Scheid Vineyards Inc. Reports Six Month Results

SALINAS, Calif., Nov. 13, 2017

Revenues for the six months ended August 31, 2017 decreased to $16.2 million, from $19.7 million for the same period in 2016.  Revenues for 2017 were offset by cost of sales of $12.7 million; general and administrative expenses of $4.0 million; selling expenses of $3.3 million; and interest expense of $1.5 million. Revenues for 2016 were offset by cost of sales of $13.0 million; general and administrative expenses of $3.7 million; selling expenses of $2.9 million and interest expense of $1.6 million.

After adjustments for the benefit from income taxes of $2.1 million, the net loss for the six months ended August 31, 2017 was $3.2 million ($3.66 per share), as compared to a net loss for the six months ended August 31, 2016 of $1.2 million ($1.39 per share).

Mr. Scott Scheid, President and CEO, noted, "It is the nature of the vineyard and wine business to be seasonal. Harvest occurs in autumn followed by the holiday season, which tends to increase case shipments. The early part of the year tends to have lower case and bulk wine shipments, and higher inventory buildups. Revenues and expenses tend to fluctuate based on these seasonality factors."

Mr. Scheid also reported, "We are pleased to announce that the harvest of 2017 was completed on November 1. Despite an early autumn heat wave, yields for most varieties were in line with Company averages, and the 2017 vintage appears to be of excellent quality."

Mr. Mike Thomsen, Chief Financial Officer of the Company, stated, "The 2017 results were primarily affected by a decrease in bulk wine sales to $1.8 million, as compared to $6.2 million in 2016. The 2016 revenues were driven primarily by sales of 2013 and 2014 vintage bulk wine inventories which were created by larger than average grape yields during those harvests."

"The Company has increased its emphasis on selling bottled, rather than bulk wine. This requires holding a larger percentage of the Company's wine production for case sales in future periods. In 2017, case sales increased 5% to $12.7 million, as compared to $12.1 million in 2016.  The 12% increase in general and administrative, and selling expenses in the 2017 period was due primarily to the increased emphasis on sales, marketing and related administrative support of case sales."