For Further Information:
Scheid Vineyards Inc. (Nasdaq:
SVIN)
305 Hilltown Road
Salinas, CA 93908
(831) 455-9990
CONTACT: Scott Scheid, President and CEO
Mike Thomsen,
Chief Financial Officer
For Immediate Release:
November 15__, 2004
SCHEID
VINEYARDS INC. REPORTS THIRD QUARTER RESULTS
President
Comments on 2004 Harvest
SALINAS, CA – November 15, 2004 - Scheid Vineyards Inc.
(Nasdaq: SVIN) announced today its
financial results for the third quarter ended September 30, 2004.
For the three
months ended September 30, 2004, revenues increased 17% to $13,484,000 from
$11,501,000 in the 2003 period. Net
income decreased to $1,399,000, or $0.26 per share, for the 2004 period as
compared to $2,175,000, or $0.40 per share, for the 2003 period.
For the
nine months ended September 30, 2004, revenues increased 23% to $16,062,000
from $13,092,000 in the 2003 period.
Net income was $92,000, or $0.02 per share, for the 2004 period as
compared to $821,000, or $0.15 per share, for the 2003 period.
Mr. Mike Thomsen, Chief Financial
Officer of the Company, stated, “The revenues generated by the Company’s
vineyards are affected by various factors, including the timing of the harvest,
the yield per acre, and the price per ton received. In addition, the Company produces bulk wine under contract and
for the speculative market, which affects the timing of revenue
recognition. Through September 30,
2004, approximately 80% of the Company’s producing acres had been harvested, as
compared to 48% at September 30, 2003.”
Mr. Thomsen continued by stating,
“The increase in grape sales due to the significantly greater percentage of
acres harvested was offset by three factors.
First, the Company had approximately 3,700 producing acres in 2003 as
compared to 3,500 acres in 2004, a decrease of approximately 5%. Second, average yields per acre through
September 30 decreased by approximately 6% from 2003 to 2004. Third, the average price per ton received on
grape sales through September 30 decreased by approximately 3% from 2003 to
2004. As of September 30 2004, the
Company had harvested approximately 14,000 tons of grapes, of which 3,500 tons
were converted to bulk wine for sale at a later date. Through September 30, 2003, the Company had harvested 9,500 tons,
of which 500 tons were converted to bulk wine.”
Mr. Thomsen concluded by
stating, “The percentage of completion of harvest at September 30th
of each year is highly dependent on weather conditions in the growing season
and can be expected to fluctuate from year to year.”
Commenting on the 2004 harvest,
Scott D. Scheid, President of the Company, stated, “The Company completed the
harvest of its vineyards on November 6th, with a decrease in total
tons harvested in 2004 as compared to 2003 of approximately 5%. We
estimate that for the fiscal year ending December 31, 2004, the Company will
record grape sale revenues of approximately $16,000,000, a decrease of
approximately 30% from fiscal 2003 grape sale revenues.”
Mr.
Scheid also stated, “In addition to grape sales, the Company crushed
approximately 6,400 tons of grapes into bulk wine in 2004, a 200% increase over
the amount made into bulk wine in 2003.
Of this total, approximately 3,300 tons were converted into bulk wine
pursuant to various wine purchase contacts with wineries, and the remaining
3,100 tons were converted into bulk wine to be sold on the speculative
market. The timing of the sales of
these wines and the prices of wines sold on the speculative market can have a
significant impact on annual results. We
also caution that historical cost of sales and other expenses deducted in
arriving at net income should not be expected to provide an indication of gross
profit or net income to be reported by the Company for fiscal 2004.”
Scheid Vineyards Inc. ( is an independent producer of
premium wine grapes and operates approximately 5,600 acres of vineyards,
primarily in Monterey County, California.
The Company sells most of its grape production under short and long-term
grape and bulk wine contracts to wineries producing high quality table wines,
and the Company also produces a small amount of ultra premium wine under its
own label.
Note: This press
release contains forward-looking statements concerning expectations for the
2004 harvest and the Company=s
2004 financial performance. These
forward-looking statements can generally be identified as such because the
context of the statement will include such words as the Company “estimates” or
words of similar import. Similarly,
statements that describe the Company=s
future operating performance, financial results, plans, objectives or goals are
also forward-looking statements. Such
forward looking statements are subject to certain factors, risks and uncertainties
which could cause actual results to differ materially from those currently
anticipated. Such factors, risks and
uncertainties include, but are not limited to, (i) success in planting,
cultivating and harvesting of existing and new vineyards, including the effects
of weather conditions, (ii) the
potential effect on the Company=s
vineyards of certain diseases, insects and pests, including the glassy-winged
sharpshooter, (iii) effects of variances in grape yields and prices from
harvest to harvest due to agricultural, market and other factors and relatively
fixed farming costs, (iv) success in, and the timing of, future acquisitions,
if any, of additional properties for vineyard development and related
businesses as well as variability in acquisition and development costs, (v)
consumer demand and preferences for the wine grape varieties produced by the
Company, (vi) general health and social concerns regarding consumption of wine
and spirits, (vii) the size and growth rate of the California wine industry,
(viii) seasonality of the wine grape producing business, (ix) increases or
changes in government regulations regarding environmental impact, water use,
labor or consumption of alcoholic beverages, (x) competition from other
producers and wineries, (xi) proposed expansion of the Company=s wine business, (xii) the
Company=s dependence
on a small number of clients for the purchase of a substantial portion of the
Company=s grape
production, (xiii) the availability of financing on terms acceptable to the
Company, and (xiv) the Company=s
labor relations. These and other
factors, risks and uncertainties are discussed in greater detail under the
caption “Business - Cautionary Information Regarding Forward Looking Statements@ in the Company=s Annual Report on Form
10-KSB filed with the Securities and Exchange Commission on March 30,
2004. Stockholders, potential investors
and other readers are urged to consider these factors carefully in evaluating
the forward-looking statements and are cautioned not to place undo reliance on
such forward-looking statements. The
forward-looking statements made herein are only made as of the date of this
press release and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.