Scheid Vineyards Inc. Reports 3rd Quarter Results
Press Release Source: Scheid Vineyards Inc.
SALINAS, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Scheid Vineyards Inc. announced today its financial results for the third quarter and nine months ended November 30, 2009.
Mike Thomsen, Chief Financial Officer, reported, "Revenues for the nine months ended November 30, 2009 increased to $20.7 million from $14.4 million for the same period in 2008, primarily due to increased sales of wine grapes and bulk wine. Revenues for 2009 were offset by cost of sales of $15.3 million; selling, general and administrative expenses of $5.3 million; and interest expense of $2.7 million. Revenues for the same period in 2008 were offset by cost of sales of $9.5 million; selling, general and administrative expenses of $6.0 million; and interest expense of $2.3 million."
Mr. Thomsen explained, "Although revenues have increased from last year's levels, margins are down in 2009 due to decreased demand for certain bulk wine varieties and a resulting decline in the sales price for those varieties. For the nine months ended November 30, 2009, the Company wrote-down its remaining 2008 vintage bulk wine inventories by $2.6 million to more properly reflect current market values." Mr. Thomsen continued by stating, "The Company's 2009 harvest was completed in late October, with the Company harvesting over 21,800 tons of wine grapes. This year's crop was slightly above the Company's 5-year moving average crop, and a 37% increase over the below average harvest of 2008."
"Losses from operations for the nine months ended November 30, 2009 totaled $2.6 million ($2.92 per share), as compared to losses from operations of $3.4 million ($3.38 per share) for the same period in 2008. After adjustments for a benefit from income taxes ($1.3 million), and an increase in the market valuation of an interest rate swap ($0.5 million), the net loss for the nine months ended November 30, 2009 was $1.8 million ($2.03 per share). After adjustments for a benefit from income taxes ($1.7 million), and an increase in the market valuation of an interest rate swap ($0.4 million), the net loss for the nine months ended November 30, 2008 was $2.1 million ($2.09 per share)."
Mr. Thomsen also stated that, "It was previously announced that due primarily to the net loss reported in fiscal 2009, the Company was in non-compliance with certain of its financial covenants under the terms of its bank loans. In December 2009, the Company and its bank agreed to amendments to the Company's credit facility, and as such, the Company is in compliance with the terms of its bank loans."
Scheid Vineyards Inc. (www.scheidvineyards.com) operates premium wine grape vineyards, primarily in Monterey County, California. The Company's state-of-the-art winery commenced operations in 2005 and has the capacity to process approximately 30,000 tons of grapes each harvest. The Company's primary business is producing wine grapes and converting them into high quality bulk wine for sale to other wineries. In addition, the Company produces ultra premium wine under the Scheid Vineyards label, which is sold through the Company's tasting rooms, wine club, and Monterey, California area retailers.
The Class A Common Stock of Scheid Vineyards is traded on the Pink Sheets Electric Quotation Service under the stock symbol SVIN. The "Pink Sheets" is a centralized quotation service that collects and publishes market maker quotes in real time, primarily through its website, www.pinksheets.com.
This release contains forward-looking statements as well as historical information. Statements of goals and strategies and words such as "plan", "believe", "anticipate", "expect", "objectives", "forecast", and "predict" and other similar words are intended to identify forward-looking statements. These forward looking statements are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, and involve risks, uncertainties and other factors that may cause the Company's actual results, performance, or financial condition to be materially different from any results, performance, or financial condition suggested by the statements in this release.
SCHEID VINEYARDS INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED NOVEMBER 30, 2009 AND 2008
(amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
November 30, November 30,
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2009 2008 2009 2008
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REVENUES:
Grape sales $9,066 $6,198 $9,066 $6,478
Bulk wine sales 1,693 972 5,900 2,229
Winery processing and other revenues 3,601 3,315 3,988 4,343
Vineyard management, services and
other fees 462 461 861 860
Direct sales revenues 310 267 921 529
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Total revenues 15,132 11,213 20,736 14,439
COST OF SALES 8,684 6,528 15,320 9,488
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GROSS PROFIT 6,448 4,685 5,416 4,951
General and administrative expenses 1,218 1,408 3,923 4,374
Selling expenses 502 820 1,424 1,626
Interest expense 744 640 2,695 2,288
Market adjustment for interest rate
swap 378 1,175 515 402
Other 7 44 2 44
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INCOME (LOSS) BEFORE (PROVISION FOR)
BENEFIT FROM INCOME TAXES 3,599 598 (3,143) (3,783)
(PROVISION FOR) BENEFIT FROM INCOME
TAXES (1,511) (107) 1,320 1,689
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NET INCOME (LOSS) $2,088 $491 $(1,823) $(2,094)
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NET INCOME (LOSS) PER SHARE:
BASIC $2.37 $0.50 $(2.03) $(2.09)
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DILUTED $2.37 $0.50 $(2.03) $(2.09)
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WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 882 987 899 1,001
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DILUTED 883 989 899 1,001
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