For Further Information:
Scheid Vineyards Inc.
(Nasdaq: SVIN)
305 Hilltown Road
Salinas, CA 93908
(831) 455-9990
Contact: Scott D. Scheid,
President and Chief Executive Officer
For Immediate Release:
February 28, 2003
SCHEID VINEYARDS INC.
REPORTS YEAR END RESULTS
ANNOUNCES TRANSFER TO NASDAQ
SMALLCAP MARKET
COMMENTS ON EXPECTED PRICES FOR 2003
Salinas, CA - February 28,
2003 - Scheid Vineyards Inc. (Nasdaq:
SVIN) announced today its financial results for the year ended December 31,
2002.
Company revenues increased 12% to $24.3 million in 2002
from $21.7 million in 2001. Net income
for 2002 was $2.46 million as compared to $2.50 million in 2001. Earnings per share was $0.45 and $0.46 in
2002 and 2001, respectively. The
weighted average shares outstanding was 5.5 million for each period.
The
2002 results include a write down of vineyard improvements in the amount of
$1,040,000. The 2001 results include
nonrecurring expenses of $659,000 associated with the Company’s relocation of
its executive offices, as well as a write down of vineyard improvements in the
amount of $195,000.
Scott D. Scheid, President and Chief Executive Officer,
said, “For the year 2002, we harvested approximately 17,550 tons of wine
grapes, a 25% increase from the 2001 harvest of 14,000 tons. This increase is primarily due to
approximately 15% more acres in partial or full production. Prices in 2002 were, on average,
approximately 9% less than in 2001 due to an oversupply of certain grape
varieties on the open market. The write
down of vineyard improvements relates to approximately 150 acres of under
performing vines.”
Scheid Vineyards also announced today that the
Company will transfer from the Nasdaq National Market to the SmallCap Market
effective upon the opening of the market on Monday, March 3, 2003. On October 28, 2002, Nasdaq notified Scheid
Vineyards that it was not in compliance with the Nasdaq National Market public
float requirement that requires the Company to maintain a $5,000,000 minimum
market value float. To ensure
continuity of its Nasdaq listing and to protect the interests of the Company’s
shareholders, Scheid Vineyards has elected to transfer to the Nasdaq SmallCap
Market. The Company’s Class A common
stock will continue to be traded under the stock symbol ‘SVIN’.
The
Company also commented on the recently released Preliminary Grape Crush Report
which covers the 2002 harvest. The
California Department of Food and Agriculture published the Preliminary Grape
Crush Report on February 10, 2003 and the Final Grape Crush Report is scheduled
to be published on March 10, 2003. 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 2003 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 7%, while
all other varieties remained relatively stable.” Ms. Scheid continued, “The market is currently in an oversupply
situation for some grape varieties, Cabernet Sauvignon in particular, and 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. Although it is a
difficult market, we believe Scheid Vineyards continues to make strides in
positioning ourselves as a quality leader on the Central Coast.”
Kurt Gollnick, Senior Vice President and Chief Operating
Officer, commented further, “Our quality-oriented approach to farming positions
us well to weather a downturn in the market for wine grapes. An oversupply situation is difficult for all
growers and those who have a reputation for quality and value are going to fare
best. 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 2003 grape prices when the Final Report is published on
March 10.
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
2003 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 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) the Company’s
dependence on a small number of clients for the purchase of a substantial
portion of the Company’s grape production, (xii) the availability of financing
on terms acceptable to the Company, and (xiii) 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 29, 2002.
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.
SCHEID VINEYARDS INC. AND
SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except
per share data)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2002
|
|
2001
|
|
2002
|
|
2001
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
15,387
|
|
$
|
10,964
|
|
$
|
23,232
|
|
$
|
20,678
|
|
|
Vineyard management, services and other fees
|
|
331
|
|
442
|
|
1,051
|
|
1,011
|
|
|
Total revenues
|
|
15,718
|
|
11,406
|
|
24,283
|
|
21,689
|
|
|
COST OF SALES
|
|
8,751
|
|
5,926
|
|
14,283
|
|
11,684
|
|
GROSS PROFIT
|
|
6,967
|
|
5,480
|
|
10,000
|
|
10,005
|
|
|
General and administrative expenses
|
|
1,030
|
|
900
|
|
4,060
|
|
3,960
|
|
|
Write down of vineyard improvements
|
|
1,040
|
|
195
|
|
1,040
|
|
195
|
|
|
Relocation expenses
|
|
—
|
|
159
|
|
—
|
|
659
|
|
|
Income from related partnership
|
|
6
|
|
—
|
|
(263
|
)
|
—
|
|
|
Interest expense, net
|
|
255
|
|
162
|
|
1,032
|
|
984
|
|
|
INCOME BEFORE PROVISION FOR INCOME TAXES
|
|
4,636
|
|
4,064
|
|
4,131
|
|
4,207
|
|
|
PROVISION FOR INCOME TAXES
|
|
1,875
|
|
1,650
|
|
1,673
|
|
1,707
|
|
|
NET INCOME
|
|
$
|
2,761
|
|
$
|
2,414
|
|
$
|
2,458
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED NET INCOME PER SHARE 1
|
|
$
|
0.50
|
|
$
|
0.44
|
|
$
|
0.45
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
5,475
|
|
5,475
|
|
5,475
|
|
5,489
|
|
1 There is no difference between basic and diluted earnings per
share.
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