For Further Information:
Scheid Vineyards Inc.
(Nasdaq: SVIN)
305 Hilltown Road
Salinas, CA 93908
(831) 455-9990
Contact: Shawna Estrada,
Director of Investor Relations
For Immediate Release:
February 28, 2002
SCHEID VINEYARDS INC. REPORTS YEAR END RESULTS,
COMMENTS ON EXPECTED PRICES FOR 2002
Salinas, CA - February 28,
2002 - Scheid Vineyards Inc. (Nasdaq:
SVIN) announced today its financial results for the year ended December 31,
2001.
Company revenues increased 25% to $21.7 million in 2001
from $17.4 million in 2000. Net income
for both 2001 and 2000 was $2.5 million, and earnings per share was $0.46 and
$0.45, respectively. Weighted average
shares outstanding were 5.5 million in 2001 and 5.6 million in 2000. The 2001 results include nonrecurring
expenses of $659,000 associated with the Company’s relocation of its executive
offices comprised of employee relocation expenses, employee severance costs and
physical relocation costs of the Company.
Scott D. Scheid, President and Chief Executive Officer,
said, “For the year 2001, we harvested approximately 14,000 tons of wine
grapes, a 31% increase from the 2000 harvest of 10,700 tons. This increase is primarily due to
approximately 18% more acres in partial or full production. In addition to revenues derived from grape
sales, the Company realized revenue of $921,000 from sales of bulk wine.” Mr. Scheid continued, “We are pleased with
the results for 2001. The Company
relocated its executive offices from Marina del Rey, California to Salinas,
California in June to be in closer proximity to its vineyards. Even with relocation expenses of $659,000,
the Company achieved an after-tax profit margin of 11.5%.”
The Company also commented on the recently released
Preliminary Grape Crush Report which covers the 2001 harvest. The California Department of Food and
Agriculture published the Preliminary Grape Crush Report on February 8, 2002
and the Final Grape Crush Report is scheduled to be published on March 8,
2002. This report is published annually
and shows prices paid during the previous year’s harvest for grapes purchased
for wine, concentrate, juice, vinegar and beverage brandy by California
processors. The majority of the
Company’s prices for current wine grape production are determined by pricing
formulas utilizing the Final Grape Crush Report.
Heidi M. Scheid, Senior Vice President, stated, “A
significant portion of the Company’s projected tons for 2002 are covered by
purchase contracts that use data from the Final Grape Crush Report to calculate
prices. Based on the Preliminary Grape
Crush Report, prices under these contracts remain relatively strong. Chardonnay showed the most change with a
decrease in the anticipated average price per ton of approximately 10%, while
all other varieties remained relatively stable.” Ms. Scheid continued, “With an oversupply situation in some
varietal grapes, we anticipate that the prices we may receive for grapes which
are currently not contracted could be significantly less than the prices we
will receive for contracted grapes. We
believe, however, that Scheid Vineyards is well-positioned to weather a
downturn in the market for wine grapes.”
Kurt Gollnick, Senior Vice President and Chief Operating
Officer, commented further, “We have positioned Scheid Vineyards as an
ultra-premium grower on the Central Coast.
While an oversupply situation is difficult for all growers, our
quality-oriented approach to farming makes us better prepared to deal with it. Our goal at Scheid Vineyards is to continue
to put quality first, regardless of market conditions, while providing
top-notch customer service to our winery clients.”
Although historically there have not been significant
differences in the pricing data reported in the Preliminary and the Final Grape
Crush Reports, it is possible that there may be some adjustments to the
Company’s expected 2002 grape prices when the Final Report is published on
March 8.
Scheid Vineyards Inc. (www.scheidvineyards.com) is a
leading independent producer of premium wine grapes and operates approximately
6,000 acres of vineyards, primarily in Monterey County, California. The Company sells most of its grape
production under long-term contracts to wineries producing primarily premium
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 pricing expectations for the
2002 harvest. These forward-looking
statements can generally be identified as such because the context of the
statement will include such words as the Company “believes”, “anticipates”,
“expects”, 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