Vintage Wine Estates, Inc. (NASDAQ: VWE) (TSX: VWE.U) (TSX:
VWE.WT.U) (“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 fourth
quarter and fiscal year ended June 30, 2021 (“fiscal 2021”).
Results include the additions of Kunde Family Winery (“Kunde”)
acquired on April 19, 2021, and The Sommelier Company (“TSC”)
acquired on June 22, 2021.
Pat Roney, Founder and Chief Executive Officer, commented,
“These have been exciting times for Vintage Wine Estates. We
completed the transaction to become a public company and our common
stock began trading on the Nasdaq and TSX on June 8, 2021. With
this transaction, we added capital to enable us to accelerate
consolidation of the fragmented premium brand wine market in the
U.S. We believe we clearly demonstrated our ability to execute on
our strategy to grow both organically and through acquisitions with
our first fiscal year results as a public company. VWE’s key growth
drivers are the combination of our omni-channel strategy and
acquisition capabilities, which have enabled us to deliver strong,
above market growth in revenue and EBITDA. We believe our strategy
drives growth, improves profitability and ultimately generates
strong cash flow that enables reinvestment for continued
expansion.”
He added, “Since becoming a public company has temporarily
strained our resources, we are building out our team, outsourcing
where needed and implementing processes to improve our
capabilities. I believe we are addressing these challenges full on
and are entering fiscal 2022 in a strong position to continue to
execute on our growth and achieve our vision to be one of the
fastest growing vintners in the U.S. offering a broad collection of
wines, serving our customers’ lifestyles and interests, all while
maintaining a humble and entrepreneurial spirit.”
_______1 Proforma adjusted EBITDA is a non-GAAP measure. Please
see related disclosures regarding the use of non-GAAP measures in
this news release. 2 Expected proforma adjusted EBTIDA is a
forward-looking non-GAAP measure. Please see related disclosures
regarding the infeasibility of reconciling forward-looking non-GAAP
measures.
Fiscal 2021 Financial Results Review
Revenue and Volume (See additional segment data in the attached
tables)
Fiscal 2021 net revenue of $220.7 million was up $30.8 million,
or 16.2%, over the prior fiscal year driven by volume growth and
improved mix across segments. Acquisitions contributed
$2.3 million in net revenue for the year.
|
|
VWE 9L Equivalent Case Sales by Segment |
|
|
|
|
|
|
Year ended June 30, |
|
|
|
|
(in
thousands) |
|
2021 |
|
|
2020 |
|
Unit Change |
|
% Change |
Wholesale |
|
969 |
|
|
1,037 |
|
-68 |
|
-6.6 |
% |
B2B |
|
558 |
|
|
411 |
|
147 |
|
35.8 |
% |
DTC |
|
348 |
|
|
274 |
|
74 |
|
27.0 |
% |
Total case volume |
|
1,875 |
|
|
1,722 |
|
153 |
|
8.9 |
% |
Case volume was up 9% for the fiscal year, driven by volume
increases in the Business-to-Business (“B2B”) and
Direct-to-Customer (“DTC”) segments. Although volume was 6.6% lower
in Wholesale, revenue was down just 3.3% as a result of improved
mix and the Kunde acquisition. B2B volume grew 35.8% for the year
while revenue increased 43.3%, reflecting the Company’s expanded
relationships in private label and custom wine production. DTC
volume was up 27.0% while revenue increased 19.7% due to the change
in mix within the channel which was more oriented toward special
programming through a large e-commerce company.
Gross Profit and Margin
Gross profit was up $3.7 million to $75.4 million, an increase
of 5.2%. Gross margin of 34.1% was impacted by atypical yearend
inventory adjustments of approximately $9.0 million (11.9% impact
on margin), primarily related to the impact of wildfires on the
2020 harvest and product mix, as well as a $4.8 million gain from
litigation proceeds. The shift in mix to greater B2B volume, which
is the lowest gross margin business, combined with a shift of
channels within the DTC segment had an approximate 5.5% impact on
margin.
Operating Expenses
Operating expenses increased $2.3 million, or 3.6%, to $66.2
million. Gains realized from the dispositions of assets, litigation
proceeds and remeasurement of contingent consideration liabilities
partially offset the $7.8 million, or 12.1%, increase in selling,
general and administrative expenses (“SG&A”). Higher SG&A
reflected incremental costs related to the going-public and
business combination transaction, increased personnel costs, higher
insurance costs, and elevated freight costs.
Operating and Net Income
Income from operations increased 18.6% to $9.2 million.
Operating margin for fiscal 2021 was 4.2%, up 8 basis points
from fiscal 2020. Mix, inventory adjustments related to the impact
of wildfires in the 2020 harvest and transaction expenses were the
primary impacts on operating income and margin, partially offset by
gains on asset dispositions, litigation proceeds and a sale
leaseback.
Interest expense for fiscal 2021 was $11.6 million, down $3.8
million, or 24.9%, as a result of lower realized rates and a lower
average balance. In fiscal 2021, VWE recognized $6.6 million for
the forgiveness of the loan granted under the Paycheck Protection
Program and $6.1 million in unrealized gain on interest rate swap
agreements.
Net income available to VWE common shareholders for fiscal 2021
was $4.1 million, significantly improved over the loss of $14.7
million in the prior year. On a per diluted share basis, net income
available to VWE common shareholders was $0.14 for fiscal 2021.
Adjusted EBITDA
Adjusted EBITDA for fiscal 2021 was $39.2 million, or 17.7% of
net revenue, delivering growth of 42.0% over the prior fiscal year
adjusted EBITDA of $27.5 million.
On a pro forma basis, which includes the acquisitions as if
owned for the full fiscal year, adjusted EBITDA was $46.4 million
and pro forma adjusted EBITDA margin was 19.3% exceeding its
previous guidance of pro forma adjusted EBITDA of $46.1
million.
NOTE: Adjusted EBITDA, pro forma adjusted EBITDA and adjusted
EBITDA margin are all non-GAAP metrics. Please see the relevant
disclosures and reconciliations of GAAP to non-GAAP measures in the
tables that accompany this release.
Fourth Quarter 2021 Financial Results
Review
Revenue for the quarter was up 36.8% to $57.0 million driven by
strength in all segments. Acquired revenue was $2.3 million in the
quarter and was primarily in Wholesale and DTC. Gross profit of
$11.1 million, or 19.5% of sales, reflected the impact of
approximately $9.0 million in atypical yearend inventory
adjustments primarily in the fourth quarter, as well as the shift
in sales mix. B2B net revenue grew 51.5% to $19.7 million in the
quarter and represented 34.6% of revenue, higher than the
historical average, as a result of strong growth in private label
and custom wine programs, which are lower margin business. DTC net
revenue grew 17.8% in the quarter with high volume growth in
special programming through a large e-commerce company.
Operating loss in the quarter of $10.9 million primarily
resulted from the $9.0 million of inventory adjustments, $1.5
million in costs related to the impacts of a delayed brand launch
during COVID restrictions, $1.3 million of going-public and
business combination transaction expenses and $1.1 million
associated with the impairment of intangible assets.
Net loss allocable to VWE common shareholders for the fourth
quarter of fiscal 2021 was $6.1 million compared with net income of
$0.7 million in the prior-year period. On a per diluted share
basis, net loss allocable to VWE common shareholders was $0.18 for
the fourth quarter.
Adjusted EBITDA for the fourth quarter was $8.8 million, or
15.4% of net revenue, delivering growth of 12.8% over the
prior-year period. Adjusted EBITDA growth was driven by strong
sales growth offset somewhat by a shift in sales mix.
Strong Balance Sheet with Financial
Flexibility
Successful Business Combination Provides Financial Strength to
Fund Growth Plans
On June 7, 2021, Vintage Wine Estates and Bespoke Capital
Acquisition Corp., combined to form Vintage Wine Estates, Inc.
The transaction enabled the paydown of $131 million in debt and
infused $70 million of cash into the Company.
Liquidity
At fiscal year end, the Company had approximately $234 million
in liquidity available for organic investments and acquisitions.
This included $118.9 million in unrestricted cash and approximately
$115 million available under its revolving line of credit.
Capital Investments
Capital expenditures in fiscal 2021 were $38.3 million and
included investments made to nearly double bottling capacity to
13.5 million cases per year and consolidate warehousing to drive
efficiencies. Capital expenditures for fiscal 2022 are expected to
be approximately $5 million to $9 million.
Fiscal Year 2022 Outlook
Mr. Roney concluded, “As a leading vintner in the U.S., we
believe we have the right strategy to continue our above industry
average growth, are building the team to execute on our plan and
are innovating with quality brands that give us a competitive
advantage in this growing market. In addition, the VWE acquisition
pipeline is very robust. We had initially expected to close one to
two acquisitions per year, but now believe we can up that pace to
three per year in fiscal 2022. There’s a great deal of opportunity
to increase our presence in the fragmented and fast-growing luxury
and premium wine markets. In this space, we believe we can create
more value for both the consumer and our shareholders.”
For fiscal 2022, the Company expects to continue its growth both
organically and through acquisitions:
- Expects pro forma net revenue of
approximately $265 million to $275 million and
- Expects pro forma adjusted EBITDA of
approximately $63 million to $65 million representing adjusted
EBITDA margin of approximately 24%
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 Information in this press release and the Company’s
filings with the SEC.
Acquisition of Vinesse
In a separate release today, VWE announced plans to acquire
Vinesse, LLC a long-standing direct to consumer platform company
specializing in wine clubs with over 60,000 members. The
acquisition further strengthens VWE’s portfolio and position as a
leader in the direct-to-consumer wine market. The acquisition is
expected to close on October 1, 2021.
Material Weakness and Filing of Annual Report on Form
10-K
During the annual audit process, VWE identified that it had a
material weakness related to the process and controls surrounding
inventory. Specifically, the Company did not have effective
business processes and controls to perform reconciliations of
certain inventory-related account balances. The Company is actively
pursuing resources necessary to remediate this deficiency.
The Company filed a Form 12b-25 with the Securities and Exchange
Commission noting it would require additional time to complete its
Annual Report on Form 10-K. Personnel shortages, the untimely death
of a key staff member and turnover in its finance and accounting
department encumbered efforts to complete the year end closing
activities on time to meet the September 28, 2021 10-K filing due
date. VWE expects to file its Annual Report on Form 10-K within the
allowed 15-day extension period.
Conference Call and Webcast
The Company will host a conference call to discuss these results
tomorrow, September 29, 2021, at 10:00 AM ET/ 7:00 AM PT.
Investors interested in participating in the live call can dial
646-904-5544 and use access code 925261.
There will also be a simultaneous, live webcast available on the
Investor Relations section of the Company’s website at
https://ir.vintagewineestates.com/. The webcast will be archived as
well for replay and a transcript will be posted 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 15th largest wine
producer in the U.S. selling more than two 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 50 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 $12 to $20 price range. The Company regularly posts
updates and additional information at
https://www.vintagewineestates.com/.
Non-GAAP Financial MeasuresIn addition to
reporting net income, a U.S. generally accepted accounting
principle (“GAAP”), VWE uses Adjusted EBITDA to supplement GAAP
measures of performance to evaluate the effectiveness of its
business strategies. Adjusted EBITDA is defined as earnings 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, including COVID-related adjustments. On a
pro forma basis, Adjusted EBITDA gives effect to the acquisition of
Kunde and TSC, as if the acquisitions had occurred on July 1,
2020.
Adjusted EBITDA is not a recognized measure of financial
performance under GAAP. VWE believes this non-GAAP measure provides
investors with additional insight into the underlying trends of
VWE’s business and assists 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 has certain
limitations as an analytical tool, and it should not be considered
in isolation or as a substitute for analysis of results as reported
under U.S. GAAP. Adjusted EBITDA, as presented, may
produce results that vary from the GAAP measure and may not be
comparable with a similarly defined non-GAAP measure used by other
companies.
In evaluating Adjusted EBITDA, 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 should not be construed as an implication that
future results will be unaffected by the types of items excluded
from the calculation of Adjusted EBITDA.
Forward-Looking StatementsSome 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, growth
prospects and consumer and industry trends and statements regarding
estimates of inventory adjustments and possibility of other further
adjustments, regarding the timing required to finalize them,
determination of the periods to which they relate and the
possibility of other adjustments in the audit process or our
financial reporting process generally. These statements are based
on various assumptions, whether or not identified in this press
release, and on the current expectations of VWE’s management and
are not guarantees of actual performance. These forward-looking
statements are provided only to provide information currently
available to us and are not intended to serve as and must not be
relied on by any investor as, a guarantee, 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 results of
the Company’s internal and external audit and other financial
reporting procedures, whether VWE is able to complete them by
October 13, 2021 as currently expected, the Company’s ability to
remediate the material weakness in internal control over financial
reporting and to maintain effective internal control over financial
reporting, including the ability to recruit and train audit,
accounting and other personnel, 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; failure to realize the anticipated benefits of
combination with Bespoke Capital Acquisition Corp.; risks relating
to the uncertainty of the 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
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 documents of VWE filed, or to be filed,
with the U.S. Securities and Exchange Commission (“SEC”) or
Canadian securities regulatory authorities. 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 press 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:
Investorsir@vintagewineestates.com |
MediaMary Ann
VangrinMVangrin@vintagewineestates.com |
Vintage Wine Estates,
Inc.Condensed Consolidated Balance
Sheets(Unaudited, except shares and per share
data)
|
|
June 30, 2021 |
|
June 30, 2020 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and restricted cash |
|
$ |
123,679,000 |
|
|
$ |
1,750,500 |
|
Accounts receivable, net |
|
|
14,639,000 |
|
|
|
10,197,800 |
|
Related party receivables |
|
|
- |
|
|
|
1,080,800 |
|
Other receivables |
|
|
14,044,000 |
|
|
|
9,588,300 |
|
Inventories |
|
|
221,145,000 |
|
|
|
206,457,400 |
|
Prepaid expenses and other current assets |
|
|
8,538,000 |
|
|
|
4,423,100 |
|
|
|
|
|
|
Total current assets |
|
|
382,045,000 |
|
|
|
233,497,900 |
|
|
|
|
|
|
Property, plant, and equipment, net |
|
|
213,673,000 |
|
|
|
162,172,500 |
|
Goodwill |
|
|
109,895,000 |
|
|
|
87,122,900 |
|
Intangible assets, net |
|
|
36,079,000 |
|
|
|
26,110,200 |
|
Other assets |
|
|
1,221,000 |
|
|
|
2,783,000 |
|
|
|
|
|
|
Total assets |
|
$ |
742,913,000 |
|
|
$ |
511,686,500 |
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
Line of credit |
|
$ |
87,351,000 |
|
|
$ |
162,544,500 |
|
Accounts payable |
|
|
16,716,000 |
|
|
|
15,124,800 |
|
Accrued liabilities and other payables |
|
|
25,078,000 |
|
|
|
13,325,400 |
|
Related party liabilities |
|
|
- |
|
|
|
12,214,900 |
|
Current maturities of long-term debt |
|
|
17,052,000 |
|
|
|
16,298,400 |
|
|
|
|
|
|
Total current liabilities |
|
|
146,197,000 |
|
|
|
219,508,000 |
|
Other long-term liabilities |
|
|
2,767,000 |
|
|
|
1,057,000 |
|
Long-term debt, less current maturities |
|
|
189,453,000 |
|
|
|
143,039,000 |
|
Interest rate swap liabilities |
|
|
13,807,000 |
|
|
|
19,943,200 |
|
Deferred tax liability |
|
|
16,752,000 |
|
|
|
5,686,700 |
|
Deferred gain |
|
|
12,000,000 |
|
|
|
13,334,800 |
|
|
|
|
|
|
Total liabilities |
|
|
380,976,000 |
|
|
|
402,568,700 |
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
|
1,681,700 |
|
|
|
1,381,700 |
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
|
Common stock, no par value, 10,000,000, and 872,931 shares
authorized; and issued and outstanding, respectively |
|
|
- |
|
|
|
- |
|
Common stock, no par value, 200,000,000 shares authorized,
60,461,611 issued and outstanding at June 30, 2021 and 2020,
respectively. |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Additional paid-in capital |
|
|
528,274,000 |
|
|
|
92,939,400 |
|
Retained earnings |
|
|
(167,541,700 |
) |
|
|
15,191,300 |
|
|
|
|
|
|
Total Vintage Wine Estates, Inc. stockholders'
equity |
|
|
360,732,300 |
|
|
|
108,130,700 |
|
|
|
|
|
|
Noncontrolling interests |
|
|
(477,000 |
) |
|
|
(394,600 |
) |
|
|
|
|
|
Total stockholders' equity |
|
|
360,255,300 |
|
|
|
107,736,100 |
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest and
stockholders' equity |
|
$ |
742,913,000 |
|
|
$ |
511,686,500 |
|
|
|
|
|
|
Vintage Wine Estates,
Inc.Condensed Consolidated Statements of
Operations(Unaudited, except shares and per share
data)
|
|
|
|
|
|
|
|
|
|
VINTAGE WINE ESTATES, INC. and SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Year ended June 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
Net Revenue |
|
|
|
|
|
|
|
|
Wine and spirits |
$ |
45,245,900 |
|
|
$ |
33,460,900 |
|
|
$ |
177,331,400 |
|
|
$ |
155,740,600 |
|
|
Nonwine |
|
11,787,600 |
|
|
|
8,238,300 |
|
|
$ |
43,411,000 |
|
|
|
34,178,000 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL NET REVENUE |
|
57,033,500 |
|
|
|
41,699,200 |
|
|
|
220,742,400 |
|
|
|
189,918,600 |
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenue |
|
|
|
|
|
|
|
|
Wine and spirits |
|
37,170,100 |
|
|
|
19,831,500 |
|
|
$ |
119,350,000 |
|
|
|
98,235,800 |
|
|
Nonwine |
|
8,753,400 |
|
|
|
4,984,900 |
|
|
$ |
26,041,000 |
|
|
|
20,050,900 |
|
|
|
|
|
|
|
|
|
|
|
Total Cost of Revenue |
|
45,923,500 |
|
|
|
24,816,400 |
|
|
|
145,391,000 |
|
|
|
118,286,700 |
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
11,110,000 |
|
|
|
16,882,800 |
|
|
|
75,351,400 |
|
|
|
71,631,900 |
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses |
|
21,573,000 |
|
|
|
14,024,100 |
|
|
|
72,505,400 |
|
|
|
64,698,800 |
|
|
Impairment of intangible assets and goodwill |
|
1,081,000 |
|
|
|
1,281,000 |
|
|
|
1,081,000 |
|
|
|
1,281,000 |
|
|
(Gain) loss on disposition of assets |
|
(337,400 |
) |
|
|
(1,161,200 |
) |
|
|
(2,336,000 |
) |
|
|
(1,051,700 |
) |
|
Gain on litigation proceeds |
|
- |
|
|
|
- |
|
|
|
(4,750,000 |
) |
|
|
- |
|
|
Gain on remeasurement of contingent consideration liabilities |
|
(328,800 |
) |
|
|
(1,034,500 |
) |
|
|
(328,800 |
) |
|
|
(1,034,500 |
) |
|
INCOME FROM OPERATIONS |
|
(10,877,800 |
) |
|
|
3,773,400 |
|
|
|
9,179,800 |
|
|
|
7,738,300 |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
Interest expense |
|
(2,407,800 |
) |
|
|
(2,329,400 |
) |
|
|
(11,581,000 |
) |
|
|
(15,422,100 |
) |
|
Net unrealized gain (loss) on interest rate swap agreements |
|
(2,076,200 |
) |
|
|
(1,830,200 |
) |
|
|
6,136,000 |
|
|
|
(12,945,200 |
) |
|
Gain on Paycheck Protection Program loan forgiveness |
|
6,604,200 |
|
|
|
- |
|
|
|
6,604,200 |
|
|
|
|
Other, net |
|
(168,600 |
) |
|
|
481,100 |
|
|
|
515,000 |
|
|
|
971,900 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL OTHER EXPENSE, NET |
|
1,951,600 |
|
|
|
(3,678,500 |
) |
|
|
1,674,200 |
|
|
|
(27,395,400 |
) |
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES |
|
(8,926,200 |
) |
|
|
94,900 |
|
|
|
10,854,000 |
|
|
|
(19,657,100 |
) |
|
INCOME TAX BENEFIT (PROVISION) |
|
3,750,400 |
|
|
|
1,927,200 |
|
|
|
(766,600 |
) |
|
|
9,957,000 |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
(5,175,800 |
) |
|
|
2,022,100 |
|
|
|
10,087,400 |
|
|
|
(9,700,100 |
) |
|
Net loss (income) attributable to the noncontrolling interests |
|
126,500 |
|
|
|
(75,600 |
) |
|
|
(217,000 |
) |
|
|
(41,200 |
) |
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO VINTAGE WINE ESTATES,
INC. |
|
(5,049,300 |
) |
|
|
1,946,500 |
|
|
|
9,870,400 |
|
|
|
(9,741,300 |
) |
|
|
|
|
|
|
|
|
|
|
Accretion on redeemable Series B stock |
|
1,025,300 |
|
|
|
1,237,700 |
|
|
|
5,785,000 |
|
|
|
4,978,000 |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ALLOCABLE TO COMMON
STOCKHOLDERS |
$ |
(6,074,600 |
) |
|
$ |
708,800 |
|
|
$ |
4,085,400 |
|
|
$ |
(14,719,300 |
) |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share allocable to common stockholders |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.18 |
) |
|
$ |
0.03 |
|
|
$ |
0.14 |
|
|
$ |
(0.67 |
) |
|
Diluted |
$ |
(0.18 |
) |
|
$ |
0.03 |
|
|
$ |
0.14 |
|
|
$ |
(0.67 |
) |
|
Weighted average shared used in the calculation of earnings (loss)
per share allocable to common stockholders |
|
|
|
|
|
|
|
|
Basic |
|
33,056,071 |
|
|
|
21,920,583 |
|
|
|
24,696,828 |
|
|
|
21,920,583 |
|
|
Diluted |
|
33,056,071 |
|
|
|
22,131,834 |
|
|
|
25,179,502 |
|
|
|
21,920,583 |
|
|
|
|
|
|
|
|
|
|
Vintage Wine Estates,
Inc.Segment
Data(Unaudited)
|
Net Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
|
Net Revenue |
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
|
Wholesale |
$ |
17,509,200 |
|
|
$ |
13,470,700 |
|
|
$ |
4,038,500 |
|
|
30.0 |
% |
|
Direct to Consumer |
|
17,954,400 |
|
|
|
15,238,900 |
|
|
|
2,715,500 |
|
|
17.8 |
% |
|
Business to Business |
|
19,736,200 |
|
|
|
13,023,600 |
|
|
|
6,712,600 |
|
|
51.5 |
% |
|
Other/ Non-Allocable |
|
1,833,700 |
|
|
|
(34,000 |
) |
|
|
1,867,700 |
|
|
(5,493.2 |
%) |
|
Total |
$ |
57,033,500 |
|
|
$ |
41,699,200 |
|
|
$ |
15,334,300 |
|
|
36.8 |
% |
|
|
|
|
|
|
|
|
|
Year ended June 30, |
|
|
|
|
|
Net Revenue |
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
|
Wholesale |
$ |
72,907,700 |
|
|
$ |
75,434,700 |
|
|
$ |
(2,527,000 |
) |
|
(3.3 |
%) |
|
Direct to Consumer |
|
66,604,800 |
|
|
|
55,638,600 |
|
|
|
10,966,200 |
|
|
19.7 |
% |
|
Business to Business |
|
77,440,100 |
|
|
|
54,056,300 |
|
|
|
23,383,800 |
|
|
43.3 |
% |
|
Other/ Non-Allocable |
|
3,789,800 |
|
|
|
4,789,000 |
|
|
|
(999,200 |
) |
|
(20.9 |
%) |
|
Total |
$ |
220,742,400 |
|
|
$ |
189,918,600 |
|
|
$ |
30,823,800 |
|
|
16.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
|
|
Operating Income |
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
|
Wholesale |
$ |
284,200 |
|
|
$ |
3,488,300 |
|
|
$ |
(3,204,100 |
) |
|
(91.9 |
%) |
|
Direct to Consumer |
$ |
1,438,500 |
|
|
$ |
3,043,200 |
|
|
|
(1,604,700 |
) |
|
(52.7 |
%) |
|
Business to Business |
$ |
(107,900 |
) |
|
$ |
3,980,800 |
|
|
|
(4,088,700 |
) |
|
(102.7 |
%) |
|
Other/ Non-Allocable |
$ |
(12,492,600 |
) |
|
$ |
(6,738,900 |
) |
|
|
(5,753,700 |
) |
|
85.4 |
% |
|
Total |
$ |
(10,877,800 |
) |
|
$ |
3,773,400 |
|
|
$ |
(14,651,200 |
) |
|
(388.3 |
%) |
|
|
|
|
|
|
|
|
|
Year ended June 30, |
|
|
|
|
|
Operating Income |
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
|
Wholesale |
$ |
15,044,400 |
|
|
$ |
14,776,700 |
|
|
$ |
267,700 |
|
|
1.8 |
% |
|
Direct to Consumer |
|
11,435,800 |
|
|
|
7,149,400 |
|
|
|
4,286,400 |
|
|
60.0 |
% |
|
Business to Business |
|
17,943,900 |
|
|
|
14,783,300 |
|
|
|
3,160,600 |
|
|
21.4 |
% |
|
Other/ Non-Allocable |
|
(35,244,300 |
) |
|
|
(28,971,100 |
) |
|
|
(6,273,200 |
) |
|
21.7 |
% |
|
Total |
$ |
9,179,800 |
|
|
$ |
7,738,300 |
|
|
$ |
1,441,500 |
|
|
18.6 |
% |
|
|
|
|
|
|
|
|
|
Vintage Wine Estates,
Inc.Reconciliation of Non-GAAP Financial
Measures(Unaudited)
|
Three Months
Ended |
|
Year
Ended |
|
June 30,
2021 |
|
June 30, 2020 |
|
June 30,
2021 |
|
June 30,
2020 |
Net income/(loss) |
$ |
(5,175,800 |
) |
|
$ |
2,022,100 |
|
|
$ |
10,087,400 |
|
|
$ |
(9,700,100 |
) |
Interest
expense |
|
2,407,900 |
|
|
|
2,329,400 |
|
|
|
11,581,000 |
|
|
|
15,422,100 |
|
Income tax
provision/(benefit) |
|
(3,750,400 |
) |
|
|
(1,927,200 |
) |
|
|
766,600 |
|
|
|
(9,957,000 |
) |
Depreciation
and amortization |
|
4,189,500 |
|
|
|
3,533,200 |
|
|
|
11,921,300 |
|
|
|
11,804,800 |
|
Amortization
of label design fees/customer lists |
|
339,700 |
|
|
|
111,600 |
|
|
|
590,200 |
|
|
|
260,400 |
|
Gain on
litigation proceeds |
|
- |
|
|
|
- |
|
|
|
(3,845,000 |
) |
|
|
- |
|
Smoke taint
reserve vineyard |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,859,000 |
|
Stock-based
compensation expense |
|
2,733,000 |
|
|
|
(116,200 |
) |
|
|
3,334,100 |
|
|
|
289,300 |
|
Inventory
adjustments for wildfire impact - vineyard |
|
- |
|
|
|
- |
|
|
|
3,301,700 |
|
|
|
- |
|
Inventory
adjustment for wildfire impact - winery overhead |
|
9,000,000 |
|
|
|
|
|
9,000,000 |
|
|
|
PPP loan
forgiveness |
|
(6,604,200 |
) |
|
|
- |
|
|
|
(6,604,200 |
) |
|
|
0 |
|
Net
unrealized/(gain) loss on interest rate swap agreements |
|
2,076,200 |
|
|
|
1,830,200 |
|
|
|
(6,136,000 |
) |
|
|
12,945,200 |
|
(Gain)/loss
on disposition of assets |
|
(337,100 |
) |
|
|
(1,161,200 |
) |
|
|
(2,336,000 |
) |
|
|
(1,051,700 |
) |
Deferred
rent adjustment |
|
(23,300 |
) |
|
|
124,500 |
|
|
|
352,300 |
|
|
|
500,100 |
|
Transaction
expenses |
|
1,324,200 |
|
|
|
- |
|
|
|
4,339,000 |
|
|
|
- |
|
Impairment
of intangible assets |
|
1,081,000 |
|
|
|
1,281,000 |
|
|
|
1,081,000 |
|
|
|
1,281,000 |
|
Remeasurement of contingent consideration liabilities |
|
(328,800 |
) |
|
|
(1,034,500 |
) |
|
|
(328,800 |
) |
|
|
(1,034,500 |
) |
Post
acquisition write down |
|
109,000 |
|
|
|
434,000 |
|
|
|
109,000 |
|
|
|
434,000 |
|
COVID
impact |
|
1,462,500 |
|
|
|
200,000 |
|
|
|
1,562,500 |
|
|
|
200,000 |
|
Inventory
acquisition basis adjustment |
|
303,600 |
|
|
|
152,900 |
|
|
|
401,100 |
|
|
|
1,271,000 |
|
Adjusted EBITDA |
$ |
8,807,000 |
|
|
$ |
7,779,800 |
|
|
$ |
39,177,200 |
|
|
$ |
27,523,600 |
|
Revenue |
$ |
57,033,500 |
|
|
$ |
41,699,200 |
|
|
$ |
220,742,400 |
|
|
$ |
189,918,600 |
|
Adjusted EBITDA Margin |
|
15.4 |
% |
|
|
18.7 |
% |
|
|
17.7 |
% |
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
Use of Non-GAAP MeasuresIn addition to results
determined in accordance with GAAP, the Company uses EBITDA,
Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP
measures of performance to evaluate the effectiveness of its
business strategies. These metrics are also frequently used by
analysts, investors and other interested parties to evaluate
companies in the industry, when considered alongside other GAAP
measures.
Adjusted EBITDA is defined as earnings 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,
non-recurring, or other items included in net income that the
Company does not consider indicative of its ongoing operating
performance, including COVID-related adjustments. Adjusted EBITDA
Margin is defined as Adjusted EBITDA divided by net revenue.
Vintage Wine Estates,
Inc.Reconciliation of Pro Forma Non-GAAP Financial
Measures(Unaudited)
|
|
Year Ended June 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Net Revenue |
|
$ |
220,742,400 |
|
|
$ |
189,918,600 |
|
|
|
|
|
|
Pro forma adjustment for full year impact of Kunde |
|
|
14,469,000 |
|
|
|
Pro forma adjustment for full year impact of The Sommelier
Company |
|
|
5,085,000 |
|
|
|
Pro Forma Adjustments |
|
|
19,554,000 |
|
|
|
|
|
|
|
|
Pro Forma Net Revenue |
|
$ |
240,296,400 |
|
|
$ |
189,918,600 |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
Net income/(loss) |
|
$ |
10,087,400 |
|
|
$ |
(9,700,100 |
) |
Income tax provision/(benefit) |
|
|
766,600 |
|
|
|
(9,957,000 |
) |
Interest expense |
|
|
11,581,000 |
|
|
|
15,422,100 |
|
PPP loan forgiveness |
|
|
(6,604,200 |
) |
|
|
- |
|
Net unrealized/(gain) loss on interest rate swap agreements |
|
|
(6,136,000 |
) |
|
|
12,945,200 |
|
Stock-based compensation expense |
|
|
3,334,100 |
|
|
|
289,300 |
|
Depreciation and amortization |
|
|
11,921,300 |
|
|
|
11,804,800 |
|
Amortization of label design fees/customer lists |
|
|
590,200 |
|
|
|
260,400 |
|
Impairment of intangible assets |
|
|
1,081,000 |
|
|
|
1,281,000 |
|
Gain on litigation proceeds |
|
|
(3,845,000 |
) |
|
|
- |
|
Remeasurement of contingent consideration liabilities |
|
|
(328,800 |
) |
|
|
(1,034,500 |
) |
(Gain)/loss on disposition of assets |
|
|
(2,336,000 |
) |
|
|
(1,051,700 |
) |
Deferred rent adjustment |
|
|
352,300 |
|
|
|
500,100 |
|
Transaction expenses |
|
|
4,339,000 |
|
|
|
- |
|
Smoke taint reserve vineyard |
|
|
- |
|
|
|
4,859,000 |
|
Inventory adjustments for wildfire impact - vineyard |
|
|
3,301,700 |
|
|
|
- |
|
Inventory adjustment for wildfire impact - winery overhead |
|
|
9,000,000 |
|
|
|
- |
|
Post acquisition write down |
|
|
109,000 |
|
|
|
434,000 |
|
Inventory acquisition basis adjustment |
|
|
401,100 |
|
|
|
1,271,000 |
|
COVID impact |
|
|
1,562,500 |
|
|
|
200,000 |
|
Adjusted EBITDA |
|
$ |
39,177,200 |
|
|
$ |
27,523,600 |
|
|
|
|
|
|
Pro forma adjustment for full year impact of Kunde |
|
|
4,065,000 |
|
|
|
Pro forma adjustment for full year impact of The Sommelier
Company |
|
|
3,174,000 |
|
|
|
Pro Forma Adjustments |
|
|
7,239,000 |
|
|
|
Pro Forma Adjusted EBITDA |
|
$ |
46,416,200 |
|
|
$ |
27,523,600 |
|
Pro Forma Adjusted EBITDA Margin |
|
|
19.3 |
% |
|
|
14.5 |
% |
|
|
|
|
|
NOTE: |
|
|
|
|
On a pro forma basis, Adjusted EBITDA gives effect to the
acquisition of Kunde and TSC, as if the acquisitions had occurred
on July 1, 2020. |
Pro forma net revenue and EBITDA adjustments for Kunde were
$14,469,000 and $4,065,000, respectively. The adjustments reflect
the financials for the period from July 1, 2020 to April 18, 2021 -
i.e., the period prior to its acquisition on April 19, 2021. |
Pro forma net revenue and EBITDA adjustments for The Sommelier
Company were $5,085,000 and $3,174,000, respectively. The Sommelier
Company was acquired on June 22, 2021. The financials reflect The
Sommelier Company management accounts for the 12-month period ended
April 30, 2021. |
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