PR Newswire
SALINAS, Calif., June 9, 2023
SALINAS, Calif., June 9, 2023 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) today reported its financial results for the fiscal year ended February 28, 2023.
Total revenues were $69.3 million, up $4.2 million, an increase of 6%. The increase was driven by the Company's cased goods sales which increased 15%, as compared to a wine industry trend of flat sales growth. Offsetting the growth was a decrease in bulk wine and grape sales of 18%, from $14.4 million to $11.8 million, primarily as the result of a smaller than average 2022 grape crop. Winery processing and storage revenues were $8.5 million, up $1 million, an increase of 13%.
Gross margin decreased from 27% in fiscal 2022 to 26% in fiscal 2023, primarily as the result of increased glass costs. Sales and marketing expenses increased 18%, from $10.4 to $12.2 million, as the Company continued its investment in the marketing of new brands and territories. These expenses were 18% of total revenues in fiscal 2023 and 16% in fiscal 2022. General and administrative costs decreased 5%, from $8.5 million to $8.1 million. Interest expense rose 46%, from $3.3 million to $4.8 million, due to increased borrowings and increases in interest rates on the Company's variable rate debt. Average interest rates on Company debt increased from 3.9% at the end of fiscal 2022 to 5.7% at the end of fiscal 2023.
In August 2022, the Company received forgiveness for 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 income of $3.7 million in fiscal 2023.
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 $1.25 million. The settlement does not contain any admission of liability or wrongdoing by the Company. The settlement amount was accrued as a liability in fiscal 2023 and will be paid in June 2023.
The loss before the effects of non-recurring income and expenses was $7.3 million for fiscal 2023, as compared to a $4.4 million loss in fiscal 2022. The Company recognized a gain of $24.4 million from the sale of vineyard properties in the first quarter of fiscal 2022. In total, the Company reported a net loss of $2.2 million in fiscal 2023, as compared to net income of $14.2 million in fiscal 2022.
Scott Scheid, President and CEO, stated, "Achieving a 15% increase in cased goods sales in fiscal 2023 in a market that has been relatively flat is a positive sign. This sales momentum is being driven by our low alcohol brand, Sunny with a Chance of Flowers, as well as increased sales in some of our private and exclusive brands. We realize, however, that there is much work to be done. In order to build a business positioned for long-term success during turbulent times, we are focused on increasing margins through taking price increases and reducing costs, honing our sales focus on our key brands, pursuing new business through our innovative brand portfolio, and continuing to strengthen relationships with our trade partners."
Financial Results Year Ended February 28, 2023 | ||||||||||||||
Year Ended | ||||||||||||||
February 28 2023 | February 28 2022 | |||||||||||||
REVENUES: | ||||||||||||||
Cased goods sales | $ | 45,601 | $ | 39,631 | ||||||||||
Bulk wine sales | 9,664 | 10,410 | ||||||||||||
Grape sales | 2,176 | 3,970 | ||||||||||||
Winery processing and storage revenues | 8,518 | 7,541 | ||||||||||||
Direct sales revenues | 2,635 | 2,718 | ||||||||||||
Other revenues | 660 | 817 | ||||||||||||
Total revenues | 69,254 | 65,087 | ||||||||||||
COST OF SALES | (51,477) | (47,313) | ||||||||||||
GROSS PROFIT | 17,777 | 17,774 | ||||||||||||
Sales and marketing expenses | (12,248) | (10,410) | ||||||||||||
General and administrative expenses | (8,100) | (8,520) | ||||||||||||
Interest expense, net | (4,778) | (3,266) | ||||||||||||
LOSS BEFORE OTHER INCOME AND EXPENSES | (7,349) | (4,422) | ||||||||||||
Loan forgiveness | 3,731 | — | ||||||||||||
Other expense | (1,250) | — | ||||||||||||
Loss from investment in Gifft Wine Venture | — | (359) | ||||||||||||
Gain on sale of vineyards and equipment | 15 | 24,377 | ||||||||||||
(LOSS) INCOME BEFORE BENEFIT FROM (PROVISON FOR) INCOME TAXES | (4,853) | 19,596 | ||||||||||||
BENEFIT FROM (PROVISION FOR) INCOME TAXES | 2,624 | (5,404) | ||||||||||||
NET (LOSS) INCOME | $ | (2,229) | $ | 14,192 | ||||||||||
NET (LOSS) INCOME PER SHARE | $ | (2.44) | $ | 15.84 | ||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 913 | 896 | ||||||||||||
(amounts in thousands, except for per share data) | ||||||||||||||
About Scheid Family Wines
Scheid Family Wines, a family-owned and operated wine company founded in 1972, is ranked among the top 25 largest wine producers in California. Based in Monterey County, Scheid is uniquely integrated to bring high quality estate grown wines to the marketplace from its sustainably certified vineyards and grower partners throughout the Central Coast. Scheid's innovative, luxury-level winery is 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 brand portfolio includes Scheid Vineyards, Sunny with a Chance of Flowers, VDR (Very Dark Red), Grandeur (made with organic grapes), Fog & Light, Metz Road, District 7, Ryder Estate, and HOXIE, a premium wine spritzer. Scheid Family Wines sells internationally to 30 countries and is one of the largest producers of nationally distributed exclusive brands.
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 |
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SOURCE Scheid Family Wines
