|
For the transition period from
|
|
to
|
|
Delaware
(State or Other Jurisdiction of
|
13-3607383
(I.R.S. Employer
|
Incorporation or Organization)
|
Identification Number)
|
2700 Napa Valley Corporate Drive, Suite B, Napa, California
(Address of Principal Executive Offices)
|
94558
(Zip Code)
|
YES
|
X
|
|
|
NO
|
|
|
YES
|
X
|
|
|
NO
|
|
|
Large accelerated filer ☐
|
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
(Do not check if a smaller reporting company)
|
Smaller reporting company ☐
|
|
|
Emerging growth company ☒
|
YES
|
|
|
|
NO
|
X
|
|
|
|
Page Number
|
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II. OTHER INFORMATION
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,713
|
|
|
$
|
9,792
|
|
Available for sale debt securities
|
16,182
|
|
|
19,956
|
|
||
Accounts receivable, net
|
6,091
|
|
|
3,981
|
|
||
Inventory
|
73,530
|
|
|
75,458
|
|
||
Other current assets
|
1,384
|
|
|
1,328
|
|
||
Assets held for sale
|
638
|
|
|
—
|
|
||
Total current assets
|
108,538
|
|
|
110,515
|
|
||
Property and equipment, net
|
126,555
|
|
|
129,018
|
|
||
Goodwill
|
1,262
|
|
|
1,262
|
|
||
Intangible and other non-current assets, net
|
12,512
|
|
|
13,214
|
|
||
Total non-current assets
|
140,329
|
|
|
143,494
|
|
||
Total assets
|
$
|
248,867
|
|
|
$
|
254,009
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
5,940
|
|
|
$
|
10,323
|
|
Customer deposits
|
683
|
|
|
593
|
|
||
Current portion of long-term debt, net of unamortized loan fees
|
1,125
|
|
|
1,125
|
|
||
Total current liabilities
|
7,748
|
|
|
12,041
|
|
||
Long-term debt, net of current portion and unamortized loan fees
|
22,743
|
|
|
23,305
|
|
||
Deferred rent, non-current
|
43
|
|
|
63
|
|
||
Deferred tax liability
|
4,874
|
|
|
4,881
|
|
||
Total non-current liabilities
|
27,660
|
|
|
28,249
|
|
||
Total liabilities
|
35,408
|
|
|
40,290
|
|
||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
||
Common shares, par value $0.01 per share, 150,000,000 shares authorized; 23,936,008 and 23,997,385 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
239
|
|
|
240
|
|
||
Additional paid-in capital
|
277,520
|
|
|
277,520
|
|
||
Accumulated other comprehensive loss
|
(41
|
)
|
|
(23
|
)
|
||
Accumulated deficit
|
(64,259
|
)
|
|
(64,018
|
)
|
||
Total equity
|
213,459
|
|
|
213,719
|
|
||
Total liabilities and equity
|
$
|
248,867
|
|
|
$
|
254,009
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net sales
|
$
|
17,282
|
|
|
$
|
15,007
|
|
|
$
|
30,511
|
|
|
$
|
29,856
|
|
Cost of sales
|
8,664
|
|
|
7,064
|
|
|
15,538
|
|
|
14,128
|
|
||||
Gross profit
|
8,618
|
|
|
7,943
|
|
|
14,973
|
|
|
15,728
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
4,002
|
|
|
3,903
|
|
|
8,051
|
|
|
7,852
|
|
||||
General and administrative
|
2,623
|
|
|
2,637
|
|
|
5,329
|
|
|
5,225
|
|
||||
Total operating expenses
|
6,625
|
|
|
6,540
|
|
|
13,380
|
|
|
13,077
|
|
||||
Net loss (gain) on disposal of property and equipment
|
94
|
|
|
1
|
|
|
105
|
|
|
(1
|
)
|
||||
Restructuring charges
|
160
|
|
|
—
|
|
|
592
|
|
|
—
|
|
||||
Income from operations
|
1,739
|
|
|
1,402
|
|
|
896
|
|
|
2,652
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(172
|
)
|
|
(47
|
)
|
|
(510
|
)
|
|
(240
|
)
|
||||
Other income, net
|
82
|
|
|
118
|
|
|
77
|
|
|
276
|
|
||||
Total other (expense) income, net
|
(90
|
)
|
|
71
|
|
|
(433
|
)
|
|
36
|
|
||||
Income before income taxes
|
1,649
|
|
|
1,473
|
|
|
463
|
|
|
2,688
|
|
||||
Income tax provision
|
478
|
|
|
575
|
|
|
137
|
|
|
1,041
|
|
||||
Net income
|
$
|
1,171
|
|
|
$
|
898
|
|
|
$
|
326
|
|
|
$
|
1,647
|
|
Basic and fully diluted weighted-average shares outstanding
|
23,972
|
|
|
23,997
|
|
|
23,985
|
|
|
23,997
|
|
||||
Basic and fully diluted earnings per share
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
$
|
0.01
|
|
|
$
|
0.07
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
1,171
|
|
|
$
|
898
|
|
|
$
|
326
|
|
|
$
|
1,647
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding losses on investments arising during the period, net of tax
|
—
|
|
|
(7
|
)
|
|
(18
|
)
|
|
(16
|
)
|
||||
Comprehensive income
|
$
|
1,171
|
|
|
$
|
891
|
|
|
$
|
308
|
|
|
$
|
1,631
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
326
|
|
|
$
|
1,647
|
|
Adjustments to reconcile net income to net cash operations:
|
|
|
|
||||
Depreciation and amortization of property and equipment
|
3,749
|
|
|
3,473
|
|
||
Amortization of intangible assets
|
756
|
|
|
779
|
|
||
Amortization of loan fees
|
8
|
|
|
3
|
|
||
Loss on change in fair value of contingent consideration
|
6
|
|
|
18
|
|
||
Loss on write-down of inventory
|
131
|
|
|
60
|
|
||
Net loss (gain) on disposal of property and equipment
|
105
|
|
|
(1
|
)
|
||
Restructuring charges
|
592
|
|
|
—
|
|
||
Impairment charges
|
24
|
|
|
—
|
|
||
Deferred rent
|
(16
|
)
|
|
(12
|
)
|
||
Net change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(2,110
|
)
|
|
176
|
|
||
Inventory
|
1,797
|
|
|
(292
|
)
|
||
Other current assets
|
(56
|
)
|
|
893
|
|
||
Other non-current assets
|
(13
|
)
|
|
(5
|
)
|
||
Accounts payable and accrued liabilities
|
(4,263
|
)
|
|
(4,977
|
)
|
||
Customer deposits
|
90
|
|
|
166
|
|
||
Net cash provided by operating activities
|
1,126
|
|
|
1,928
|
|
||
Net cash flows from investing activities:
|
|
|
|
|
|
||
Purchase of available for sale debt securities
|
(4,000
|
)
|
|
(2,750
|
)
|
||
Redemptions of available for sale debt securities
|
7,750
|
|
|
6,500
|
|
||
Acquisition of property and equipment
|
(2,666
|
)
|
|
(6,737
|
)
|
||
Proceeds from disposal of property and equipment
|
31
|
|
|
22
|
|
||
Net cash provided by (used in) investing activities
|
1,115
|
|
|
(2,965
|
)
|
||
Net cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
10,000
|
|
||
Principal payments on long-term debt
|
(570
|
)
|
|
(480
|
)
|
||
Repurchase of common stock
|
(568
|
)
|
|
—
|
|
||
Payment of contingent consideration
|
(141
|
)
|
|
(357
|
)
|
||
Payment of loan fees
|
(41
|
)
|
|
(66
|
)
|
||
Net cash (used in) provided by financing activities
|
(1,320
|
)
|
|
9,097
|
|
||
Net increase in cash and cash equivalents
|
921
|
|
|
8,060
|
|
||
Cash and cash equivalents - beginning of period
|
9,792
|
|
|
4,795
|
|
||
Cash and cash equivalents - end of period
|
$
|
10,713
|
|
|
$
|
12,855
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid during the period for:
|
|
|
|
|
|
||
Interest, net of capitalized interest
|
$
|
690
|
|
|
$
|
578
|
|
Income taxes
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing activity:
|
|
|
|
|
|||
Net unrealized holding losses on investments, net of tax
|
$
|
(18
|
)
|
|
$
|
(16
|
)
|
Acquisition of property and equipment accrued but not yet paid
|
$
|
114
|
|
|
$
|
985
|
|
1.
|
Background and Basis of Presentation
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
Standards that are not yet adopted
|
||||||
Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (Subsequently updated with ASU 2018-01)
|
|
Increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.
|
|
January 1, 2019, early adoption is permitted for the Company.
|
|
The Company is currently evaluating the impact of the pending adoption of this new standard on its unaudited interim consolidated financial statements and has yet to determine the overall impact this ASU is expected to have. Management currently anticipates recognizing a right-of-use asset and a lease liability associated with its long-term operating leases.
|
ASU 2017-04, Goodwill and Other (Topic 350)
|
|
Eliminates Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.
|
|
January 1, 2020, early adoption is permitted for the Company.
|
|
Management is currently evaluating the potential impact of this guidance on the Company’s unaudited interim consolidated financial statements.
|
ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220)
|
|
Allows the company to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income into retained earnings.
|
|
January 1, 2019, early adoption is permitted for the Company.
|
|
Management is currently evaluating the potential impact of this guidance on the Company’s unaudited interim consolidated financial statements.
|
Standards that were adopted
|
||||||
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)
(Subsequently updated with ASU 2016-08, ASU 2016-11, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-13 and ASU 2017-14)
|
|
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as amended, which is guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. Topic 606 defines a five step process to require revenue to be recognized when control of goods is transferred to the customer and consideration is expected to be received. ASU 2014-09 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments related to revenue recognition.
|
|
January 1, 2018
|
|
The Company adopted ASU 2014-09 using the modified retrospective method in Q1 2018. Based on the new guidance, the Company will continue to recognize revenue at a particular point in time for its contracts with customers. Therefore, the adoption of ASC 606 did not result in a cumulative-effect adjustment to opening retained earnings. See Note 2 “Revenue,” for further information.
|
ASU 2017-01, Business Combinations (Topic 805)
|
|
Clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.
|
|
January 1, 2018
|
|
The adoption of this standard did not have an impact on the Company’s unaudited interim consolidated financial statements.
|
ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10)
|
|
Requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and updates certain presentation and disclosure requirements.
|
|
January 1, 2018
|
|
The adoption of this standard did not have an impact on the Company’s unaudited interim consolidated financial statements.
|
2.
|
Revenue
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
Outstanding at beginning of period (December 31)
|
$
|
593
|
|
|
$
|
367
|
|
Increase (decrease) attributed to:
|
|
|
|
||||
Upfront payments
|
24,092
|
|
|
23,739
|
|
||
Revenue recognized
|
(24,002
|
)
|
|
(23,573
|
)
|
||
Outstanding at end of period
|
$
|
683
|
|
|
$
|
533
|
|
3.
|
Restructuring
|
|
Balance at December 31, 2017
|
|
Additions
|
|
Payments
|
|
Balance at June 30, 2018
|
||||||||
Severance related costs
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
(47
|
)
|
|
$
|
65
|
|
4.
|
Inventory
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Finished goods
|
$
|
38,770
|
|
|
$
|
40,778
|
|
In-process goods
|
33,782
|
|
|
34,080
|
|
||
Packaging and bottling supplies
|
978
|
|
|
600
|
|
||
Total inventory
|
$
|
73,530
|
|
|
$
|
75,458
|
|
5.
|
Property and Equipment
|
|
Depreciable Lives
|
|
|
|
|
||||
|
(in years)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Land and improvements
|
N/A
|
|
$
|
46,164
|
|
|
$
|
46,566
|
|
Buildings and improvements
|
20-40
|
|
59,300
|
|
|
58,946
|
|
||
Winery and vineyard equipment
|
3-25
|
|
38,062
|
|
|
38,631
|
|
||
Vineyards, orchards and improvements
|
7-25
|
|
36,530
|
|
|
37,090
|
|
||
Caves
|
20-40
|
|
5,639
|
|
|
5,639
|
|
||
Vineyards under development
|
N/A
|
|
2,814
|
|
|
3,353
|
|
||
Construction in progress
|
N/A
|
|
3,471
|
|
|
1,814
|
|
||
Total
|
|
|
191,980
|
|
|
192,039
|
|
||
Accumulated depreciation and amortization
|
|
|
(65,425
|
)
|
|
(63,021
|
)
|
||
Total property and equipment, net
|
|
|
$
|
126,555
|
|
|
$
|
129,018
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Capitalized into inventory
|
|
$
|
1,468
|
|
|
$
|
1,360
|
|
|
$
|
2,932
|
|
|
$
|
2,718
|
|
Expensed to general and administrative
|
|
407
|
|
|
381
|
|
|
817
|
|
|
755
|
|
||||
Total depreciation and amortization
|
|
$
|
1,875
|
|
|
$
|
1,741
|
|
|
$
|
3,749
|
|
|
$
|
3,473
|
|
6.
|
Financial Instruments
|
June 30, 2018
|
Par Value
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Level 1
|
|
Level 2
|
|
Total Fair Value
Measurements
|
||||||||||||||
Certificates of Deposit
|
$
|
16,250
|
|
|
$
|
16,250
|
|
|
$
|
—
|
|
|
$
|
(68
|
)
|
|
$
|
—
|
|
|
$
|
16,182
|
|
|
$
|
16,182
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury Note
|
$
|
6,000
|
|
|
$
|
6,000
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
5,999
|
|
|
$
|
—
|
|
|
$
|
5,999
|
|
Certificates of Deposit
|
14,000
|
|
|
14,000
|
|
|
2
|
|
|
(45
|
)
|
|
—
|
|
|
13,957
|
|
|
13,957
|
|
|||||||
Total
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
$
|
2
|
|
|
$
|
(46
|
)
|
|
$
|
5,999
|
|
|
$
|
13,957
|
|
|
$
|
19,956
|
|
7.
|
Intangible and Other Non-Current Assets
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Amortizable lives
(in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net book value
|
||||||||||||
Brand
|
15 - 17
|
|
$
|
18,000
|
|
|
$
|
7,373
|
|
|
$
|
10,627
|
|
|
$
|
18,000
|
|
|
$
|
6,841
|
|
|
$
|
11,159
|
|
Distributor relationships
|
10 - 14
|
|
2,700
|
|
|
1,340
|
|
|
1,360
|
|
|
2,700
|
|
|
1,242
|
|
|
1,458
|
|
||||||
Customer relationships
|
7
|
|
1,900
|
|
|
1,900
|
|
|
—
|
|
|
1,900
|
|
|
1,787
|
|
|
113
|
|
||||||
Legacy permits
|
14
|
|
250
|
|
|
126
|
|
|
124
|
|
|
250
|
|
|
118
|
|
|
132
|
|
||||||
Trademark
|
20
|
|
200
|
|
|
98
|
|
|
102
|
|
|
200
|
|
|
93
|
|
|
107
|
|
||||||
Total
|
|
|
$
|
23,050
|
|
|
$
|
10,837
|
|
|
$
|
12,213
|
|
|
$
|
23,050
|
|
|
$
|
10,081
|
|
|
$
|
12,969
|
|
Other non-current assets
|
|
|
|
|
|
|
299
|
|
|
|
|
|
|
|
245
|
|
|||||||||
Total intangible and other non-current assets, net
|
|
|
|
|
|
|
$
|
12,512
|
|
|
|
|
|
|
|
$
|
13,214
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
Amortization expense
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Total amortization expense
|
|
|
|
|
|
|
$
|
366
|
|
|
$
|
390
|
|
|
$
|
756
|
|
|
$
|
779
|
|
|
Amortization
|
||
Remainder of 2018
|
$
|
646
|
|
2019
|
1,286
|
|
|
2020
|
1,286
|
|
|
2021
|
1,286
|
|
|
2022
|
1,286
|
|
|
Thereafter
|
6,423
|
|
|
Total
|
$
|
12,213
|
|
8.
|
Accounts Payable and Accrued Liabilities
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Accrued compensation related expenses
|
$
|
2,156
|
|
|
$
|
5,412
|
|
Accounts payable
|
1,185
|
|
|
2,225
|
|
||
Sales and marketing
|
507
|
|
|
324
|
|
||
Production and farming
|
403
|
|
|
307
|
|
||
Litigation settlement accrual
|
390
|
|
|
390
|
|
||
Accrued interest
|
317
|
|
|
324
|
|
||
Depletion allowance
|
195
|
|
|
608
|
|
||
Contingent liability related to Seven Hills Winery
|
140
|
|
|
308
|
|
||
Acquisition of property and equipment
|
114
|
|
|
264
|
|
||
Other accrued expenses
|
533
|
|
|
161
|
|
||
Total accounts payable and accrued liabilities
|
$
|
5,940
|
|
|
$
|
10,323
|
|
9.
|
Debt
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
|
|
||||||||||||||||||||
|
|
Current
|
|
Long-term
|
|
Total
|
|
Current
|
|
Long-term
|
|
Total
|
|
Interest Rate
|
|
Maturity Date
|
||||||||||||
2015 Term Loan
|
|
$
|
640
|
|
|
$
|
13,760
|
|
|
$
|
14,400
|
|
|
$
|
640
|
|
|
$
|
14,080
|
|
|
$
|
14,720
|
|
|
5.24%
|
|
October 1, 2040
|
2017 Term Loan
|
|
500
|
|
|
9,125
|
|
|
9,625
|
|
|
500
|
|
|
9,375
|
|
|
9,875
|
|
|
5.39%
|
|
July 1, 2037
|
||||||
Total debt
|
|
1,140
|
|
|
22,885
|
|
|
24,025
|
|
|
1,140
|
|
|
23,455
|
|
|
24,595
|
|
|
|
|
|
||||||
Unamortized loan fees
|
|
(15
|
)
|
|
(142
|
)
|
|
(157
|
)
|
|
(15
|
)
|
|
(150
|
)
|
|
(165
|
)
|
|
|
|
|
||||||
Total debt, net of unamortized loan fees
|
|
$
|
1,125
|
|
|
$
|
22,743
|
|
|
$
|
23,868
|
|
|
$
|
1,125
|
|
|
$
|
23,305
|
|
|
$
|
24,430
|
|
|
|
|
|
10.
|
Stockholders’ Equity
|
11.
|
Income Taxes
|
12.
|
Business Segment Information
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||||||||||
|
Wholesale
|
|
Direct to Consumer
|
|
Other/Non-Allocable
|
|
Total
|
||||||||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Net sales
|
$
|
9,956
|
|
|
$
|
7,807
|
|
|
$
|
6,127
|
|
|
$
|
6,036
|
|
|
$
|
1,199
|
|
|
$
|
1,164
|
|
|
$
|
17,282
|
|
|
$
|
15,007
|
|
Cost of sales
|
5,469
|
|
|
4,332
|
|
|
1,999
|
|
|
1,912
|
|
|
1,196
|
|
|
820
|
|
|
8,664
|
|
|
7,064
|
|
||||||||
Gross profit
|
4,487
|
|
|
3,475
|
|
|
4,128
|
|
|
4,124
|
|
|
3
|
|
|
344
|
|
|
8,618
|
|
|
7,943
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
1,485
|
|
|
1,441
|
|
|
1,609
|
|
|
1,709
|
|
|
908
|
|
|
753
|
|
|
4,002
|
|
|
3,903
|
|
||||||||
General and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,623
|
|
|
2,637
|
|
|
2,623
|
|
|
2,637
|
|
||||||||
Total operating expenses
|
1,485
|
|
|
1,441
|
|
|
1,609
|
|
|
1,709
|
|
|
3,531
|
|
|
3,390
|
|
|
6,625
|
|
|
6,540
|
|
||||||||
Net loss on disposal of property and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
1
|
|
|
94
|
|
|
1
|
|
||||||||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||||||
Income (loss) from operations
|
$
|
3,002
|
|
|
$
|
2,034
|
|
|
$
|
2,519
|
|
|
$
|
2,415
|
|
|
$
|
(3,782
|
)
|
|
$
|
(3,047
|
)
|
|
$
|
1,739
|
|
|
$
|
1,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||
|
Wholesale
|
|
Direct to Consumer
|
|
Other/Non-Allocable
|
|
Total
|
||||||||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Net sales
|
$
|
17,446
|
|
|
$
|
16,828
|
|
|
$
|
11,130
|
|
|
$
|
11,131
|
|
|
$
|
1,935
|
|
|
$
|
1,897
|
|
|
$
|
30,511
|
|
|
$
|
29,856
|
|
Cost of sales
|
9,979
|
|
|
9,164
|
|
|
3,652
|
|
|
3,429
|
|
|
1,907
|
|
|
1,535
|
|
|
15,538
|
|
|
14,128
|
|
||||||||
Gross profit
|
7,467
|
|
|
7,664
|
|
|
7,478
|
|
|
7,702
|
|
|
28
|
|
|
362
|
|
|
14,973
|
|
|
15,728
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
3,165
|
|
|
3,110
|
|
|
3,126
|
|
|
3,198
|
|
|
1,760
|
|
|
1,544
|
|
|
8,051
|
|
|
7,852
|
|
||||||||
General and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,329
|
|
|
5,225
|
|
|
5,329
|
|
|
5,225
|
|
||||||||
Total operating expenses
|
3,165
|
|
|
3,110
|
|
|
3,126
|
|
|
3,198
|
|
|
7,089
|
|
|
6,769
|
|
|
13,380
|
|
|
13,077
|
|
||||||||
Net loss (gain) on disposal of property and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
(1
|
)
|
|
105
|
|
|
(1
|
)
|
||||||||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
592
|
|
|
—
|
|
|
592
|
|
|
—
|
|
||||||||
Income (loss) from operations
|
$
|
4,302
|
|
|
$
|
4,554
|
|
|
$
|
4,352
|
|
|
$
|
4,504
|
|
|
$
|
(7,758
|
)
|
|
$
|
(6,406
|
)
|
|
$
|
896
|
|
|
$
|
2,652
|
|
13.
|
Commitments and Contingencies
|
|
Three Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase
|
|
% change
|
||||||
Wholesale
|
$
|
9,956
|
|
|
$
|
7,807
|
|
|
$
|
2,149
|
|
|
28%
|
Direct to Consumer
|
6,127
|
|
|
6,036
|
|
|
91
|
|
|
2%
|
|||
Other
|
1,199
|
|
|
1,164
|
|
|
35
|
|
|
3%
|
|||
Total net sales
|
$
|
17,282
|
|
|
$
|
15,007
|
|
|
$
|
2,275
|
|
|
15%
|
|
Three Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% change
|
||||||
Wholesale
|
$
|
4,487
|
|
|
$
|
3,475
|
|
|
$
|
1,012
|
|
|
29%
|
Wholesale gross margin percentage
|
45
|
%
|
|
45
|
%
|
|
|
|
|
|
|||
Direct to Consumer
|
4,128
|
|
|
4,124
|
|
|
4
|
|
|
—%
|
|||
Direct to Consumer gross margin percentage
|
67
|
%
|
|
68
|
%
|
|
|
|
|
|
|||
Other
|
3
|
|
|
344
|
|
|
(341
|
)
|
|
(99)%
|
|||
Total gross profit
|
$
|
8,618
|
|
|
$
|
7,943
|
|
|
$
|
675
|
|
|
8%
|
Total gross margin percentage
|
50
|
%
|
|
53
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% change
|
||||||
Sales and marketing
|
$
|
4,002
|
|
|
$
|
3,903
|
|
|
$
|
99
|
|
|
3%
|
General and administrative
|
2,623
|
|
|
2,637
|
|
|
(14
|
)
|
|
(1)%
|
|||
Total operating expenses
|
$
|
6,625
|
|
|
$
|
6,540
|
|
|
$
|
85
|
|
|
1%
|
|
Three Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% change
|
||||||
Interest expense, net
|
$
|
(172
|
)
|
|
$
|
(47
|
)
|
|
$
|
125
|
|
|
266%
|
Other income, net
|
82
|
|
|
118
|
|
|
(36
|
)
|
|
(31)%
|
|||
Total other (expense) income
|
$
|
(90
|
)
|
|
$
|
71
|
|
|
$
|
161
|
|
|
227%
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% change
|
||||||
Wholesale
|
$
|
17,446
|
|
|
$
|
16,828
|
|
|
$
|
618
|
|
|
4%
|
Direct to Consumer
|
11,130
|
|
|
11,131
|
|
|
(1
|
)
|
|
—%
|
|||
Other
|
1,935
|
|
|
1,897
|
|
|
38
|
|
|
2%
|
|||
Total net sales
|
$
|
30,511
|
|
|
$
|
29,856
|
|
|
$
|
655
|
|
|
2%
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Decrease
|
|
% change
|
||||||
Wholesale
|
$
|
7,467
|
|
|
$
|
7,664
|
|
|
$
|
(197
|
)
|
|
(3)%
|
Wholesale gross margin percentage
|
43
|
%
|
|
46
|
%
|
|
|
|
|
|
|||
Direct to Consumer
|
7,478
|
|
|
7,702
|
|
|
(224
|
)
|
|
(3)%
|
|||
Direct to Consumer gross margin percentage
|
67
|
%
|
|
69
|
%
|
|
|
|
|
|
|||
Other
|
28
|
|
|
362
|
|
|
(334
|
)
|
|
(92)%
|
|||
Total gross profit
|
$
|
14,973
|
|
|
$
|
15,728
|
|
|
$
|
(755
|
)
|
|
(5)%
|
Total gross margin percentage
|
49
|
%
|
|
53
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase
|
|
% change
|
||||||
Sales and marketing
|
$
|
8,051
|
|
|
$
|
7,852
|
|
|
$
|
199
|
|
|
3%
|
General and administrative
|
5,329
|
|
|
5,225
|
|
|
104
|
|
|
2%
|
|||
Total operating expenses
|
$
|
13,380
|
|
|
$
|
13,077
|
|
|
$
|
303
|
|
|
2%
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
2018
|
|
2017
|
|
Increase (Decrease)
|
|
% change
|
||||||
Interest expense, net
|
$
|
(510
|
)
|
|
$
|
(240
|
)
|
|
$
|
270
|
|
|
113%
|
Other income, net
|
77
|
|
|
276
|
|
|
(199
|
)
|
|
(72)%
|
|||
Total other (expense) income
|
$
|
(433
|
)
|
|
$
|
36
|
|
|
$
|
469
|
|
|
1,303%
|
Cash provided by (used in):
|
2018
|
|
2017
|
||||
Operating activities
|
$
|
1,126
|
|
|
$
|
1,928
|
|
Investing activities
|
1,115
|
|
|
(2,965
|
)
|
||
Financing activities
|
(1,320
|
)
|
|
9,097
|
|
Fiscal Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plan (millions)
|
||||||
April 1-30, 2018
|
|
10,690
|
|
|
$
|
9.22
|
|
|
10,690
|
|
|
$
|
1.9
|
|
May 1-31, 2018
|
|
25,467
|
|
|
9.21
|
|
|
36,157
|
|
|
1.7
|
|
||
June 1-30, 2018
|
|
25,220
|
|
|
9.29
|
|
|
61,377
|
|
|
1.4
|
|
||
Total
|
|
61,377
|
|
|
|
|
|
|
|
|
|
|
CRIMSON WINE GROUP, LTD.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
August 8, 2018
|
By:
|
/s/ Karen L. Diepholz
|
|
|
|
|
Karen L. Diepholz
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
/s/ Patrick DeLong
|
|
Patrick DeLong
|
|
President Chief Executive Officer
|
|
/s/ Karen Diepholz
|
Date:
|
June 1, 2018
|
|
Karen Diepholz
|
|
|
|
Signature:
|
/s/ Karen Diepholz
|
Date:
|
June 1, 2018
|
|
|
Karen Diepholz
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 8, 2018
|
|
/s/ Patrick M. DeLong
|
|
|
|
Patrick M. DeLong
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
Date:
|
August 8, 2018
|
|
/s/ Karen L. Diepholz
|
|
|
|
Karen L. Diepholz
|
|
|
|
Chief Financial Officer
|
Date: August 8, 2018
|
|
By: /s/ Patrick M. DeLong
|
|
|
Patrick M. DeLong
|
|
|
President and Chief Executive Officer
|
Date: August 8, 2018
|
|
By: /s/ Karen L. Diepholz
|
|
|
Karen L. Diepholz
|
|
|
Chief Financial Officer
|