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Vintage Wine Estates Reports Revenue Growth of 68% to $78.9 Million in Third Quarter Fiscal 2022 and Raises Full Year Fiscal 2022 Revenue Expectations

05/16/2022
  • Demonstrated growth in all channels with business-to-business ("B2B") growing to $33.7 million as a result of the Meier's acquisition and timing of private label programs
  • Consistently growing traffic in tasting rooms drove 11% organic growth in direct-to-consumer ("DTC")
  • Reported net income of $2.8 million or $0.05 per diluted share; adjusted earnings per diluted share1 was $0.08
  • Achieved adjusted EBITDA2 of $14.0 million, or 17.7% of revenue
  • Increasing revenue guidance for fiscal 2022 to approximately $290 million to $295 million with expected adjusted EBITDA3 of approximately $62 million to $64 million

INCLINE VILLAGE, Nev.--(BUSINESS WIRE)-- 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 third quarter fiscal year 2022 ended March 31, 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 overdelivered on the quarter with revenue up 68%, or $32.0 million. Organic growth was 44% and was the result of strong execution while acquisitions contributed $11.4 million in revenue. Our DTC channel is a hallmark of Vintage Wine Estates and continues to validate the success of our omnichannel strategy by reaching the consumer through multiple touch points. Our tasting room traffic is outperforming as more people are exploring new entertainment options and we deliver a great experience. Importantly, this activity has not cannibalized our ecommerce traffic, which has held relatively stable. The acquisition of Meier's at the beginning of the quarter drove our B2B results, as well as our ability to deliver for our customers' private label programs. We are ecstatic about the continued success of our Bar Dog brand, but equally excited regarding the strong market appeal for our Firesteed, Photograph and Clos Pegase brands, as well. We believe that, similar to our omnichannel marketing strategy, a multibrand portfolio will help drive our growth."

Mr. Roney continued, "The headwinds of supply chain and labor constraints have been persistent, but our team is demonstrating the agility it takes to continue to produce and deliver in these adverse conditions. The deep experience of our team enables our ability to quickly pivot on bottling schedules and brands and our very collaborative culture links our production and marketing teams which enables rapid decision making to keep operations running. Inflation is yet another issue we are addressing. We are expecting price to begin to flow through and help offset rising costs beginning in the fiscal fourth quarter. We are being creative in other ways as well to help offset costs such as in packaging. Despite the challenges, we are energized by the achievements of our team to drive growth, deliver for our customers and create an enduring enterprise."

Third Quarter Fiscal 2022 Highlights and Financial Results Review (compared with prior-year period unless noted otherwise)

Highlights

  • Robust DTC revenue growth of $4.9 million, or 33.5%, to $19.6 million was due to strong organic growth and acquisitions, which added $3.3 million in revenue. Organic growth of 11% was driven by tasting room traffic which increased 45% as recovery from COVID restrictions continues and customers increase their onsite engagement which also drove wine club membership gains. Combined Average Order Value (AOV) was stable across all DTC channels.
  • B2B revenue increased $22.6 million, or 205.3%, to $33.7 million as customers' private label projects were delivered. Acquisitions contributed $3.1 million in the quarter.
  • Wholesale revenue increased $3.5 million, or 16.4%, to $24.6 million primarily from acquired revenue of $5.0 million which helped against the strong comparator quarter for off premise market demand. Across brands, VWE achieved depletion volume growth of 2.4% over the prior-year period, whereas for the Company’s priority brands, which represent approximately 55% of total depletion volume, depletions grew 7.6%. 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 $78.9 million was up $32.0 million, or 68.3%, over the prior-year period driven by significant increases in volume across all segments. Acquisitions contributed $11.4 million in net revenue for the period.

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

(in thousands)

 

2022

 

 

2021

 

 

Unit Change

 

 

% Change

 

Wholesale

 

 

357

 

 

 

318

 

 

 

39

 

 

 

12.3

%

B2B

 

 

113

 

 

 

85

 

 

28

 

 

 

32.9

%

DTC

 

 

87

 

 

 

52

 

 

35

 

 

 

67.3

%

Total case volume

 

 

557

 

 

 

455

 

 

 

102

 

 

 

22.4

%

 

Case volume was up 22.4% for the quarter and was strong across all channels.

Gross Profit and Margin

Gross profit was up $9.8 million to $28.0 million, an increase of 53.6%. Gross margin decreased 340 basis points to 35.5% as higher costs due to inflation and supply chain challenges were not yet offset from pricing actions.

Selling, General and Administrative Expenses (SG&A)

SG&A increased $8.7 million, or 47%, to $27.0 million, but declined as a percentage of revenue to 34.3% compared with 39.2% in the prior-year period. The higher level of SG&A represents public company costs, investments in talent and incremental SG&A from acquisitions of $5.8 million including amortization expense of $2.0 million, which does not yet represent expected synergies.

Operating and Net Income

Income from operations during the quarter increased $0.7 million, or 380.4%, to $0.9 million in the third quarter of fiscal 2022. Operating margin for the quarter was 1.1%, compared with 0.4% in the prior-year period. Operating income and margin were impacted by the acquisitions, which have not yet been fully integrated, as well as inefficiencies related to labor, logistics and supply chain challenges. While the Company plans to invest further in its operating infrastructure to enable growth and scale, it also expects certain initial public company costs to be reduced beginning in fiscal 2023. This includes approximately $0.9 million in annual D&O insurance and professional fees.

Interest expense for the third quarter fiscal 2022 was $3.7 million, down $0.1 million, or 3.0%, on lower outstanding balances.

Net income available to VWE common shareholders for the quarter was $2.8 million, up from a loss of $0.9 million in the prior-year period. On a per diluted share basis, net income available to VWE common shareholders was $0.05 for the quarter compared with a loss of $0.04 per diluted share in the prior-year period.

Adjusted net income, which excludes amortization of intangible assets related to acquisitions, was $4.9 million, or $0.08 per diluted share. NOTE: Adjusted net income and adjusted 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 38.2% to $14.0 million, from $10.1 million, on higher revenue. As a percentage of net revenue, adjusted EBITDA was 17.7% compared with 21.6% in the prior-year period as the combination of certain acquisitions not being fully integrated and higher costs not yet covered by pricing actions.

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 $246.1 million in liquidity available for organic investments and acquisitions. This included $69.1 million in unrestricted cash, approximately $77.0 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 in the fiscal 2022 third quarter were $4.5 million and $15.7 million for the year. This was higher than previously expected due to opportunistic investments in productivity and the acquisitions. Capital expenditures for fiscal 2022 are now expected to be approximately $19 million to $20 million, which includes expected capital investments related to acquisitions.

Fiscal Year 2022 Outlook

Mr. Roney noted, "We continue to outperform in the face of tough headwinds and the team is executing well on all fronts. We have a very full pipeline of potential acquisitions and continue to sift through for those that provide the best synergistic potential gained by leveraging our production facilities, marketing channels and leadership experience. We are very encouraged with the progress we are making with our current acquisitions as well as the excellent performance of our organic business.”

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:

 

$290 million to $295 million

FY22 Adjusted EBITDA:

 

$62 million to $64 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 from the U.S.: +1.844.200.6205 or International: +1.929.526.1599 and entering the passcode 108213. 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, May 30, 2022, and can be accessed by dialing +1.866.813.9403 and entering the conference ID number 311764. 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 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 and adjusted net income, 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 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 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 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.

 

Vintage Wine Estates, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

 

 

 

March 31, 2022

 

 

June 30, 2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

69,109

 

 

$

118,879

 

Restricted cash

 

 

6,600

 

 

 

4,800

 

Accounts receivable, net

 

 

39,649

 

 

 

21,193

 

Other receivables

 

 

13,668

 

 

 

7,490

 

Inventories

 

 

221,264

 

 

 

221,145

 

Prepaid expenses and other current assets

 

 

10,968

 

 

 

8,538

 

Total current assets

 

 

361,258

 

 

 

382,045

 

Property, plant, and equipment, net

 

 

234,141

 

 

 

213,673

 

Goodwill

 

 

158,185

 

 

 

109,895

 

Intangible assets, net

 

 

64,809

 

 

 

36,079

 

Other assets

 

 

7,635

 

 

 

1,806

 

Total assets

 

$

826,028

 

 

$

743,498

 

Liabilities, redeemable noncontrolling interest, and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Line of credit

 

$

146,732

 

 

$

87,351

 

Accounts payable

 

 

14,777

 

 

 

17,301

 

Accrued liabilities and other payables

 

 

30,460

 

 

 

25,078

 

Current maturities of long-term debt

 

 

21,200

 

 

 

22,964

 

Total current liabilities

 

 

213,169

 

 

 

152,694

 

Other long-term liabilities

 

 

8,740

 

 

 

2,767

 

Long-term debt, less current maturities

 

 

172,324

 

 

 

183,541

 

Interest rate swap liabilities

 

 

5,225

 

 

 

13,807

 

Deferred tax liability

 

 

29,965

 

 

 

16,752

 

Deferred gain

 

 

10,999

 

 

 

12,000

 

Total liabilities

 

 

440,422

 

 

 

381,561

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

1,684

 

 

 

1,682

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, no par value, 2,000,000 shares authorized, and none issued and outstanding at March 31, 2022 and June 30, 2021.

 

 

-

 

 

 

-

 

Common stock, no par value, 200,000,000 shares authorized, 61,691,054 issued and 61,377,515 outstanding at March 31, 2022 and 60,461,611 issued and outstanding at June 30, 2021.

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

373,196

 

 

 

360,732

 

Treasury stock, at cost: 313,539 and zero shares held at March 31, 2022 and June 30, 2021, respectively

 

 

(2,833

)

 

 

-

 

Retained earnings

 

 

14,176

 

 

 

-

 

Total Vintage Wine Estates, Inc. stockholders' equity

 

 

384,539

 

 

 

360,732

 

Noncontrolling interests

 

 

(617

)

 

 

(477

)

Total stockholders' equity

 

 

383,922

 

 

 

360,255

 

Total liabilities, redeemable noncontrolling interest, and stockholders' equity

 

$

826,028

 

 

$

743,498

 

 

Vintage Wine Estates, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

Nine Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

 

Wine, spirits and cider

 

$

50,859

 

 

$

37,238

 

 

$

157,292

 

 

$

132,086

 

Nonwine

 

 

28,074

 

 

 

9,659

 

 

 

60,939

 

 

 

31,623

 

 

 

 

78,933

 

 

 

46,897

 

 

 

218,231

 

 

 

163,709

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

Wine, spirits and cider

 

 

38,764

 

 

 

23,561

 

 

 

98,428

 

 

 

82,180

 

Nonwine

 

 

12,152

 

 

 

5,095

 

 

 

29,886

 

 

 

17,288

 

 

 

 

50,916

 

 

 

28,656

 

 

 

128,314

 

 

 

99,468

 

Gross profit

 

 

28,017

 

 

 

18,241

 

 

 

89,917

 

 

 

64,241

 

Selling, general, and administrative expenses

 

 

27,035

 

 

 

18,378

 

 

 

70,662

 

 

 

50,932

 

Loss (gain) on sale of property, plant, and equipment

 

 

98

 

 

 

(322

)

 

 

(493

)

 

 

(1,999

)

Gain on litigation proceeds

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,750

)

Income from operations

 

 

884

 

 

 

184

 

 

 

19,748

 

 

 

20,058

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,729

)

 

 

(3,842

)

 

 

(10,825

)

 

 

(9,173

)

Net unrealized gain on interest rate swap agreements

 

 

4,553

 

 

 

5,589

 

 

 

8,582

 

 

 

8,212

 

Other, net

 

 

1,957

 

 

 

327

 

 

 

1,945

 

 

 

684

 

Total other income (expense), net

 

 

2,781

 

 

 

2,075

 

 

 

(298

)

 

 

(277

)

Income before provision for income taxes

 

 

3,665

 

 

 

2,259

 

 

 

19,450

 

 

 

19,780

 

Income tax provision

 

 

958

 

 

 

1,633

 

 

 

5,412

 

 

 

4,517

 

Net income

 

 

2,707

 

 

 

626

 

 

 

14,038

 

 

 

15,263

 

Net income (loss) attributable to the noncontrolling interests

 

 

(73

)

 

 

53

 

 

 

(138

)

 

 

343

 

Net income attributable to Vintage Wine Estates, Inc.

 

 

2,780

 

 

 

573

 

 

 

14,176

 

 

 

14,920

 

Accretion on redeemable Series B stock

 

 

-

 

 

 

1,446

 

 

 

-

 

 

 

4,760

 

Net income (loss) allocable to common stockholders

 

$

2,780

 

 

$

(873

)

 

$

14,176

 

 

$

10,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.05

 

 

$

(0.04

)

 

$

0.23

 

 

$

0.38

 

Diluted

 

$

0.05

 

 

$

(0.04

)

 

$

0.23

 

 

$

0.35

 

Weighted average shares used in the calculation of earnings per share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

61,410,403

 

 

 

21,920,583

 

 

 

60,773,258

 

 

 

21,920,583

 

Diluted

61,410,403

 

 

21,920,583

 

 

 

60,773,258

 

 

 

24,564,309

 

 

Vintage Wine Estates, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

 

 

 

Nine Months Ended March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

14,038

 

 

$

15,263

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

17,365

 

 

 

7,732

 

Amortization of deferred loan fees and line of credit fees

 

 

296

 

 

 

357

 

Amortization of label design fees

 

 

668

 

 

 

251

 

Litigation proceeds

 

 

-

 

 

 

(4,750

)

Stock-based compensation expense

 

 

1,943

 

 

 

601

 

Provision for doubtful accounts

 

 

45

 

 

 

87

 

Impairment of inventory

 

 

-

 

 

 

3,302

 

Net unrealized gain on interest rate swap agreements

 

 

(8,582

)

 

 

(8,212

)

(Benefit) provision for deferred income tax

 

 

888

 

 

 

-

 

Loss (gain) on disposition of assets

 

 

508

 

 

 

(999

)

Deferred gain on sale leaseback

 

 

(1,000

)

 

 

(1,000

)

Deferred rent

 

 

285

 

 

 

376

 

Change in operating assets and liabilities (net of effect of business combinations):

 

 

 

 

 

 

Accounts receivable

 

 

(21,261

)

 

 

(1,001

)

Related party receivables

 

 

-

 

 

 

(2,038

)

Other receivables

 

 

376

 

 

 

(2,338

)

Litigation receivable

 

 

-

 

 

 

4,750

 

Inventories

 

 

4,244

 

 

 

(8,964

)

Prepaid expenses and other current assets

 

 

(2,232

)

 

 

(5,829

)

Other assets

 

 

(6,215

)

 

 

1,688

 

Accounts payable

 

 

(8,106

)

 

 

616

 

Accrued liabilities and other payables

 

 

2,836

 

 

 

16,073

 

Related party liabilities

 

 

-

 

 

 

3,698

 

Net cash (used in) provided by operating activities

 

 

(3,903

)

 

 

19,661

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from disposition of assets

 

 

105

 

 

 

1,064

 

Purchases of property, plant, and equipment

 

 

(15,723

)

 

 

(30,688

)

Label design expenditures

 

 

(225

)

 

 

(375

)

Proceeds on related party notes receivable

 

 

-

 

 

 

756

 

Acquisition of businesses

 

 

(74,268

)

 

 

-

 

Net cash used in investing activities

 

 

(90,111

)

 

 

(29,243

)

Cash flows from financing activities

 

 

 

 

 

 

Repurchase of common stock

 

 

(2,833

)

 

 

-

 

Principal payments on line of credit

 

 

(67,210

)

 

 

(25,195

)

Proceeds from line of credit

 

 

126,591

 

 

 

32,281

 

Outstanding checks in excess of cash

 

 

2,900

 

 

 

9,277

 

Principal payments on long-term debt

 

 

(13,178

)

 

 

(15,234

)

Proceeds from long-term debt

 

 

-

 

 

 

8,902

 

Principal payments on related party note

 

 

-

 

 

 

(489

)

Deferred offering costs

 

 

-

 

 

 

(768

)

Payments on acquisition payable

 

 

(226

)

 

 

(486

)

Net cash provided by financing activities

 

 

46,044

 

 

 

8,287

 

Net change in cash and restricted cash

 

 

(47,970

)

 

 

(1,295

)

Cash and restricted cash, beginning of period

 

 

123,679

 

 

 

1,751

 

Cash and restricted cash, end of period

 

$

75,709

 

 

$

456

 

Supplemental cash flow information

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest

 

$

9,508

 

 

$

9,230

 

Income taxes

 

$

22

 

 

$

25

 

Noncash investing and financing activities:

 

 

 

 

 

 

Contingent consideration in a business combination

 

$

8,460

 

 

$

-

 

Issuance of common stock in business combination

 

$

10,521

 

 

$

-

 

Accretion of redemption value of Series B redeemable cumulative stock

 

$

-

 

 

$

4,760

 

Accretion of redemption value of Series A redeemable stock

 

$

-

 

 

$

16,466

 

Offering costs

$

-

$

535

 

Vintage Wine Estates, Inc.
Segment Data
(Unaudited)

 

 

Three months ended March 31,

 

 

 

 

 

 

 

(in thousands)

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

24,549

 

 

$

21,092

 

 

$

3,457

 

 

 

16.4

%

Direct to Consumer

 

19,595

 

 

 

14,675

 

 

 

4,920

 

 

 

33.5

%

Business to Business

 

33,657

 

 

 

11,026

 

 

 

22,631

 

 

 

205.3

%

Corporate and Other/ Non-Allocable

1,132

 

 

104

 

 

1,028

 

 

NM*

Total

$

78,933

 

 

$

46,897

 

 

$

32,036

 

 

 

68.3

%

*Not meaningful

 

 

Nine Months Ended March 31,

 

 

 

 

 

 

 

(in thousands)

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

62,923

 

 

$

55,399

 

 

$

7,524

 

 

 

13.6

%

Direct to Consumer

 

69,316

 

 

 

48,650

 

 

 

20,666

 

 

 

42.5

%

Business to Business

 

83,349

 

 

 

57,704

 

 

 

25,645

 

 

 

44.4

%

Corporate and Other/ Non-Allocable

 

2,643

 

 

 

1,956

 

 

 

687

 

 

 

35.1

%

Total

$

218,231

 

 

$

163,709

 

 

$

54,522

 

 

 

33.3

%

 

 

Three months ended March 31,

 

 

 

 

 

 

 

(in thousands)

2022

 

 

2021

 

 

$ Change

 

 

Percent Change

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

3,270

 

 

$

6,138

 

 

$

(2,868

)

 

 

(46.7

%)

Direct to Consumer

 

916

 

 

 

1,986

 

 

 

(1,070

)

 

 

(53.9

%)

Business to Business

 

10,457

 

 

 

3,391

 

 

 

7,066

 

 

 

208.4

%

Corporate and Other/ Non-Allocable

 

(13,759

)

 

 

(11,331

)

 

 

(2,428

)

 

 

21.4

%

Total

$

884

 

 

$

184

 

 

$

700

 

 

 

380.4

%

 

 

Nine Months Ended March 31,

 

 

 

 

 

 

 

(in thousands)

2022

 

 

2021

 

 

$ Change

 

 

Percent Change

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

12,654

 

 

$

14,760

 

 

$

(2,106

)

 

 

(14.3

%)

Direct to Consumer

 

14,834

 

 

 

9,997

 

 

 

4,837

 

 

 

48.4

%

Business to Business

 

26,274

 

 

 

18,052

 

 

 

8,222

 

 

 

45.5

%

Corporate and Other/ Non-Allocable

 

(34,014

)

 

 

(22,751

)

 

 

(11,263

)

 

 

49.5

%

Total

$

19,748

 

 

$

20,058

 

 

$

(310

)

 

 

(1.5

%)

 

Case Volume

 

Nine Months Ended March 31,

 

 

 

 

 

 

 

(in thousands)

 

2022

 

 

2021

 

 

Unit Change

 

 

% Change

 

Wholesale

 

 

1,072

 

 

 

782

 

 

 

290

 

 

 

37.1

%

B2B

 

 

452

 

 

 

437

 

 

15

 

 

 

3.4

%

DTC

 

 

307

 

 

 

240

 

 

67

 

 

 

27.9

%

Total case volume

1,831

1,459

372

25.5

%

 

Vintage Wine Estates, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

March 31, 2022

 

 

March 31, 2021

 

 

March 31, 2022

 

 

March 31, 2021

 

Net income

$

2,707

 

 

$

626

 

 

$

14,038

 

 

$

15,263

 

Interest expense

 

3,729

 

 

 

3,842

 

 

 

10,825

 

 

 

9,173

 

Income tax provision

 

958

 

 

 

1,633

 

 

 

5,412

 

 

 

4,517

 

Depreciation and amortization

 

8,122

 

 

 

2,439

 

 

 

18,033

 

 

 

7,982

 

Stock-based compensation expense

 

1,943

 

 

 

143

 

 

 

1,943

 

 

 

601

 

Net unrealized/(gain) loss on interest rate swap agreements

 

(4,553

)

 

 

(5,589

)

 

 

(8,582

)

 

 

(8,212

)

(Gain)/loss on disposition of assets

 

1,099

 

 

 

678

 

 

 

508

 

 

 

(999

)

Gain on litigation proceeds

 

(3,000

)

 

 

905

 

 

 

(3,000

)

 

 

(3,845

)

Deferred rent adjustment

 

47

 

 

 

126

 

 

 

285

 

 

 

376

 

Incremental public company costs

 

912

 

 

 

-

 

 

 

3,060

 

 

 

-

 

Acquisition integration costs

 

243

 

 

 

-

 

 

 

643

 

 

 

-

 

Deferred gain on sale leaseback

 

(1,000

)

 

 

(1,000

)

 

 

(1,000

)

 

 

(1,000

)

Inventory adjustment for casualty losses

 

-

 

 

 

3,302

 

 

 

-

 

 

 

3,302

 

Transaction expenses

 

-

 

 

 

3,015

 

 

 

-

 

 

 

3,015

 

COVID related adjustments

 

-

 

 

 

-

 

 

 

-

 

 

 

100

 

Inventory acquisition basis adjustment

 

2,789

 

 

 

8

 

 

 

3,848

 

 

 

97

 

Adjusted EBITDA

$

13,996

 

 

$

10,128

 

 

$

46,013

 

 

$

30,370

 

Revenue

$

78,933

 

 

$

46,897

 

 

$

218,231

 

 

$

163,709

 

Adjusted EBITDA margin

 

17.7

%

 

 

21.6

%

 

 

21.1

%

 

 

18.6

%

 

Reconciliation of Net Income to Adjusted Net Income
(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

March 31, 2022

 

 

March 31, 2021

 

 

March 31, 2022

 

 

March 31, 2021

 

Net income

$

2,707

 

 

$

626

 

 

$

14,038

 

 

$

15,263

 

Amortization of intangible assets

 

1,656

 

 

 

25

 

 

 

3,270

 

 

 

75

 

Acquisition integration costs

 

243

 

 

 

-

 

 

 

643

 

 

 

-

 

(Gain)/loss on disposition of assets

 

1,099

 

 

 

678

 

 

 

508

 

 

 

(999

)

Gain on litigation proceeds

 

(3,000

)

 

 

905

 

 

 

(3,000

)

 

 

(3,845

)

COVID related adjustments

 

-

 

 

 

-

 

 

 

-

 

 

 

100

 

Inventory acquisition basis adjustment

 

2,789

 

 

 

8

 

 

 

3,848

 

 

 

97

 

Tax effect of above

 

(585

)

 

 

(339

)

 

 

(1,106

)

 

 

960

 

Non-GAAP net income

$

4,909

 

 

$

1,903

 

 

$

18,201

 

 

$

11,651

 

Non-GAAP net income per diluted share

$

0.08

 

 

$

0.09

 

 

$

0.30

 

 

$

0.47

 

 

 

Investors
Deborah K. Pawlowski, Kei Advisors LLC
dpawlowski@keiadvisors.com
Phone: 716.843.3908

Media
Mary Ann Vangrin
MVangrin@vintagewineestates.com

Source: Vintage Wine Estates, Inc.

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