Scheid Vineyards Inc reports sales for the nine months ended Nov.30, 2017, fell 16% to $33.4 million, from $39.8 million a year earlier. High expenses and lower sales resulted in a net loss of $2.5 million compared to net income for the nine months ended Nov. 30, 2016 of $1.2 million, or $1.34 a share.
Scott Scheid, President/CEO, said, “The 2017 wine grape harvest in Monterey County was completed in early November, and it has been characterized by somewhat lower yields and good overall quality.”
Mike Thomsen, Chief Financial Officer of the Company, stated, “Harvest yields can have an impact on year over year comparisons, and the resulting grape and bulk wine revenues and overall margins may fluctuate based on such yields.
“Company vineyard grape yields for the 2017 harvest were approximately 16% lower than the 2016 harvest, and 8% lower than the Company’s 10-year average. Grape sales decreased to $4.6 million in 2017, as compared to $7.5 million in 2016. Bulk wine revenues decreased to $3.4 million, as compared to $8.5 million in 2016. The large grape harvests in 2013 and 2014 resulted in higher bulk wine inventories available for sale in 2016.”
“In addition, the Company has increased its emphasis on selling bottled, rather than bulk wine and grapes. This requires holding a larger percentage of the Company’s wine production for case sales in future periods, resulting in fewer grape and bulk wine sales as the Company continues with this shift,” he said adding:
“In 2017, case sales increased 3% to $19.3 million, as compared to $18.7 million in 2016. The 11% increase in general and administrative, and selling expenses in the 2017 period was due primarily to the increased emphasis on sales, marketing and related administrative support of case sales.”