Fresh Vine Wine, Inc. (NYSE American: VINE), a leading producer of
lower carb, lower sugar, and lower calorie premium wines in the
United States, announced that the company today filed with the
Securities and Exchange Commission its Quarterly Report on Form
10-Q for the third quarter ended September 30, 2022.
Rick Nechio, Interim Chief Executive Officer of Fresh Vine Wine,
added, “Fresh Vine Wine has successfully opened product
distribution in 43 states, plus Puerto Rico, with 2 additional
states awaiting licensing this year. Today between our distributors
and online strategic partners, Fresh Vine Wine reaches all 50
states. Our wines are being produced by one of the most decorated
winemakers in California, Jamey Whetstone, leading to wide acclaim
from some of the most celebrated wine critics, and are the
signature product of two celebrities, Nina Dobrev and Julianne
Hough. As a result, we have been able to secure relationships with
four of the five largest wine distributors in the United States,
placement on the two largest online wine retailers, and shelf space
in numerous grocery chains, while being featured on the wine list
of a growing cadre of restaurant chains. This is a solid foundation
for growth that has been achieved in what we understand to be
record time.”
“As with many fast-growing companies building a brand and
creating a new market, there have been learnings along the way.
Consequently, to better leverage our success to date, we are
reorganizing Fresh Vine Wine to position the company for continued
growth while conserving cash. The intention of our strategic
reorganization is to better leverage our existing assets, improve
our sales and marketing efficiency and preserve cash. We are highly
confident in this new organizational structure and believe it is
the best way to optimize the value of Fresh Vine Wine both today as
well as over the long term.”The main components of the Company’s
reorganization in the third and fourth quarter include:
- Outsourcing the company’s sales function to a third-party
organization with extensive experience in the wine and spirits
industry, which is expected to improve sales efficiency and
productivity. In the process, the company converted a majority of
the company’s sales expense from a fixed to a variable cost.
- Entering a contract with a marketing agency that has extensive
consumer packaged goods experience, including celebrity and
influencer-endorsed brands, to completely overhaul the company’s
marketing strategy and plan, primarily intended to better leverage
the company’s tremendous assets, including celebrity ownership, to
grow the Company’s Direct-to-Consumer business.
- The company’s leadership team has already deferred certain
investments in additional inventory, curtailed its sales and
marketing efforts and staffing, and taken other measures to reduce
expenses and business operations. Collectively, these cost
reduction efforts have reduced the company’s budgeted cash
requirements by approximately $5.0 million for the second half of
2022, preserving capital for its highest-priority expenses and
investments and providing an additional runway for the growth
strategy to gain traction in the market.
- Hired James Spellmire, a veteran public company financial
professional, accomplished entrepreneur and expert in cash
preservation strategies, as Chief Financial Officer.
An important element of the reorganization plan is establishing
a cash runway that will provide sufficient time for the plan to
gain traction. As part of that plan, the company believes it
currently has sufficient wine in inventory to meet demand for the
balance of year and early 2023 as well as mitigate supply chain
risks the industry is facing, which would otherwise have been a
drain on cash.
“In short, we feel we are well-positioned for the move into Q4,
which is historically the season for the lion’s share of wine sales
over the course of the year. We are already in place with several
national grocery retailers, with more coming online between now and
the end of the year, just in time for the holidays,” says
Nechio.
Third Quarter Financial Results and
CommentaryFor the three months ended September 30, 2022,
net revenue was flat compared to the same periods in 2021 due to
timing of orders and seasonality. For the nine months ended
September 30, 2022, we experienced an increase of 136% in net
revenue compared to the same periods in 2021. The increase in net
revenue for the nine-month period was primarily attributable to our
increasing presence in the wholesale market and additional varietal
offerings. In correlation with increasing sales, the cost of
revenues during the three and nine months that ended September 30,
2022, increased 86% and 190%, respectively, compared to the same
periods in 2021 due to volumes of shipments as well as higher
storage fees. As a result of the cash preservation
initiatives undertaken in the third quarter of 2022, we reduced our
net loss by $2 million on a sequential basis, to approximately $2.6
million in the third quarter of 2022 as compared to approximately
$4.6 million during the second quarter of 2022.
In parallel, the company continues to execute its growth
strategy, opening new distributor and retail relationships,
expanding to new geographic markets, and introducing new product
extensions. The company believes that these efforts will further
accelerate top-line growth in ways that will improve liquidity
measures as the company converts inventory and receivables to
cash.
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 September 30,
2022, as filed with the Securities and Exchange
Commission, which includes further detail on the company's business
plans, operations, financial condition, and results of
operations.
Press contact – FreshVineWine@jonesworks.comIR contact
– Joeh@gregoryfca.com
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-$24.99. Fresh
Vine Wine's varietals currently include its Cabernet Sauvignon,
Chardonnay, Pinot Noir, Rosé, Sauvignon Blanc, Sparkling Rosé and a
limited Reserve Napa Cabernet Sauvignon. Forward-Looking
StatementsThis 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, our ability to achieve
positive cash flow from our operations on our anticipated
timeframes or at all; the inclusion of the Company’s wines in Fall
resets of four national, big box grocery retailers and the impact
of such inclusion of the Company’s operating results; 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 are or
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.
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