 initiatives and the amount of cost we’ve taken out has been amazing as a company. Headcount, we’ve taken close to 20% of the people out. I think we’ve kept all the key leaders despite the terrible situation we were walking into. The key management team is in place and really excited about the future and motivated about what we’re doing going forward.

In addition, we looked at everything, whether it was every account we had, whether it was insurance. We’ve negotiated a tremendous new deal with FedEx on the bottom line, consolidated number of operations in our warehouses. And for those who don’t know the background on Solo Stove, it was originally called DTC on the stock exchange and that’s because they’re going to build a big direct to consumer model and build this big infrastructure and just keep acquiring brands. Not the case right now. Let’s take that huge infrastructure out.

Let’s focus on these three great divisions of lifestyle brands we have and maximize profitability for them and manage them how they need to be managed. We’re not an administrative machine just shipping products out. I think Amazon has that market covered a little bit myself. They do a nice job. And then we created enterprise wide centers of expertise.

And so the reality is brand research, being great on performance marketing, those things go across all of our divisions. But we were three pretty disparate divisions. So we brought these centers of expertise that help bring headcount together. But more importantly, all the contracts you have with outside consultants and all that, let’s bring it in a space and so it offered a lot of efficiencies as well. So we feel good about where we’re moving in organizational design.

And we’ve identified a handful of additional initiatives versus the restructuring that provide us some big upside. Pricing and promotion strategy. Imagine you’re a public company and what are you doing? You’re chasing your quarterly guidance and they’re in the fourth quarter and things aren’t going well and we start promoting on our website like we promote every single day and we start discounting bigger and bigger and bigger trying to chase the top line. And what you end up doing other than training your consumer base and not acting like a premium band is you undercut all your retail partners.

For the solo stove division in particular, that’s what we were doing. And so you get to the end of the year and what happens? You’ve got retail partners that are full of inventory because you’ve undercut them and they’re not happy about holding your inventory. I think their quote was, your product is great, your customers love you, we just don’t like doing business with you. That’s where you put yourself in a relationship.

And that happens when 40% of your results for the year are based in the fourth quarter, you’re expecting big things on Black Friday, you kind of meet up. So what we did immediately and I said, look, I’ve run for fourteen years companies of very premium brands with a big DTC component, but you need to treat your partners in a very special way. You make the most money on your own sales DTC, so I love DTC. Cash flow is better, margins are better, you control your destiny, you talk to your consumer directly, it’s great. But to be a great brand, need key retail partners.

And to do that, you need to have your promotional calendars coordinated, You need to have a map strategy out there that makes sense, so your margins stay whole. And you’re a premium brand, you’re a Bose, you’re an Apple, you’re not out there promoting three sixty five days a year. So we changed the entire calendar. We went out and talked to all our retailers. We told them, hey, we’re changing our ways.

And they believe it now because it happened from the week after I was there for the next six months. The problem was we loaded retailers with inventory in ’24. They were stacked with inventory and then we undercut them with pricing. So we walked into the year holding probably nine to twelve months almost worth of inventory at our key retail partners on the solo stove side. So a very difficult situation and so we’ve been really living through a hangover, but we’re doing the right things to become a premium brand and how you work with your retail partners.

Marketing effectiveness, you know, with the spend over 20% at $100,000,000 I can’t tell you. Let’s say I negotiated out of what three, four contracts Laura and I worked on. We had signed some big deals. This this was a young company that went public because they had so much momentum. They were selling so many smokeless fire pits.

They went from 0 to 300,000,000 in three or four years. They were taking big swings. Cash was falling out everywhere. I’m going to acquire this company. I’m going to sign up with a $100,000,000 media deal if they take some inventory from me.

There was just a lot of things done that weren’t, let’s just say with the business intent and detailed focus that it needed and we really had to unwind all of that. And so, spent a lot of time in that first quarter doing that. Eliminate high cost, low return marketing partnerships. I think I covered that one. I love direct to consumer.

I love performance marketing and you got to figure out is every dollar spent really returning to you. And so now we wake up every morning, we got a metric that we see and we know exactly margin dollars delivered from that day before exactly to the bottom line of the company and we measure it by profitability with every single product, by every single ad, by every single medium we place it in. And it is so fun because the sales team was like, I am never going to hit these DTC numbers, John. I don’t get to out promote. I don’t get to undercut everybody.

I got to be aligned with our map strategy. And I said, you just need to hit the profit numbers. So right now, we’re hitting more profit at 70% of the top line than we were making last year at the other numbers there simply because you’ve controlled margins, you’ve managed it the right way, you have marketing spend that is now far more effective. And our marketing spend is now in the teens, which is great for consumer brand. That’s not low by any means, but it’s in the mid teens versus over 20% despite our revenue decline.

So what happened as we walk through all of that? We got our debt refinanced. So in the midst of going through these changes and challenges, we did get our debt refinanced. We got runway through 2028. We felt good about that.

We worked through with the auditors. They saw the plan that’s in place. The banks saw the plan in place, showed confidence in us and we removed our going concern disclaimer came off of our financials. So we felt much better about that. The NYSE, we had a meeting with them having a little debate about whether we should have been delisted or not, at least their trading being suspended.

We had a meeting set up in New York for, I think it was the seventeenth of was it July? I think it was July. And they called us up the week in advance and they said, you’ve satisfied every single requirement that was the reason, you know, you were delisted to begin with. So we don’t need to have the meeting. We’re going relist you on the exchange.

And we thought, you know what? This is a new beginning. Let’s call us SBDS because it was available and it sounds like solo brands versus being DTC which was different a different time when the company was put together just to be a DTC operational machine. That was a busy two or three months. And I tell you, you were this close to getting your refinancing done and then on Friday, some guy would announce amazing tariff changes.

And you have to redo the model all day Saturday and all day Sunday to say, you’ve got to be kidding me. Okay. So so how do I have a financeable model here that makes sense within this window and and you think you had it good, and then the next Thursday, it would happen again. Laura and her team, just a tremendous job. And I think when they walked through the plan that we had with the banks, they said we believe in the management team and the strategy you have.

So, you know, we’re going to work with you. So we felt really good about at least giving ourselves an opportunity here to win. But let me talk truly about performance, and let’s be straight and honest here. Second quarter results, 132,000,000 in sales last year, 92,000,000 this year, a true hangover at Solo Stove, our biggest division. What was 60% of our revenue, retailers full of inventory, I’m no longer undercutting them on the DTC model side.

I’m working through the start of the year. I’m not getting replant orders. We were working through a hangover for sure. Sir.

Unidentified speaker: At any point when this overstock or stuff that was did you take any of that stuff back?

John Merris, CEO, Solo Brands: Not really. Not much at all. So they kept it? They kept it. They kept it.

Unidentified speaker: It’s a great product. It’s a game. We’re with all this in the store.

John Merris, CEO, Solo Brands: Right. But here’s my version of it. I’ll give you an example of one retailer. Okay. This retailer ordered $22,000,000 of product from us in 2024.

This year so far, they’ve ordered $560,000 from us, okay? But I have their sell through data and the sell through data in the same timeframe was within one million dollars of 11,000,000 or $10,000,000 So what we’re getting in actual results right now isn’t representative of how the product is selling through, but they’re just working through that heavy inventory overhang right now. What I am really proud about those, if you look at top line down $40,000,000 and our EBITDA down $4,000,000 If you look at our gross margins over 60, you look at contribution margins or flow through probably close to 45% organizationally, you lose $40,000,000 in revenue, you lose $18,000,000 in EBITDA. If we walked into this meeting today, I’m just glad you’re having the meeting with me today, but if we were showing 15 and negative different story. Really proud about the lower left hand corner, what we’ve done in SG and A.

So taking SG and A down 23,000,000 has allowed us to still deliver to the bottom line despite the very aggressive sales hangover we’ve been working through so far. And to get even more honest, it’s a tale of two brands. Most of what I’ve been talking to you about has been Solo Stove, our biggest brand and the challenges we have faced. But the reality is Chubby’s is having a spectacular first half of the year. The beauty for us is Chubby’s is a first half of the year product and Solo Stove is the back half.

So for our distribution centers, warehouses, staffing and all that, it’s a real nice fit for us. But thank goodness for Chubbies and the results they’ve had and had a really strong for six months of the year and feel really bullish about the opportunities with Chubbies and expansion going forward. I’ll talk about that briefly. Solo Stove, a different story, but for all the things I’ve already talked to you about at this point in time. Okay.

So I’d like to take you through some of the products here. So this is that fourth box. I’m talking about product innovation and launch and what we have to do. And I’m a product guy through and through, period. It’s all I care about.

You have great products, you’re going to win. I joked about Shark Ninja before, you know. I get an AI update that’s sent to me every week about top competitors, how they’re performing, what they’re doing. And unfortunately for my team that means we don’t really have excuses about all the other macro things people like to talk about. You need to do it with great product.

There was already a plan in place and a lot of research was done with Bain previously at the company to me coming in and identified where does Solo Stove have an opportunity to grow. And it really identified outdoor cooking and outdoor cooling. And it said, you’re an outdoor lifestyle brand. People love your product. You’re not going to grow continuing to build stainless steel fire pits that last forever and have a lifetime warranty because you’ve already sold close to 3,000,000 of them.

So where is the opportunity? And so we launched our first new product in the cooling space called the Windchill 47. I have a video to show you briefly about it because we’re kind of excited. It gives you a little better description, but it’s basically a rolling air conditioner. So it has the capability of an air conditioner you’d put in a room.

So if you got a patio or a screened in porch or something, you can put in there, actually cools it on a hot summer day. If you’re out there or sitting in your your chair having a beer and that’s sitting next to you, it is blowing cool mist over the top of you and keeping you as cool as you could be. But I think the funniest videos are all the kids at the club sports events when they’re playing soccer or baseball in the middle of summer. And and the parent who walks in with this and has the mister going, every kid is sticking their face in it and fighting and everyone wants to be around there. So, really unique technology, well executed.

The product team that we put in place prior to me being at Solo Stove is an excellent team and feel great about that product and the reviews. Next, we launched the SteelFire Griddle. That just came out recently and we sold out of everyone we had produced to begin with. We’re anxiously waiting and taking many orders a day for more of the SteelFire Griddle. What I’ll tell you about this is what a crowded category.

And to jump in with the Traegers and the Green Eggs and everybody else in this space and the Blackstones and say, how are we going to compete? But what the team stayed with is we’re a premium brand. And so it is the only brand in this and I will say not the highest end chef in the thousands and thousands of dollars that actually has a stainless steel cooking surface. Easy to clean, heats immediately, has a burner system that we call it the racetrack burner system that has no cold spots. It’s oval shaped like solo stove, so it’s unique in the space and it has just had rave reviews.

And we are so excited about that product. In addition, we have two more products coming, one in three weeks and another one in Q4. Very excited about it. So in addition to ancillary spaces, my general belief is we need to reinvigorate or reignite, excuse the pun, the smokeless fire pit space. And so innovation in that space is going to be critical to us being great going forward and expanding smokeless fire pits into kind of the outdoor space.

So very excited about that. And why don’t I go then to our videos. I have to use the mouse so if I’m technically competent, we’ll see if we’ll show you. So the first one is the cooler which we just launched. And this will give you a little better feeling for what we’re doing in the outdoors.

So if you’re tennis fans, I know the US Open is going on now, but the real precursor to the US Open is the Cincinnati Open. And so they ordered these coolers and put them on both sides for their players. So in all the changeover seating, there are the solo stove coolers blowing, keeping them cool, sitting out there as they change over between events. And it’s, you know, it’s a unique, it’s a high end product, really well executed. And if my engineer were here, he would tell you about the ball bearings in the wheels to make it roll the best so it can be so simple.

He talked about how the handle pulls out and he runs his finger along saying, do you see how we did this? It’s great. And so, you know, the level of focus is what we need as a premium brand and we’re excited about that product. Next is the griddle. And this is so fun.

We’re making smash burgers. We had a big event with all of our employees in town. We made everyone cook on it, use it, get it. It’s spectacular. So hopefully, I can get it to play here for you.

So how many people have cooked on a griddle before? You gotta season it. You gotta keep it right. You hope it doesn’t rust over time when it just sits there. All that work and the cleanup on it.

Oh my gosh. Getting some of the stuff on it. I mean, it’s it’s great and all that. This is unbelievable. You don’t even have to put oil on it.

You can just put the stuff right on there at the end to clean up it rolls to a little trap door and it’s done and cleaned up and it looks like a million bucks. Yes. It’s propane. It’s propane and we’re looking for a natural gas conversion kit for it so people could build it in if they like. Yes.

So this one, funny story about that, but I won’t tell you that one. We call it the SteelFire 30 because it’s about 30 inches wide in surface area. We haven’t announced anything publicly, but there are other sizes that would seem to make a lot of sense as well. Yeah. It’s a great size.

You know, others are Yep. Great. Great. Well, I’m well, I’ll get your name and we’ll send you one. It’s okay.

And in ’26, we have just an aggressive, if not more aggressive product rollout strategy and it’s going to be in the outdoor cooling and in the cooking space as you see and probably in the fire pit space as well. Oh, oh, okay. I blew it. You told me there’s a way to go to the next slide without playing this again. I’m trying to find it.

I’m sorry. Okay. We’ll watch it. Yeah. Yeah.

Okay. Cool. Yeah. That’s the right one. Thanks.

I appreciate it. I like movies better anyway. Okay. So that was Solo Stove and the products we’re really excited about. Then you talk about Chubbies.

They launched a couple of products this year and it was unbelievable that two inch inseam short was a hit. We sold out immediately. You know, Chubby’s is very irreverent if you haven’t been part of it as a brand. The quality of the clothes are amazing, shirts, shorts, really started with swimsuits and is really hitting on all cylinders. So when they went to this kind of on the edge two inch inseam, it’s kind of a joke internally about how successful it’s been, but it has been hugely successful and sold out for us.

We’re now launching a whole line of NFL gear to start with the year. So all the teams we’ve licensed agreements to have products around that space. And when you think about Chubby’s, all in the men’s space, great retail partners, great success, huge growth this year, both retail and in our DTC model. So when you have 30%, 40% growth in some of your retail deal and you still increase on DTC, it tells you how strong the brand is really healthy in the marketplace right now. And so maybe that brand should expand into some other verticals here in the apparel space.

So we’re really excited about what Chubby’s has coming forward. I haven’t talked about water sports a lot, it’s 10% of our business. Some great products, I have a handful of these products. I have two, three of them that are on the screen and have been using them this summer. And so we have a lot of unique technology on the Oro side and aisle side.

We have kind of an origami folding kayak that we’re we’re most known for in the Oro brand, is amazing. You can put it in trunk of your car, it weighs 22 pounds, you carry it like a briefcase, you fold it out, put a few straps and you got a kayak on the water, one of our cool products. And aisle, our other division has some very unique things as fly water skiff on the right continues to be sold out over and over again. It’s a unique boat. You can fish out of it.

You can stand on a platform and the structure is crazy. But there’s an all new product coming in Q4 that we’re so excited to launch, which I can’t tell you the specifics about it. But in about two months, you’ll see it and we think it’s a whole new category that could really blow up for Isle in terms of our unique inflatable space. All right. So quickly, kind of what we talked about today.

Hey, we came into the year tough, okay. Our performance wasn’t what it should be. We got great brands. We got the basis for a great company moving forward. But the reality is we had a lot of work we had to get through to get the refinancing done etcetera to get rid of the going concern.

We now have the financing we need. Now we need to grow our way in the financing to pay it down and really start delivering for the shareholders. We’ve made big moves to take structural cost down, which I feel great about. We’ve got a huge product line development coming. And in the end, our CapEx expenditures for new products is very small as a percent of our total revenue.

So there was no reason not to lean in if you’re a premium brand to do that. So when you’re spending X amount of marketing and you hadn’t had a new product in your core brand space in three years, it was time to lean in and really go with an aggressive product program as we move out. There’s a lot of critical work for us to do. I’m not going to sugarcoat it here. Fourth quarter is going to be big for us.

Again, it’s a large percentage of our volume. We need to show that all the initiatives we put in place are going to deliver. But in the end, I’m really energized. It’s the reason I’m sitting here because we got great brands, we got great products coming. It was a challenge coming in, but I’m excited with the products, the brand and the team we have in place to get it done.

So why should you invest in us? Because now you’re getting in at the bottom. I mean the bottom line. We are clear leader in our core markets. Fire pits, our pizza ovens are amazing.

I make pizzas in all the time and I have so much fun. I become Giuseppe, my alter ego when I’m making pizzas, but they’re great products. We have a passionate community of people who do love our products. We’re in the premium segment. We’re not going in the bottom fighting with all the lower end competitors there on Amazon that would come after you.

We’re to stay premium. We understand where we sit. Clear adjacencies where Solo Stove was, we’ve seen that through the research and the initial response to the griddle has been so strong. We feel like we have a real hit there with some success. The management team is in place.

Our balance sheet is really clean now. We have payables, all the things you do when you’re struggling as a company right now. But right now, balance sheet is very clean. We’re in a good space. We delivered operating cash flow of $11,000,000 despite sales going down in the second quarter because we’re making all the right decisions, managing working capital directly, managing to the bottom line.

And we did accomplish a significant resizing of the company to put us in place to start delivering to the shareholders. So with that, I’ll wrap it up and open it up to any questions anyone has. Got to plant a question. You blew your wad during the presentation.

Unidentified speaker: I’ve given those those stoves out for years since gifts and stuff like that. Everybody loves them and I know people that have them. So I I didn’t literally, it was like a last minute decision coming in here. I didn’t recognize any other than

John Merris, CEO, Solo Brands: Yeah.

Unidentified speaker: Retail accounts are you with? Home Depot?

John Merris, CEO, Solo Brands: Yes. Home Depot, Bass Pro Shops, Dick’s Sporting Goods, Shields, those are kind of our key retailers. There’s some other the apparel side. We’ve got some Dunhams, we have Kohl’s, we’ve been in a number of places. But really premium brands, we’re focusing on those key critical accounts that get you great positioning and product.

And DSG has been truly great for Chubby’s. They were bragging their wall sold $2,000,000 the other week and continue to give us more space. Well, that’s let me tell you, that changed a lot over the tariff window and moving around. All different parts of Asia, whether it’s Vietnam, Cambodia, some in China, some in Mexico right now. And I will say, given we are going through the refinancing and the uncertainty around tariffs, it forced us to get so on top of the tariff issue on exactly.

We have costing by every major product, by every partner, by where have you sourced the steel from given the steel tariffs that do exist and went through a very thorough analysis. But not just that, within a month, we had moved some of our manufacturing already to other places. So there’s been a pretty broad shift in where we’re manufactured. Right now, not in The U. S.

And we haven’t made any public announcements, but we’re continuing to evaluate each area and near shoring is certainly one of the options. Yes, yes. It really has. Part of it was we had a previous supplier for our core products and they happen to be in a different Asian country in Vietnam. And so we went back to them.

It was better to be dual sourced and the quality has been great. Good question. I know we’re getting close to the end. They’re telling me I’m over. Yes?

Unidentified speaker: Yes. With the Solo Soaps, I know there’s a couple of different sizes of the table top and there’s a partnership with like Snoop Dogg.

John Merris, CEO, Solo Brands: Yes. There’s

Unidentified speaker: a couple different iterations of of that product. We do see more iterations coming in the future for that or is it kind of like only slice that takes so many times?

John Merris, CEO, Solo Brands: Yeah. No. I think there’s a lot of innovation that can be had there. And so hang on a few weeks and maybe you’ll we’ll get your take on it too. Yeah.

No. I think there’s great opportunities. And and there’s great ancillary accessories that can go with it. And I think there’s things you can do differently. And my product team thinks I’m crazy, but there’s a lot of new things that we’re gonna be doing there.

Yeah. Yep. Great. Anyone else? Okay.

Great. Thank you for your time. I really appreciate your time.

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