First Quarter 2022 Revenues Increase 675%
Year over Year and Accelerate to 43% Sequential Growth over the
Fourth Quarter of 2021
A Sixth Varietal – Sauvignon Blanc – Ready
to Launch next month
Celebrities Nina
Dobrev and Julianne Hough,
initial and ongoing investors are enthusiastic about Fresh Vine
Wine's growth and new market expansion. Brand activations,
appearances and social media engagements are planned to continue
brand awareness to their 30+ million social media
followers.
MINNEAPOLIS, May 16, 2022
/PRNewswire/ -- Fresh Vine Wine, Inc. (NYSE American: VINE), the
premier producer of premium lower carb, lower sugar, and lower
calorie premium wines in the United
States, today reported strong financial results for the
three months ended March 31, 2022.
For the quarter, revenue was up 675% year-over-year and 43%
sequentially from the fourth quarter of 2021.
Janelle Anderson, CEO of Fresh
Vine Wine, Inc., said, "I am extremely excited to announce another
quarter of significant growth. Revenues were up 675%
year-over-year and, more importantly, up 43% sequentially, which
represents an acceleration in our sequential growth rate compared
to 19% for the fourth quarter of 2021.
"During the first quarter we put the proceeds of our December IPO
into immediate action implementing our growth strategy. This
includes a ramp up in marketing spend, strengthening of our
staffing and infrastructure, and the acquisition of wine inventory
critical for spring, summer and fall retail resets to capitalize on
upcoming heavier selling seasons."
The results of the company's numerous initiatives have been
impressive:
- Strong operational execution, with over 6,000 total cases
shipped and invoiced (almost 300,000 5 oz. glasses of wine) in the
quarter, ~100% increase quarter over quarter
- Doubling of Wholesale channel revenues quarter over quarter, a
key company growth strategy
- Added an incremental +1,000 new points of distribution (PODs)
ended the quarter with over +2,000 total PODs
- Added retail outlets such as, The Fresh Market, Lowe's Foods,
wine.com, and many other highly respected banners across various
retail channels
- Acceptance into Aspen Food &Wine Classic, slated to attend
June 2022, introducing the brand to
top buyers, as well as trade and key industry representatives
- The company's year-to-date inventory investments exceeds
$3.5 million, specifically in
response to increased demand. This inventory build will allow Fresh
Vine Wine to meet balance of year demand and mitigate supply chain
risks the industry is facing
- Increased inventory in part reflects increased production of
our 2021 Vintage Rose, where we produced 21 times more 2021 Vintage
that we did 2020 Vintage Rose – which sold out
- Planned exciting new press and consumer events and maintained
significant social media presence featuring our celebrity owners,
Nina Dobrev and Julianne Hough
Fresh Vine Wine also significantly strengthened the organization
in the first quarter, led by the hiring of Ellen Scipta, who is an accomplished,
experienced public company CFO. In addition, the company expanded
our sales organization with experienced industry veterans to grow
our national chain retail points of distribution, which is
frequently considered a leading indicator of future growth.
Janelle Anderson continued,
"Fresh Vine Wine is a category-defining product that appeals to the
product demand in the rapidly expanding Better for You
category. To capitalize on this trend, we will be launching
our new varietal, Sauvignon Blanc, one of the top 3 most popular
wines in the world, just in time for the warm summer months.
I am incredibly pleased with the progress we have achieved building
a foundation for growth of both a new company and a new consumer
category in such a short amount of time. Now, with the capital to
implement a robust growth strategy, we believe we will be able to
continue to grow the Fresh Vine Wine brand throughout the United States and other promising
international markets."
Recent Business
Highlights
- In the first quarter the Company shipped over 6,000 cases,
~100% sequential increase
- Gross Margins in the first quarter were flat. With our emphasis
on the wholesale channel, we expect to see increasing revenues and
compressed margins.
- The ($4.3 million) loss for the
quarter includes approximately $2.0
million in non-cash stock compensation, with stock
compensation expected to decline to less than $1 million in subsequent quarters
- The Company's cash and cash equivalents balance as of
March 31, 2022, was approximately
$11.2 million and $8.0 million as of May 13,
2022. Of this the largest portion was used to purchase
inventory to mitigate supply chain issues. The company continues to
aggressively invest in driving awareness and distribution,
inventory, staffing, and the foundations necessary for company
growth and success. The Company has no material debt.
- Headcount increased by 36% in the first quarter, adding
strategic CFO and strengthening our sales organization allowing us
to expand into new markets
New Product Release
- Planning to shortly release a new varietal, Sauvignon
Blanc
-
- Sauvignon Blanc is one of the top 3 most popular white wines in
the world, and the release of this varietal was coordinated with
the warm summer season, when a disproportionate share of white wine
varietals are sold
- We also listened to requests from our extremely loyal consumer
base asking for a Sauvignon Blanc
Retail
- Fresh Vine Wine is looking forward to be included in summer and
fall retail resets in large regional and national chains
- True Food Kitchen is launching a national menu offer on
June 29th, opening on
Chardonnay by the glass in 42 restaurants in 17 states. True Food
Kitchen is the leading health-driven seasonal restaurant and
scratch bar where real food and serious flavors are served
- Secured distribution on wine.com, the nation's largest online
wine retailer
Geographic Footprint
- Fresh Vine Wine is now available throughout the entire
United States through DTC and key
agreements with the most prominent distributors across the
country
- Opened 5 new markets: Washington, Hawaii, Oregon, Alaska and Colorado
Direct to Consumer
- Continued to grow the DTC business with 13% sequential growth
in Fresh Vine Wine Club membership
Bottling of New Vintage
Rose
- The new vintage of Rose has been bottled and is now shipping to
retail after a successful DTC pre-order sale
- The Company bottled 21 times as much 2021 Vintage Rose as was
bottled in the 2020 Vintage
First Quarter Financial Results
and Commentary
Net revenue in the first quarter of 2022 was $929,125, up from $119,925 in the same period a year ago. Revenue
in the wholesale channel was $529,840
compared to $55,393 in the first
quarter of 2021 while direct to consumer revenues were $248,401 in the quarter, up from $64,532 a year ago. Compared to the full year
fiscal 2021 when wholesale and direct-to-consumer revenues were
approximately equal, wholesale revenues, in the first quarter more
than doubled. The Company is focused on leveraging its nationwide
wholesale distribution market as the channel that offers rapid
growth potential, and the year-over-year increase experienced this
quarter is validation of this strategy's success. Strategic
Services segment revenues were $150,884, consistent with the company's
previously articulated expectations. Service revenues are expected
to suspend at the end of the current calendar quarter to allow the
company's lean team to prioritize the growth and expansion of the
Fresh Vine Wine brand.
Selling, general and administrative expenses were approximately
$2.7 million for the three
months ended March 31, 2022, compared
to $649,733 for the quarter ended
March 31, 2021, driven by increases in Selling, Marketing and
General & Administrative expenses. Selling expenses generally
follow our sales volume growth and include annual sponsorship
agreements in the sports and entertainment industry. The
year-over-year increase in marketing expenses primarily resulted
from increased advertising and social media marketing. The
year-over-year increase in general and administrative expenses is
the result of increased salaries as operational activity increased
from 2021 to 2022 relating to the sales activity increasing
throughout 2021 The Company reported a net loss of approximately
$4.3 million, or ($0.35) per share, for first quarter of 2022,
compared to a net loss of approximately $1.3
million, or ($0.19) per share
in the first quarter of 2021. Included in the first quarter loss
was an approximate $1.9 million of
non-cash, equity-based compensation, this expense is expected to be
less than $1 million per quarter
starting in the current calendar quarter.
As the foundation of success, the company has invested in
driving market awareness, broadening distribution, increasing
staffing, and building inventory to support upcoming distribution
into large regional and national chains. The Board of
Directors and management are evaluating growth strategies to
maintain its current quarterly rate of investment in operations and
growth initiatives. The Company has no debt and will need to
raise additional capital/seek debt or equity financing by the
fourth quarter of this fiscal year. If the company is
not able to do so, it could be required to defer additional
investments in inventory and significantly reduce expenses to
sustain its growth plan into the fourth quarter of 2022.
Readers are referred to, and encouraged to read in its
entirety, the company's Quarterly Report on Form 10-Q for the three
months ended March 31, 2022, to be
filed with the Securities and Exchange Commission, which includes
further detail on the company's business plans, operations,
financial condition, and results of operations.
About Fresh Vine Wine,
Inc.
Fresh Vine Wine, Inc. (NYSE American: VINE) is a premier
producer of lower carb, lower calorie premium wines in the United States, kicking off a 2022 growth
plan following its IPO in mid-December
2021. Fresh Vine Wine's brand vision is to lead the emerging
natural and accessible premium wine category, as health trends
continue to accelerate in the US marketplace. The 2020 US wine
market was a $69 billion category.
Fresh Vine Wine plans to accelerate growth in 2022 by amplifying
its marketing, expanding product offerings, and expanding its team.
Fresh Vine Wine positions its core brand lineup as an affordable
luxury, retailing between $14.99-$22.99.
Fresh Vine Wine's varietals currently include its Cabernet
Sauvignon, Chardonnay, Pinot Noir, and with Sauvignon Blanc
expected to launch late June.
Forward-Looking
Statements
This press release includes forward-looking statements. These
forward-looking statements generally can be identified by the use
of words such as "anticipate," "expect," "plan," "could," "may,"
"will," "believe," "estimate," "forecast," "goal," "project," and
other words of similar meaning. These forward-looking statements
address various matters including statements regarding the timing
or nature of future operating or financial performance or other
events. Each forward-looking statement contained in this press
release is subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such statement. Applicable risks and uncertainties include,
among others, the Company's ability to obtain debt or equity
financing on acceptable terms, the ability to successfully reduce
its expenses in the absence of additional financing, the adequacy
of the Company's existing cash resources to fund its operations or
any particular period of time, the Company's ability to hire
additional personnel and to manage the growth of its business; the
Company's reliance on its brand name, reputation and product
quality; the Company's ability to adequately address increased
demands that may be placed on its management, operational and
production capabilities; the effectiveness of the Company's
advertising and promotional activities and investments; the
Company's reliance on celebrities to endorse its wines and market
its brand; general competitive conditions; fluctuations in consumer
demand for wine; overall decline in the health of the economy and
consumer discretionary spending; the occurrence of adverse weather
events, natural disasters, public health emergencies, or other
unforeseen circumstances that may cause delays to or interruptions
in the Company's operations; risks associated with disruptions in
the Company's supply chain for grapes and raw and processed
materials; the impact of COVID-19 and its variants on the Company's
customers, suppliers, business operations and financial results;
disrupted or delayed service by the distributors the Company relies
on for the distribution of its wines; the Company's ability to
successfully execute its growth strategy; the Company's success in
retaining or recruiting, or changes required in, its officers, key
employees or directors; the Company's ability to protect its
trademarks and other intellectual property rights; the Company's
ability to comply with laws and regulations affecting its business,
including those relating to the manufacture, sale and distribution
of wine; claims, demands and lawsuits to which the Company may be
subject and the risk that its insurance or indemnities coverage may
not be sufficient; the Company's ability to operate, update or
implement its IT systems; the Company's ability to successfully
pursue strategic acquisitions and integrate acquired businesses;
the Company's potential ability to obtain additional financing when
and if needed; the Company's founders' significant influence over
the Company; and the risks identified in the Company's other
filings with the SEC. The Company cautions investors not to place
considerable reliance on the forward-looking statements contained
in this press release. You are encouraged to read the Company's
filings with the SEC, available at www.sec.gov, for a discussion of
these and other risks and uncertainties. The forward-looking
statements in this press release speak only as of the date of this
document, and the Company undertakes no obligation to update or
revise any of these statements. The Company's business is subject
to substantial risks and uncertainties, including those referenced
above. Investors, potential investors, and others should give
careful consideration to these risks and uncertainties.
Contact: FreshVineWine@jonesworks.com
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SOURCE Fresh Vine Wine, Inc.