SCHEID FAMILY WINES REPORTS THIRD QUARTER RESULTS

SALINAS, Calif., Jan. 23, 2023 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) announced today its financial results for the nine months ended November 30, 2022 (3^rd Quarter of Fiscal 2023).

Financial Results – Third Quarter Results Fiscal 2023 (March 1, 2022 – November 30, 2022)

Mr. Mike Thomsen, Chief Financial Officer of the Company, commented on the third quarter results stating, "Overall revenues increased 18% in the first nine months of fiscal 2023. The Company's cased goods sales increased 26%, compared to a wine industry trend of flat sales growth. Winery processing and storage revenues increased 32%, bulk wine sales increased 23%, and grape sales decreased 45% from the previous year. Gross margins remained at 28% for each period.

Sales and marketing expenses increased 29%, from $7.5 to $9.7 million, as the Company continued its investment in the marketing of new brands and territories.  These expenses were 19% of total revenues in the fiscal 2023 period and 17% in 2022. In addition, interest expense rose 28% to $3.3 million, due to increased borrowings and an increase in interest rates on the Company's variable rate debt.

In August 2022, the Company received forgiveness for a $3.7 million loan made to the Company pursuant to the Paycheck Protection Plan ("PPP") administered by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Company recognized a gain of $3.7 million in the current period.

In addition, as a non-recurring event, the Company agreed to settle a class action lawsuit alleging violation of California wage and hour employment laws, for $1,250,000.  The settlement agreement is subject to final court approval.  The settlement does not contain any admission of liability or wrongdoing by the Company.  The settlement amount was accrued as a liability in the second quarter ended August 31, 2022 and is expected to be paid by the end of the first quarter of fiscal 2024. 

The loss before the effects of non-recurring income and expenses totaled $4.9 million during the first nine months of fiscal 2023, as compared to a $4.2 million loss in fiscal 2022. The Company recognized a gain of $23.8 million from the sale of vineyard properties in the first quarter of fiscal 2022. In total, the Company had a net loss of $1.7 million in the first nine months of fiscal 2023, as compared to net income of $14.4 million in fiscal 2022."

Mr. Scott Scheid, President and CEO of the Company, stated, "The Company's 2022 grape harvest was completed on November 1, 2022. Yields were down approximately 15% from the Company's five-year average and are generally consistent with wine grape yields from Monterey and other California coastal vineyard regions.

Mr. Scheid continued, "The recent storms in Northern California caused some flooding in the Salinas Valley. Fortunately, there was no flooding in our vineyards, and we experienced only minor erosion in several locations. The rainfall was beneficial to the soils and served to fill local reservoirs from their previous low levels."

About Scheid Family Wines

Scheid Family Wines, a family-owned and operated wine company founded in 1972, is ranked among the top 20 largest wine producers in California. Based in Monterey County, Scheid is uniquely integrated to bring high quality estate grown wines to the marketplace from its sustainably certified vineyards and grower partners throughout the Central Coast. Scheid's innovative, luxury-level winery is powered by 100% renewable wind energy generated by a 400-foot-tall wind turbine, which also supplies energy to many homes in the local community. The Scheid Family Wines globally distributed brand portfolio includes Scheid Vineyards, Sunny with a Chance of Flowers, VDR (Very Dark Red), Grandeur (made with organic grapes), Fog & Light, Metz Road, District 7, Ryder Estate, and HOXIE, a premium wine spritzer. Scheid Family Wines sells internationally to 26 countries and is one of the largest producers of nationally distributed exclusive brands.

Please visit www.scheidfamilywines.com and www.otcmarkets.com/stock/SVIN/quote for more information.

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SOURCE Scheid Family Wines