HEALDSBURG, Calif.,
May 11, 2017 /PRNewswire/
-- Truett-Hurst, Inc. (NASDAQ: THST), which operates an
innovative super-premium and ultra-premium wine sales, marketing,
and production company based in the acclaimed Dry Creek Valley of
Sonoma County, California,
reported results for the third quarter of fiscal year 2017 which
ended on March 31, 2017.
Nine months FY17 vs. FY16
For the nine months ended
March 31, 2017, total net sales from
continuing operations decreased 14.2% compared to the same period
in the prior year and totaled $17.0
million. Consolidated gross margin from continuing
operations was 34.7%, an increase of 1.8 margin points over the
prior year.
Wholesale
- Net Sales of $12.4 million
(-19.9% or $3.1 million)
- Gross Margin of 23.8% (a decrease of 0.1 margin points)
- Gross Profit of $2.9 million
(-$0.8 million)
Direct to Consumer (DTC)
- Net Sales of $4.6 million (+5.9%
or $0.3 million)
- Gross Margin of 64.1% (a decrease of 0.8 margin points)
- Gross Profit of $2.9 million
(+$0.1 million)
Operating Expenses
Operating expenses for the nine
months ended March 31, 2017 were
$6.0 million compared to $6.2 million in the same period in the prior
year, though the expenses expressed as a percentage of net sales
increased due to the net sales shortfall. Sales and marketing
expenses decreased $0.1 million,
22.7% of net sales vs 19.8% from the prior year period. General and
administrative expenses decreased $0.1
million, 12.7% of net sales vs 11.3% from the prior year
period.
Third Quarter FY17 vs. FY16
For the three months ended
March 31, 2017, total net sales from
continuing operations increased 8.9% compared to the same periods
in the prior year and totaled $5.3
million. Consolidated gross margin from continuing
operations was 37.9%, an increase of 2.8 margin points over the
prior year.
Wholesale
- Net Sales of $3.9 million (12.4%
or $0.4 million)
- Gross Margin of 27.8% (an increase of 4.6 margin points)
- Gross Profit of $1.1 million
(+$0.3 million)
Direct to Consumer (DTC)
- Net Sales of $1.4 million (+0% or
$0.0 million)
- Gross Margin of 65.8% (an increase of 1.5 margin points)
- Gross Profit of $0.9 million
(+$0.0 million)
Operating Expenses
Operating expenses for the three
months ended March 31, 2017 increased
by $0.1 million compared to the same
period in the prior year.
Earnings Call
Truett-Hurst, Inc.'s management will
host a conference call on May 11,
2017, at 1:30 p.m. PT
(4:30 p.m. ET) to discuss the
Company's financial results. To listen to the conference
call, dial in approximately ten minutes before the scheduled call
to 1.888.347.6082 or international at 1.412.902.4286 and request
Truett-Hurst, Inc.'s Fiscal 2017 Third Quarter Results Call, or
visit our webcast link:
https://www.webcaster4.com/Webcast/Page/1132/21104.
A supporting presentation, in advance of the conference call,
will be available at:
http://www.truetthurstinc.com
To listen to a replay of the call, dial US Toll Free:
1.877.344.7529 or International Toll: 1.412.317.0088 and enter the
replay access code 10107310. The call will be available one
hour after the end of the conference call through May 18, 2017 at 9:00 am
ET.
About Truett-Hurst, Inc.
Truett-Hurst, Inc. (NASDAQ:
THST, www.truetthurstinc.com) is a holding company and its sole
asset is the controlling equity interest in H.D.D. LLC., an
innovative super-premium, ultra-premium and luxury wine sales,
marketing and production company based in the acclaimed Dry Creek
Valley of Sonoma County,
California. Truett-Hurst, Inc. is headquartered in
Healdsburg, California.
Forward-Looking Statements
This press release
and our earnings conference call for the quarter ended March 31, 2017 contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended, that are made
as of the date of this press release based upon our current
expectations. All statements, other than statements of
historical fact, regarding our strategy, future operations,
financial position, estimated revenue, projected costs, prospects,
plans, opportunities, and objectives constitute "forward-looking
statements." The words "may," "will," "expect," "intend,"
"plan," "anticipate," "believe," "estimate," "potential" or
"continue" and similar types of expressions identify such
statements, although not all forward-looking statements contain
these identifying words. Such forward-looking statements
include expectations regarding revenue, income, expenses, for the
period ended March 31, 2017.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results
to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Important factors that could cause such
differences include, but are not limited to, a reduction in the
supply of grapes and bulk wine available to us; significant
competition; any change in our relationships with retailers which
could harm our business; we may not achieve or maintain
profitability in the future; the loss of key employees; a reduction
in our access to, or an increase in the cost of, the third-party
services we use to produce our wine; credit facility restrictions
on our current and future operations; failure to protect, or
infringement of, trademarks and proprietary rights; these factors
should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in this report. For additional information, see our Annual
Report on Form 10-K filed on September 28,
2016, or our other reports currently on file with the
Securities and Exchange Commission, which contain a more detailed
discussion of risks and uncertainties that may affect future
results. We undertake no obligation to publicly update or
review any forward-looking statement, whether as a result of new
information, future developments or otherwise.
TRUETT-HURST, INC.
AND SUBSIDIARY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except share data)
|
|
|
|
|
|
|
|
March 31,
2017
|
|
June 30,
2016
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
542
|
$
|
4,043
|
Accounts
receivable
|
|
1,985
|
|
2,678
|
Inventories,
net
|
|
19,336
|
|
19,918
|
Bulk wine
deposits
|
|
568
|
|
271
|
Other current
assets
|
|
180
|
|
125
|
Total current
assets
|
|
22,611
|
|
27,035
|
|
|
|
|
|
Property and
equipment, net
|
|
5,356
|
|
5,583
|
Intangible assets,
net
|
|
503
|
|
496
|
Other assets,
net
|
|
300
|
|
391
|
Total
assets
|
$
|
28,770
|
$
|
33,505
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Lines of
credit
|
$
|
4,311
|
$
|
10,311
|
Accounts
payable
|
|
3,024
|
|
1,351
|
Accrued
expenses
|
|
392
|
|
1,348
|
Depletion
allowance
|
|
566
|
|
610
|
Current maturities of
long term debt
|
|
507
|
|
475
|
Total current
liabilities
|
|
8,800
|
|
14,095
|
|
|
|
|
|
Long term debt, net
of current maturities
|
|
3,115
|
|
3,189
|
Total
liabilities
|
|
11,915
|
|
17,284
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred
stock, par value of $0.001 per share, 5,000,000 shares
authorized,
|
|
|
|
|
none issued and
outstanding at March 31, 2017 and June 30, 2016
|
|
-
|
|
-
|
Class A common
stock, par value of $0.001 per share, 15,000,000
authorized,
|
|
|
|
|
4,426,789 and
4,306,609 issued and outstanding at March 31, 2017 and June
30, 2016
|
|
4
|
|
4
|
Class B common
stock, par value of $0.001 per share, 1,000 authorized,
7
|
|
|
|
|
issued and
outstanding at March 31, 2017 and June 30, 2016
|
|
-
|
|
-
|
Additional paid-in
capital
|
|
15,890
|
|
15,794
|
Accumulated
deficit
|
|
(5,296)
|
|
(5,600)
|
Total Truett-Hurst,
Inc. equity
|
|
10,598
|
|
10,198
|
Noncontrolling
interest
|
|
6,257
|
|
6,023
|
Total
equity
|
|
16,855
|
|
16,221
|
Total liabilities and
equity
|
$
|
28,770
|
$
|
33,505
|
TRUETT-HURST, INC.
AND SUBSIDIARY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except share data)
|
(unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
Sales
|
$
|
5,427
|
$
|
5,090
|
|
$
|
17,487
|
$
|
20,367
|
|
Less excise
tax
|
|
(87)
|
|
(184)
|
|
|
(525)
|
|
(587)
|
|
Net sales
|
|
5,340
|
|
4,906
|
|
|
16,962
|
|
19,780
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
3,318
|
|
3,186
|
|
|
11,074
|
|
13,272
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
2,022
|
|
1,720
|
|
|
5,888
|
|
6,508
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
1,236
|
|
1,103
|
|
|
3,843
|
|
3,925
|
|
General and
administrative
|
|
641
|
|
635
|
|
|
2,156
|
|
2,244
|
|
Loss on disposal of
assets
|
|
4
|
|
11
|
|
|
47
|
|
10
|
|
Total operating
expenses
|
|
1,881
|
|
1,749
|
|
|
6,046
|
|
6,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
|
141
|
|
(29)
|
|
|
(158)
|
|
329
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(71)
|
|
(73)
|
|
|
(248)
|
|
(242)
|
|
Other
|
|
(14)
|
|
(80)
|
|
|
945
|
|
(148)
|
|
Total other
income (expense)
|
|
(85)
|
|
(153)
|
|
|
697
|
|
(390)
|
|
Net income (loss)
before income taxes
|
|
56
|
|
(182)
|
|
|
539
|
|
(61)
|
|
Income tax
expense
|
|
(1)
|
|
(1)
|
|
|
(2)
|
|
(1)
|
|
Net income
(loss) from continuing operations
|
|
55
|
|
(183)
|
|
|
537
|
|
(62)
|
|
Income from
discontinued operations, net of tax
|
|
-
|
|
-
|
|
|
-
|
|
45
|
|
Net income
(loss)
|
|
55
|
|
(183)
|
|
|
537
|
|
(17)
|
|
Net (income) loss
attributable to noncontrolling interest: H.D.D. LLC
|
|
(22)
|
|
90
|
|
|
(234)
|
|
(55)
|
|
Net income
(loss) attributable to Truett-Hurst, Inc.
|
$
|
33
|
$
|
(93)
|
|
$
|
303
|
$
|
(72)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic per
share
|
$
|
0.01
|
$
|
(0.02)
|
|
$
|
0.07
|
$
|
(0.02)
|
|
Diluted per
share
|
$
|
0.00
|
$
|
(0.02)
|
|
$
|
0.04
|
$
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares
|
|
4,365,122
|
|
4,253,026
|
|
|
4,323,487
|
|
4,114,545
|
|
|
Diluted weighted
average shares
|
|
7,459,702
|
|
4,253,026
|
|
|
7,572,351
|
|
4,114,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUETT-HURST, INC.
AND SUBSIDIARY
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
Nine Months
Ended
|
|
March
31,
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
$
|
537
|
$
|
(17)
|
Income from
discontinued operations, net of tax
|
|
-
|
|
(45)
|
Net income (loss)
from continuing operations
|
|
537
|
|
(62)
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
623
|
|
496
|
Stock-based
compensation
|
|
96
|
|
274
|
Deferred
rent
|
|
-
|
|
(5)
|
(Gain) loss on fair
value of interest rate swap
|
|
(140)
|
|
112
|
Loss on disposal
of assets
|
|
188
|
|
10
|
|
|
|
|
|
Changes in
operating assets and liabilities, net
|
|
|
|
|
Accounts
receivable
|
|
693
|
|
1,061
|
Inventories
|
|
582
|
|
2,289
|
Bulk wine
deposits
|
|
(297)
|
|
(595)
|
Other current
assets
|
|
(37)
|
|
29
|
Accounts
payable
|
|
1,673
|
|
(875)
|
Accrued
expenses
|
|
(834)
|
|
(332)
|
Depletion
allowance
|
|
(44)
|
|
216
|
Due to related
parties
|
|
-
|
|
(38)
|
Cash provided by
discontinued operations
|
|
-
|
|
78
|
Net cash provided by
operating activities
|
|
3,040
|
|
2,659
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of
property and equipment
|
|
(473)
|
|
(395)
|
Acquisition of
intangible and other assets
|
|
(31)
|
|
(125)
|
Proceeds from sale of
assets
|
|
5
|
|
4
|
Net cash used in
investing activities
|
|
(499)
|
|
(516)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net (payments on)
proceeds from line of credit
|
|
(6,000)
|
|
1,022
|
Proceeds from long
term debt
|
|
388
|
|
500
|
Payments on long term
debt
|
|
(430)
|
|
(373)
|
Net cash (used in)
provided by financing activities
|
|
(6,042)
|
|
1,149
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
(3,501)
|
|
3,292
|
Cash and cash
equivalents at beginning of period
|
|
4,043
|
|
1,578
|
Cash and cash
equivalents at end of period
|
$
|
542
|
$
|
4,870
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Cash paid for
interest
|
$
|
245
|
$
|
242
|
Cash paid for income
taxes
|
$
|
2
|
$
|
-
|
|
|
|
|
|
For more information,
contact:
Truett-Hurst, Inc.
Evan B.
Meyer,
Chief Financial
Officer
Phone:
707.431.4423
Fax:
707.395.0289
Email: evan@truetthurstinc.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/truett-hurst-inc-reports-third-quarter-and-nine-months-ended-march-31-2017-results-300455730.html
SOURCE Truett-Hurst, Inc.