US: Scheid Vineyards in talks with banks after H1 losses
Scheid Vineyards in the US is attempting to renegotiate its bank loans following deepening losses in the first half of the group's fiscal year.
Net losses for the six months to the end of August were US$3.9m ($4.31 per share), compared to losses of $2.6m in the same period of last year, Scheid said this week.
Mike Thomsen, chief financial officer, said: "Due primarily to the net losses reported in fiscal 2009, which was the result of a major decrease in grape production in the company's vineyards, and the losses for the first six months of fiscal 2010, the company is currently in non-compliance of certain of its financial covenants under the terms of its bank loans."
He added: "The Company is in the process of working with its bank to resolve this situation."
Net sales for the half-year increased to $5.6m from $3.2m for the same period in 2008, primarily due to increased sales of bulk wine, said Scheid.
Thomsen said: "Although revenues have increased from last year's levels, margins are down in 2009 due to decreased demand for certain bulk wine varieties and a resulting decline in the sales price for those varieties. The company wrote-down its remaining 2008 vintage bulk wine inventories by $2.3m in the second quarter to more properly reflect their current market values."
Scheid, which owns 5,300 acres of premium wine grape vineyards, primarily in Monterey County, California, said that it receives the majority of its annual sales in the third and fourth quarters of its fiscal year.
Scheid Vineyards cut net losses in the first nine months of 2009 and is on a firmer financial footing after securing renewed support from its banks....
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Heineken to stay "active player" in beer M&A - CFO
- Focus - Pernod Ricard's Q1 sales by brand
- Time for Heineken to make a European break
- Moët Hennessy unveils first Travel Retail outlet
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- Whisky downturn slows Diageo's Scotch spend
- Pernod Ricard sees sales lift in Q1