US: Purchase costs hit Chalone Group's H1
The Chalone Wine Group, Ltd. has posted a fall in net income for the first six months of this year. The Napa-based winemaker announced yesterday that it had a net revenue of $30,573,000 and net income of $58,000 during the first six months of 2004, compared to a net revenue of $29,012,000 and a net income of $504,000 in the same period of 2003.
"This quarter we have already begun to see the positive effects of our three new wineries on our bottom line," said president and CEO Tom Selfridge in a statement. "The current releases of Provenance Vineyards are selling well in the marketplace; in April we had the debut of the Orogeny Vineyards Pinot Noir from Russian River Valley's Green Valley and in May we celebrated the inaugural release of Hewitt Vineyard's estate Cabernet Sauvignon from the Rutherford Bench. Thanks to these new wines, plus our efforts with our other wineries, we had an increase in net revenues of $1,561,000 in the first six months of 2004, compared to that same time frame in 2003."
Commenting on the results for the first half of 2004, Selfridge said, "As previously announced, on May 17th we received a proposal from Domaines Barons de Rothschild (Lafite) SCA (DBR) to purchase the company. We have formed an independent special committee of the board of the directors to evaluate the proposal, and the committee has retained outside attorneys and financial advisors to assist its evaluation of the DBR proposal. If we subtract the costs associated with the special committee and other efforts associated with the proposal, we would have posted a higher profit of $370,000 for the first half of 2004."
Selfridge added, "The proposed purchase is just that - a proposal. This will take some time to sort out and, in the meantime, all of the employees at Chalone Wine Group are focusing on producing and selling great wine. During these very competitive times in the marketplace, we are continuing to keep our eye on the ball."
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