0000950170-24-060487.txt : 20240515 0000950170-24-060487.hdr.sgml : 20240515 20240515161646 ACCESSION NUMBER: 0000950170-24-060487 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 79 CONFORMED PERIOD OF REPORT: 20240331 FILED AS OF DATE: 20240515 DATE AS OF CHANGE: 20240515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Vintage Wine Estates, Inc. CENTRAL INDEX KEY: 0001834045 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] ORGANIZATION NAME: 04 Manufacturing IRS NUMBER: 871005902 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40016 FILM NUMBER: 24951047 BUSINESS ADDRESS: STREET 1: 205 CONCOURSE BOULEVARD CITY: SANTA ROSA STATE: CA ZIP: 95403 BUSINESS PHONE: 877-289-9463 MAIL ADDRESS: STREET 1: 205 CONCOURSE BOULEVARD CITY: SANTA ROSA STATE: CA ZIP: 95403 FORMER COMPANY: FORMER CONFORMED NAME: Bespoke Capital Acquisition Corp DATE OF NAME CHANGE: 20201125 10-Q 1 vwe-20240331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to______

Commission file number 001-40016

 

img10355338_0.jpg 

 

Vintage Wine Estates, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

 

 

87-1005902

(State or other jurisdiction of incorporation or organization)

 

 

 

(I.R.S. Employer Identification No.)

 

205 Concourse Boulevard

Santa Rosa, California 95403

(Address of principal executive offices) (Zip code)

 

Registrant’s telephone number, including area code: (877) 289-9463

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common stock, no par value per share

 

VWE

 

The Nasdaq Capital Market

Warrants to purchase common stock

 

VWEWW

 

The Nasdaq Capital Market

 

 

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No

As of May 10, 2024, 62,814,389 shares of the registrant’s common stock were outstanding.

 


 

 

Part I. Financial Information

1

Item 1. Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations and Comprehensive Income

2

Condensed Consolidated Statements of Stockholders' Equity

3

Condensed Consolidated Statements of Cash Flows

5

Notes to the Condensed Consolidated Financial Statements

7

Note 1: Basis of Presentation and Significant Accounting Policies

7

Note 2: Restructuring

10

Note 3: Inventory

10

Note 4: Assets Held For Sale

11

Note 5: Intangible Assets

12

Note 6: Fair Value Measurements

13

Note 7: Commitments and Contingencies

13

Note 8: Long-term and Other Short-Term Obligations

15

Note 9: Stockholders' Equity

17

Note 10: Income Taxes

18

Note 11: Related Party Transactions

19

Note 12: Segments

20

Note 13: Subsequent Events

21

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

30

Item 4. Controls and Procedures

30

Part II. Other Information

31

Item 1. Legal Proceedings

31

Item 1A. Risk Factors

32

Item 5. Other Information

35

Item 6. Exhibits

36

Signatures

37

 

 


Part I—Financial Information

Item 1. Financial Statements

VINTAGE WINE ESTATES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

 

March 31, 2024

 

 

June 30, 2023

 

Assets

 

(Unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

24,106

 

 

$

18,233

 

Restricted cash

 

 

201

 

 

 

-

 

Accounts receivable, net

 

 

16,104

 

 

 

24,561

 

Other receivables

 

 

371

 

 

 

507

 

Inventories

 

 

132,887

 

 

 

201,363

 

Assets held for sale, net

 

 

56,565

 

 

 

511

 

Current interest rate swap asset

 

 

4,341

 

 

 

4,669

 

Prepaid expenses

 

 

13,830

 

 

 

14,895

 

Total current assets

 

 

248,405

 

 

 

264,739

 

Property, plant, and equipment, net

 

 

173,065

 

 

 

215,967

 

Operating lease right-of-use assets

 

 

29,058

 

 

 

32,945

 

Finance lease right-of-use-assets

 

 

513

 

 

 

630

 

Intangible assets, net

 

 

22,670

 

 

 

38,994

 

Interest rate swap asset

 

 

2,157

 

 

 

4,317

 

Other assets

 

 

2,765

 

 

 

3,562

 

Total assets

 

$

478,633

 

 

$

561,154

 

Liabilities, redeemable noncontrolling interest, and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Line of credit

 

$

141,635

 

 

$

115,444

 

Accounts payable

 

 

15,094

 

 

 

20,413

 

Accrued liabilities and other payables

 

 

16,119

 

 

 

19,668

 

Accrued employee compensation

 

 

9,087

 

 

 

6,618

 

Current operating lease liabilities

 

 

6,358

 

 

 

6,243

 

Current finance lease liabilities

 

 

242

 

 

 

304

 

Current maturities of long-term debt

 

 

180,170

 

 

 

14,449

 

Total current liabilities

 

 

368,705

 

 

 

183,139

 

Other long-term liabilities

 

 

393

 

 

 

4,196

 

Long-term debt, less current maturities

 

 

-

 

 

 

173,409

 

Long-term operating lease liabilities

 

 

23,914

 

 

 

26,792

 

Long-term finance lease liabilities

 

 

279

 

 

 

334

 

Deferred tax liability

 

 

175

 

 

 

506

 

Total liabilities

 

 

393,466

 

 

 

388,376

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

246

 

 

 

262

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, no par value, 2,000,000 shares authorized, and none issued and outstanding at March 31, 2024 and June 30, 2023.

 

 

-

 

 

 

-

 

Common stock, no par value, 200,000,000 shares authorized, 62,814,389 issued and 59,942,495 outstanding at March 31, 2024 and 62,234,028 issued and 59,362,134 outstanding at June 30, 2023.

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

384,745

 

 

 

381,689

 

Treasury stock, at cost: 2,871,894 shares held at March 31, 2024 and June 30, 2023.

 

 

(26,034

)

 

 

(26,034

)

Accumulated deficit

 

 

(272,871

)

 

 

(182,308

)

Total Vintage Wine Estates, Inc. stockholders' equity

 

 

85,840

 

 

 

173,347

 

Noncontrolling interests

 

 

(919

)

 

 

(831

)

Total stockholders' equity

 

 

84,921

 

 

 

172,516

 

Total liabilities, redeemable noncontrolling interest, and stockholders' equity

 

$

478,633

 

 

$

561,154

 

See notes to unaudited condensed consolidated financial statements.

1


VINTAGE WINE ESTATES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except share and per share amounts)

 

 

Three Months Ended March 31,

 

 

Nine Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

2024

 

2023

 

Net revenue

 

 

 

 

 

 

 

 

 

 

 

Wine, spirits and cider

 

$

32,303

 

 

$

41,276

 

 

$

131,804

 

$

147,252

 

Nonwine

 

 

13,362

 

 

 

23,375

 

 

 

55,124

 

 

73,880

 

Total revenue

 

 

45,665

 

 

 

64,651

 

 

 

186,928

 

 

221,132

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Wine, spirits and cider

 

 

24,016

 

 

 

37,575

 

 

 

126,344

 

 

107,251

 

Nonwine

 

 

11,149

 

 

 

13,800

 

 

 

40,367

 

 

45,329

 

Total cost of revenue

 

 

35,165

 

 

 

51,375

 

 

 

166,711

 

 

152,580

 

Gross profit

 

 

10,500

 

 

 

13,276

 

 

 

20,217

 

 

68,552

 

Selling, general, and administrative expenses

 

 

24,158

 

 

 

26,506

 

 

 

78,168

 

 

90,094

 

Amortization expense

 

 

1,055

 

 

 

1,813

 

 

 

4,579

 

 

5,429

 

Goodwill impairment losses

 

 

-

 

 

 

-

 

 

 

-

 

 

125,285

 

Intangible impairment losses

 

 

360

 

 

 

-

 

 

 

5,102

 

 

12,643

 

Gain on remeasurement of contingent liability

 

 

(1,065

)

 

 

-

 

 

 

(6,273

)

 

(3,289

)

Restructuring expense

 

 

1,286

 

 

 

-

 

 

 

5,130

 

 

-

 

(Gain) loss on insurance and litigation

 

 

-

 

 

 

(884

)

 

 

148

 

 

(1,414

)

Loss (gain) on sale of assets and assets held for sale

 

 

5,241

 

 

 

(5,977

)

 

 

4,442

 

 

(1,546

)

Loss from operations

 

 

(20,535

)

 

 

(8,182

)

 

 

(71,079

)

 

(158,650

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(6,108

)

 

 

(4,291

)

 

 

(17,152

)

 

(13,322

)

Net gain (loss) on interest rate swap agreements

 

 

357

 

 

 

(3,596

)

 

 

(2,464

)

 

4,892

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

(479

)

Other, net

 

 

(129

)

 

 

(161

)

 

 

(155

)

 

326

 

Total other (expense) income, net

 

 

(5,880

)

 

 

(8,048

)

 

 

(19,771

)

 

(8,583

)

Loss before provision for income taxes

 

 

(26,415

)

 

 

(16,230

)

 

 

(90,850

)

 

(167,233

)

Income tax benefit

 

 

(228

)

 

 

(2,702

)

 

 

(183

)

 

(24,880

)

Net loss

 

 

(26,187

)

 

 

(13,528

)

 

 

(90,667

)

 

(142,353

)

Net loss attributable to the noncontrolling interests

 

 

(33

)

 

 

(14

)

 

 

(104

)

 

(1,235

)

Net loss attributable to common stockholders

 

$

(26,154

)

 

$

(13,514

)

 

$

(90,563

)

$

(141,118

)

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.44

)

 

$

(0.23

)

 

$

(1.52

)

$

(2.39

)

Diluted

 

$

(0.44

)

 

$

(0.23

)

 

$

(1.52

)

$

(2.39

)

Weighted average shares used in the calculation of earnings per share allocable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

59,902,030

 

 

 

59,289,659

 

 

 

59,678,013

 

 

59,014,915

 

Diluted

 

 

59,902,030

 

 

 

59,289,659

 

 

 

59,678,013

 

 

59,014,915

 

See notes to unaudited condensed consolidated financial statements.

2


VINTAGE WINE ESTATES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share amounts)

 

 

Redeemable Non-Controlling
Interest Amount

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-In Capital

 

 

Accumulated
Deficit

 

 

Non-Controlling
Interests

 

 

Total Stockholders' Equity

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2023

 

$

262

 

 

 

62,234,028

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

381,689

 

 

$

(182,308

)

 

$

(831

)

 

$

172,516

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,269

 

 

 

-

 

 

 

-

 

 

 

1,269

 

Vesting of restricted stock

 

 

-

 

 

 

233,311

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

129

 

 

 

-

 

 

 

-

 

 

 

129

 

Taxes paid related to net share settlement of equity awards

 

 

-

 

 

 

(29,655

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23

)

 

 

-

 

 

 

-

 

 

 

(23

)

Net loss

 

 

(7

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,058

)

 

 

(33

)

 

 

(15,091

)

Balance, September 30, 2023

 

$

255

 

 

 

62,437,684

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

383,064

 

 

$

(197,366

)

 

$

(864

)

 

$

158,800

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,277

 

 

 

-

 

 

 

-

 

 

 

1,277

 

Vesting of restricted stock

 

 

-

 

 

 

413,522

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Taxes paid related to net share settlement of equity awards

 

 

-

 

 

 

(89,422

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(81

)

 

 

-

 

 

 

-

 

 

 

(81

)

Net loss

 

 

(3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(49,351

)

 

 

(29

)

 

 

(49,380

)

Balance, December 31, 2023

 

$

252

 

 

 

62,761,784

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

384,260

 

 

$

(246,717

)

 

$

(893

)

 

$

110,616

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

501

 

 

 

-

 

 

 

-

 

 

 

501

 

Vesting of restricted stock

 

 

-

 

 

 

82,260

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Taxes paid related to net share settlement of equity awards

 

 

-

 

 

 

(29,655

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16

)

 

 

-

 

 

 

-

 

 

 

(16

)

Net loss

 

 

(7

)

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(26,154

)

 

 

(26

)

 

 

(26,179

)

Balance, March 31, 2024

 

$

246

 

 

 

62,814,389

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

384,745

 

 

$

(272,871

)

 

$

(919

)

 

$

84,921

 

3


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Non-Controlling
Interest Amount

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-In Capital

 

 

(Accumulated Deficit) Retained
Earnings

 

 

Non-Controlling
Interests

 

 

Total Stockholders' Equity

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2022

 

$

1,494

 

 

 

61,691,054

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

376,099

 

 

$

(1,092

)

 

$

(735

)

 

$

348,238

 

Adoption of ASC 842

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,752

 

 

 

-

 

 

 

7,752

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,440

 

 

 

-

 

 

 

-

 

 

 

3,440

 

Repurchase of public warrants

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(172

)

 

 

-

 

 

 

-

 

 

 

(172

)

Stockholder distribution

 

 

(66

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net income (loss)

 

 

(146

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,532

 

 

 

(28

)

 

 

1,504

 

Balance, September 30, 2022

 

$

1,282

 

 

 

61,691,054

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

379,367

 

 

$

8,192

 

 

$

(763

)

 

$

360,762

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,250

 

 

 

-

 

 

 

-

 

 

 

3,250

 

Vesting of restricted stock

 

 

-

 

 

 

755,880

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Taxes paid related to net share settlement of equity awards

 

 

-

 

 

 

(285,381

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(976

)

 

 

-

 

 

 

-

 

 

 

(976

)

Net income (loss)

 

 

(1,023

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(129,135

)

 

 

(24

)

 

 

(129,159

)

Balance, December 31, 2022

 

$

259

 

 

 

62,161,553

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

381,641

 

 

$

(120,943

)

 

$

(787

)

 

$

233,877

 

Stock-based compensation expense, net of forfeitures

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(1,024

)

 

 

-

 

 

 

-

 

 

 

(1,024

)

Net income (loss)

 

 

2

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(13,514

)

 

 

(16

)

 

 

(13,530

)

Balance, March 31, 2023

 

$

261

 

 

 

62,161,553

 

 

$

-

 

 

 

2,871,894

 

 

$

(26,034

)

 

$

380,617

 

 

$

(134,457

)

 

$

(803

)

 

$

219,323

 

See notes to unaudited condensed consolidated financial statements.

4


VINTAGE WINE ESTATES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

 

 

Nine Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(90,667

)

 

$

(142,353

)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

Depreciation expense

 

 

11,932

 

 

 

11,799

 

Non-cash operating lease expense

 

 

4,229

 

 

 

4,024

 

Amortization expense

 

 

4,830

 

 

 

5,622

 

Amortization of deferred loan fees and line of credit fees

 

 

1,380

 

 

 

574

 

Goodwill and intangible assets impairment losses

 

 

5,102

 

 

 

137,929

 

Stock-based compensation expense

 

 

3,047

 

 

 

5,666

 

Provision for credit losses

 

 

2,045

 

 

 

405

 

Provision for inventory reserves

 

 

32,509

 

 

 

10,131

 

Deferred income tax benefit

 

 

(331

)

 

 

(24,927

)

Loss (gain) on disposition of assets and assets held for sale

 

 

4,442

 

 

 

(1,546

)

Loss on extinguishment of debt

 

 

-

 

 

 

479

 

Remeasurement of contingent consideration liabilities

 

 

(6,273

)

 

 

(