SCHEID VINEYARDS INC. SALINAS, Calif., Jan. 15, 2024 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) announced today its financial results for the nine months ended November 30, 2023 (3rd quarter of fiscal 2024).
Financial Results
Total revenues for the nine months ended November 30, 2023, were $52.4 million, up $1.2 million from the nine months ended November 30, 2022, an increase of 2%. This increase was driven primarily by the Company's winery processing and storage revenues which increased 35%, to $10.4 million from $7.7 million, which was partially offset by a decrease in bulk wine and grape sales of 29%, to $4.0 million from $5.6 million. Cased goods sales for the current nine-month period were relatively flat. After a slow start to fiscal 2024 shipments, cased goods sales were up 15% for the three months ended November 30, 2023, compared to the same three-month period in 2022.
Gross margin increased to 30%, from 28%, primarily as result of the change in sales mix. Sales and marketing expenses decreased 14%, to $8.3 million, from $9.7 million, as the Company reorganized its sales and marketing departments in late 2022. These expenses were 16% of total revenues in the first nine months ended November 30, 2023, compared to 19% for the same period in 2022. General and administrative expenses decreased 18%, to $5.3 million, from $6.5 million.
Operating income for the nine months ended November 30, 2023 was $2.3 million, compared to an operating loss of $1.6 million during the same period in 2022, an increase of $3.9 million as the Company continues to focus on reducing costs across all departments. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 13%, to $6.1 million, from $5.4 million.
Interest expense rose 45%, to $4.8 million, from $3.3 million, due to increased borrowings and increases in interest rates on the Company's variable rate debt. Average interest rates on Company debt increased to 6.2% for the nine months ended November 30, 2023, from 4.0% during the same period in 2022.
During the nine months ended November 30, 2022, the Company recognized a gain from the forgiveness 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). During the same period, the Company settled a class action lawsuit which alleged violations of California wage and hour employment laws, for $1.25 million.
In total, the Company reported a net loss of $1.8 million for the nine months ended November 30, 2023, compared to a $1.7 million net loss for the nine months ended November 30, 2022.
2023 Harvest Update
The 2023 grape harvest began in late September, approximately three weeks later than a normal harvest season on the Central Coast, due to a cool summer growing season that affected all of California. Mr. Scott Scheid, President and CEO of the Company, stated, "Harvest was completed on November 17, with overall yields approximately 18% above the Company's five-year average yields. Our winemaking team is impressed with the quality, as the winter rains and extended growing season lent themselves to favorable conditions for producing high quality wine grapes."
Nine Months Ended November 30, | ||||||||||||
2023 | 2022 | |||||||||||
REVENUES: | ||||||||||||
Cased goods sales | $ | 35,228 | $ | 35,141 | ||||||||
Winery processing and storage revenues | 10,362 | 7,730 | ||||||||||
Bulk wine sales | 2,696 | 3,396 | ||||||||||
Grape sales | 1,321 | 2,175 | ||||||||||
Direct sales revenues … | 2,286 | 2,223 | ||||||||||
Vineyard management revenues | 536 | 525 | ||||||||||
Other revenues | 10 | 8 | ||||||||||
Total net revenues | 52,439 | 51,198 | ||||||||||
COST OF SALES | (36,578) | (36,723) | ||||||||||
GROSS PROFIT | 15,861 | 14,475 | ||||||||||
Sales and marketing expenses | (8,348) | (9,653) | ||||||||||
General and administrative expenses | (5,258) | (6,453) | ||||||||||
OPERATING INCOME (LOSS) | 2,255 | (1,631) | ||||||||||
Interest expense, net | (4,787) | (3,283) | ||||||||||
Loan forgiveness | — | 3,731 | ||||||||||
Other income (loss) | — | (1,250) | ||||||||||
Gain on sale of property, plant and equipment | 40 | 15 | ||||||||||
LOSS BEFORE BENEFIT FROM INCOME TAXES | (2,492) | (2,418) | ||||||||||
BENEFIT FROM INCOME TAXES | 713 | 676 | ||||||||||
NET LOSS | $ | (1,779) | $ | (1,742) | ||||||||
NET LOSS PER SHARE | $ | (1.94) | $ | (1.91) | ||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 915 | 913 | ||||||||||
(amounts in thousands, except for per share data)
About Scheid Family Wines
Scheid Family Wines, a family-owned and operated wine company for over 50 years, is ranked among the top 25 largest wine producers in the United States. Based in Monterey County, California, Scheid is vertically integrated to bring high quality estate grown wines to the marketplace from its sustainably and organically certified vineyards and grower partners throughout the Central Coast. Scheid's innovative, luxury-level winery is 100% powered by renewable wind energy generated by a 400-foot-tall wind turbine, which also supplies energy to 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 (organically certified), Fog & Light, Metz Road, District 7, Ryder Estate, and HOXIE, a premium wine spritzer. Scheid Family Wines sells internationally to over 30 countries and is one of the largest producers of premium exclusive brands.
Please visit www.scheidfamilywines.com and www.otcmarkets.com/stock/SVIN/quote for more information.
CONTACT: | Scott Scheid, President and CEO, scott.scheid@scheidfamilywines.com |
Mike Thomsen, Chief Financial Officer, mike.thomsen@scheidfamilywines.com | |
(831) 455-9990 |
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SOURCE Scheid Family Wines
