HEALDSBURG, Calif.,
Oct. 13, 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 its fiscal year 2017 which ended on
June 30, 2017.
FY17 vs. FY16
For fiscal year 2017, total net sales from continuing operations
totaled $21.5 million, a decrease of
16.5% compared to the prior year. The reduction was primarily the
result of a FY16 retail exclusive project with a national retailer
that was nonrecurring in FY17. In addition, sales related to two
other retail exclusive partners decreased in FY17 vs. FY16.
Consolidated gross margin from continuing operations was 33.5%, an
increase of 1.4% over the prior year due to a change in the ratio
of wholesale to direct to consumer sales.
Wholesale Segment
- Net Sales of $15.6 million
(-22.2% or -$4.4 million compared to
the prior year)
- Gross Margin of 21.9% (a decrease of 0.9 margin points compared
to the prior year)
- Gross Profit of $3.4 million
(-25.1% or -$1.1 million compared to
the prior year)
Direct to Consumer (DTC) Segment
- Net Sales of $6.0 million (+3.3%
or $0.2 million compared to the prior
year)
- Gross Margin of 63.9% (a decrease of 0.7 margin points compared
to the prior year)
- Gross Profit of $3.8 million
(+2.2% or +$0.1 million compared to the prior year)
Operating Expenses
Operating expenses for the fiscal year ended June 30, 2017 were $8.0
million compared to $8.4
million in the prior year, a decrease of 4.0%.
"Fiscal year 2017 was a year of significant change for our
company," commented Phillip L.
Hurst, Truett-Hurst, Inc.'s President and CEO. "We moved our
wine production to a new custom crush facility and purchased state
of the art winemaking equipment to achieve greater quality control
over our ultra-premium products. We broke ground on the VML tasting
room at our Dry Creek Valley estate to enhance the reach of our DTC
segment. Moreover, we put in place new sales, marketing, and
finance leadership allowing us to strengthen our relationships with
distributor partners and key customers."
Earnings Call
The Company will not be conducting an earnings call related to
its results for the fiscal year ended June
30, 2017.
About Truett-Hurst, Inc.
Truett-Hurst, Inc. (NASDAQ: THST) 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 for the fiscal year ended June 30, 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, and expenses for the periods after June 30, 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; risks relating
to our inventory; risks relating to our structure; 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 expected to be filed on October
13, 2017, 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
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except share data)
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
783
|
|
|
$
|
4,043
|
|
Accounts
receivable
|
|
|
1,932
|
|
|
|
2,678
|
|
Inventories,
net
|
|
|
20,609
|
|
|
|
19,918
|
|
Bulk wine
deposits
|
|
|
—
|
|
|
|
271
|
|
Other current
assets
|
|
|
505
|
|
|
|
125
|
|
Total current
assets
|
|
|
23,829
|
|
|
|
27,035
|
|
Property and
equipment, net
|
|
|
5,426
|
|
|
|
5,583
|
|
Intangible assets,
net
|
|
|
506
|
|
|
|
496
|
|
Other assets,
net
|
|
|
277
|
|
|
|
391
|
|
Total
assets
|
|
$
|
30,038
|
|
|
$
|
33,505
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Lines of
credit
|
|
$
|
7,290
|
|
|
$
|
10,311
|
|
Accounts
payable
|
|
|
1,994
|
|
|
|
1,351
|
|
Accrued
expenses
|
|
|
546
|
|
|
|
820
|
|
Depletion allowance
and accrual for sales returns
|
|
|
495
|
|
|
|
1,138
|
|
Current portion of
capital lease obligation
|
|
|
11
|
|
|
|
—
|
|
Current maturities of
long term debt
|
|
|
491
|
|
|
|
475
|
|
Total current
liabilities
|
|
|
10,827
|
|
|
|
14,095
|
|
Long term debt, net
of current maturities
|
|
|
3,002
|
|
|
|
3,189
|
|
Capital lease
obligation, net of current portion
|
|
|
63
|
|
|
|
—
|
|
Total
liabilities
|
|
|
13,892
|
|
|
|
17,284
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock, par
value of $0.001 per share, 5,000,000 shares authorized,
none issued and outstanding at June 30,
2017 and June 30, 2017
|
|
|
—
|
|
|
|
—
|
|
Class A common stock,
par value of $0.001 per share, 15,000,000 authorized, 4,426,789 issued and outstanding at June
30, 2017 and 4,306,609 issued and
outstanding at June 30, 2016
|
|
|
4
|
|
|
|
4
|
|
Class B common stock,
par value of $0.001 per share, 1,000 authorized, 7 issued and
outstanding at June 30, 2017 and June 30, 2016
|
|
|
—
|
|
|
|
—
|
|
Additional paid-in
capital
|
|
|
16,082
|
|
|
|
15,794
|
|
Accumulated
deficit
|
|
|
(5,651)
|
|
|
|
(5,600)
|
|
Total Truett-Hurst,
Inc. shareholders' equity
|
|
|
10,435
|
|
|
|
10,198
|
|
Noncontrolling
interest
|
|
|
5,711
|
|
|
|
6,023
|
|
Total
equity
|
|
|
16,146
|
|
|
|
16,221
|
|
Total liabilities and
equity
|
|
$
|
30,038
|
|
|
$
|
33,505
|
|
TRUETT-HURST, INC.
AND SUBSIDIARY
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except share data)
|
|
|
|
Fiscal Year Ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
Sales
|
|
$
|
22,153
|
|
|
$
|
26,517
|
|
Less excise
tax
|
|
|
(617)
|
|
|
|
(734)
|
|
Net sales
|
|
|
21,536
|
|
|
|
25,783
|
|
Cost of
sales
|
|
|
14,314
|
|
|
|
17,496
|
|
Gross
profit
|
|
|
7,222
|
|
|
|
8,287
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
4,986
|
|
|
|
5,286
|
|
General and
administrative
|
|
|
2,985
|
|
|
|
3,062
|
|
Loss on disposal of
assets
|
|
|
62
|
|
|
|
17
|
|
Total operating
expenses
|
|
|
8,033
|
|
|
|
8,365
|
|
Net loss from
operations
|
|
|
(811)
|
|
|
|
(78)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(331)
|
|
|
|
(317)
|
|
Gain on lease
termination, net
|
|
|
844
|
|
|
|
—
|
|
Gain (loss) on fair
value of interest rate swap
|
|
|
131
|
|
|
|
(143)
|
|
Other
expense
|
|
|
(35)
|
|
|
|
(8)
|
|
Total other income
(expense)
|
|
|
609
|
|
|
|
(468)
|
|
Net loss before
income taxes
|
|
|
(202)
|
|
|
|
(546)
|
|
Income tax
expense
|
|
|
(2)
|
|
|
|
(2)
|
|
Net loss from
continuing operations
|
|
|
(204)
|
|
|
|
(548)
|
|
Income from
discontinued operations, net of tax
|
|
|
—
|
|
|
|
45
|
|
Net loss attributable
to Truett-Hurst, Inc. and H.D.D. LLC
|
|
|
(204)
|
|
|
|
(503)
|
|
Net loss attributable
to noncontrolling interest: H.D.D. LLC
|
|
|
(153)
|
|
|
|
(259)
|
|
Net loss attributable
to Truett-Hurst, Inc.
|
|
$
|
(51)
|
|
|
$
|
(244)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
Basic per
share
|
|
$
|
(0.01)
|
|
|
$
|
(0.06)
|
|
Weighted average
shares used in computing net loss per share:
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average shares
|
|
|
4,377,994
|
|
|
|
4,155,151
|
|
TRUETT-HURST, INC.
AND SUBSIDIARY
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
|
Fiscal Year
Ended
|
|
|
|
June
30,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(204)
|
|
|
$
|
(503)
|
|
Income from
discontinued operations, net of tax
|
|
|
—
|
|
|
|
(45)
|
|
Net loss from
continuing operations
|
|
|
(204)
|
|
|
|
(548)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
851
|
|
|
|
707
|
|
Stock-based
compensation
|
|
|
129
|
|
|
|
375
|
|
(Gain) loss on fair
value of interest rate swap
|
|
|
(131)
|
|
|
|
143
|
|
Gain on lease
termination, net
|
|
|
(844)
|
|
|
|
—
|
|
Proceeds received on
lease termination
|
|
|
955
|
|
|
|
—
|
|
Loss on disposal of
assets
|
|
|
92
|
|
|
|
17
|
|
Changes in
operating assets and liabilities, net
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
746
|
|
|
|
105
|
|
Inventories
|
|
|
(691)
|
|
|
|
2,162
|
|
Bulk wine
deposits
|
|
|
271
|
|
|
|
74
|
|
Other current
assets
|
|
|
(372)
|
|
|
|
166
|
|
Accounts
payable
|
|
|
643
|
|
|
|
(1,538)
|
|
Accrued
expenses
|
|
|
(151)
|
|
|
|
28
|
|
Depletion allowance
and accrual for sales returns
|
|
|
(643)
|
|
|
|
90
|
|
Due to related
parties
|
|
|
—
|
|
|
|
(134)
|
|
Net cash provided by
net operating assets and liabilities of discontinued
operations
|
|
|
—
|
|
|
|
78
|
|
Net cash provided by
operating activities
|
|
|
651
|
|
|
|
1,725
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
|
(674)
|
|
|
|
(428)
|
|
Acquisition of
intangible and other assets
|
|
|
(50)
|
|
|
|
(137)
|
|
Proceeds from sale of
assets
|
|
|
5
|
|
|
|
4
|
|
Net cash used in
investing activities
|
|
|
(719)
|
|
|
|
(561)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Net (payments on)
proceeds from lines of credit
|
|
|
(3,021)
|
|
|
|
1,277
|
|
Proceeds from long
term debt
|
|
|
387
|
|
|
|
500
|
|
Payments on long term
debt
|
|
|
(558)
|
|
|
|
(476)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(3,192)
|
|
|
|
1,301
|
|
Net change in cash and
cash equivalents
|
|
|
(3,260)
|
|
|
|
2,465
|
|
Cash and cash
equivalents at beginning of year
|
|
|
4,043
|
|
|
|
1,578
|
|
Cash and cash
equivalents at end of year
|
|
$
|
783
|
|
|
$
|
4,043
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
327
|
|
|
$
|
324
|
|
Cash paid for income
taxes
|
|
$
|
2
|
|
|
$
|
1
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
Equipment financed
with capital lease obligation
|
|
$
|
74
|
|
|
|
—
|
|
For more information, contact:
Truett-Hurst,
Inc.
Evan B. Meyer,
Chief Financial Officer
Phone: 707.431.4423
Fax: 707.395.0289
Email: evan@truetthurst.com
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SOURCE Truett-Hurst, Inc.