VWE Vintage Wine Estates Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 12, 2023

 

 

Vintage Wine Estates, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Nevada			001-40016	87-1005902
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
937 Tahoe Boulevard Suite 210
Incline Village, Nevada				89451
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (877) 289-9463

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, no par value per share		VWE		The Nasdaq Stock Market LLC
Warrants to purchase common stock		VWEWW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 1.01 Entry into a Material Definitive Agreement

As previously disclosed on December 19, 2022, Vintage Wine Estates, Inc. (the “Company”) entered into a Second Amended and Restated Loan and Security Agreement, dated as of December 13, 2022 (as amended from time to time, the “Credit Agreement”), by and among the Company, certain subsidiaries of the Company party thereto from time to time (collectively, the “Borrowers”), certain financial institutions party thereto from time to time (collectively, the “Lenders”), and BMO Bank N.A., as successor in interest to Bank of the West, as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

On October 12, 2023, the Company entered into a fourth amendment to the Second Amended and Restated Loan and Security Agreement (the “Amendment”) by and among the Company, the Borrowers, the Lenders party thereto, and Agent. The Amendment, among other things:

The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On October 13, 2023, the Company issued a press release announcing its financial results for the three months and fiscal year ended June 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1.

The information set forth, or referred to, in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth by specific reference in such filing.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 above is incorporated into this Item 2.03 by reference.

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Item 7.01 Regulation FD Disclosure

On October 13, 2023, the Company issued a press release relating to the Amendment. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated herein by reference.

 

A copy of the presentation materials that management will review during the Company’s earnings conference call to be held on October 16, 2023 will be posted in the Investor Relations section of the company’s website at www.vintagewineestates.com.

The information set forth, or referred to, in this Item 7.01, including Exhibit 99.2, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

 

Exhibit No.	Description
10.1	Amendment Number Four to Second Amended and Restated Loan and Security Agreement and Waiver, dated as of October 12, 2023, by and among Vintage Wine Estates, Inc., certain subsidiaries of Vintage Wine Estates, Inc. party thereto, certain financial institutions party thereto, and BMO Bank N.A., as successor in interest to Bank of the West, as Administrative Agent and Collateral Agent.*
99.1	Press release dated October 13, 2023 relating to financial results for the three months and fiscal year ended June 30, 2023
99.2	Press release dated October 13, 2023 relating to the Credit Agreement Amendment

 

104	Cover Page Interactive Data File (embedded within the inline XBRL document)

 

*Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Vintage Wine Estates, Inc.
Date:	October 13, 2023	By:	/s/ Kristina Johnston
			Chief Financial Officer

 

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Exhibit 10.1

AMENDMENT Number four TO Second

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT and waiver

This AMENDMENT NUMBER FOUR TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND WAIVER (this “Amendment”) is dated as of October 12, 2023 (the “Effective Date”), and is entered into by and among VINTAGE WINE ESTATES, INC., a Nevada corporation (“Holdings”), VINTAGE WINE ESTATES, INC., a California corporation (“Borrower Agent”), each Subsidiary of Borrower Agent party to this Amendment (together with Borrower Agent, each a “Borrower” and, collectively, “Borrowers”), the Lenders party to this Amendment, and BMO BANK N.A., as successor in interest to BANK OF THE WEST (“BMO”), as administrative agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”).

RECITALS

WHEREAS, Holdings, Borrowers, the Lenders, and the Agent are parties to that certain Second Amended and Restated Loan and Security Agreement, dated as of December 13, 2022 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Loan Agreement”).

WHEREAS, Holdings and Borrowers have informed Agent and the Lenders of their intention to restate the unaudited consolidated financial statements for the Fiscal Quarters ended September 30, 2022, December 31, 2022, March 31, 2023 and June 30, 2023.

WHEREAS, certain Events of Default may have occurred arising from, with respect to or otherwise related to the financial statements previously delivered with respect to such periods, the financial condition of Holdings and its Subsidiaries for such periods and related matters, including, without limitation (i) Holdings’ and its Subsidiaries’ failure to be in compliance with the minimum Fixed Charge Coverage Ratio covenant and the maximum Debt to Capitalization Ratio covenant under Section 10.3.1 and Section 10.3.2 of the Loan Agreement, respectively, as of the end of such Fiscal Quarters, (ii) Holdings’ and its Subsidiaries’ failure to deliver substantially accurate unaudited consolidated financial statements under Section 10.1.2(c) of the Loan Agreement and Compliance Certificates under Section 10.1.2(d) for such Fiscal Quarters, (iii) any possible misrepresentations made or deemed made by Holdings or any of its Subsidiaries under the Loan Agreement or any other Loan Document related to any of the foregoing and (iv) Holdings and its Subsidiaries’ failure to provide Agent and the Lenders with written notice of any Event of Default described in clauses (i) – (iii) pursuant to Section 10.1.3 of the Loan Agreement (the Events of Default described in clauses (i) – (iv), collectively, the “Existing Events of Default”).

WHEREAS, Holdings and Borrowers have requested that Required Lenders waive the Existing Events of Default.

WHEREAS, Agent and Required Lenders have agreed to waive the Existing Events of Default subject to Holdings and Borrowers agreeing to certain amendments to the Loan Agreement as set forth in more detail below.

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NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties agree as follows:

Amendment No. 4 Closing Date: October 12, 2023.

Availability Block: means (a) $15,000,000 during the months of February through September of each year, and (b) $10,000,000 during the months of October of any year through January of the following year.

Covenant Modification Period: the period commencing on July 1, 2023, and continuing up to and including December 31, 2024.

Curative Equity: means the net amount of proceeds received by the Borrowers or Holdings from issuances of Equity Interests (or capital contributions in respect thereof) or Subordinated Debt (which Subordinated Debt shall not permit cash payments of interest or principal until Full Payment of the Obligations) in immediately available funds and which are designated “Curative Equity” by such Borrower under Section 10.3.4 at the time it is contributed. For the avoidance of doubt, the forgiveness of antecedent debt (whether Debt, trade payables, or otherwise) shall not constitute Curative Equity.

Cure Expiration Date: as defined in Section 10.3.4(a).

Financial Covenant Default: as defined in Section 10.3.10.3.44(a).

Financial Covenants: the financial covenants set forth in Section 10.3.1, Section 10.3.2, and Section 10.3.3.

Liquidity: as of the date of determination, Availability plus unrestricted (other than restrictions in deposit account control agreements in favor of Agent) cash and Cash Equivalents of Holdings and its Subsidiaries on such date of determination so long as such cash and Cash Equivalents are subject to control agreements in favor of the Agent.

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Test Period: at any date of determination, the most recently completed four consecutive Fiscal Quarters of the Holdings ending on or prior to such date for which financial statements have been (or are required to be) delivered to the Agent pursuant to Section 10.1.2(a) or Section 10.1.2(c).

13-Week Forecast: a 13 week consolidated cash flow forecast for the Borrowers in a weekly format commencing on October 23, 2023, in form and content satisfactory to Agent, together with a comparison report of Borrowers’ actual results for the immediately preceding two week period compared to the cash flow forecast for such two week period (for the avoidance of doubt, the initial 13-week consolidated cash flow forecast shall not include a comparison report of Borrowers’ actual results for the immediately preceding two week period).

Transaction: has the meaning set forth in Borrowers’ 2024 Business Optimization Plan.

Applicable Margin: the per annum margin set forth below, subject to the terms and conditions set forth in this definition:

Time Period	Revolver Loans		Unused Line Fee Rate for Revolver Loans	Term Loan, Equipment Loan, Capital Expenditure Loans and Delayed Draw Term Loans		Unused Line Fee Rate for Term Loans and Delayed Draw Term Loans
	SOFR	Adjusted Base Rate		SOFR	Adjusted Base Rate
Amendment No. 4 Closing Date up to and including June 30, 2024 (or thereafter as described below)*	3.00%	2.00%	0.20%	3.00%	2.00%	0.25%

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July 1, 2024, up to and December 31, 2024 (or thereafter as described below)*	3.75%	2.75%	0.20%	3.75%	2.75%	0.25%
January 1, 2025, up to and including Full Payment of all Obligations and termination of Loan Documents*	4.50%	3.50%	0.20%	4.50%	3.50%	0.25%

 

*Following the Amendment No. 4 Closing Date, if the Term Loans are prepaid by not less than $20,000,000 by no later than June 30, 2024 (the “First Prepayment Date”), which may be from proceeds of Permitted Asset Dispositions, then the 0.75% increase in the Applicable Margin on July 1, 2024, will not be implemented and the Applicable Margin in effect immediately prior to such date shall remain in effect. Following Amendment No. 4 Closing Date, if the Term Loans are prepaid by not less than $45,000,000 (including amounts, if any, that were paid prior to the First Prepayment Date), which may be from proceeds of Permitted Asset Dispositions, then the 0.75% increase in the Applicable Margin on January 1, 2025, will not be implemented and the Applicable Margin in effect immediately prior to such date shall remain in effect. For the avoidance of doubt, if the Applicable Margin is increased 0.75% on July 1, 2024, such increase shall not be reversed, even if the aggregate amount of Term Loan prepayments equals or exceeds $45,000,000 by December 31, 2024.

Adjusted EBITDA: for any applicable period, and determined on a consolidated basis for Holdings and its Subsidiaries, shall be the sum of:

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provided, that for purposes of calculating Adjusted EBITDA for any period that the Borrowers and their Subsidiaries have consummated a Permitted Acquisition or the Transaction, Adjusted EBITDA for such period shall be calculated after giving pro forma effect thereto.

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Borrowing Base: on any date of determination, an amount equal to the lesser of (a) the aggregate amount of Revolver Commitments, minus the Availability Block, minus the Availability Reserve then in effect; or (b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount, plus the Permitted Acquisition Inventory Amount (but without duplication of the Inventory Formula Amount), minus the Availability Block, minus the Availability Reserve then in effect.

(n) so long as no Event of Default has occurred and is continuing, an Asset Disposition of any Primary Term Loan Collateral constituting Real Estate; provided, that either (i) the aggregate original appraised “as-is” fair market value (which was used to determine the Term Loan Formula Amount) of all such Real Estate sold under this clause (n), other than Real Property subject to (ii) below, shall not exceed twenty-five (25%) of the aggregate original appraised “as-is” fair market value (which was used to determine the Term Loan Formula Amount) of all Primary Term Loan Collateral constituting Real Estate, or (ii) the Real Property sold under this clause (n) is listed on Schedule 1(N) to this Agreement;

(p) sales of personal property associated with Real Estate sold in reliance of clause (n)(ii) above that are (i) tangible personal property located on such Real Estate, and (ii) are intangible personal property that are uniquely associated with such Real Estate; provided that (x) such sales of personal property shall not include Accounts, and (y) for the purpose of any calculation with respect to related mandatory prepayments, the portion of the purchase price for such Real Estate and personal property (collectively) that is attributed to the Real Estate shall not be less than its original appraised “as-is” fair market value which was used to determine the Term Loan Formula Amount (or, if such aggregate purchase price is less than such appraised value, no less than 75% of such appraised value).

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Permitted Acquisition: any Acquisition approved by the Required Lenders and satisfying each of the following:

(o) [reserved] (for the avoidance of doubt, no Acquisitions, including Permitted Acquisitions, shall be permitted prior to (A) the later of (i) the Revolver Termination Date, and (ii) the Term Loan Maturity Date), and (B) the Full Payment of all Obligations.

(o) Debt incurred by a Borrower or any of its Subsidiaries arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, in connection with Permitted Acquisitions approved by Required Lenders or dispositions of any business, asset or Subsidiary of Borrower or any of its Subsidiaries that are permitted under the Loan Documents.

(x) Liens on property in existence at the time such property is acquired pursuant to a Permitted Acquisition approved by the Required Lenders or on such property of a Subsidiary of an Obligor in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition approved by the Required Lenders; provided that such Liens are not incurred in connection with or in anticipation of such Permitted Acquisition and do not attach to any other assets of any Obligor or any Subsidiary;

Trigger Period: means the period (a) commencing on the date that (i) an Event of Default occurs or (ii) for a period of five (5) or more consecutive Business Days, Availability is less than the greater of (x) $20,000,000, or (y) 10.0% of the Borrowing Base; and (b) continuing until a period of thirty (30) consecutive days has elapsed, during which at all times (i) no Event of Default exists and (ii) Availability is more than the greater of (x) $20,000,000, or (y) 10.0% of the Borrowing Base.

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Notwithstanding the foregoing, following the Amendment No. 4 Closing Date, all requests for a DDTL shall require the approval of the Required Lenders, in addition to all other conditions for making a DDTL.

5.4.1 Notwithstanding anything herein to the contrary and in addition to the scheduled amortization payments of the Term Loans but less any mandatory prepayments made pursuant to Section 5.4.2 or Section 5.4.3 on or after the Amendment No. 4 Closing Date (but prior to such scheduled mandatory prepayments), Borrower shall make the following mandatory prepayments of the Term Loans which shall be applied to the remaining installments of the Term Loans on a pro rata basis in inverse order of maturity: (i) $10,000,000 by no later than March 31, 2024, (ii) $20,000,000 (inclusive of amounts paid under clause (i) above) by no later than June 30, 2024, and (iii) $45,000,000 (inclusive of amounts paid under clauses (i) and (ii) above) by no later than December 31, 2024. For the avoidance of doubt, the amount of any mandatory prepayments made under Section 5.4.2 or 5.4.3 on or after the Amendment No. 4 Closing Date (but prior to such scheduled mandatory prepayments) shall reduce the amount of mandatory prepayments required to be made under this Section 5.4.1 on a dollar-for-dollar basis.

5.4.3. Notwithstanding anything to the contrary in Section 5.4.2, within five (5) Business Days of receipt of the Net Proceeds of any sale or other disposition of Real Estate pursuant to clause (n) of the definition of “Permitted Asset Disposition”, Borrowers shall repay the outstanding balance of the Term Loans in an amount equal to 75% of the original appraised “as-is” fair market value (which was used to determine the Term Loan Formula Amount) of such Real Estate, less

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any scheduled amortization payments already made, and any excess Net Proceeds of such Permitted Asset Disposition shall be applied, at the Borrowers’ option, to either (i) prepay the then-outstanding principal balance of Revolver Loans pro rata (without a permanent reduction of the Revolver Commitments) or (ii) prepay the outstanding principal balance of the Term Loans pro rata;

5.4.9 Notwithstanding anything herein to the contrary, if any balance sheet furnished to Agent pursuant to Section 10.1.2 reflects that Borrower maintains cash in excess of $20,000,000, then Borrower shall, promptly, but in no event later than two (2) Business Days following delivery of such financial statements to Agent, prepay the Obligations in an amount equal to such excess cash balance;

5.4.10. Other than with respect to mandatory prepayments pursuant to Sections 5.4.1, 5.4.3, 5.4.4, 5.4.7 and 5.4.8, notwithstanding anything else to the contrary contained herein:

(i) FIRST, to the then-outstanding principal balance of the Revolver Loans (without a permanent reduction of the Revolver Commitments), the Term Loan, the Capital Expenditure Loans, the Equipment Loan and the DDTLs, pro rata in inverse order of maturity with respect to the Term Loan, the Capital Expenditure Loans, the Equipment Loan and the DDTLs; provided, that to the extent the outstanding Revolver Loans, Term Loan, Capital Expenditure Loans, Equipment Loan and DDTLs include Adjusted Base Rate Loans and SOFR Loans, the mandatory prepayments shall first be applied to the Adjusted Base Rate Loans and remaining balance shall be held as cash collateral in Cash Collateral Account until the end of the Interest Periods applicable to such outstanding SOFR Loans and then shall be applied to such SOFR Loans;

(b) on the first Business Day of each consecutive two week period, commencing on October 23, 2023, Borrower Agent shall deliver to Agent a 13-Week Forecast for the 13 week period commencing on the first Business Day of such two week period.

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10.1.15 Quarterly Update Calls. Within fifteen (15) Business Days following each release by Holdings of its quarterly earnings report, or more frequently as may be reasonably requested by Agent, Holdings shall host an update call with Agent and not less than three (3) Business Days prior to the scheduled date for each such call Holdings shall issue to Agent a comparison of actual results to the projections delivered to Agent pursuant to Section 10.1.2(h) for such period.

10.3 Financial Covenants. Until Full Payment of the Obligations and for the periods set forth below, Holdings and its Subsidiaries on a consolidated basis shall maintain as of the date of determination (and to be certified by a Senior Officer of Borrower Agent in the Compliance Certificate provided in accordance with Section 10.1.2(d)):

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As further consideration for the above release, each Obligor specifically agrees, represents, and warrants that the matters released herein are not limited to matters which are known or disclosed, and such Obligor hereby waives any and all rights and benefits which it now has, or in the future may have, by virtue of the provisions of Section 1542 of the Civil Code of the State of California which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE LENDER OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

Each Obligor is aware that it may later discover facts in addition to or different from those which it now knows or believes to be true with respect to the releases given herein, and that it is nevertheless such Obligor’s intention to settle, release, and discharge fully, finally, and forever all of these matters, known or unknown, suspected or unsuspected, which previously

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existed, now exist, or may exist. In furtherance of such intention, each Obligor specifically acknowledges and agrees that the releases given in this Amendment shall be and shall remain in effect as full and complete releases of the matters being released, notwithstanding the discovery or existence of any such additional or different facts and that such releases shall not be subject to termination or rescission by reason of any such additional or different facts.

[Signatures are on the following pages]

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IN WITNESS WHEREOF, this Amendment has been executed and delivered as of the Effective Date set forth above.

 

HOLDINGS:

 

 

VINTAGE WINE ESTATES, INC.,

a Nevada corporation

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Chief Financial Officer

 

 

BORROWERS:

 

 

VINTAGE WINE ESTATES, INC.,

a California corporation

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Chief Financial Officer

 

GROVE ACQUISITION, LLC,

a California limited liability company

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Chief Financial Officer

 

 

GIRARD WINERY LLC,

a California limited liability company

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Chief Financial Officer

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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MILDARA BLASS INC.,

a California corporation

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Secretary and Treasurer

 

 

SPLINTER GROUP NAPA, LLC,

a California limited liability company

By:	/s/ Patrick Roney
Name:	Patrick Roney
Title:	Manager

 

 

SABOTAGE WINE COMPANY, LLC,
a California limited liability company

 

By:	/s/ Patrick Roney
Name:	Patrick Roney
Title:	Manager

 

 

VWE CAPTIVE, LLC,
a Nevada limited liability company

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Manager

 

CALIFORNIA CIDER CO., INC.,

a California corporation

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Vice President, Secretary and Treasurer

 

 

 

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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THAMES AMERICA TRADING COMPANY LTD.,

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Vice President, Secretary and Treasurer

 

 

VINESSE, LLC,
a California limited liability company

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Manager

 

 

 

MEIER’S WINE CELLARS, INC.,
an Ohio corporation

 

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Chief Financial Officer

 

 

MEIER’S WINE CELLARS ACQUISITION, LLC,
a Delaware limited liability company

 

 

By:	/s/ Kristina Johnston
Name:	Kristina Johnston
Title:	Secretary and Treasurer

 

 

 

 

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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AGENT:

 

BMO BANK N.A., as successor in interest to BANK OF THE WEST,

as Agent

 

 

By:	/s/ Darren Jung
Name:	Darren Jung
Title:	Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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LENDERS:

BMO BANK N.A., as successor in interest to BANK OF THE WEST,
as a Lender

By:	/s/ Tracy Holmes
Name:	Tracy Holmes
Title:	Managing Director

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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RABO AGRIFINANCE LLC,
as a Lender

By:	/s/ Catherine M. Vyenielo
Name:	Catherine M. Vyenielo
Title:	SVP

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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AGCOUNTRY FARM CREDIT SERVICES, PCA,
as a Lender

By:	/s/ Lisa Caswell
Name:	Lisa Caswell
Title:	Vice President Capital Markets

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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COMPEER FINANCIAL PCA,

as a Lender

By:	/s/ Daniel J. Best
Name:	Daniel J. Best
Title:	Director, Capital Markets

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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HTLF BANK,

as a Lender

By:	/s/ Travis Moncada
Name:	Travis Moncada
Title:	SVP/SRM

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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COMERICA BANK,

as a Lender

By:	/s/ Chris Thomson
Name:	Chris Thomson
Title:	Senior Vice President

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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GREENSTONE FARM CREDIT SERVICES, ACA,

as a Lender

By:	/s/ Curtis Flammini
Name:	Curtis Flammini
Title:	VP of Capital Markets Lending

 

GREENSTONE FARM CREDIT SERVICES, FLCA,

as a Lender

By:	/s/ Curtis Flammini
Name:	Curtis Flammini
Title:	VP of Capital Markets Lending

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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FARM CREDIT MID-AMERICA, PCA,
as a Lender

By:	/s/ Tabatha Hamilton
Name:	Tabatha Hamilton
Title:	Vice President Food and Agribusiness

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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FARM CREDIT BANK OF TEXAS,
as a Lender

By:	/s/ Evelin Herrera
Name:	Evelin Herrera
Title:	Director

 

Amendment Number Four to Second Amended and Restated Loan and Security Agreement

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Exhibit 99.1

	News Release

_______________________________________________________________________________________________________________________

937 Tahoe Boulevard, Suite 210 | Incline Village, NV 89451

For Immediate Release

Vintage Wine Estates Reports Fourth Quarter and Fiscal Year 2023 Financial Results

INCLINE VILLAGE, NV, October 13, 2023 – Vintage Wine Estates, Inc. (Nasdaq: VWE and VWEWW) (“VWE” or the “Company”), one of the top wine producers in the U.S. with an industry leading direct-to-consumer platform, today reported its financial results for its fourth quarter and fiscal year ended June 30, 2023. These financial results reflect the impacts of the restatement of prior fiscal 2023 quarters and the related revisions of fiscal 2022 financial results. Results include Vinesse, LLC ("Vinesse") acquired on October 4, 2021, ACE Cider, acquired on November 16, 2021, and Meier's Wine Cellars, Inc. (“Meier’s”) acquired on January 18, 2022. (Note: all references to revenue are equivalent to net revenue)

Jon Moramarco, Interim Chief Executive Officer, commented, "My objective these last eight months since being appointed as interim CEO has been to stabilize operations and strengthen the foundation of our business to provide a focused enterprise with which our new CEO can drive cash generation and reduce debt while delivering a great customer experience with key brands and leveraging our channels to market and top-tier estate wineries. We have made progress with further improving customer experience in our tasting rooms and maintaining our industry leading retention rates of club members with our estate properties. We have measurably improved efficiencies in our warehousing and bottling operations, meaningfully cleaned out our inventory and strengthened inventory management. Importantly, we have instituted appropriate pricing for many brands and channels. Solid shipments and depletion rates on most of our priority brands reflect the strength of the premiumization trend and our positioning in the market. We have also gained more distribution points for ACE Cider and our depletion rates demonstrate the appeal of our cider with consumers. In addition, Meier's has increased booked business by improving market penetration. We expect additional progress as we advance through our transition year of fiscal 2024.”

He added, "We still have work to do. We are further evaluating profitability of various categories of our business and relationships with certain customers. We have to strengthen brand integrity and make much needed investments in health, safety and efficiency for our facilities. Nevertheless, I am very encouraged by the energy of the VWE team, the focus on driving improvements and the opportunities in front of us."

Five-Point Plan Progress

The Company’s Five-Point Plan is centered around five priorities which include margin expansion through simplification and better execution, measurable cost reduction, disciplined cash management, monetizing assets and reducing debt and growing revenue in its key brands.

Since initiating the plan in the latter half of fiscal 2023 through the first quarter of fiscal 2024 the Company has accomplished the following:

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Fourth Quarter Fiscal 2023 Highlights and Financial Results Review (compared with revised prior-year period unless noted otherwise)

1Case Volume is a Key Performance Measure (“KPI”). Please see related disclosures regarding the use of this KPI in this news release.

2As referenced here and throughout the release, adjusted net income and adjusted EBITDA are non-GAAP measures. Please see related disclosures regarding the use of non-GAAP measures in this news release.

Fiscal Year 2023 Highlights and Financial Results Review (compared with revised prior-year results unless noted otherwise)

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Strong Balance Sheet with Financial Flexibility

Liquidity

At fiscal year end, the Company had approximately $54 million in liquidity comprised of $18.2 million in cash and approximately $35.9 million available under its revolving line of credit.

During fiscal 2023, the Company reduced total debt by $24.9 million to $303.3 million at June 30, 2023, primarily using the proceeds from the sale of assets. Separately today, the Company announced that it has amended its credit agreement (the "Amended Credit Agreement") to, among other things, waive existing events of default, redefine financial covenants and allow for additional types of asset sales up to $60 million. Collateral underlying the Amended Credit Agreement includes real estate valued at approximately $215 million plus receivables and bulk and cased inventory. The Company intends to market certain assets assuming a return of fair value.

The Company believes that the availability on its revolver, strong working capital management and asset monetization efforts will be sufficient to execute its operating plan and meet required debt service over the next twelve months.

Kristina L. Johnston, Chief Financial Officer, noted, "We believe the Amended Credit Agreement together with our focused cash management and operational improvements to generate cash in fiscal 2024 provide the necessary liquidity to execute on our plans. In addition, we intend to market certain assets at fair value. We believe these efforts during our transition year will support our ability to make the required principal payments in fiscal 2024 to avoid higher interest rates and achieve our goal to reduce debt."

Capital Investments

Capital expenditures were $2.9 million for the fiscal 2023 fourth quarter and $14.2 million for the year. Capital expenditures in the fourth quarter and full year fiscal 2022 were $9.1 million and $24.8 million, respectively. Higher capital expenditures in fiscal 2022 were the result of the expansion of the Hopland bottling operations. Fiscal 2023 capital expenditures included increased barrel capacity, barrels, installment of the solar power system at the Hopland facility, upgrading the Firesteed tasting room, vineyard development and other productivity and safety enhancements. Capital expenditures for fiscal 2024 are expected to be approximately $12 million.

Fiscal Year 2024 Outlook

VWE's expectations for fiscal 2024 have been refined from its preliminary expectations provided on July 20, 2023. The Company expects the following to be driven by execution of its restructuring and Five-Point Plan:

Revenue:	Approximately $260 million to $270 million
Gross margin:	Approximately 38%, an estimated 800 basis point improvement on lower volume
SG&A(excludes amortization expense):	Approximately $98 million, excluding restructuring costs
Depreciation expense: Non-cash amortization expense:	Approximately $16 million Approximately $6.1 million
Estimated restructuring charges:	$5 million to $6 million

Lower expected revenue in fiscal 2024 primarily reflects approximately $33 million related to lower sales of aged bulk whiskey inventory due to depleting inventory, $6 million related to the discontinued bottled spirits program and an estimated $9 million related to SKU rationalization. These declines are expected to be somewhat offset by improved pricing and higher volume in select brands. For fiscal 2024, SG&A excludes restructuring costs and executive stock-based compensation awards expected with new leadership.

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Conference Call and Webcast

The Company will host a conference call and live webcast Monday, October 16, 2023 at 9:00 AM ET/ 6:00 AM PT, at which time management will review the Company’s financial results, plans and outlook. The review will be accompanied by a slide presentation, which will be available on the Company’s website at https://ir.vintagewineestates.com. A question-and-answer session will follow the formal discussion.

The conference call can be accessed by dialing 1.404.975.4839 and providing access code 358700. The listen-only audio webcast can be monitored at https://ir.vintagewineestates.com/events-and-presentations. A telephonic replay will be available through Monday, October 23, 2023, and can be accessed by dialing 1.929.458.6194 and entering the conference ID number 406504. Alternatively, an archived webcast of the call can be found on the Company’s website in the investor relations section. A transcript of the call will be posted to the website once available.

About Vintage Wine Estates, Inc.

Vintage Wine Estates is a family of wineries and wines whose singular focus is producing the best quality wines and incredible customer experiences with wineries throughout Napa, Sonoma, California’s Central Coast, Oregon, and Washington State. Since its founding 20 years ago, the Company has grown to be the 14th largest wine producer in the U.S., selling more than 2.2 million nine-liter equivalent cases annually. With approximately
40 brands, key focus brands include ACE Cider, Bar Dog, B.R. Cohn, Cameron Hughes, Cherry Pie, Firesteed, and Kunde, many of which have achieved critical acclaim. To consistently drive growth, the Company curates, creates, stewards, and markets its many brands and services to customers and end consumers via a balanced omni-channel strategy encompassing direct-to-consumer, wholesale, and private label and custom wine making services. While VWE is diverse across price points and varietals with brands ranging from $10 to $150 USD at retail, its primary focus is on the fastest growing luxury segment of the U.S. wine industry with the majority of brands selling in the range of $10 to $20 per bottle. The Company regularly posts updates and additional information at vintagewineestates.com.

Non-GAAP Financial Measures

In addition to reporting net income/(loss) and net income/(loss) margin prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), VWE uses adjusted EBITDA, adjusted EBITDA margin, adjusted net income/(loss) and adjusted net income/(loss) per share to supplement GAAP measures of performance to evaluate the effectiveness of its business strategies. Adjusted EBITDA is defined as earnings/(loss) before interest, income taxes, depreciation and amortization, stock-based compensation expense, casualty losses or gains, impairment losses, changes in the fair value of derivatives, restructuring related income or expenses, acquisition and integration costs, and certain non-cash, nonrecurring, or other items that are included in net income that VWE does not consider indicative of its ongoing operating performance. Adjusted EBTIDA margin is the ratio of adjusted EBITDA to net revenue. Adjusted net income/(loss) is defined as net income/(loss) as reported adjusted for the impacts of amortization of intangible assets, acquisition integration costs, gains or losses on disposition of assets, gain on litigation of proceeds, COVID impact, and inventory acquisition basis adjustment and also adjusted for a normalized tax rate. Adjusted net income/(loss) per share is calculated based on the weighted average shares outstanding for the period.

Adjusted EBITDA, adjusted EBITDA margin, adjusted net income/(loss) and adjusted net income/(loss) per share are not recognized measures of financial performance under GAAP. VWE believes these non-GAAP measures provide investors with additional insight into the underlying trends of VWE’s business and assist in analyzing VWE’s performance across reporting periods on a consistent basis by excluding items that VWE does not believe are indicative of its core operating performance, which allows for a better comparison against historical results and expectations for future performance. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income/(loss), and adjusted net income/(loss) per share have certain limitations as analytical tools, and they should not be considered in isolation or as a substitute for analysis of results as reported under U.S. GAAP. These non-GAAP measures, as presented, may produce results that vary from the most comparable GAAP measure and may not be comparable with a similarly defined non-GAAP measure used by other companies.

In evaluating adjusted EBITDA, adjusted EBITDA margin, adjusted net income/(loss), and adjusted net income/(loss) per share, be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. VWE’s presentation of adjusted EBITDA, adjusted EBITDA margin, adjusted net income/(loss), and adjusted net income/(loss) per share should not be construed as an implication that future results will be unaffected by the types of items excluded from the calculation of these non-GAAP measures.

Key Performance Indicators

A key performance indicator ("KPI") is generally defined as a quantifiable measurement or metric used to gauge performance, specifically to help determine strategic, financial, and operational achievements, especially compared to those of similar businesses.

Case volumes represents the number of 9-liter equivalent cases of wine that we sell during a particular period. Case volumes are an important indicator of what is driving gross margin. This metric also allows us to develop our supply and production targets for future periods.

Forward-Looking Statements

Some of the statements contained in this press release are forward-looking statements within the meaning of applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements are all statements other than those of historical fact, and generally may be identified by the use of words such as “actively,” “believe,” “efforts,” “estimate,” “evaluating,” “expect,” “forecast,” “intend,” “may,” “ongoing,” “opportunity,” “outlook,” “plan,” “potential,” “should,” “will,” or other similar expressions that indicate future events or trends. These forward-looking statements include, but are not limited to, statements regarding VWE’s organization restructuring and other cost savings and expected results therefrom, expected results from the implementation of the Company’s Five-Point Plan, expectations reflecting restructuring benefits and business improvements in fiscal 2024, and the appointment of Seth Kaufman as President and CEO. These statements are based on various assumptions, whether or not identified in this news release, and on the current expectations of VWE’s management. These forward-looking statements are not

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intended to serve as, and should not be relied on by any investor as, a guarantee of actual performance or an assurance or definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ materially from those contained in or implied by such forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the control of VWE. Factors that could cause actual results to differ materially from the results expressed or implied by such forward-looking statements include, among others: risks relating to the uncertainty of projected financial information; the risk that we are unable to regain and maintain compliance with Nasdaq continued listing requirements and our securities are delisted from Nasdaq; potential reputational harm to VWE’s brands from internal and external sources; the effect of economic conditions on the industries and markets in which VWE operates, including financial market conditions, rising inflation, fluctuations in prices, interest rates and market demand; inability to achieve some or all of the expected benefits from cost reduction and revenue enhancing initiatives and any future restructuring plans or changes in management may adversely affect our business; declines or unanticipated changes in consumer demand for VWE’s products or a shift in consumer sentiment to purchase less wine through VWE’s direct-to-consumer channel; the effects of competition on VWE’s future business; VWE’s significant reliance on its distribution channels, including independent distributors and their effect on VWE’s wholesale operations and revenue; loss or significant decline of sales to one or more of the Company’s distributors; possible decreases in VWE’s wine quality ratings; VWE’s level of insurance against catastrophic events and losses; VWE’s ability to protect its trademarks and other intellectual property rights; the potential adverse effects of health pandemics, epidemics or contagious diseases; risks associated with new lines of businesses or products; the ability of the Company to retain key personnel; possible litigation relating to misuse or abuse of alcohol; changes in applicable laws and regulations and the significant expense to VWE of operating in a highly regulated industry; increases in costs or the disruption of supply or shortage of energy; the impact of climate change, environmental catastrophe, natural disasters, disease, pests, weather conditions and inadequate water supply on VWE’s business including the Hopland facility; VWE’s ability to adequately source grapes and other raw materials and any increase in the cost of such materials; risks associated with the Company’s information technology and ability to maintain and protect personal information; VWE’s ability to maintain necessary licenses; the Company’s limited experience operating as a public company and its ability to remediate its material weakness in internal controls over financial reporting and to maintain effective internal controls over financial reporting; integration risks associated with recent and future acquisitions; VWE’s ability to make payments on its indebtedness; and those factors discussed in the Company’s most recent Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission. There may be additional risks including other adjustments that VWE does not presently know or that VWE currently believes are immaterial that could also cause actual results to differ from those expressed in or implied by these forward-looking statements. In addition, forward-looking statements reflect VWE’s expectations, plans or forecasts of future events and views as of the date and time of this news release. VWE undertakes no obligation to update or revise any forward-looking statements contained herein, except as may be required by law. Accordingly, undue reliance should not be placed upon these forward-looking statements.

Financial Tables Follow.

 

Contacts:

Investors Deborah K. Pawlowski, Kei Advisors LLC dpawlowski@keiadvisors.com Phone: 716.843.3908	Media Mary Ann Vangrin MVangrin@vintagewineestates.com

 

 

 

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Vintage Wine Estates, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

		June 30, 2023				June 30, 2022
Assets
Current assets:
Cash and cash equivalents		$	18,233			$	44,758
Restricted cash			-				4,800
Accounts receivable, net			24,561				37,869
Other receivables			507				3,866
Inventories			201,363				192,922
Assets held for sale, net			511				-
Current interest rate swap asset			4,669				2,877
Prepaid expenses and other current assets			14,895				11,864
Total current assets			264,739				298,956
Property, plant, and equipment, net			215,967				238,719
Operating lease right-of-use assets			32,945				-
Finance lease right-of-use-assets			630				-
Goodwill			-				154,951
Intangible assets, net			38,994				63,097
Interest rate swap asset			4,317				6,280
Other assets			3,562				3,464
Total assets		$	561,154			$	765,467
Liabilities, redeemable noncontrolling interest, and stockholders' equity
Current liabilities:
Line of credit		$	115,444			$	144,215
Accounts payable			20,413				13,473
Accrued liabilities and other payables			26,286				26,997
Current operating lease liabilities			6,243				-
Current finance lease liabilities			304				-
Current maturities of long-term debt			14,449				14,909
Total current liabilities			183,139				199,594
Other long-term liabilities			4,196				7,055
Long-term debt, less current maturities			173,409				169,095
Long-term operating lease liabilities			26,792				-
Long-term finance lease liabilities			334				-
Deferred tax liability			506				29,325
Deferred gain			-				10,666
Total liabilities			388,376				415,735
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest			262				1,494
Stockholders' equity:
Preferred stock, no par value, 2,000,000 shares authorized, and none issued and outstanding at June 30, 2023 and June 30, 2022.			-				-
Common stock, no par value, 200,000,000 shares authorized, 62,234,028 issued and 59,362,134 outstanding at June 30, 2023 and 61,691,054 issued and 58,819,160 outstanding at June 30, 2022.			-				-
Additional paid-in capital			381,689				376,099
Treasury stock, at cost: 2,871,894 shares held at June 30, 2023 and June 30, 2022, respectively.			(26,034	)			(26,034	)
Accumulated deficit			(182,308	)			(1,092	)
Total Vintage Wine Estates, Inc. stockholders' equity			173,347				348,973
Noncontrolling interests			(831	)			(735	)
Total stockholders' equity			172,516				348,238
Total liabilities, redeemable noncontrolling interest, and stockholders' equity		$	561,154			$	765,467

 

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Vintage Wine Estates, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

		Three Months Ended June 30,								Year Ended June 30,
		2023				2022				2023				2022
Net revenue
Wine, spirits and cider		$	42,109			$	50,379			$	189,361			$	208,019
Nonwine			19,987				23,877				93,867				84,816
			62,096				74,256				283,228				292,835
Cost of revenue
Wine, spirits and cider			30,792				44,227				138,043				150,834
Nonwine			14,680				22,493				60,009				53,088
			45,472				66,720				198,052				203,922
Gross profit			16,624				7,536				85,176				88,913
Selling, general, and administrative expenses			28,337				31,296				118,431				96,978
Amortization expense			1,828				2,010				7,257				5,948
Goodwill impairment losses			20,673				-				145,958				-
Intangible impairment losses			3,553				1,281				16,196				1,281
Gain on remeasurement of contingent liability			3,430				(3,570	)			141				(3,415	)
Gain on insurance and litigation proceeds			(876	)			(3,000	)			(2,290	)			(3,000	)
Loss (gain) on sale leaseback			-				(334	)			-				(1,334	)
Loss (gain) on sale of assets			9,846				(22	)			8,300				366
Loss from operations			(50,167	)			(20,125	)			(208,817	)			(7,911	)
Other income (expense)
Interest expense			(5,085	)			(3,085	)			(18,407	)			(13,910	)
Net gain on interest rate swap agreements			1,451				3,103				6,343				22,578
Loss on modification or extinguishment of debt			-				-				(479	)			-
Other, net			(555	)			(2,681	)			(229	)			(736	)
Total other (expense) income, net			(4,189	)			(2,663	)			(12,772	)			7,932
(Loss) income before provision for income taxes			(54,356	)			(22,788	)			(221,589	)			21
Income tax (benefit) provision			(6,480	)			(5,673	)			(31,360	)			723
Net loss			(47,876	)			(17,115	)			(190,229	)			(702	)
Net loss attributable to the noncontrolling interests			(27	)			(203	)			(1,262	)			(277	)
Net loss attributable to common stockholders		$	(47,849	)		$	(16,912	)		$	(188,967	)		$	(425	)
Net earnings per share allocable to common stockholders
Basic		$	(0.81	)		$	(0.28	)		$	(3.20	)		$	(0.01	)
Diluted		$	(0.81	)		$	(0.28	)		$	(3.20	)		$	(0.01	)
Weighted average shares used in the calculation of earnings per share allocable to common stockholders
Basic			59,340,325				60,374,289				59,096,045				60,673,789
Diluted			59,340,325				60,374,289				59,096,045				60,673,789

 

 

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Vintage Wine Estates, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

		Year Ended June 30,
		2023				2022
Cash flows from operating activities
Net loss		$	(190,229	)		$	(702	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation expense			15,926				15,248
Amortization expense			8,702				6,343
Loss on goodwill and intangible assets impairment			162,154				1,281
Stock-based compensation expense			6,737				5,116
Provision for credit losses			369				(294	)
Provision for inventory reserves			10,828				3,667
Inventory write-down			-				15,433
Remeasurement of contingent consideration liabilities			141				(3,415	)
Net gain on interest rate swap agreements			(6,343	)			(22,578	)
Provision for deferred income tax			(31,734	)			643
Loss on sale of assets			8,300				366
Deferred gain on sale leaseback			-				(1,334	)
Loss on modification or extinguishment of debt			479				-
Deferred rent			-				375
Change in operating assets and liabilities (net of effect of business combinations):
Accounts receivable			12,939				(12,588	)
Other receivables			3,459				3,624
Inventories			(17,569	)			18,462
Prepaid expenses and other current assets			(3,031	)			(3,127	)
Other assets			1,565				(2,607	)
Accounts payable			5,264				(7,535	)
Accrued liabilities and other payables			5,637				297
Net change in lease assets and liabilities			(2,005	)			-
Other			-				(836	)
Net cash (used in) provided by operating activities			(8,411	)			15,839
Cash flows from investing activities
Proceeds from sale of assets			20,078				153
Purchases of property, plant and equipment			(14,204	)			(24,835	)
Acquisition of businesses			-				(73,680	)
Net cash provided by (used in) investing activities			5,874				(98,362	)
Cash flows from financing activities
Principal payments on line of credit			(136,358	)			(144,706	)
Proceeds from line of credit			112,878				201,570
Financing costs incurred			(2,710	)			-
Change in outstanding checks in excess of cash			1,676				1,025
Principal payments on long-term debt			(76,903	)			(22,763	)
Proceeds from debt			74,635				-
Principal payments on finance leases			(257	)			-
Payments of minimum tax withholdings on stock-based payment awards			(990	)			-
Distributions to noncontrolling interest			(66	)			-
Repurchase of common stock			-				(26,034	)
Repurchase of public warrants			(172	)			(270	)
Payments on acquisition payable			(521	)			(420	)
Net cash (used in) provided by financing activities			(28,788	)			8,402
Net change in cash, cash equivalents and restricted cash			(31,325	)			(74,121	)
Cash, cash equivalents and restricted cash, beginning of year			49,558				123,679
Cash, cash equivalents and restricted cash, end of year		$	18,233			$	49,558

 

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Vintage Wine Estates, Inc.

Fiscal 2023 and Fiscal 2022 Segment Data

Revenue

(in thousands)

 

 

Fiscal Year 2023	Three months ended																Year ended
Net Revenue	September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				June 30, 2023
Wholesale	$	23,987			$	23,083			$	20,811			$	18,837			$	86,718
Direct to Consumer		19,992				26,472				17,008				19,897				83,369
Business to Business		34,180				28,814				26,831				23,358				113,183
Other/ Non-Allocable		(79	)			32				1				4				(42	)
Total	$	78,080			$	78,401			$	64,651			$	62,096			$	283,228

 

Fiscal Year 2022	Three months ended																Year ended
Net Revenue	September 30, 2021				December 31, 2021				March 31, 2022				June 30, 2022				June 30, 2022
Wholesale	$	16,203			$	22,171			$	24,549			$	20,990			$	83,913
Direct to Consumer		15,263				34,806				19,595				22,537				92,201
Business to Business		24,467				25,225				33,657				30,486				113,835
Other/ Non-Allocable		102				1,409				1,132				243				2,886
Total	$	56,035			$	83,611			$	78,933			$	74,256			$	292,835

 

	Year-Over-Year $ Change
	Three months ended																Year ended
Net Revenue	September 30				December 31				March 31				June 30				June 30
Wholesale		7,784				912				(3,738	)			(2,153	)			2,805
Direct to Consumer		4,729				(8,334	)			(2,587	)			(2,640	)			(8,832	)
Business to Business		9,713				3,589				(6,826	)			(7,128	)			(652	)
Other/ Non-Allocable		(181	)			(1,377	)			(1,131	)			(239	)			(2,928	)
Total	$	22,045			$	(5,210	)		$	(14,282	)		$	(12,160	)		$	(9,607	)

 

	Year-Over-Year % Change
	Three months ended																Year ended
Net Revenue	September 30				December 31				March 31				June 30				June 30
Wholesale		48.0	%			4.1	%			-15.2	%			-10.3	%			3.3	%
Direct to Consumer		31.0	%			-23.9	%			-13.2	%			-11.7	%			-9.6	%
Business to Business		39.7	%			14.2	%			-20.3	%			-23.4	%			-0.6	%
Other/ Non-Allocable		(177.5	%)			(97.7	%)			(99.9	%)			(98.4	%)			(101.5	%)
Total		39.3	%			-6.2	%			-18.1	%			-16.4	%			-3.3	%

 

 

 

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Vintage Wine Estates, Inc.

Fiscal 2023 and Fiscal 2022 Segment Data

Operating Income

(in thousands)

 

 

Fiscal Year 2023	Three months ended																Year ended
Operating Income (Loss)	September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				June 30, 2023
Wholesale	$	2,288			$	(126,896	)		$	(1,573	)		$	(4,294	)		$	(130,475	)
Direct to Consumer		1,969				1,424				(2,905	)			(18,774	)			(18,286	)
Business to Business		10,533				(1,167	)			2,406				512				12,284
Other/ Non-Allocable		(18,175	)			(20,443	)			(6,110	)			(27,612	)			(72,340	)
Total	$	(3,385	)		$	(147,082	)		$	(8,182	)		$	(50,168	)		$	(208,817	)

 

Fiscal Year 2022	Three months ended																Year ended
Operating Income (Loss)	September 30, 2021				December 31, 2021				March 31, 2022				June 30, 2022				June 30, 2022
Wholesale	$	3,042			$	4,204			$	3,256			$	(7,471	)		$	3,031
Direct to Consumer		2,031				10,523				1,014				2,427				15,995
Business to Business		6,229				7,255				10,016				(5,749	)			17,751
Other/ Non-Allocable		(8,093	)			(12,525	)			(14,738	)			(9,332	)			(44,688	)
Total	$	3,209			$	9,457			$	(452	)		$	(20,125	)		$	(7,911	)

 

	Year-Over-Year $ Change
	Three months ended																Year ended
Operating Income (Loss)	September 30				December 31				March 31				June 30				June 30
Wholesale		(754	)			(131,100	)			(4,829	)			3,177				(133,506	)
Direct to Consumer		(62	)			(9,099	)			(3,919	)			(21,201	)			(34,281	)
Business to Business		4,304				(8,422	)			(7,610	)			6,261				(5,467	)
Other/ Non-Allocable		(10,082	)			(7,918	)			8,628				(18,280	)			(27,652	)
Total	$	(6,594	)		$	(156,539	)		$	(7,730	)		$	(30,043	)		$	(200,906	)

 

	Year-Over-Year % Change
	Three months ended																Year ended
Operating Income (Loss)	September 30				December 31				March 31				June 30				June 30
Wholesale		-24.8	%			-3118.5	%			-148.3	%			-42.5	%			-4404.7	%
Direct to Consumer		-3.1	%			-86.5	%			-386.5	%			-873.5	%			-214.3	%
Business to Business		69.1	%			-116.1	%			-76.0	%			-108.9	%			-30.8	%
Other/ Non-Allocable		124.6	%			63.2	%			-58.5	%			195.9	%			61.9	%
Total		-205.5	%			-1655.3	%			1710.2	%			149.3	%			2539.6	%

 

 

 

 

 

 

 

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Vintage Wine Estates, Inc.

Fiscal 2023 and Fiscal 2022 Segment Data

Case Volume1

(case volume in thousands)

 

 

The following table summarizes 9-liter equivalent cases sold by segment:

 

Fiscal Year 2023		Three Months Ended																Year Ended
		September 30, 2022				December 31, 2022				March 31, 2023				June 30, 2023				June 30, 2023
Wholesale			539				453				433				472				1,897
Business to Business		*				*				*				*				*
Direct to Consumer			99				125				67				70				361
Total case volume			638				578				500				542				2,258

 

Fiscal Year 2022		Three Months Ended																Year Ended
		September 30, 2021				December 31, 2021				March 31, 2022				June 30, 2022				June 30, 2022
Wholesale			209				379				484				489				1,561
Business to Business		*				*				*				*				*
Direct to Consumer			60				160				87				101				408
Total case volume			269				539				571				590				1,969

 

		Year-Over-Year Unit Change
		Three Months Ended																Year Ended
		September 30				December 31				March 31				June 30				June 30
Wholesale			330				74				(51	)			(17	)			336
Business to Business		*				*				*				*				*
Direct to Consumer			39				(35	)			(20	)			(31	)			(47	)
Total case volume			369				39				-71				-48				289

 

		Year-Over-Year % Change
		Three Months Ended																Year Ended
		September 30				December 31				March 31				June 30				June 30
Wholesale			157.9	%			19.5	%			-10.5	%			-3.5	%			21.5	%
Business to Business		*				*				*				*				*
Direct to Consumer			65.0	%			-21.9	%			-23.0	%			-30.7	%			-11.5	%
Total case volume			137.2	%			7.2	%			(12.4	%)			(8.1	%)			14.7	%

 

*B2B segment sales are primarily not related to case volumes, therefore the Company has elected to not report case volumes for this segment as it would not be indicative of the underlying performance of the business.

 

 

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Vintage Wine Estates, Inc.

Reconciliation of Net Loss to Adjusted EBITDA
and Net Loss to Adjusted EBITDA Margin

(Unaudited, in thousands)

 

	Three Months Ended								Year Ended
(in thousands)	June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
Net loss	$	(47,876	)		$	(17,115	)		$	(190,229	)		$	(702	)
Interest expense		5,085				3,085				18,407				13,910
Income tax (benefit) provision		(6,480	)			(5,673	)			(31,360	)			723
Depreciation expense		4,127				5,864				15,926				15,248
Amortization expense		1,828				2,010				7,257				5,948
Gain on insurance and litigation proceeds		(876	)			(3,000	)			(2,290	)			(3,000	)
Stock-based compensation expense		1,071				3,722				6,737				5,116
Goodwill and Intangibles Impairment		24,226				1,281				162,154				1,281
Net gain on interest rate swap agreements		(1,451	)			(3,103	)			(6,343	)			(22,578	)
(Gain)/loss on disposition of assets		9,846				(22	)			8,300				366
Adjusted EBITDA	$	(10,500	)		$	(12,951	)		$	(11,441	)		$	16,312
Net revenue	$	62,096			$	74,256			$	283,228			$	292,835
Net loss margin		-77.1	%			-23.0	%			-67.2	%			-0.2	%
Adjusted EBITDA margin		-16.9	%			-17.4	%			-4.0	%			5.6	%

 

Reconciliation of Net Loss to Adjusted Net Loss
and Net Loss per Share to Adjusted Net Loss per Share

(Unaudited, in thousands, except per share data)

 

	Three Months Ended								Year Ended
	June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
Net loss	$	(47,876	)		$	(17,115	)		$	(190,229	)		$	(702	)
Amortization expense		1,828				2,010				7,257				5,948
Gain on insurance and litigation proceeds		(876	)			(3,000	)			(2,290	)			(3,000	)
Loss on goodwill and intangible assets impairment		24,226				1,281				162,154				1,281
Net gain on interest rate swap agreements		(1,451	)			(3,103	)			(6,343	)			(22,578	)
(Gain)/loss on sale of assets		9,846				(22	)			8,300				366
Non-GAAP adjusted net loss	$	(14,303	)		$	(19,949	)		$	(21,151	)		$	(18,685	)
Net loss per share		(0.81	)			(0.28	)			(3.22	)			(0.01	)
Non-GAAP adjusted net loss per share		(0.24	)			(0.33	)			(0.36	)			(0.31	)

 

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Exhibit 99.2

 

News Release

937 Tahoe Boulevard, Suite 210 | Incline Village, NV 89451

For Immediate Release

Vintage Wine Estates Announces Amended Credit Agreement

INCLINE VILLAGE, NV, October 12, 2023 - Vintage Wine Estates, Inc. (Nasdaq: VWE and VWEWW) (“VWE” or the “Company”), one of the top wine producers in the U.S. with an industry leading direct-to-consumer platform, today announced it has amended its credit agreement (the “Amended Credit Agreement”) to, among other things, waive existing events of default, redefine financial covenants and allow for additional asset sales.

Kristina L. Johnston, Chief Financial Officer of VWE, commented, “We are pleased our lenders have worked with us to execute a credit agreement that we believe provides us financial and operational flexibility to continue to execute on our Five-Point Plan. We are becoming a more efficient and productive wine company with stronger cash generation from operations. We are simplifying the business, improving inventory management and quality while focusing sales and marketing on our key brands. We also look forward to advancing our strategy under new leadership with Seth Kaufman assuming the role of CEO on October 30, 2023.” As of closing, the Company had approximately $305 million in outstanding borrowings under the Amended Credit Agreement and approximate total liquidity of approximately $73 million including approximately $18 million of cash.

In exchange for the waiver of defaults and financial covenant modifications, the Amended Credit Agreement, among other things, reduces the aggregate revolving commitment and the aggregate delayed draw term loan commitment to $200 million and $38.1 million respectively, requires term loan prepayments of $10 million by March 31, 2024, an additional $10 million by June 30, 2024 and an additional $25 million by December 31, 2024. In addition, the Company will be required to make prepayments with any cash on hand in excess of $20 million and suspends the exercise of any incremental facilities through December 31, 2024. The rates under the Amended Credit Agreement are initially SOFR plus 3%. The Company has filed a Form 8-K with additional details regarding the Amended Credit Agreement and its revised terms.

BMO Bank N.A. acts as administrative agent under the Amended Credit Agreement.

About Vintage Wine Estates, Inc.

Vintage Wine Estates is a family of wineries and wines whose singular focus is producing the best quality wines and incredible customer experiences with wineries throughout Napa, Sonoma, California’s Central Coast, Oregon, and Washington State. Since its founding 20 years ago, the Company has grown to be the 14th largest wine producer in the U.S., selling more than 2.2 million nine-liter equivalent cases annually. With approximately
40 brands, key focus brands include ACE Cider, Bar Dog, B.R. Cohn, Cameron Hughes, Cherry Pie, Firesteed, and Kunde, many of which have achieved critical acclaim. To consistently drive growth, the Company curates, creates, stewards, and markets its many brands and services to customers and end consumers via a balanced omni-channel strategy encompassing direct-to-consumer, wholesale, and private label and custom wine making services. While VWE is diverse across price points and varietals with brands ranging from $10 to $150 USD at retail, its primary focus is on the fastest growing luxury segment of the U.S. wine industry with the majority of brands selling in the range of $10 to $20 per bottle. The Company regularly posts updates and additional information at ir.vintagewineestates.com.

-MORE-

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Vintage Wine Estates Announces Amended Credit Agreement
October 13, 2023

Page 2 of 3

Forward-Looking Statements
Some of the statements contained in this press release are forward-looking statements within the meaning of applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements are all statements other than those of historical fact, and generally may be identified by the use of words such as “continue,” “intend,” “plan,” “becoming,” “simplifying,” “improving,” “focusing,” “advancing,” “requires,” “provides,” or other similar expressions that indicate future events or trends. These forward-looking statements include, but are not limited to, statements regarding the anticipated benefits of the Amended Credit Agreement, expected results from the implementation of the Company’s Five-Point Plan; and the expected timing and results of Seth Kaufman’s start as President and CEO. These statements are based on various assumptions, whether or not identified in this news release, and on the current expectations of VWE’s management. These forward-looking statements are not intended to serve as, and should not be relied on by any investor as, a guarantee of actual performance or an assurance or definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ materially from those contained in or implied by such forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the control of VWE. Factors that could cause actual results to differ materially from the results expressed or implied by such forward-looking statements include, among others: risk that the Amended Credit Agreement does not provide the anticipated financial and operational flexibility, if at all; risks that the Company is unable to meet the additional restrictions and obligations imposed by the Amended Credit Agreement; the Company’s ability to recognize benefits from any organization restructuring and other cost savings actions, including expected results from the implementation of the Company’s Five-Point Plan and positive cash generation; the risk that Seth Kaufman does not start as President and CEO in the expected the time frame, or at all; the Company’s ability to regain compliance with the Nasdaq Listing Standards and maintain the listing of its securities on Nasdaq; risks related to ongoing legal proceedings; the Company’s limited experience operating as a public company and its ability to remediate its material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting; the ability of the Company to retain key personnel; the effect of economic conditions on the industries and markets in which VWE operates, including financial market conditions, rising inflation, fluctuations in prices, interest rates and market demand; risks relating to the uncertainty of projected financial information; the effects of competition on VWE’s future business; risks related to the organic and inorganic growth of VWE’s business and the timing of expected business milestones; the potential adverse effects of the ongoing COVID-19 pandemic on VWE’s business and the U.S. economy; declines or unanticipated changes in consumer demand for VWE’s products; VWE’s ability to adequately source grapes and other raw materials and any increase in the cost of such materials; the impact of environmental catastrophe, natural disasters, disease, pests, weather conditions and inadequate water supply on VWE’s business; VWE’s level of insurance against catastrophic events and losses; VWE’s significant reliance on its distribution channels, including independent distributors; potential reputational harm to VWE’s brands from internal and external sources; possible decreases in VWE’s wine quality ratings; integration risks associated with recent acquisitions; possible litigation relating to misuse or abuse of alcohol; changes in applicable laws and regulations and the significant expense to VWE of operating in a highly regulated industry; VWE’s ability to maintain necessary licenses; VWE’s ability to protect its trademarks and other intellectual property rights; risks associated with the Company’s information technology and ability to maintain and protect personal information; VWE’s ability to make payments on its indebtedness; and those factors discussed in the Company’s most recent Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q or other reports filed with the Securities and Exchange Commission. There may be additional risks including other adjustments that VWE does not presently know or that VWE currently believes are immaterial that could also cause actual results to differ from those expressed in or implied by these forward-looking statements. In addition, forward-looking statements reflect VWE’s expectations, plans or forecasts of future events and views as of the date and time of this news release. VWE undertakes no obligation to update or revise any forward-looking statements contained herein, except as may be required by law. Accordingly, undue reliance should not be placed upon these forward-looking statements.

 

 

 

 

 

 

 

 

 

 

 

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Vintage Wine Estates Announces Amended Credit Agreement
October 13, 2023

Page 2 of 3

 

 

Contacts:

Investors Deborah K. Pawlowski Kei Advisors LLC dpawlowski@keiadvisors.com Phone: 716.843.3908	Media Mary Ann Vangrin mvangrin@vintagewineestates.com

 

 

######

 

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v3.23.3

Document And Entity Information	Oct. 12, 2023
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 12, 2023
Entity Registrant Name	Vintage Wine Estates, Inc.
Entity Central Index Key	0001834045
Entity Emerging Growth Company	true
Securities Act File Number	001-40016
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	87-1005902
Entity Address, Address Line One	937 Tahoe Boulevard
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	Incline Village
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89451
City Area Code	(877)
Local Phone Number	289-9463
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Security Exchange Name	NASDAQ
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common stock, no par value per share
Trading Symbol	VWE
Warrant [Member]
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase common stock
Trading Symbol	VWEWW

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