Scheid Family Wines Announces Financial Results for Q2 of Fiscal 2025

Scheid Family Wines: Financial Results for Q2 of Fiscal 2025

Scheid Vineyards Inc., operating as Scheid Family Wines, has publicly disclosed its financial outcomes for the six months concluding on August 31, 2024. Scott Scheid, the President and CEO, provided insights into the current challenges facing the wine industry, highlighting a sustained downturn in bulk wine prices and a contracting market for bottled wines, marked by destocking efforts from distributors and retailers.

The recent results indicate a 6% decrease in total revenues, amounting to $26.1 million, down from $27.7 million during the same period last fiscal year. Cased goods sales also took a hit, experiencing a decline of 6%, falling to $21.2 million from $22.5 million. Notably, bulk wine sales decreased by 14%, while revenues from winery processing and storage remained steady at $1.5 million. Throughout these fluctuations, gross margins were consistent at 20% across both periods.

In response to these challenges, Scheid reported a commendable reduction in operational expenses. Sales and marketing costs were decreased by 16%, now at $4.8 million, and general and administrative expenses saw a 5% drop to $3.5 million. These measures are part of an overarching effort to optimize operational efficiency amidst tough market conditions.

Furthermore, the company recently negotiated new forbearance agreements with its lenders, extending through July 31, 2025. These agreements effectively suspend interest and principal payments on existing debt, while also allowing for an additional $5 million infusion to bolster working capital. This critical maneuver aims to provide the necessary liquidity for the company to navigate these turbulent times.

Financial highlights also include a noteworthy rise in interest expenses, which surged by 150% to $7.5 million due to rising interest rates, with lenders accruing interest at an average default rate of 14.3%. Nonetheless, the company reported positive shifts in their earnings before interest, taxes, depreciation, and amortization (EBITDA), which improved to $4.4 million from a loss of $1.2 million. This improvement was largely attributed to revenues generated from the dissolution of a winery processing agreement and profits gained from selling non-vineyard land.

Despite these developments, the company faced a net loss of $3.9 million throughout the six-month span, compared to a loss of $4.8 million in the previous year.

As Scheid Family Wines continues its quest for stability and growth, it remains dedicated to leveraging its sustainable practices in wine production. With over 50 years of experience and a portfolio that includes a wide range of premium brands, the company strives to adapt and thrive in an evolving market.

For further insights on their financial performance and strategic initiatives, visit Scheid Family Wines' official websites.