Revenue fell to $57.3 million from $62.5 million a year earlier, thanks to lower bulk wine sales and lower grape sales. But revenue from sales of cased goods, winery processing and storage and vineyard management all showed gains.
Before accounting for the impact of the tax reform act passed last year, the company posted a $3.7 million loss. But after adding in the $6.1 million tax benefit, Scheid records a profit of $2.4 million, or $2.75 a share, down from $2.9 million, or $3.32 a share, a year earlier.
Mike Thomsen, Chief Financial Officer, said:
“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 fiscal 2018 harvest were approximately 16% lower than the fiscal 2017 harvest, and 8% lower than the Company’s 10-year average. Grape sales decreased to $4.6 million in fiscal 2018, as compared to $7.5 million in fiscal 2017, and bulk wine revenues decreased to $19.2 million, as compared to $25.3 million in fiscal 2017. The large grape harvests in fiscal 2014 and 2015 resulted in higher bulk wine inventories available for sale in fiscal 2017.”
“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. In fiscal 2018, case sales increased 13% to $26.3 million, as compared to $23.2 million in fiscal 2017. The 16% increase in general and administrative, and selling expenses in the fiscal 2018 period was due primarily to the increased emphasis on sales, marketing and related administrative support of case sales.”