The Chalone Wine Group, Ltd. (Nasdaq:CHLN) announced record revenues of $52.8 million for the twelve-month period ended March 31, 2000, an $8.8 million or 20% increase, compared to the same period last year. The resulting gross profit of $22.9 million for the twelve-month period ended March 31, 2000 was an increase of $3.3 million over the same period in the prior year.

Case sales for FY00 were 448,000, an increase of 18% over the prior year. Average sales price per case for FY00 was $116, up from $115 for the same period the prior year.

"Capturing an increase in our average price per case is a significant achievement for us, considering we increased the volume of our value-priced Echelon line of wines by 50%," said President and CEO Thomas B. Selfridge.

The Company has invested over $30 million during the past year in vineyard and winery properties including Hewitt Vineyard in Napa Valley's Rutherford Bench, Suscol Creek Vineyard in southern Napa Valley, Sagelands Winery and adjoining vineyards in Washington state's Yakima Valley, as well as the Jade Mountain brand from the Napa Valley.

"We have invested in prestigious winery and vineyard properties to grow our portfolio of premium estate wineries. Although it will take three-to-four years before we begin to realize profit from most of these investments, we expect that they will allow us to maintain our growth well into the future," commented Selfridge.

For the twelve-month period ended March 31, 2000, the Company announced net income of $3.68 million and diluted earnings per share of $0.34 compared to $6.63 million and $0.75, respectively, over the prior fiscal year. The previous year's income was benefited by the inclusion of a legal settlement with Pacific Gas and Electric ("PG&E") relating to a vineyard fire which occurred in 1996 at Carmenet Winery.

Chalone Wine Group, Ltd. (the "Company") is a Napa-based company specializing in premium white and red varietal wines. In California, the Company owns and operates Chalone Vineyard® in Monterey County, Acacia(TM) Winery in the Carneros District of Napa County, Jade Mountain brand in Napa County and Carmenet® Vineyard in Sonoma County. In conjunction with its 50 percent joint-venture partner, Paragon Vineyard Co., the Company also owns and operates Edna Valley Vineyard® in San Luis Obispo County. Additionally, the Company produces and markets wines of Central Coast appellation under the brand name Echelon Vineyards(TM). In the state of Washington, the Company owns and operates Sagelands Winery(TM) and is a 50.5 percent managing partner in Canoe Ridge Vineyard®. In the Bordeaux region of France, the Company owns 23.5 percent of the fourth-growth estate of Chateau Duhart-Milon, in partnership with Domaines Barons de Rothschild (Lafite) which owns the other 76.5 percent.

The financial results below are in thousands of US dollars:

March 31,
2000 1999

Current assets $ 64,432 $ 52,057

Total asset 145,665 103,471

Current liabilities 34,213 2,865

Total liabilities 67,235 40,903

Shareholders' equity 73,672 58,291

Working capital $ 30,219 $ 49,192

Three months ended Twelve months ended
March 31, March 31, 2000 1999 2000 1999
2000 1999 2000 1999

Gross revenues $ 12,442 $ 11,024 $ 52,808 $ 43,973
Excise taxes (338) (295) (1,351) (1,147)
Net revenues 12,104 10,729 51,457 42,826
Cost of wines sold (7,501) (5,634) (28,535) (23,201)
Gross profit 4,603 5,095 22,922 19,625
Other operating
revenue and
expenses, net 62 130 124 196
SG&A expenses (3,670) (2,956) (13,941) (10,805)
Operating income 995 2,269 9,105 9,016
Interest expense (459) (480) (2,225) (1,761)
Settlement income n/a 4,447 n/a 4,447
Other,net (125) 9 (84) (2)
Equity in Chateau
Duhart-Milon 37 48 735 766
Minority interests (323) (212) (1,290) (1,219)
Income before taxes 125 6,081 6,241 11,247
Net income 72 $ 3,587 $ 3,681 $ 6,636

Net income applicable
to common
shareholders $ (386) $ 3,587 $ 3,223 $ 6,636
Diluted earnings per
share $ (0.04) $ 0.40 $ 0.34 $ 0.75
Average outstanding
number of shares 9,579 8,860 9,483 8,852

From time-to-time, information provided by the Company, statements made by its employees, or information included in its filings with the Securities and Exchange Commission as well as its statements to the press (including this earnings release) may contain statements which are not historical facts, so called "forward looking statements" that involve risks and uncertainties. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The terms "anticipates," "expects," "estimates," "intends," "believes," and other similar terms as they relate to the Company or its management are intended to identify such forward looking statements. Factors that may cause such differences include, but are not limited to: (i) future weather and general farming conditions affecting annual harvest quantity as well as quality; (ii) variations in market taste as well as demand; (iii) changes in the wine industry regulatory environment; (iv) changes in world-wide supply and demand of grapes and wine. Each of the factors, and others, are discussed from time-to-time in the Company's filings with the Securities and Exchange Commission including the Company's annual report on Form 10-K for the year ended March 31, 1999.