SCHEID FAMILY WINES REPORTS SECOND QUARTER RESULTS

Rhea-AI Summary

Scheid Vineyards reported a notable 35% increase in revenues for the six months ended August 31, 2022, driven by significant growth in cased goods (32%) and bulk wine sales (28%). Gross profit rose to $7.05 million, with gross margins improving from 20% to 23%. However, the company incurred a net loss of $1.44 million compared to a net income of $12.58 million in the previous year, impacted by increased expenses and non-recurring losses. The 2022 grape harvest is expected to yield 15% lower than average due to adverse weather conditions.

Positive

• Revenues increased by 35%, reaching $30.72 million compared to $22.70 million in the previous year.
• Gross profit rose to $7.05 million with improved gross margins from 20% to 23%.
• Bulk wine sales grew by 28%, while winery processing and storage revenues surged by 112%.
• Received $3.7 million in loan forgiveness under the PPP program.

Negative

• Net loss of $1.44 million, a significant decline from the previous year's profit of $12.58 million.
• Sales and marketing expenses increased by 29% to $6.6 million, impacting overall profitability.
• 2022 grape harvest yields are projected to be 15% lower than the five-year average.

SALINAS, Calif., Oct. 20, 2022 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) announced today its financial results for the six months ended August 31, 2022  (2^nd Quarter of Fiscal 2023).

Financial Results – Second Quarter Results Fiscal 2023 (March 1, 2022 – August 31, 2022)
			Six Months Ended August 31,
			2022			2021
REVENUES:
Cased goods sales			$	24,308		$	17,956
Bulk wine sales			2,922			2,285
Winery processing and storage revenues			1,980			934
Direct sales revenues			1,265			1,330
Grape sales			60			—
Vineyard management revenues			184			191
Other revenues			2			2
Total revenues			30,721			22,698
COST OF SALES			(23,670)			(18,146)
GROSS PROFIT			7,051			4,552
Sales and marketing expenses			(6,600)			(5,079)
General and administrative expenses			(4,385)			(4,064)
Interest expense, net			(2,006)			(1,723)
LOSS BEFORE OTHER INCOME AND EXPENSES			(5,940)			(6,314)
Loan forgiveness			3,731			—
Other income (loss)			(1,250)			5
Gain on sale of vineyards and equipment			15			23,777
(LOSS) INCOME BEFORE BENEFIT FROM   (PROVISION FOR) INCOME TAXES			(3,444)			17,468
BENEFIT FROM (PROVISION FOR) INCOME TAXES			2,005			(4,886)
NET (LOSS) INCOME			$	(1,439)		$	12,582
NET (LOSS) INCOME PER SHARE			$	(1.58)		$	14.04
WEIGHTED AVERAGE SHARES OUTSTANDING			912			896
(amounts in thousands, except for per share data)

Mr. Mike Thomsen, Chief Financial Officer of the Company, commented on the second quarter results stating, "Overall revenues increased 35% in the first six months of fiscal 2023. Cased goods sales increased 32%, bulk wine sales increased 28%, and winery processing and storage revenues increased 112% from the previous year. Gross margins increased from 20% in the 2021 period to 23% in 2022. Margins increased primarily due to changes in product mix and were partially offset by increases in material costs.

Sales and marketing expenses increased 29%, from $5.1 to $6.6 million, as the Company continued its investment in the marketing of new brands and territories.  Such expenses were 22% of total revenues for both periods.

During the six months ended August 31, 2022, the Company received forgiveness from the Small Business Association of a $3.7 million loan made to the Company pursuant to the Paycheck Protection Plan ("PPP") administered by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Company recognized a gain for such forgiveness during the current period.

In addition, as a non-recurring event, the Company agreed to settle a class action lawsuit alleging violation of California wage and hour employment laws, for $1,250,000.  The settlement agreement is subject to court approval.  The settlement does not contain any admission of liability or wrongdoing by the Company.  The settlement amount has been accrued as a liability in the quarter ended August 31, 2022 and is expected to be paid by the end of the first quarter of fiscal 2024.  

The loss before the effects of non-recurring income and expenses totaled $5.9 million during the first six months of fiscal 2023, as compared to a $6.3 million loss in fiscal 2022. The Company recognized a gain of $23.8 million from the sale of vineyard properties in the first quarter of fiscal 2022. In total, the Company had a net loss of $1.4 million in the first six months of fiscal 2023, as compared to net income of $12.6 million in fiscal 2022."

2022 Harvest Update

Mr. Scott Scheid, President and CEO of the Company, stated, "The 2022 grape harvest began in mid-August and is expected to be completed in late October.  This timing is approximately two weeks ahead of a normal harvest season for wine grape vineyards on the Central Coast, due primarily to a record heat wave that affected all of California in early September. We are currently approximately 80% complete with harvest and, primarily as a result of the heat wave, overall yields appear to be trending at a rate 15% lower than the Company's five-year average yields. These yields appear consistent with those from all wine grapes grown in the California coastal regions."

About Scheid Family Wines

Scheid Family Wines is a family-owned and operated wine company founded in 1972. Based in Monterey County, California, Scheid is uniquely integrated to bring high-quality wines to the marketplace from its sustainably certified vineyards and innovative luxury-level winery. Scheid's winery and bottling operations are powered by 100% renewable wind energy generated by a 400-foot-tall wind turbine, which also supplies energy to many homes in the local community. The Scheid Family Wines globally distributed portfolio includes its namesake brand Scheid Vineyards, Sunny with a Chance of Flowers, District 7, Ryder Estate, Metz Road, VDR (Very Dark Red), Stokes' Ghost, and HOXIE, an artisanal dry wine spritzer. Scheid Family Wines also produces many regionally distributed brands and distributes a portfolio of imported wines through its partnership with PH Imports.

Please visit www.scheidfamilywines.com and www.otcmarkets.com/stock/SVIN/quote for more information.

CONTACT:	Scott Scheid, President and CEO
	Mike Thomsen, Chief Financial Officer
	(831) 455-9990

 

           

View original content:https://www.prnewswire.com/news-releases/scheid-family-wines-reports-second-quarter-results-301654385.html

SOURCE Scheid Family Wines

FAQ

What were the revenue results for Scheid Vineyards (SVIN) for the second quarter of fiscal 2023?

Scheid Vineyards reported a revenue increase of 35%, totaling $30.72 million for the first six months of fiscal 2023.

What is the net income for Scheid Vineyards (SVIN) for the first half of fiscal 2023?

The net loss for Scheid Vineyards in the first half of fiscal 2023 was $1.44 million, compared to a net income of $12.58 million in the same period in the previous year.

How did the expenses impact Scheid Vineyards' (SVIN) profitability in fiscal 2023?

Sales and marketing expenses rose by 29% to $6.6 million, affecting the overall profitability despite higher revenues.

What challenges did Scheid Vineyards (SVIN) face in the grape harvest of 2022?

The 2022 grape harvest is expected to yield 15% lower than the five-year average due to a record heat wave impacting California.