- Leadership accelerating efforts to streamline business model
with focus on branded Super Premium+ wine and cider across
wholesale and direct-to-consumer (“DTC”) channels
- Measurable progress on monetization of non-core production
services and stand-alone DTC platforms to support debt
reduction
- Lenders aligned on turnaround and restructuring plan;
forbearance agreement provides time for amendment discussions
- Planning to report second quarter fiscal 2024 results on March
12, 2024
Vintage Wine Estates, Inc. (Nasdaq: VWE and VWEWW) (“VWE” or the
“Company”), one of the top wine producers in the U.S., today
provided an update on the business to include its progress with
restructuring and asset sales, discussions with its lenders and
financial reporting timing expectations.
Streamlined business offers commercial/operational focus and
improved financial profile, supported by divestment of high-cost
operations
Seth Kaufman, President and CEO of Vintage Wine Estates,
commented, “To reposition VWE as an omnichannel wine and cider
company that offers the highest quality Super Premium+ products in
the U.S., we are aggressively advancing on our top priorities
to:
- improve profitability and build a strong go-to-market
capability that supports differentiated brands,
- sell non-core assets to measurably reduce debt, and
- optimize operations to improve cash generation.
We are actively executing against our planned roadmap to engage
potential acquirers for our stand-alone DTC and certain production
services businesses, in addition to other assets. This will
generate needed focus and allow us to strategically deploy our
resources to support a unique branded wine and cider business which
we believe can offer accelerated top-line growth, gains in market
share, expanded margins, and improved cash generation. We
anticipate that selling these non-core assets with unfavorable cost
structures will materially reduce operating expenses and help
transform VWE into a much smaller, but more profitable business,
that can consistently generate cash. And, perhaps most importantly,
these actions can allow us to return our focus to developing and
scaling unique brands that delight consumers with highly-rated
wines and ciders.”
Sale of assets update
The Company retained Oppenheimer & Co. in January 2024 to
aggressively pursue the sale of several assets and to date has
received numerous attractive bids as well as a non-binding letter
of intent. The Company believes it is well positioned to close
certain of these transactions over the next few months. There is
also an ongoing evaluation of interest in other assets, which could
be opportunistically sold if offers exceed valuation and return
hurdles.
Mr. Kaufmann noted, “The level of interest in our non-core
businesses and other assets has exceeded our expectations in terms
of the quantity and quality of discussions. We remain optimistic in
our ability to monetize these assets, which will allow us to pay
down debt and increase liquidity.”
Forbearance agreement with lenders
The Company also announced that its plans to reorganize and
dispose of certain assets through sales were accepted by its lender
group. The lender group subsequently provided an agreement to
forbear exercising their rights and remedies under the Second
Amended and Restated Loan and Security Agreement as amended on
October 12, 2023 (the “Second A&R Loan and Security
Agreement”), in respect of, or arising out of, certain defaults
under the Second A&R Loan and Security Agreement until the
earlier of March 31, 2024 or in the event of any other event of
default other than those designated in the agreement. The Second
A&R Loan and Security Agreement currently has principal amounts
outstanding of $324.3 million as of February 29, 2024. The
forbearance agreement provides flexibility for the Company to
continue executing the previously announced restructuring and
transformation while working with its lenders on an amended credit
agreement.
Kristina L. Johnston, Chief Financial Officer of VWE, commented,
“Our lenders remain fully engaged with us and we appreciate the
progress we are making with discussions to further amend our credit
agreement to reflect our current business operations as we execute
our restructuring roadmap and advance asset sales.”
The Company will provide an update when further disclosure is
required or otherwise appropriate.
Second quarter fiscal 2024 financial results timing
As previously announced, the Company has not yet filed its
financial results for the period ended December 31, 2023. It
expects to report these results and file its Form 10-Q on March 12,
2024.
About Vintage Wine Estates, Inc.
Vintage Wine Estates (Nasdaq: VWE and VWEWW) is reimagining
itself to become a leading wine and cider company that makes the
highest quality, Super Premium+ wines and ciders that are
accessible and approachable for consumers. Its vision is to be a
growing, highly profitable omnichannel business with a
consumer-centric culture. VWE has a family of estate wineries in
Napa, Sonoma, California’s Central Coast, Oregon, and Washington
State with valuable heritage and offerings. Through its Five-Point
Plan and its strategy to reimagine the future of VWE, the Company
is simplifying its offering to ACE Cider, three leading lifestyle
brands (Bar Dog, Cherry Pie and Layer Cake) and key estate wines
including B.R. Cohn, Firesteed, Girard, Kunde and Laetitia as well
as several other heritage estate brands. Its primary focus is on
the Super Premium+ segment of the U.S. wine industry defined as
$15+ per bottle. The Company regularly posts updates and additional
information at ir.vintagewineestates.com.
Forward-Looking Statements
Some of the statements contained in this press release are
forward-looking statements within the meaning of applicable
securities laws (collectively, “forward-looking statements”).
Forward-looking statements are all statements other than those of
historical fact, and generally may be identified by the use of
words such as “anticipate,” “believe,” “expect,” “future,” “plan,”
“will,” or other similar expressions that indicate future events or
trends. These forward-looking statements include, but are not
limited to statements regarding VWE’s business strategies; the
ability of VWE’s business strategies to offer accelerated top-line
growth, gains in market share, expanded margins, and improved cash
generation; the ability of the efforts to divest non-core assets,
and for such efforts to measurably reduce debt; the ability of
Oppenheimer & Co. to accelerate the VWE’s monetization efforts
through the divestment of non-core assets; the ability of selling
non-core assets to help transform VWE into a smaller, but more
profitable business that can consistently generate cash; any
interest or opportunities related to other assets of the Company;
the benefits and timing of the forbearance agreement with VWE’s
lenders; the discussions with VWE’s lenders and the possibility for
a future amendment to the Second A&R Loan and Security
Agreement; and the anticipated timing of the filing of VWE’s
results for the second quarter ended December 31, 2023. These
statements are based on various assumptions, whether or not
identified in this news release, and on the current expectations of
VWE’s management. These forward-looking statements are not intended
to serve as, and should not be relied on by any investor as, a
guarantee of actual performance or an assurance or definitive
statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and may differ materially
from those contained in or implied by such forward-looking
statements. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond the
control of VWE. Factors that could cause actual results to differ
materially from the results expressed or implied by such
forward-looking statements include, among others: the Company’s
limited experience operating as a public company; the Company’s
ability to complete its closing procedures for the quarter ended
December 31, 2023 within the anticipated timeframe; the ability of
the Company to regain compliance with Nasdaq continued listing
requirements; the time and expense associated with any necessary
remediation of control deficiencies; the ability of the Company to
effectively execute its strategic plans to reimagine the Company;
the Company’s ability to deleverage within the anticipated time
frame or at all and its ability to regain compliance with the
covenants in its credit agreement, or satisfy its other contractual
arrangements, including the forbearance agreement with its lenders;
the ability of the Company to retain key personnel; the effect of
economic conditions on the industries and markets in which VWE
operates, including financial market conditions, rising inflation,
fluctuations in prices, interest rates and market demand; the
effects of competition on VWE’s future business; the potential
adverse effects of health pandemics, epidemics or contagious
diseases on VWE’s business and the U.S. and world economy; declines
or unanticipated changes in consumer demand for VWE’s products;
disruption of supply or shortage of energy; VWE’s ability to
adequately source grapes and other raw materials and any increase
in the cost of such materials; the impact of environmental
catastrophe, natural disasters, disease, pests, weather conditions
and inadequate water supply on VWE’s business; VWE’s level of
insurance against catastrophic events and losses; impacts from
climate change and related government regulations; VWE’s
significant reliance on its distribution channels, including
independent distributors, particularly in its wholesale operations;
a loss or significant decline of sales to important distributors,
marketing companies, or retailers; risks associated with new lines
of business or products; potential reputational harm to VWE’s
brands from internal and external sources; decline in consumer
sentiment to purchase wine through VWE’s direct-to-consumer
channels; possible decreases in VWE’s wine quality ratings;
integration risks associated with recent or future acquisitions;
possible litigation relating to misuse or abuse of alcohol; changes
in applicable laws and regulations and the significant expense to
VWE of operating in a highly regulated industry; VWE’s ability to
maintain necessary licenses; VWE’s ability to protect its
trademarks and other intellectual property rights; risks associated
with the Company’s information technology and ability to maintain
and protect personal information; VWE’s ability to make payments on
its indebtedness; risks that the Company is unable to meet the
additional restrictions and obligations imposed by its amended
credit agreement; and those factors discussed in the Company’s most
recent Annual Report on Form 10-K and in subsequent Quarterly
Reports on Form 10-Q or other reports filed with the Securities and
Exchange Commission. There may be additional risks including other
adjustments that VWE does not presently know or that VWE currently
believes are immaterial that could also cause actual results to
differ from those expressed in or implied by these forward-looking
statements. In addition, forward-looking statements reflect VWE’s
expectations, plans or forecasts of future events and views as of
the date and time of this news release. VWE undertakes no
obligation to update or revise any forward-looking statements
contained herein, except as may be required by law. Accordingly,
undue reliance should not be placed upon these forward-looking
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240305812394/en/
Investors Deborah K. Pawlowski Kei Advisors LLC
dpawlowski@keiadvisors.com Phone: 716.843.3908
Vintage Wine Estates (NASDAQ:VWE)
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