BrewBilt Manufacturing Inc. (BBRW)·Q3 2021 Earnings Summary

Executive Summary

• Revenue rebounded to $575,128 in Q3 2021 from $48,764 in Q2 2021, though down versus $927,012 in Q3 2020 as project completions resumed; management cited normalization post-COVID and highlighted increased quotation activity and purchase orders expected to drive “in excess of $2,000,000” of future revenues .
• Operating performance improved sequentially to near breakeven loss from operations of $(32,213) vs. $(419,809) in Q2, but net loss widened to $(1,518,878) on sizable non-operating charges (derivative expenses and interest), underscoring financing-driven P&L drag .
• Margins compressed YoY on materials inflation and a mix shift to smaller, lower-margin orders; gross profit margin was ~37.9% in Q3 2021 vs. ~82.4% in Q3 2020, per MD&A drivers (higher materials costs, smaller orders) .
• No formal quantitative guidance provided; Street consensus from S&P Global was unavailable for BBRW this quarter (thus no beat/miss assessment). Management’s commentary on >$2M future revenue from POs and elevated quotation activity is the key near-term stock catalyst as orders convert and revenue is recognized .

What Went Well and What Went Wrong

What Went Well

• Revenue inflected sharply QoQ as project deliveries resumed: Q3 2021 sales of $575,128 vs. $48,764 in Q2 2021; management said, “revenues have begun to rebound as the economy returns to normalized levels following the impact of COVID-19” .
• Commercial traction signals: “received customer purchase orders that are expected to result in revenues in excess of $2,000,000 in future quarters” (manufacture and delivery dependent), suggesting multi-quarter visibility as the build schedule progresses .
• Sales funnel strengthening: “increasing inquiries from customers for quotations” with a typical 4–6 month cycle from quote to binding order (while not guaranteed), supporting a healthier pipeline into 2022 .

What Went Wrong

• YoY contraction and margin compression: Q3 2021 revenue $575,128 vs. $927,012 in Q3 2020; gross margin compressed to ~37.9% from ~82.4% as materials costs rose and mix skewed to smaller, lower-margin orders .
• Heavy non-operating burden: derivative expenses of $(792,182), interest expense $(415,441), and loss on conversion $(262,778) drove total other expenses of $(1,486,665), resulting in net loss of $(1,518,878) despite near-breakeven operations .
• Balance sheet constraints persist: current liabilities exceed current assets; billings in excess of revenue rose to $2,029,571 (indicative of deposits/progress billing), but funding costs (convertible notes, derivative liabilities) continue to weigh on results .

Financial Results

Notes: Q3 2021 press release disclosed “approximately $575,000” revenue, consistent with the 10-Q figure of $575,128 .

Segment breakdown: Not applicable—no segment disclosures identified for the period in filings.

KPIs and Operating Indicators

Drivers: Q3 margin compression driven by material cost increases and a higher mix of smaller, low-margin orders per MD&A; Q2 margin was atypically high due to a canceled order penalty lowering costs .

Guidance Changes

No formal quantitative ranges provided for revenue, margins, OpEx, or other items in Q3 2021 filings/press release.

Earnings Call Themes & Trends

No Q3 2021 earnings call transcript or slides were found in the document set.

Management Commentary

• “We are pleased to report that our revenues have begun to rebound as the economy returns to normalized levels following the impact of COVID-19.” — Jef Lewis, CEO .
• “The Company has received customer purchase orders that are expected to result in revenues in excess of $2,000,000 in future quarters, as the Company manufactures and delivers the brewing systems ordered by these customers.” .
• “We are encouraged by increasing inquiries from customers for quotations… [t]he time between providing a quote… and receiving a binding purchase order generally can take from four to six months… [and] there can be no assurance that any quote… will result in a signed purchase order or revenues.” .
• MD&A highlights margin headwinds: higher materials costs and a greater number of smaller, low-margin orders in Q3 .

Q&A Highlights

No Q3 2021 earnings call transcript identified; no Q&A to report from company documents in the period.

Estimates Context

• Wall Street consensus (S&P Global) was unavailable for BBRW for Q3 2021; therefore, we cannot assess beats/misses versus Street expectations this quarter.
• We anchor quantitative assessments on the company’s 8-K press release and 10-Q filings .

Key Takeaways for Investors

• Revenue recovery is underway from a very low base; sequential step-up to $575k suggests manufacturing/delivery cadence normalized in Q3, but YoY still lags and margin pressures are evident .
• The commercial pipeline strengthened: increased quotations and POs expected to translate into >$2M of future revenue as builds are completed; conversion timing (4–6 months typical) and execution are key swing factors .
• Margin trajectory bears close monitoring given materials inflation and mix toward smaller orders; improving scale/mix is needed to restore gross margin toward historical levels .
• Non-operating charges (derivatives, interest, conversions) remain the primary driver of net losses; balance sheet/funding strategy will influence equity dilution and earnings volatility .
• Backlog proxies are rising: billings in excess of revenue increased to ~$2.03M, indicating deposits/progress billing that should support near-term revenue recognition as milestones are met .
• With no formal guidance and no Street estimates, near-term stock moves may hinge on incremental order announcements, evidence of quote-to-order conversion, and margin stabilization as materials costs/mix normalize .

Sources: Q3 2021 8-K with Exhibit 99.1 press release (Nov 9, 2021) ; Q3 2021 10-Q (Nov 15, 2021) for financial statements and MD&A ; Q2 2021 10-Q (Aug 16, 2021) for prior-quarter comparatives and commentary ; Q1 2021 10-Q (May 14, 2021) for early-2021 comparatives .