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SALINAS, Calif., July 24, 2024 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) announced today its financial results for the three months ended May 31, 2024 (first quarter of fiscal 2025).
Scott Scheid, President and CEO, commented, "There's no doubt that it's been a challenging market for both cased goods and bulk wine. I'm proud of the significant efforts our team has undertaken to do more with less, highlighted by our first quarter results showing a modest increase in sales of 4% while achieving double-digit decreases in sales, marketing and G&A expenses. These efforts are ongoing. Continuous improvement is one of our core values and our teams come to work each day looking for opportunities to improve the way we do business."
Mr. Scheid continued, "We've also made progress with our lenders and recently executed forbearance agreements with both of them. We are working diligently with them to provide a consistent flow of information as we seek to extend the forbearance period beyond its initial term of July 31, 2024."
Financial Results
Total revenues increased 4%, to $15.0 million for the three months ended May 31, 2024, from $14.4 million in fiscal 2024. Cased goods sales increased 1%, to $11.0 million in the first three months of fiscal 2025, from $10.9 million in fiscal 2024. In addition, the Company's winery processing and storage revenues increased 12%, to $1.1 million from $0.8 million, and bulk wine sales remained flat at $1.8 million. Gross margins increased to 26% in the fiscal 2025 period, as compared to 21% in fiscal 2024.
Sales and marketing expenses decreased 10%, to $2.7 million, from $3.0 million, and general and administrative expenses decreased 10%, to $1.7 million, from $1.9 million, as the Company continues its cost cutting efforts.
During the first quarter of fiscal 2025, the Company recognized revenue of $3.6 million from proceeds received from the dissolution of a winery processing agreement.
Interest expense rose 27%, to $1.9 million, from $1.5 million, due to increases in interest rates on the Company's variable rate debt. Average interest rates on Company debt increased to 6.8% for fiscal 2025, from 5.9% for fiscal 2024.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $4.5 million, from a loss of $0.1 million.
In total, the Company reported net income of $0.9 million for the three months ended May 31, 2024, compared to a net loss of $2.4 million for the three months ended May 31, 2024.