Truett-Hurst, Inc. Reports Second Quarter and First Half Fiscal 2017 Results

HEALDSBURG, Calif., Feb. 8, 2017 /PRNewswire/ -- Truett-Hurst, Inc. THST, which operates an innovative super-premium and ultra-premium wine sales, marketing, and production company based in the acclaimed Dry Creek and Russian River Valleys of Sonoma County, California, reported results for the second quarter of fiscal 2017 which ended on December 31, 2016.

First Half FY17 vs. FY16
For the six months ended December 31, 2016, total net sales from continuing operations decreased 21.9% compared to the same period in the prior year and totaled $11.6 million.  Consolidated gross margin from continuing operations was 33.3%, an increase of 1.1 margin points over the prior year.

Wholesale

• Net Sales of $8.5 million (-29.3% or $3.5 million)
• Gross Margin of 22.0% (a decrease of 2.1 margin points)
• Gross Profit of $1.9 million (-$1.0 million)

Direct to Consumer (DTC)

• Net Sales of $3.2 million (+8.4% or $0.2 million)
• Gross Margin of 63.5% (a decrease of 1.7 margin points)
• Gross Profit of $2.0 million (+$0.1 million)

Operating Expenses
Operating expenses for the six months ended December 31, 2016 were $4.2 million compared to $4.4 million in the same period in the prior year, though the expenses expressed as a percentage of net sales increased due to the net sales shortfall. Sales and marketing expenses decreased $0.2 million, 22.4% of net sales vs 19.0% from the prior year period. General and administrative expenses decreased $0.1 million, 13.1% of net sales vs 10.8% from the prior year period.

Second Quarter FY17 vs. FY16
For the three months ended December 31, 2016, total net sales from continuing operations decreased 33% compared to the same periods in the prior year and totaled $5.7 million.  Consolidated gross margin from continuing operations was 35.5%, an increase of 4.5 margin points over the prior year. 

Wholesale

• Net Sales of $4.0 million (-42.3% or $2.9 million)
• Gross Margin of 22.4% (a decrease of 0.7 margin points)
• Gross Profit of $.9 million (-$0.7 million)

Direct to Consumer (DTC)

• Net Sales of $1.8 million (+8% or $0.1 million)
• Gross Margin of 64.4% (an increase of 0.3 margin points)
• Gross Profit of $1.2 million (+$0.1 million)

Operating Expenses
Operating expenses for the three months ended December 31, 2016 were flat compared to the same period in the prior year. 

"Consistent with our earlier guidance," commented Phillip L. Hurst, Truett-Hurst, Inc.'s President and CEO, "Our sales were lower in the first half of FY17 compared to FY16 due to our product mix and a non-recurring launch by a large US retailer."

Earnings Call
Truett-Hurst, Inc.'s management will host a conference on February 8, 2017, at 1:30 p.m. PT (4:30 p.m. ET) to discuss the Company's financial results.  To listen to the conference call, dial in approximately ten minutes before the scheduled call to 1.888.347.6082 or international at 1.412.902.4286 and request Truett-Hurst, Inc.'s Fiscal 2017 Second Quarter Results Call, or visit our webcast link: https://www.webcaster4.com/Webcast/Page/1132/19356.

A supporting presentation, in advance of the conference call, will be available at:

http://www.truetthurstinc.com

To listen to a replay of the call, dial US Toll Free:  1.877.344.7529 or International Toll: 1.412.317.0088 and enter the replay access code 10100030.  The call will be available one hour after the end of the conference call through February 15, 2017 at 9:00 am ET.  

About Truett-Hurst, Inc.
Truett-Hurst, Inc. THST www.truetthurstinc.com)) is a holding company and its sole asset is the controlling equity interest in H.D.D. LLC., an innovative and fast-growing super-premium, ultra-premium and luxury wine sales, marketing and production company based in the acclaimed Dry Creek and Russian River Valleys of Sonoma County, California. Truett-Hurst, Inc. is headquartered in Healdsburg, California.

Forward-Looking Statements
This press release and our earnings conference call for the quarter ended December 31, 2016 contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, that are made as of the date of this press release based upon our current expectations.  All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenue, projected costs, prospects, plans, opportunities, and objectives constitute "forward-looking statements."  The words "may," "will," "expect," "intend," "plan," "anticipate," "believe," "estimate," "potential" or "continue" and similar types of expressions identify such statements, although not all forward-looking statements contain these identifying words.  Such forward-looking statements include expectations regarding revenue, income, expenses, for the period ended December 31, 2016.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Important factors that could cause such differences include, but are not limited to, a reduction in the supply of grapes and bulk wine available to us; significant competition; any change in our relationships with retailers which could harm our business; we may not achieve or maintain profitability in the future; the loss of key employees; a reduction in our access to, or an increase in the cost of, the third-party services we use to produce our wine; credit facility restrictions on our current and future operations; failure to protect, or infringement of, trademarks and proprietary rights; these factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report.  For additional information, see our Annual Report on Form 10-K filed on September 28, 2016, or our other reports currently on file with the Securities and Exchange Commission, which contain a more detailed discussion of risks and uncertainties that may affect future results.  We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

 

 

 

For more information, contact:                                    
Truett-Hurst, Inc.
Evan B. Meyer,                                                                        
Chief Financial Officer              
Phone: 707.431.4423                                                                
Fax: 707.395.0289                                                                    
Email: evan@truetthurstinc.com

 

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SOURCE Truett-Hurst, Inc.