Vintage Wine Estates, Inc. (Nasdaq: VWE and VWEWW) (“VWE” or the
“Company”), one of the fastest-growing wine producers in the U.S.
with an industry leading direct-to-customer platform, today
reported its financial results for its fiscal year 2022 ended June
30, 2022. Results include Vinesse, LLC ("Vinesse") acquired on
October 4, 2021, ACE Cider, acquired on November 16, 2021, and
Meier's Wine Cellars, Inc. acquired on January 18, 2022.
Pat Roney, Founder and Chief Executive Officer,
commented, “We are executing well on our strategy to drive growth,
are successfully diversifying and expanding our portfolio and
upgrading our capabilities and capacity. As an organization, I
believe we made great progress in our first year as a public
company even in the face of supply chain constraints and
significant cost pressures due to rapid inflation. Importantly, we
are establishing an improved accounting structure, implementing
strengthened processes and controls and we are investing in our
infrastructure to provide a solid foundation from which we can
scale. This includes a stronger accounting and finance team under a
new chief financial officer as well as the addition of several
other key leadership positions. The processes that we have since
implemented to work towards remediation of our material weaknesses
drove the non-cash adjustments in the quarter. We expect this will
not only improve the quality of our financials, but enable greater
consistency and transparency moving forward."
He added, "Our acquisitions are integrating nicely
and over time, we believe they will deliver greater synergies and
margin expansion. Continued challenges with the supply chain
disrupted our ability to capture certain synergies as timely as we
had planned. For example, necessary equipment for the expansion of
our canning capacity in both Sebastapol, CA and Cincinnati, OH was
delayed by approximately 6 months. In addition, the pick & pack
operation for Vinesse was several months behind schedule. As these
operations get back on schedule, we expect to see lower operating
costs and improved production efficiencies. We are excited about
the strength of our channels to market, the power of our brands,
and our digital marketing capabilities. We are actively advancing
our acquisition pipeline and believe that fiscal 2023 will be
another strong year for VWE as we transform the Company into a much
larger, more significant player in the wine industry."
Fourth Quarter Fiscal 2022 Highlights and Financial
Results Review (compared with prior-year period unless
noted otherwise)
Revenue
- Net revenue of $75.5 million was up $18.5 million, or 32%,
driven by higher volume and increased prices. Acquisitions
contributed $13.3 million in net revenue for the quarter.
- DTC revenue grew $5.1 million, or 29%, to $23.1 million driven
by 10% organic growth and acquired revenue of $3.4 million. Organic
growth was the result of record tasting room traffic and wine club
memberships combined with more events as travel and entertainment
became a priority for consumers with pandemic concerns
receding.
- B2B revenue increased $10.8 million, or 55%, to $30.6 million
driven by bulk distilled alcohol sales and $4.2 million of acquired
revenue. Private label projects were modestly lower reflecting lack
of availability of inventory for certain programs.
- Wholesale revenue increased $4.1 million, or 23%, to $21.6
million due to acquired revenue of $5.7 million and the benefit of
improved pricing, which was partially offset by the change in
programming schedules and tight supply related to a specific
varietal. VWE total depletions were (11.6)% over the prior-year
period, similar to the Company’s priority brands, which represented
approximately 57% of total depletion volume. On premise depletions
for all brands were up 4.1%.
Volume (See additional volume data by segment in
the attached tables)
Case
Volume |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
(in
thousands) |
|
2022 |
|
|
2021 |
|
|
Unit Change |
|
|
% Change |
|
Wholesale |
|
|
489 |
|
|
|
187 |
|
|
|
302 |
|
|
|
161.5 |
% |
B2B |
|
130 |
|
|
|
121 |
|
|
|
9 |
|
|
|
7.4 |
% |
DTC |
|
94 |
|
|
|
108 |
|
|
|
(14 |
) |
|
|
-13.0 |
% |
Total case volume |
|
|
713 |
|
|
|
416 |
|
|
|
297 |
|
|
|
71.4 |
% |
The increase in case volume was primarily due to
wholesale which included volumes associated with the ACE Cider
acquisition. B2B volume was also up due to the Meier's Beverage
Group acquisition. Lower DTC volume due to shortages of 2020
California vintages was more than offset by higher prices.
Gross Profit and Margin
Gross profit was down $11.1 million to $38
thousand reflecting adjustments identified through processes
implemented to improve internal controls. Specifically, the Company
recorded $19.1 million in non-cash inventory adjustments identified
through efforts t improve and strengthen inventory management,
processes and reporting. This included physical inventory count
adjustments of $12.4 million, $3.7 million related to the
establishment of inventory reserves and $3.0 million related to the
impact of additional remediation efforts. In addition, the quarter
included approximately $6.8 million in overhead burden that was
related to the first and second quarter of fiscal 2022, but not
material to the respective periods. Also impacting gross profit
were inefficiencies created by supply chain constraints and
inflation. These impacts were partially offset by gross profit
contributions of the acquisitions and improved pricing in DTC.
Kristina Johnston, Chief Financial Officer,
commented, “Since joining VWE in March, I have been impressed by
this team of very dedicated people who are intent upon executing
our strategy to drive growth and deliver on our mission to provide
the finest quality wines and create incredible customer
experiences. We are now diligently applying this focus and
intensity in our financial processes in order to remediate our
material weakness. We have instituted improved accountability
metrics, updated assumptions for overhead absorption processes
better reflecting the current business and created greater
discipline around timeliness in reporting throughout the
organization. The implementation of more stringent processes drove
the adjustments in inventory, but we expect this will also drive
greater transparency and better future results for the
Company."
The Company has implemented significant change in
financial processes and personnel throughout the organization.
Changes included more rigorous procedures with inventory
management, expanding and upgrading the accounting and finance
team, and measurably increased training throughout the organization
regarding inventory, reporting and reconciliation procedures. In
addition, VWE added a chief information officer to establish and
maintain effective governance for information technology
controls.
Selling, General and Administrative Expenses
(SG&A)
SG&A increased $13.1 million, or 61%, to $34.6
million. The higher level of SG&A represents public company
costs, investments in talent and incremental SG&A from
acquisitions of $4.9 million, including $1.3 million of
amortization expense.
Operating and Net Income
Loss from operations was $27.7 million, compared
with loss from operations of $10.9 million in the prior year
quarter. Operating loss reflected the $19.1 million non-cash
inventory adjustments identified through material weakness
remediation efforts, the incremental overhead burden from prior
periods, the SG&A costs that are not expected to repeat in
future quarters and the impact to gross profit of supply chain
constraints, related production inefficiencies and inflation. These
costs were partially offset by operating leverage gained from
higher volumes and revenue.
Interest expense for the quarter was $3.1 million,
an increase of $0.7 million, or 28%, on higher outstanding
balances.
Net loss available to VWE common shareholders was
$14.7 million, compared with net loss of $6.1 million in the
prior-year period. On a per diluted share basis, net loss available
to VWE common shareholders was $0.24 compared with net loss of
$0.18 per diluted share in the prior-year period.
Adjusted net income3, which excludes amortization
of intangible assets related to acquisitions, was $10.0 million, or
$0.17 per diluted share.
Adjusted EBITDA
Adjusted EBITDA for the quarter was $7.6 million
compared with adjusted EBITDA of $11.5 million in the prior-year
quarter reflecting the impacts of SG&A expenses of
approximately $2.5 million that are not expected to repeat as well
as approximately $2.5 million in costs related to supply chain
challenges on productivity, inflation and delayed receipt of
equipment required to establish new capacity needed for acquisition
synergies.
Third Quarter Fiscal 2022 Restatement
Related to Interest Rate Swaps Resulted in Higher Reported Net
Income
During the preparation of its fiscal year 2022
results, the Company uncovered an error in the treatment of its
interest rate swap agreements that led to a restatement of its
three-months and nine-months ended March 31, 2022 results. The
overall result of the error was an understatement of net income of
$6.7 million, or $0.11 per diluted share and an overstatement or
liabilities of $1.6 million.
Fiscal Year 2022 Highlights and Financial
Results Review (compared with prior-year unless noted
otherwise)
Highlights
- Net revenue of $293.8 million was up $73.0 million, or 33%,
driven by higher volume in wholesale, strength in DTC and the
contribution of bulk distilled alcohol sales in B2B. Acquisitions
contributed $31.7 million in net revenue for the year.
- DTC revenue grew $25.8 million, or 39%, to $92.4 million
reflecting both strong organic growth and $11.0 million in revenue
from acquisitions. Organic growth of 22% was driven by increased
tasting room traffic, a greater number of wine club memberships and
events as recovery from COVID restrictions advanced through the
year and customers increased their onsite engagement. DTC was 32%
of total revenue.
- B2B revenue was up $36.5 million, or 47%, to $113.9 million and
included acquired revenue of $7.3 million. Driving growth was
primarily sales of bulk distilled alcohol. B2B was 39% of total
revenue.
- Wholesale revenue increased $11.6 million, or 16%, to $84.5
million primarily from acquired revenue of $13.4 million, partially
offset by discontinued brands. Wholesale was 29% of total
revenue.
Loss from operations was $7.9 million, compared
with income from operations of $9.2 million in the prior year.
Operating margin was (2.7)%, compared with 4.2% in the prior-year.
Operating income and margin were impacted by the $19.1 million
non-cash inventory adjustments identified through material weakness
remediation efforts, as well as the impact of the supply chain on
attaining synergies from acquisitions and productivity, partially
offset by higher sales in the B2B and DTC segments.
Interest expense for fiscal 2022 was $13.9
million, an increase of $2.3 million, or 20%, on higher outstanding
balances.
Net loss available to VWE common shareholders was
$(0.6) million, compared with net income of $4.1 million in the
prior-year. On a per diluted share basis, net loss available to VWE
common shareholders was $(0.01) compared with net income of $0.14
per diluted share in the prior-year.
Adjusted net income3, which excludes amortization
of intangible assets related to acquisitions, was $25.2 million, or
$0.42 per diluted share measurably improved over adjusted net
income of $7.9 million, or $0.31 per diluted share in the prior
year.
Strong Balance Sheet with Financial
Flexibility
Liquidity
At fiscal year end, the Company had approximately
$165.7 million in liquidity available for organic investments and
acquisitions. This included $43.7 million in unrestricted
cash, approximately $22.0 million available under its revolving
line of credit and $100.0 million available under the accordion
feature of the lending agreement for acquisitions.
Capital Investments
Capital expenditures were $9.1 million for the
fiscal 2022 fourth quarter and $24.8 million for the year.
Investments were primarily related to production capacity
expansion, including adding canning capacity in the Ohio operations
and other productivity enhancements. Capital expenditures for
fiscal 2023 are expected to be between $12 million to $15
million.
Share and Warrant Repurchases
During the quarter, the Company repurchased
2,558,355 shares at an average price of $9.04 per share and 181,533
warrants at an average price of $1.46. For the fiscal year, the
Company repurchased 2,871,894 shares at an average price of $9.03
per share. A total of $26.2 million was invested in stock and
warrant repurchases in fiscal 2022.
Fiscal Year 2023 Outlook
The Company expects revenue and adjusted EBITDA
for fiscal year 2023 (excluding potential fiscal 2023 acquisitions)
to be in the following ranges.
|
|
2023 Guidance |
FY23 Net Revenue: |
|
$300 million
to $310 million |
FY23 Adjusted EBITDA: |
|
$55 million
to $65 million |
Note regarding forward looking non-GAAP metrics:
VWE cannot provide a reconciliation between its forecasted adjusted
EBITDA and net revenue metrics to the nearest GAAP measure without
unreasonable effort or expense due to the inherent difficulty of
forecasting and providing reliable estimates for certain items.
These non-GAAP financial measures are preliminary estimates and are
subject to risks and uncertainties, including, among others,
changes in connection with quarter-end and yearend adjustments.
These items reside outside the Company’s control and may vary
greatly between periods and could significantly impact future
financial results. For more information regarding the use of
non-GAAP measures, please see discussion provided under Non-GAAP
Financial Measures in this news release and the Company’s filings
with the SEC.
Conference Call and Webcast
The Company will host a conference call and live
webcast today at 4:45 PM ET/ 1:45 PM PT, at which time management
will review the Company’s financial results and strategy. 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
1-201-689-8562. The listen-only audio webcast can be monitored at
https://ir.vintagewineestates.com. A telephonic replay will be
available from 7:45 PM ET / 4:45 PM PT on the day of the call
through Tuesday, September 20, 2022, and can be accessed by dialing
1-412-317-6671 and entering the conference ID number 13732030.
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 mission is to produce the finest quality wines and
provide 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
2.5 million nine-liter equivalent cases annually. 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 exclusive brand arrangements with national retailers.
While VWE is diverse across price points and varietals with over 88
brands ranging from $10 to $150 at retail, its primary focus is on
the fastest growing premium segment of the wine industry with the
majority of brands selling in the $10 to $20 price range. The
Company regularly posts updates and additional information at
www.vintagewineestates.com.
Non-GAAP Financial Measures
In addition to reporting net income/(loss)
prepared in accordance with accounting principles generally
accepted in the United States, VWE uses adjusted EBITDA, 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 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 and adjusted net income 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. Adjusted EBITDA, adjusted net income/(loss) and adjusted net
income/(loss) per share, 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 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 and
adjusted net income 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.
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 “anticipate,” “believe,” “continue,”
“estimate,” “expect,” “future,” “intend,” “may,” “model,”
“outlook,” “plan,” “pro forma,” “project,” “seek,” “should,”
“will,” “would” or other similar expressions that indicate future
events or trends. These forward-looking statements include, but are
not limited to, estimates and forecasts of financial and
performance metrics, projections of market opportunity and market
share, business plans and strategies, expansion and acquisition
opportunities, potential synergies from prior acquisitions, growth
prospects and consumer and industry trends. 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: the Company’s ability to remediate its
material weakness in internal control over financial reporting and
to maintain effective internal control over financial reporting,
the effect of economic conditions on the industries and markets in
which VWE operates, including financial market conditions,
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; the impact of environmental catastrophe, natural
disasters, disease, pests, weather conditions and inadequate water
supply on VWE’s business; VWE’s significant reliance on its
distribution channels; 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; changes in applicable laws and regulations and the
significant expense to VWE of operating in a highly regulated
industry; VWE’s ability to make payments on its indebtedness; and
those factors discussed in the Company’s 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 |
Media |
Deborah K.
Pawlowski, Kei Advisors LLC |
Mary Ann
Vangrin |
dpawlowski@keiadvisors.com |
MVangrin@vintagewineestates.com |
Phone:
716.843.3908 |
|
Vintage Wine Estates, Inc.
Condensed Consolidated Balance Sheets (in
thousands)
|
|
June 30, 2022 |
|
June 30, 2021 |
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash |
|
$ |
43,692 |
|
|
$ |
118,879 |
|
Restricted cash |
|
|
6,600 |
|
|
|
4,800 |
|
Accounts receivable, net |
|
|
38,192 |
|
|
|
21,193 |
|
Other receivables |
|
|
3,866 |
|
|
|
7,490 |
|
Inventories |
|
|
192,102 |
|
|
|
221,145 |
|
Interest rate swap asset |
|
|
2,877 |
|
|
|
- |
|
Prepaid expenses and other current assets |
|
|
13,394 |
|
|
|
8,538 |
|
Total current assets |
|
|
300,723 |
|
|
|
382,045 |
|
Property,
plant, and equipment, net |
|
|
236,100 |
|
|
|
213,673 |
|
Goodwill |
|
|
154,951 |
|
|
|
109,895 |
|
Intangible
assets, net |
|
|
64,377 |
|
|
|
36,079 |
|
Interest
rate swap asset |
|
|
6,280 |
|
|
|
- |
|
Other assets |
|
|
3,464 |
|
|
|
1,806 |
|
Total assets |
|
$ |
765,895 |
|
|
$ |
743,498 |
|
Liabilities, redeemable noncontrolling interest, and
stockholders' equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Line of credit |
|
$ |
144,215 |
|
|
$ |
87,351 |
|
Accounts payable |
|
|
13,947 |
|
|
|
17,301 |
|
Accrued liabilities and other payables |
|
|
24,204 |
|
|
|
25,078 |
|
Current maturities of long-term debt |
|
|
14,909 |
|
|
|
22,964 |
|
Total current liabilities |
|
|
197,275 |
|
|
|
152,694 |
|
Other long-term liabilities |
|
|
6,491 |
|
|
|
2,767 |
|
Long-term debt, less current maturities |
|
|
169,095 |
|
|
|
183,541 |
|
Interest rate swap liabilities |
|
|
- |
|
|
|
13,807 |
|
Deferred tax liability |
|
|
29,979 |
|
|
|
16,752 |
|
Deferred gain |
|
|
10,666 |
|
|
|
12,000 |
|
Total liabilities |
|
|
413,506 |
|
|
|
381,561 |
|
Commitments
and contingencies (Note 18) |
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
|
1,663 |
|
|
|
1,682 |
|
Stockholders' equity: |
|
|
|
|
|
|
Preferred stock, no par value, 2,000,000 shares authorized, and
none issued and outstanding at June 30, 2022 and June 30,
2021. |
|
|
- |
|
|
|
- |
|
Common stock, no par value, 200,000,000 shares authorized,
61,691,054 issued and 58,819,160 outstanding at June 30, 2022 and
60,461,611 issued and outstanding at June 30, 2021. |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
377,897 |
|
|
|
360,732 |
|
Treasury stock, at cost: 2,871,894 and zero shares held at June 30,
2022 and June 30, 2021, respectively. |
|
|
(26,034 |
) |
|
|
- |
|
Retained earnings |
|
|
(571 |
) |
|
|
- |
|
Total Vintage Wine Estates, Inc. stockholders' equity |
|
|
351,292 |
|
|
|
360,732 |
|
Noncontrolling interests |
|
|
(566 |
) |
|
|
(477 |
) |
Total stockholders' equity |
|
|
350,726 |
|
|
|
360,255 |
|
Total liabilities, redeemable noncontrolling interest, and
stockholders' equity |
|
$ |
765,895 |
|
|
$ |
743,498 |
|
Vintage Wine Estates, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
|
|
Three Months Ended June 30, |
|
Year Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Wine, spirits and cider |
|
$ |
51,662 |
|
|
$ |
45,245 |
|
|
$ |
208,954 |
|
|
$ |
177,331 |
|
Nonwine |
|
|
23,877 |
|
|
|
11,788 |
|
|
|
84,816 |
|
|
|
43,411 |
|
|
|
|
75,539 |
|
|
|
57,033 |
|
|
|
293,770 |
|
|
|
220,742 |
|
Cost
of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Wine, spirits and cider |
|
|
52,689 |
|
|
|
37,170 |
|
|
|
151,117 |
|
|
|
119,350 |
|
Nonwine |
|
|
22,812 |
|
|
|
8,753 |
|
|
|
52,698 |
|
|
|
26,041 |
|
|
|
|
75,501 |
|
|
|
45,923 |
|
|
|
203,815 |
|
|
|
145,391 |
|
Gross profit |
|
|
38 |
|
|
|
11,110 |
|
|
|
89,955 |
|
|
|
75,351 |
|
Selling,
general, and administrative expenses |
|
|
34,634 |
|
|
|
21,573 |
|
|
|
105,296 |
|
|
|
72,505 |
|
Impairment
of intangible assets |
|
|
- |
|
|
|
1,081 |
|
|
|
- |
|
|
|
1,081 |
|
(Gain) loss
on sale of property, plant, and equipment |
|
|
(356 |
) |
|
|
(337 |
) |
|
|
485 |
|
|
|
(1,001 |
) |
Deferred
gain on sale leaseback |
|
|
- |
|
|
|
- |
|
|
|
(1,334 |
) |
|
|
(1,335 |
) |
Gain on
litigation proceeds |
|
|
(3,000 |
) |
|
|
- |
|
|
|
(3,000 |
) |
|
|
(4,750 |
) |
Gain on remeasurement of contingent consideration liabilities |
|
|
(3,570 |
) |
|
|
(329 |
) |
|
|
(3,570 |
) |
|
|
(329 |
) |
(Loss) income from operations |
|
|
(27,670 |
) |
|
|
(10,878 |
) |
|
|
(7,922 |
) |
|
|
9,180 |
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(3,085 |
) |
|
|
(2,408 |
) |
|
|
(13,910 |
) |
|
|
(11,581 |
) |
Net unrealized gain (loss) on interest rate swap agreements |
|
|
14,368 |
|
|
|
(2,076 |
) |
|
|
22,950 |
|
|
|
6,136 |
|
Gain on Paycheck Protection Program loan forgiveness |
|
|
- |
|
|
|
6,604 |
|
|
|
- |
|
|
|
6,604 |
|
Other, net |
|
|
(2,681 |
) |
|
|
(169 |
) |
|
|
(736 |
) |
|
|
515 |
|
Total other income, net |
|
|
8,602 |
|
|
|
1,951 |
|
|
|
8,304 |
|
|
|
1,674 |
|
(Loss)
income before provision for income taxes |
|
|
(19,068 |
) |
|
|
(8,926 |
) |
|
|
382 |
|
|
|
10,854 |
|
Income tax (benefit) provision |
|
|
(4,351 |
) |
|
|
(3,751 |
) |
|
|
1,061 |
|
|
|
766 |
|
Net (loss) income |
|
|
(14,717 |
) |
|
|
(5,175 |
) |
|
|
(679 |
) |
|
|
10,088 |
|
Net income (loss) attributable to the noncontrolling interests |
|
|
30 |
|
|
|
(125 |
) |
|
|
(108 |
) |
|
|
218 |
|
Net (loss) income attributable to Vintage Wine Estates,
Inc. |
|
|
(14,747 |
) |
|
|
(5,050 |
) |
|
|
(571 |
) |
|
|
9,870 |
|
Accretion on redeemable Series B stock |
|
|
- |
|
|
|
1,025 |
|
|
|
- |
|
|
|
5,785 |
|
Net (loss) income allocable to common
stockholders |
|
$ |
(14,747 |
) |
|
$ |
(6,075 |
) |
|
$ |
(571 |
) |
|
$ |
4,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share allocable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.24 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.14 |
|
Diluted |
|
$ |
(0.24 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.14 |
|
Weighted average shares used in the calculation of earnings
per share allocable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,374,289 |
|
|
|
33,056,071 |
|
|
|
60,673,789 |
|
|
|
24,696,828 |
|
Diluted |
|
|
60,374,289 |
|
|
|
33,056,071 |
|
|
|
60,673,789 |
|
|
|
25,179,502 |
|
Vintage Wine Estates, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
|
|
Year Ended June 30, |
|
|
2022 |
|
2021 |
Cash
flows from operating activities |
|
|
|
|
|
|
Net (loss) income |
|
$ |
(679 |
) |
|
$ |
10,088 |
|
Adjustments to reconcile net income to net cash from operating
activities: |
|
|
|
|
|
|
Gain on forgiveness of PPP loan |
|
|
- |
|
|
|
(6,604 |
) |
Depreciation and amortization |
|
|
23,930 |
|
|
|
11,436 |
|
Goodwill and intangible assets impairment expense |
|
|
- |
|
|
|
1,081 |
|
Amortization of deferred loan fees and line of credit fees |
|
|
394 |
|
|
|
79 |
|
Amortization of label design fees |
|
|
973 |
|
|
|
464 |
|
Litigation proceeds |
|
|
(3,000 |
) |
|
|
(4,750 |
) |
Stock-based compensation expense |
|
|
6,915 |
|
|
|
3,334 |
|
Provision for doubtful accounts |
|
|
(22 |
) |
|
|
48 |
|
Impairment of inventory |
|
|
3,667 |
|
|
|
3,302 |
|
Inventory write down |
|
|
15,433 |
|
|
|
- |
|
Remeasurement of contingent consideration liabilities |
|
|
(3,570 |
) |
|
|
(329 |
) |
Net unrealized gain on interest rate swap agreements |
|
|
(22,950 |
) |
|
|
(6,136 |
) |
Provision for deferred income tax |
|
|
981 |
|
|
|
851 |
|
Loss (gain) on disposition of assets |
|
|
485 |
|
|
|
(1,001 |
) |
Deferred gain on sale leaseback |
|
|
(1,334 |
) |
|
|
(1,335 |
) |
Noncash interest expense |
|
|
- |
|
|
|
68 |
|
Deferred rent |
|
|
375 |
|
|
|
352 |
|
Change in operating assets and liabilities (net of effect of
business combinations): |
|
|
|
|
|
|
Accounts receivable |
|
|
(13,183 |
) |
|
|
(3,137 |
) |
Related party receivables |
|
|
- |
|
|
|
325 |
|
Other receivables |
|
|
3,624 |
|
|
|
(4,456 |
) |
Litigation receivable |
|
|
3,000 |
|
|
|
4,750 |
|
Inventories |
|
|
18,075 |
|
|
|
2,311 |
|
Prepaid expenses and other current assets |
|
|
(4,656 |
) |
|
|
(4,115 |
) |
Other assets |
|
|
(2,464 |
) |
|
|
1,498 |
|
Accounts payable |
|
|
(7,795 |
) |
|
|
(4,983 |
) |
Accrued liabilities and other payables |
|
|
(2,217 |
) |
|
|
8,191 |
|
Related party liabilities |
|
|
- |
|
|
|
(2,215 |
) |
Net cash provided by operating activities |
|
|
15,982 |
|
|
|
9,117 |
|
Cash
flows from investing activities |
|
|
|
|
|
|
Proceeds from disposition of assets |
|
|
153 |
|
|
|
1,044 |
|
Purchases of property, plant, and equipment |
|
|
(24,835 |
) |
|
|
(38,032 |
) |
Label design expenditures |
|
|
(143 |
) |
|
|
(492 |
) |
Proceeds on related party notes receivable |
|
|
- |
|
|
|
756 |
|
Acquisition of businesses |
|
|
(73,680 |
) |
|
|
(23,564 |
) |
Net cash used in investing activities |
|
|
(98,505 |
) |
|
|
(60,288 |
) |
Cash
flows from financing activities |
|
|
|
|
|
|
Principal payments on line of credit |
|
|
(144,706 |
) |
|
|
(181,411 |
) |
Proceeds from line of credit |
|
|
201,570 |
|
|
|
106,217 |
|
Outstanding checks in excess of cash |
|
|
1,759 |
|
|
|
2,509 |
|
Purchase of Series B redeemable stock |
|
|
- |
|
|
|
(32,000 |
) |
Settlement of stock options |
|
|
- |
|
|
|
(7,944 |
) |
Borrowings on long-term debt |
|
|
- |
|
|
|
76,067 |
|
Loan fees |
|
|
- |
|
|
|
(492 |
) |
Principal payments on long-term debt |
|
|
(22,763 |
) |
|
|
(28,374 |
) |
Merger and PIPE financing, net of transaction costs |
|
|
- |
|
|
|
250,126 |
|
Principal payments on related party debt |
|
|
- |
|
|
|
(10,000 |
) |
Debt issuance costs |
|
|
- |
|
|
|
(918 |
) |
Repurchase of common stock |
|
|
(26,034 |
) |
|
|
- |
|
Repurchase of public warrants |
|
|
(270 |
) |
|
|
- |
|
Payments on acquisition payable |
|
|
(420 |
) |
|
|
(681 |
) |
Net cash provided by financing activities |
|
|
9,136 |
|
|
|
173,099 |
|
Net change
in cash and restricted cash |
|
|
(73,387 |
) |
|
|
121,928 |
|
Cash and restricted cash, beginning of year |
|
|
123,679 |
|
|
|
1,751 |
|
Cash and restricted cash, end of year |
|
$ |
50,292 |
|
|
$ |
123,679 |
|
Vintage Wine Estates, Inc.
Condensed Consolidated Statements of Cash Flows
Continued (in thousands)
|
Year Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
Cash paid during the year for: |
|
|
|
|
|
|
Interest |
|
$ |
13,199 |
|
|
$ |
13,373 |
|
Income taxes |
|
$ |
23 |
|
|
$ |
222 |
|
Noncash investing and financing activities: |
|
|
|
|
|
|
Accretion Series A |
|
$ |
- |
|
|
$ |
156,467 |
|
Accretion Series B |
|
$ |
- |
|
|
$ |
5,785 |
|
Conversion of promissory note to common stock |
|
$ |
- |
|
|
$ |
4,818 |
|
Contingent consideration in a business combination |
|
$ |
8,534 |
|
|
$ |
4,000 |
|
Issuance of Common Stock in a business combination |
|
$ |
10,521 |
|
|
$ |
- |
|
Issuance of Series A stock in a business combination |
|
$ |
- |
|
|
$ |
25,831 |
|
Note payable for acquisition of business |
|
$ |
- |
|
|
$ |
11,668 |
|
Vintage Wine Estates, Inc.
Segment Data ($'s in thousands)
|
Three months ended June 30, |
|
|
|
|
|
|
|
Net
Revenue |
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Wholesale |
$ |
21,611 |
|
|
$ |
17,509 |
|
|
$ |
4,102 |
|
|
|
23.4 |
% |
Direct to
Consumer |
|
23,100 |
|
|
|
17,954 |
|
|
|
5,146 |
|
|
|
28.7 |
% |
Business to
Business |
|
30,585 |
|
|
|
19,736 |
|
|
|
10,849 |
|
|
|
55.0 |
% |
Corporate and Other/ Non-Allocable |
|
243 |
|
|
|
1,834 |
|
|
|
(1,591 |
) |
|
|
(86.8 |
%) |
Total |
$ |
75,539 |
|
|
$ |
57,033 |
|
|
$ |
18,506 |
|
|
|
32.4 |
% |
|
Year ended June 30, |
|
|
|
|
|
|
|
Net
Revenue |
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
Wholesale |
$ |
84,534 |
|
|
$ |
72,908 |
|
|
$ |
11,626 |
|
|
|
15.9 |
% |
Direct to
Consumer |
|
92,416 |
|
|
|
66,605 |
|
|
|
25,811 |
|
|
|
38.8 |
% |
Business to
Business |
|
113,934 |
|
|
|
77,440 |
|
|
|
36,494 |
|
|
|
47.1 |
% |
Corporate and Other/ Non-Allocable |
|
2,886 |
|
|
|
3,789 |
|
|
|
(903 |
) |
|
|
(23.8 |
%) |
Total |
$ |
293,770 |
|
|
$ |
220,742 |
|
|
$ |
73,028 |
|
|
|
33.1 |
% |
|
Three months ended June 30, |
|
|
|
|
|
|
|
Operating Income |
2022 |
|
|
2021 |
|
|
Dollar Change |
|
|
Percent Change |
|
Wholesale |
$ |
(7,147 |
) |
|
$ |
284 |
|
|
$ |
(7,431 |
) |
|
* |
|
Direct to Consumer |
|
213 |
|
|
|
1,439 |
|
|
|
(1,226 |
) |
|
|
(85.2 |
%) |
Business to
Business |
|
(9,354 |
) |
|
|
(108 |
) |
|
|
(9,246 |
) |
|
* |
|
Corporate and Other/ Non-Allocable |
|
(11,382 |
) |
|
|
(12,493 |
) |
|
|
1,111 |
|
|
|
(8.9 |
%) |
Total |
$ |
(27,670 |
) |
|
$ |
(10,878 |
) |
|
$ |
(16,792 |
) |
|
|
154.4 |
% |
* Not meaningful
|
Year ended June 30, |
|
|
|
|
|
|
|
Operating Income |
2022 |
|
|
2021 |
|
|
Dollar Change |
|
|
Percent Change |
|
Wholesale |
$ |
5,507 |
|
|
$ |
15,044 |
|
|
$ |
(9,537 |
) |
|
|
(63.4 |
%) |
Direct to
Consumer |
|
15,047 |
|
|
|
11,437 |
|
|
|
3,610 |
|
|
|
31.6 |
% |
Business to
Business |
|
16,920 |
|
|
|
17,944 |
|
|
|
(1,024 |
) |
|
|
(5.7 |
%) |
Corporate and Other/ Non-Allocable |
|
(45,396 |
) |
|
|
(35,245 |
) |
|
|
(10,151 |
) |
|
|
28.8 |
% |
Total |
$ |
(7,922 |
) |
|
$ |
9,180 |
|
|
$ |
(17,102 |
) |
|
|
(186.3 |
%) |
Case
Volume |
|
Fiscal 2022 |
|
(in
thousands) |
|
Q1 |
|
|
Q2 |
|
|
Q3 |
|
|
Q4 |
|
|
Total |
|
Wholesale |
|
|
209 |
|
|
|
378 |
|
|
|
485 |
|
|
|
489 |
|
|
|
1,561 |
|
B2B |
|
127 |
|
|
|
212 |
|
|
|
113 |
|
|
|
130 |
|
|
|
582 |
|
DTC |
|
60 |
|
|
|
160 |
|
|
|
87 |
|
|
|
94 |
|
|
|
401 |
|
Total case volume |
|
|
396 |
|
|
|
750 |
|
|
|
685 |
|
|
|
713 |
|
|
|
2,544 |
|
Case
Volume |
|
Fiscal 2021 |
|
(in
thousands) |
|
Q1 |
|
|
Q2 |
|
|
Q3 |
|
|
Q4 |
|
|
Total |
|
Wholesale |
|
|
202 |
|
|
|
262 |
|
|
|
318 |
|
|
|
187 |
|
|
|
969 |
|
B2B |
|
211 |
|
|
|
141 |
|
|
|
85 |
|
|
|
121 |
|
|
|
558 |
|
DTC |
|
53 |
|
|
|
135 |
|
|
|
52 |
|
|
|
108 |
|
|
|
348 |
|
Total case volume |
|
|
466 |
|
|
|
538 |
|
|
|
455 |
|
|
|
416 |
|
|
|
1,875 |
|
Vintage Wine Estates, Inc.
Reconciliation of Net Income to Adjusted
EBITDA
(Unaudited, in thousands)
|
Three Months
Ended |
|
|
Year
Ended |
|
(in thousands) |
June 30, 2022 |
|
|
June 30, 2021 |
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
Net (loss) income |
$ |
(14,717 |
) |
|
|
(5,175 |
) |
|
$ |
(679 |
) |
|
$ |
10,088 |
|
Interest
expense |
|
3,085 |
|
|
|
2,408 |
|
|
|
13,910 |
|
|
|
11,581 |
|
Income tax
(benefit) provision |
|
(4,351 |
) |
|
|
(3,751 |
) |
|
|
1,061 |
|
|
|
766 |
|
Depreciation
and amortization |
|
7,264 |
|
|
|
3,918 |
|
|
|
25,297 |
|
|
|
11,900 |
|
Gain on
litigation proceeds |
|
- |
|
|
|
- |
|
|
|
(3,000 |
) |
|
|
(3,845 |
) |
Stock-based
compensation expense |
|
4,971 |
|
|
|
2,733 |
|
|
|
6,914 |
|
|
|
3,334 |
|
Inventory
adjustment for wildfire impact - vineyard |
|
- |
|
|
|
3,302 |
|
|
|
- |
|
|
|
3,302 |
|
Inventory
adjustment for wildfire impact - winery overhead |
|
- |
|
|
|
9,000 |
|
|
|
- |
|
|
|
9,000 |
|
Prior
quarter overhead adjustment |
|
6,800 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Inventory
write down |
|
19,100 |
|
|
|
- |
|
|
|
19,100 |
|
|
|
- |
|
PPP loan
forgiveness |
|
- |
|
|
|
(6,604 |
) |
|
|
- |
|
|
|
(6,604 |
) |
Net
unrealized (gain)/loss on interest rate swap agreements |
|
(14,368 |
) |
|
|
2,076 |
|
|
|
(22,950 |
) |
|
|
(6,136 |
) |
(Gain)/loss
on disposition of assets |
|
(23 |
) |
|
|
(2 |
) |
|
|
485 |
|
|
|
(1,001 |
) |
Deferred
rent adjustment |
|
90 |
|
|
|
(24 |
) |
|
|
375 |
|
|
|
352 |
|
Transaction
expenses |
|
- |
|
|
|
1,324 |
|
|
|
- |
|
|
|
4,339 |
|
Impairment
of intangible assets |
|
- |
|
|
|
1,081 |
|
|
|
- |
|
|
|
1,081 |
|
Remeasurement of contingent consideration liabilities |
|
(3,570 |
) |
|
|
(329 |
) |
|
|
(3,570 |
) |
|
|
(329 |
) |
Post-acquisition accounts receivable write-down |
|
- |
|
|
|
109 |
|
|
|
- |
|
|
|
109 |
|
Incremental
public company costs |
|
1,940 |
|
|
|
- |
|
|
|
5,000 |
|
|
|
- |
|
Acquisition
integration costs |
|
291 |
|
|
|
- |
|
|
|
934 |
|
|
|
- |
|
Deferred
gain on sale leaseback |
|
(334 |
) |
|
|
(335 |
) |
|
|
(1,334 |
) |
|
|
(1,335 |
) |
COVID
related adjustments |
|
- |
|
|
|
1,463 |
|
|
|
- |
|
|
|
1,563 |
|
Inventory acquisition basis adjustment |
|
1,427 |
|
|
|
304 |
|
|
|
5,275 |
|
|
|
401 |
|
Adjusted EBITDA |
$ |
7,605 |
|
|
$ |
11,498 |
|
|
$ |
46,818 |
|
|
$ |
38,566 |
|
Revenue |
$ |
75,539 |
|
|
$ |
103,930 |
|
|
$ |
293,770 |
|
|
$ |
220,742 |
|
Adjusted EBITDA margin |
|
10.1 |
% |
|
|
11.1 |
% |
|
|
15.9 |
% |
|
|
17.5 |
% |
Reconciliation of Net Income to Adjusted
Net Income
(Unaudited, in thousands, except per share
data)
|
Three Months
Ended |
|
|
Year
Ended |
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
Net income (loss) |
$ |
(14,717 |
) |
|
$ |
(5,175 |
) |
|
$ |
(679 |
) |
|
$ |
10,088 |
|
Amortization
of intangible assets |
|
1,705 |
|
|
|
25 |
|
|
|
4,976 |
|
|
|
100 |
|
Acquisition
integration costs |
|
291 |
|
|
|
- |
|
|
|
934 |
|
|
|
- |
|
(Gain) loss
on disposition of assets |
|
(23 |
) |
|
|
(2 |
) |
|
|
485 |
|
|
|
(1,001 |
) |
Gain on
litigation proceeds |
|
- |
|
|
|
- |
|
|
|
(3,000 |
) |
|
|
(3,845 |
) |
COVID
related adjustments |
|
- |
|
|
|
1,463 |
|
|
|
- |
|
|
|
1,563 |
|
Inventory
acquisition basis adjustment |
|
1,427 |
|
|
|
304 |
|
|
|
5,275 |
|
|
|
401 |
|
Prior
quarter overhead adjustment |
|
6,800 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Inventory
write down |
|
19,100 |
|
|
|
- |
|
|
|
19,100 |
|
|
|
- |
|
Incremental
public company costs |
|
1,940 |
|
|
|
- |
|
|
|
5,000 |
|
|
|
- |
|
Tax effect of above |
|
(6,560 |
) |
|
|
(376 |
) |
|
|
(6,882 |
) |
|
|
584 |
|
Non-GAAP net income |
|
9,963 |
|
|
|
(3,761 |
) |
|
|
25,209 |
|
|
|
7,890 |
|
Non-GAAP net income per diluted share |
$ |
0.17 |
|
|
$ |
(0.11 |
) |
|
$ |
0.42 |
|
|
$ |
0.31 |
|
Grafico Azioni Vintage Wine Estates (NASDAQ:VWEWW)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Vintage Wine Estates (NASDAQ:VWEWW)
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Da Lug 2023 a Lug 2024