- Delivered net income of $8.6 million or $0.14 per diluted
share; adjusted earnings per diluted share1 were $0.17
- Achieved record Adjusted EBITDA2 of $20.2 million, or 24.2%
of revenue, representing growth of over 135%
- Strong results in quarter reflect strong execution of
omni-channel, multi-brand strategy and success of
acquisitions
- Direct-to-consumer ("DTC") and business-to-business ("B2B")
grew measurably and delivered over 30% operating margins in the
quarter
- Raising revenue guidance for fiscal 2022 to approximately
$275 million to $285 million with expected adjusted EBITDA3 margin
in range of $63 million to $66 million
- Acquired Meier's Beverage Group in January 2022; expands
production capabilities and provides better access into East Coast
markets for recently acquired ACE Cider
Vintage Wine Estates, Inc. (Nasdaq: VWE) (Nasdaq: VWEWW) (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 second quarter fiscal year 2022 ended December 31, 2021.
Results include Vinesse, LLC ("Vinesse") acquired on October 4,
2021 and ACE Cider, acquired on November 16, 2021.
Pat Roney, Founder and Chief Executive Officer, commented, “We
delivered strong growth of 33%, or $20.6 million, in the quarter
which was complemented with $7.6 million in revenue from the
acquisitions of ACE Cider and Vinesse and is a testament to the
successful execution of our growth strategy. Operationally, we are
making great strides in our B2B market channel as we execute well
for our customers on their exclusive label programs. We also are
excited to have our DTC business continue to expand as the
multitude of channels that we use to reach the consumer are all
performing well. Tasting room traffic exceeded pre-pandemic levels,
wine club membership continues to expand, customer retention
remains strong and our ecommerce subscriber count keeps increasing.
On the Wholesale front, our Bar Dog brand is hitting it out of the
ballpark having sold nearly 100,000 cases in calendar 2021
demonstrating a very high velocity of turn and a relatively rare
success rate in the wine industry. In terms of acquisitions, the
recent additions of Vinesse, ACE Cider and Meier's Beverage Group
are all highly complementary and our pipeline remains robust."
Mr. Roney continued, "While the opportunities for VWE are
strong, operationally these are challenging times. We are operating
in a tight labor market as well as facing challenges with the
timing of deliveries of dry goods. We are working with our
suppliers to prioritize our needs and carefully managing our
customers' requirements. It takes an agile and resilient team to
succeed in this environment. Inflation is impacting the industry
and, while we will not be a leader in price changes, we are seeing
the trend and we intend to systematically implement price increases
as early as March to address the inflationary impact on input
costs. We also expect to realize significant cost synergies from
our acquisitions that should help offset these headwinds. Its
typically about six to nine months following an acquisition that
those benefits begin to be realized. Overall, the momentum in the
business remains very strong and, as a result, we are increasing
our revenue guidance for fiscal 2022 to a range of $275 million to
$285 million and raising the upper band of our adjusted EBITDA
guidance to $63 million to $66 million."
Second Quarter Fiscal 2022 Highlights and Financial Results
Review (compared with prior-year period unless noted
otherwise)
Highlights
- Strong DTC revenue growth of $11.7 million, or 50.8%, to $34.8
million driven by increased customer engagement in tasting rooms
and at events and a $4.6 million contribution from acquisitions.
Tasting room traffic increased 11% from the prior year quarter. DTC
also benefitted from gains in wine club membership, strong average
retention rates, increased subscribers in eCommerce and digital
channels. Combined Average Order Value (AOV) grew 8% across all DTC
channels.
- B2B revenue increased $4.6 million, or 22.2%, to $25.2 million
reflecting timing of customer projects, execution on previous
delayed shipments and strong responses and pull through on private
label brands.
- Wholesale revenue increased $2.9 million, or 15.1%, to $22.2
million mostly from acquired revenue of $2.9 million and a 93%
increase in case volume. Across brands, VWE achieved depletion
volume growth of 5.5% over the prior-year period, whereas for the
Company’s priority brands, which represent approximately 52% of
total depletion volume, depletions grew 10.6%. Case volume
increases were primarily driven by the ACE Cider acquisition.
Revenue and Volume (See additional segment data in the attached
tables)
Net revenue in the quarter of $83.6 million was up $22.5
million, or 32.8%, over the prior-year period driven by significant
increases in volume across all segments. Acquisitions contributed
$7.6 million in net revenue for the period.
Three Months Ended December
31,
(in thousands)
2021
2020
Unit Change
% Change
Wholesale
506
262
244
93.1
%
B2B
212
141
71
50.4
%
DTC
160
135
25
18.5
%
Total case volume
878
538
340
63.2
%
Case volume was up 63.2% for the quarter. Wholesale volume
increases were primarily driven by the ACE Cider acquisition and
success with the Company's priority brands. Volume growth was also
the result of strong growth in B2B, which included shipments that
had been delayed in the trailing first quarter, and solid
performance in the DTC channel.
Gross Profit and Margin
Gross profit was up $15.0 million to $38.5 million, an increase
of 63.9%. Gross margin expanded 873 basis points to 46.0% from the
leverage gained from higher volumes and improved efficiencies from
the new bottling and packaging facilities.
Operating Expenses
Operating expenses increased $13.6 million, or 111.7%, to $25.8
million. Higher selling, general and administrative expenses
reflected approximately $1.8 million of higher professional fees
primarily related to public company costs, as well as investments
in marketing and talent. In addition, variable selling expenses,
which increase with volume and are typically approximately 10% of
revenue, were $3.7 million in the quarter. Incremental SG&A
from the acquisitions was $2.3 million and does not yet represent
expected synergies.
Operating and Net Income
Income from operations during the quarter increased $1.4
million, or 12.5%, to $12.7 million in the second quarter of fiscal
2022. Operating margin for the quarter was 15.2%, compared with
18.0% in the prior-year period. Higher operating income of $6.5
million from the three primary operating segments did not fully
offset the $5.1 million of incremental costs related to the public
company structure reflected in the Corporate and Other segment. The
Company plans to invest further in its operating infrastructure to
enable growth and scale, but expects certain initial costs related
to the being public will be reduced in fiscal 2023. This includes
approximately $0.9 million in unusually high D&O insurance and
professional fees.
Interest expense for the second quarter fiscal 2022 was $3.5
million, up $1.5 million, or 79.1%, as a result of higher rates and
borrowings.
Net income available to VWE common shareholders for the quarter
was $8.6 million, up from $7.8 million in the prior-year period. On
a per diluted share basis, net income available to VWE common
shareholders was $0.14 for the quarter compared with $0.27 per
diluted share in the prior-year period.
Adjusted Non-GAAP cash net income, which excludes amortization
of intangible assets related to acquisitions, was $10.0 million, or
$0.17 per diluted share. NOTE: Adjusted non-GAAP cash net income
and adjusted non-GAAP cash net income per diluted share are
non-GAAP metrics. Please see the relevant disclosures and
reconciliations of GAAP to non-GAAP measures in the tables that
accompany this release.
Adjusted EBITDA
Adjusted EBITDA increased 137% to $20.2 million, or 24.2% of net
revenue, from $8.6 million, or 13.6% of net revenue, reflecting the
overall strong performance of VWE in the quarter. The incremental
benefit of ACE Cider and Vinesse were minimal for the quarter as
synergies were not yet realized.
NOTE: Adjusted EBITDA and adjusted EBITDA margin are non-GAAP
metrics. Please see the relevant disclosures and reconciliations of
GAAP to non-GAAP measures in the tables that accompany this
release.
Strong Balance Sheet with Financial Flexibility
Liquidity
At quarter end, the Company had approximately $274.2 million in
liquidity available for organic investments and acquisitions. This
included $75.1 million in unrestricted cash, approximately $99.1
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 in the fiscal 2022 second quarter were $3.4
million primarily for ongoing maintenance and barrel purchases.
Capital expenditures for fiscal 2022 are expected to be
approximately $12 million to $14 million, which includes
approximately $5.4 million related to the bottling and warehouse
facility expansion. The total estimated spend for capital
expenditures excludes spend for newly acquired entities.
Fiscal Year 2022 Outlook
Mr. Roney noted, "We are executing well on our strategy for
growth and are raising our expectations for fiscal 2022 even as we
address headwinds associated with the pandemic and resulting supply
chain and labor constraints. I am extremely encouraged about VWE's
future. We have a strong acquisition pipeline, we are delivering
robust growth, and we anticipate we will be able to capture price
to overcome the inflationary headwinds. We will continue to invest
in our digital marketing strategies, channels to market and talent
to build a much larger, more profitable enterprise over time. Our
acquisition pipeline remains robust as we continue our strategy to
identify and acquire complementary "tuck-in" businesses.”
The Company is increasing its revenue guidance for fiscal year
2022 and refining adjusted EBITDA expectations to reflect impacts
of inflation and supply chain challenges. Margin expectations also
accommodate for the costs of consolidation for acquisitions which
create a short term drag on margins until synergies start to be
realized after about six months of ownership. The Company now
expects results to be in the following approximate ranges:
Updated Guidance
FY22 Net Revenue:
$275 million to $285 million
FY22 Adjusted EBITDA:
$63 million to $66 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 Information 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 from the U.S.:
+1.844.200.6205 or International: +1.929.526.1599 and entering the
passcode 178539. The listen-only audio webcast can be monitored at
https://ir.vintagewineestates.com. The telephonic replay will be
available from 7:45 PM ET / 4:45 PM PT on the day of the call
through Monday, February 21, 2022, and can be accessed by dialing
+1.866.813.9403 and entering the conference ID number 517337.
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
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 $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 prepared in accordance with
accounting principles generally accepted in the United States, VWE
uses Adjusted EBITDA and Adjusted Net Income 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. Adjusted net income is defined as net income
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 EBITDA and Adjusted net income are not a recognized
measure of financial performance under GAAP. VWE believes these
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 and Adjusted net income have 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 and Adjusted net income, 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 and Adjusted net income, 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, growth
prospects and consumer and industry trends. 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 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 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 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 future 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 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.
___________________________ 1 Adjusted earnings per diluted
share is a non-GAAP measure. Please see related disclosures
regarding the use of non-GAAP measures in this news release. 2
Adjusted EBITDA is a non-GAAP measure. Please see related
disclosures regarding the use of non-GAAP measures in this news
release. 3 Expected Adjusted EBTIDA is a forward-looking non-GAAP
measure. Please see related disclosures regarding the inability of
reconciling forward-looking non-GAAP measures.
Vintage Wine Estates, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
December 31, 2021
June 30, 2021
Assets
Current assets:
Cash
$
75,145
$
118,879
Restricted cash
6,600
4,800
Accounts receivable, net
25,815
14,639
Other receivables
18,740
14,044
Inventories
222,341
221,145
Prepaid expenses and other current
assets
16,066
8,538
Total current assets
364,707
382,045
Property, plant, and equipment, net
221,139
213,673
Goodwill
148,211
109,895
Intangible assets, net
60,265
36,079
Other assets
4,140
1,806
Total assets
$
798,462
$
743,498
Liabilities, redeemable noncontrolling
interest, and stockholders' equity
Current liabilities:
Line of credit
$
125,152
$
87,351
Accounts payable
19,063
17,301
Accrued liabilities and other payables
28,971
25,078
Current maturities of long-term debt
24,321
22,964
Total current liabilities
197,507
152,694
Other long-term liabilities
11,428
2,767
Long-term debt, less current
maturities
177,460
183,541
Interest rate swap liabilities
9,778
13,807
Deferred tax liability
17,688
16,752
Deferred gain
11,333
12,000
Total liabilities
425,194
381,561
Commitments and contingencies (Note
13)
Redeemable noncontrolling interest
1,690
1,682
Stockholders' equity:
Preferred stock, no par value, 2,000,000
shares authorized, and none issued and outstanding at December 31,
2021 and June 30, 2021.
-
-
Common stock, no par value, 200,000,000
shares authorized, 60,461,611 and 60,461,611 issued and outstanding
at December 31, 2021 and June 30, 2021.
-
-
Additional paid-in capital
360,732
360,732
Retained earnings
11,396
-
Total Vintage Wine Estates, Inc.
stockholders' equity
372,128
360,732
Noncontrolling interests
(550
)
(477
)
Total stockholders' equity
371,578
360,255
Total liabilities, redeemable
noncontrolling interest, and stockholders' equity
$
798,462
$
743,498
Vintage Wine Estates, Inc. Condensed
Consolidated Statements of Operations (Unaudited)
Three Months Ended December
31,
Six Months Ended December
31,
2021
2020
2021
2020
Net revenues
Wine, spirits and cider
$
70,146
$
52,084
$
106,433
$
94,847
Nonwine
13,465
10,893
32,865
21,965
83,611
62,977
139,298
116,812
Cost of revenues
Wine, spirits and cider
39,076
33,213
59,664
58,618
Nonwine
6,072
6,293
17,734
12,193
45,148
39,506
77,398
70,811
Gross profit
38,463
23,471
61,900
46,001
Selling, general, and administrative
expenses
25,993
18,233
43,627
32,554
Gain on sale of property, plant, and
equipment
(251
)
(1,321
)
(591
)
(1,677
)
Gain on litigation proceeds
-
(4,750
)
-
(4,750
)
Income from operations
12,721
11,309
18,864
19,874
Other income (expense)
Interest expense
(3,493
)
(1,950
)
(7,096
)
(5,332
)
Net unrealized gain on interest rate swap
agreements
2,636
1,777
4,029
2,623
Other, net
(51
)
167
(12
)
356
Total other income (expense),
net
(908
)
(6
)
(3,079
)
(2,353
)
Income before provision for income
taxes
11,813
11,303
15,785
17,521
Income tax provision
3,261
2,028
4,454
2,884
Net income
8,552
9,275
11,331
14,637
Net income (loss) attributable to the
noncontrolling interests
(40
)
(13
)
(65
)
291
Net income attributable to Vintage Wine
Estates, Inc.
8,592
9,288
11,396
14,346
Accretion on redeemable Series B stock
-
1,478
-
3,314
Net income allocable to common
stockholders
$
8,592
$
7,810
$
11,396
$
11,032
Net earnings per share allocable to
common stockholders
Basic
$
0.14
$
0.30
$
0.19
$
0.42
Diluted
$
0.14
$
0.27
$
0.19
$
0.39
Weighted average shares used in the
calculation of earnings per share allocable to common
stockholders
Basic
60,461,611
21,920,583
60,461,611
21,920,583
Diluted
60,461,611
24,516,984
60,461,611
24,493,615
Vintage Wine Estates, Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended December
31,
2021
2020
Cash flows from operating
activities
Net income
$
11,331
$
14,637
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
9,670
5,328
Amortization of deferred loan fees and
line of credit fees
199
238
Amortization of label design fees
241
215
Litigation proceeds
-
(4,750
)
Stock-based compensation expense
-
458
Provision for doubtful accounts
75
30
Impairment of inventory
-
3,302
Net unrealized gain on interest rate swap
agreements
(4,029
)
(2,623
)
(Benefit) provision for deferred income
tax
(6,030
)
-
Gain (loss) on disposition of assets
76
(1,010
)
Deferred gain on sale leaseback
(667
)
(667
)
Deferred rent
238
250
Change in operating assets and liabilities
(net of effect of business combinations):
Accounts receivable
(11,251
)
629
Related party receivables
-
28
Other receivables
(4,696
)
238
Litigation receivable
-
4,750
Inventories
2,656
(4,847
)
Prepaid expenses and other current
assets
(7,528
)
(6,375
)
Other assets
(2,491
)
906
Accounts payable
(2,167
)
14,531
Accrued liabilities and other payables
8,899
11,118
Related party liabilities
-
(1,196
)
Net cash (used in) provided by operating
activities
(5,474
)
35,190
Cash flows from investing
activities
Proceeds from disposition of assets
6
976
Purchases of property, plant, and
equipment
(11,278
)
(19,743
)
Label design expenditures
(149
)
(339
)
Acquisition of businesses
(61,768
)
-
Net cash used in investing activities
(73,189
)
(19,106
)
Cash flows from financing
activities
Principal payments on line of credit
(36,964
)
(15,700
)
Proceeds from line of credit
74,765
3,600
Outstanding checks in excess of cash
3,929
(4,010
)
Principal payments on long-term debt
(4,856
)
(5,431
)
Proceeds from long-term debt
-
6,548
Payments on acquisition payable
(145
)
(173
)
Net cash provided by financing
activities
36,729
(15,166
)
Net change in cash and restricted cash
(41,934
)
918
Cash and restricted cash, beginning
of period
123,679
1,751
Cash and restricted cash, end of
period
$
81,745
$
2,669
Supplemental cash flow
information
Cash paid during the period for:
Interest
$
6,146
$
2,280
Income taxes
$
189
$
4
Noncash investing and financing
activities:
Contingent consideration in a business
combination
$
3,560
$
-
Accretion of redemption value of Series B
redeemable cumulative stock
$
-
$
3,314
Accretion of redemption value of Series A
redeemable stock
$
-
$
7,943
Offering costs
$
-
$
178
Vintage Wine Estates, Inc. Segment Data
(Unaudited)
Three months ended December
31,
Net Revenue
2021
2020
$ Change
% Change
Wholesale
$
22,171
$
19,263
$
2,908
15.1
%
Direct to Consumer
34,806
23,079
11,727
50.8
%
Business to Business
25,225
20,635
4,590
22.2
%
Corporate and Other/ Non-Allocable
1,409
0
1,409
*
Total
$
83,611
$
62,977
$
20,634
32.8
%
*Not meaningful
Six Months Ended December
31,
Net Revenue
2021
2020
$ Change
% Change
Wholesale
$
38,374
$
34,308
$
4,066
11.9
%
Direct to Consumer
49,721
33,975
15,746
46.3
%
Business to Business
49,692
46,451
3,241
7.0
%
Corporate and Other/ Non-Allocable
1,511
2,078
(567
)
(27.3
%)
Total
$
139,298
$
116,812
$
22,486
19.2
%
Three months ended December
31,
Operating Income
2021
2020
Dollar Change
Percent Change
Wholesale
$
5,196
$
5,634
$
(438
)
(7.8
%)
Direct to Consumer
11,379
6,894
4,485
65.1
%
Business to Business
8,303
5,877
2,426
41.3
%
Corporate and Other/ Non-Allocable
(12,157
)
(7,096
)
(5,061
)
71.3
%
Total
$
12,721
$
11,309
$
1,412
12.5
%
Six Months Ended December
31,
Operating Income
2021
2020
Dollar Change
Percent Change
Wholesale
$
9,383
$
8,622
$
761
8.8
%
Direct to Consumer
13,918
8,012
5,906
73.7
%
Business to Business
15,817
14,661
1,156
7.9
%
Corporate and Other/ Non-Allocable
(20,254
)
(11,421
)
(8,833
)
77.3
%
Total
$
18,864
$
19,874
$
(1,010
)
(5.1
%)
Case Volume
Six Months Ended December
31,
(in thousands)
2021
2020
Unit Change
% Change
Wholesale
715
464
251
54.1
%
B2B
339
352
-13
-3.7
%
DTC
220
188
32
17.0
%
Total case volume
1,274
1,004
270
26.9
%
Vintage Wine Estates, Inc. Reconciliation of
Non-GAAP Net Income to Adjusted EBITDA (Unaudited)
Three Months Ended
Six Months Ended
December 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Net income
$
8,552
$
9,275
$
11,331
$
14,637
Interest expense
3,493
1,950
7,096
5,332
Income tax provision
3,261
2,028
4,454
2,884
Depreciation and amortization
5,757
2,758
9,911
5,543
Stock-based compensation expense
-
128
-
458
Net unrealized/(gain) loss on interest
rate swap agreements
(2,636
)
(1,777
)
(4,029
)
(2,623
)
(Gain)/loss on disposition of assets
(251
)
(1,321
)
(591
)
(1,677
)
Gain on litigation proceeds
-
(4,750
)
-
(4,750
)
Deferred rent adjustment
110
125
238
250
Incremental public company costs
936
-
2,148
-
COVID Impact
-
100
-
100
Acquisition integration costs
400
-
400
-
Inventory acquisition basis adjustment
622
34
1,059
89
Adjusted EBITDA
$
20,244
$
8,550
$
32,017
$
20,243
Revenue
83,611
$
62,977
139,298
$
116,812
Adjusted EBITDA margin
24.2
%
13.6
%
23.0
%
17.3
%
Reconciliation of Non-GAAP Net Income to
Adjusted Net Income (Unaudited)
Three Months Ended
Six Months Ended
December 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Net income
$
8,552
$
9,275
$
11,331
$
14,637
Amortization of intangible assets
1,083
25
1,614
50
Acquisition integration costs
400
-
400
-
(Gain)/loss on disposition of assets
(251
)
(1,321
)
(591
)
(1,677
)
Gain on litigation proceeds
-
(4,750
)
-
(4,750
)
COVID Impact
-
100
-
100
Inventory acquisition basis adjustment
622
34
1,059
89
Tax effect of above
(390
)
1,242
(521
)
1,299
Non-GAAP net income
$
10,017
$
4,605
$
13,292
$
9,748
Non-GAAP net income per diluted
share
$
0.17
$
0.19
$
0.22
$
0.40
Use of Non-GAAP Measures
In 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220214005711/en/
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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