Cover Page
Cover Page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 09, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-54866 | ||
Entity Registrant Name | CRIMSON WINE GROUP, LTD. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-3607383 | ||
Entity Address, Address Line One | 5901 Silverado Trail | ||
Entity Address, City or Town | Napa | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94558 | ||
City Area Code | 800 | ||
Local Phone Number | 486-0503 | ||
Title of 12(g) Security | Common Stock, par value $0.01 per share | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 95,389 | ||
Entity Common Stock, Shares Outstanding | 23,243,476 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Central Index Key | 0001562151 | ||
No Trading Symbol Flag | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 29,314 | $ 12,986 |
Investments available for sale | 8,507 | 10,006 |
Accounts receivable, net | 7,906 | 10,131 |
Inventory | 57,554 | 69,464 |
Other current assets | 2,349 | 1,904 |
Assets held for sale | 555 | 2,383 |
Total current assets | 106,185 | 106,874 |
Property and equipment, net | 113,683 | 119,112 |
Goodwill | 1,262 | 1,262 |
Intangible assets and other non-current assets, net | 9,238 | 10,950 |
Total non-current assets | 124,183 | 131,324 |
Total assets | 230,368 | 238,198 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 9,419 | 10,368 |
Customer deposits | 270 | 405 |
Current portion of long-term debt, net of unamortized loan fees | 3,388 | 1,127 |
Total current liabilities | 13,077 | 11,900 |
Long-term debt, net of current portion and unamortized loan fees | 21,201 | 21,054 |
Deferred tax liability, net | 477 | 3,090 |
Other non-current liabilities | 93 | 255 |
Total non-current liabilities | 21,771 | 24,399 |
Total liabilities | 34,848 | 36,299 |
Commitments and Contingencies (Note 15) | ||
Equity | ||
Common shares | 232 | 232 |
Additional paid-in capital | 277,550 | 277,522 |
Accumulated other comprehensive income | 13 | 12 |
Accumulated deficit | (82,275) | (75,867) |
Total equity | 195,520 | 201,899 |
Total liabilities and equity | $ 230,368 | $ 238,198 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common shares, shares issued (in shares) | 23,243,476 | 23,243,476 |
Common shares, shares outstanding (in shares) | 23,243,476 | 23,243,476 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 64,108 | $ 67,135 |
Cost of sales | 44,416 | 42,026 |
Gross profit | 19,692 | 25,109 |
Operating expenses: | ||
Sales and marketing | 14,250 | 17,956 |
General and administrative | 11,369 | 11,792 |
Total operating expenses | 25,619 | 29,748 |
Net loss on disposal of property and equipment | 175 | 203 |
Restructuring costs | 1,424 | 76 |
Impairment charges | 1,347 | 2,193 |
Loss from operations | (8,873) | (7,111) |
Other (expense) income: | ||
Interest expense, net | (1,094) | (1,061) |
Other income, net | 472 | 433 |
Total other expense, net | (622) | (628) |
Loss before income taxes | (9,495) | (7,739) |
Income tax benefit | (3,087) | (2,073) |
Net loss | $ (6,408) | $ (5,666) |
Basic and fully diluted weighted-average shares outstanding (in shares) | 23,243 | 23,513 |
Basic and fully diluted loss per share (in dollars per share) | $ (0.28) | $ (0.24) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Losses - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (6,408) | $ (5,666) |
Other comprehensive income (loss): | ||
Net unrealized holding gains on investments arising during the period, net of tax | 1 | 31 |
Comprehensive loss | $ (6,407) | $ (5,635) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net cash flows from operating activities: | ||
Net loss | $ (6,408) | $ (5,666) |
Adjustments to reconcile net loss to net cash provided by operations: | ||
Depreciation and amortization of property and equipment | 6,981 | 7,620 |
Amortization of intangible assets | 1,286 | 1,287 |
Loss on write-down of inventory | 6,434 | 2,038 |
Provision for doubtful accounts | 187 | 89 |
Net loss on disposal of property and equipment | 175 | 203 |
Restructuring costs | 1,424 | 76 |
Impairment charges | 1,380 | 2,244 |
Benefit for deferred income tax | (2,614) | (1,730) |
Stock-based compensation | 28 | 2 |
Net change in operating assets and liabilities: | ||
Accounts receivable | 2,038 | (2,935) |
Inventory | 5,476 | 2,811 |
Other current assets | (445) | 51 |
Other non-current assets | 180 | (377) |
Accounts payable and accrued liabilities | (2,247) | (2,352) |
Customer deposits and other payables | (122) | 49 |
Other non-current liabilities | (162) | 232 |
Net cash provided by operating activities | 13,591 | 3,642 |
Net cash flows from investing activities | ||
Purchase of investments available for sale | (8,500) | (10,000) |
Redemption of investments available for sale | 10,000 | 19,250 |
Acquisition of property and equipment | (3,103) | (5,355) |
Proceeds from disposals of property and equipment | 1,945 | 818 |
Net cash provided by investing activities | 342 | 4,713 |
Net cash flows from financing activities: | ||
Proceeds from PPP term loan | 3,820 | 0 |
Principal payments on long-term debt | (1,425) | (1,140) |
Payment of contingent consideration | 0 | (112) |
Repurchase of common stock | 0 | (3,493) |
Net cash provided by (used in) financing activities | 2,395 | (4,745) |
Net increase in cash and cash equivalents | 16,328 | 3,610 |
Cash and cash equivalents - beginning of year | 12,986 | 9,376 |
Cash and cash equivalents - end of year | 29,314 | 12,986 |
Cash paid during the period for: | ||
Interest, net of capitalized interest | 1,558 | 1,313 |
Income tax payments, net | 0 | 0 |
Non-cash investing activity: | ||
Unrealized holding gains on investments, net of tax | 1 | 31 |
Acquisition of property and equipment accrued but not yet paid | $ 35 | $ 157 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In-Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2018 | 23,714,208 | ||||
Balance at Dec. 31, 2018 | $ 211,025 | $ 237 | $ 277,520 | $ (19) | $ (66,713) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (5,666) | (5,666) | |||
Other comprehensive income | 31 | 31 | |||
Stock-based compensation | 2 | 2 | |||
Repurchase of common stock (in shares) | (470,732) | ||||
Repurchase of common stock | (3,493) | $ (5) | (3,488) | ||
Balance (in shares) at Dec. 31, 2019 | 23,243,476 | ||||
Balance at Dec. 31, 2019 | 201,899 | $ 232 | 277,522 | 12 | (75,867) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (6,408) | (6,408) | |||
Other comprehensive income | 1 | 1 | |||
Stock-based compensation | 28 | 28 | |||
Balance (in shares) at Dec. 31, 2020 | 23,243,476 | ||||
Balance at Dec. 31, 2020 | $ 195,520 | $ 232 | $ 277,550 | $ 13 | $ (82,275) |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2020 | |
Nature Of Operations [Abstract] | |
Nature of Operations | Nature of Operations Crimson is in the business of producing and selling luxury wines (i.e., wines that retail for over $16 per 750ml bottle). Crimson is headquartered in Napa, California and through its wholly-owned subsidiaries owns seven primary wine estates and brands: Pine Ridge Vineyards, Archery Summit, Chamisal Vineyards, Seghesio Family Vineyards, Double Canyon, Seven Hills Winery, and Malene Wines. Pine Ridge Vineyards was acquired in 1991 and has been conducting operations since 1978. Pine Ridge Vineyards owns 154 acres, and controls through leasing arrangements an additional two acres, of estate vineyards in five Napa Valley, California appellations – Stags Leap District, Rutherford, Oakville, Carneros and Howell Mountain. Approximately 132 acres are currently planted. Archery Summit was created by Crimson in 1993. Archery Summit owns 92 acres of estate vineyards in the Willamette Valley, Oregon. Approximately 68 acres are currently planted. Double Canyon vineyard land was acquired in 2005 and is located in the Horse Heaven Hills of Washington’s Columbia Valley. In September 2017, Double Canyon completed construction of a 47,000 square-foot wine production facility in West Richland, Washington. As part of our strategic initiatives targeted at supply chain management, Crimson completed its exit of the Double Canyon farming operations in January 2020. Chamisal Vineyards was acquired in 2008 and has been conducting operations since 1973. Chamisal Vineyards owns 92 acres of vineyards in the Edna Valley, California, of which 66 acres are currently planted. Seghesio Family Vineyards was acquired in 2011 and has been conducting operations since 1895. Seghesio Family Vineyards owns 311 acres of vineyards in two Sonoma County, California appellations, the Alexander Valley and Russian River Valley, of which approximately 276 acres are currently planted. Seven Hills Winery, which has been conducting operations since 1988, was acquired in January 2016 and is located in Walla Walla, Washington. The Company also purchased land, primarily in the Walla Walla Valley. The land purchase encompassed 108 acres of vineyards and apple orchards, of which 51 acres are currently planted. Malene Wines was created by Crimson in 2016 and owns two Airstream travel trailers, one of which serves as its home and wine experience in the Edna Valley, California. Malene wines has certain estate acres within the Chamisal Vineyards property and its wines are produced at the Chamisal winemaking facility. Crimson’s revenue model is a combination of direct to consumer and wholesale distributor sales. The Company’s wines are available through many principal retail channels for premium table wines, including fine wine restaurants, hotels, specialty shops, supermarkets and club stores, in all states domestically and in nearly 30 countries throughout the world. References to cases of wine herein refer to nine-liter equivalent cases. In addition, Crimson’s wines are available, where legal, via Ecommerce sites and social media platforms from the wine estates and third party websites and social media platforms. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies (a) Critical Accounting Estimates: The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates all of these estimates and assumptions. The following areas have been identified as critical accounting estimates because they have the potential to have a significant impact on the Company’s consolidated financial statements, and because they are based on assumptions which are used in the accounting records to reflect, at a specific point in time, events whose ultimate outcome will not be known until a later date. Actual results could differ from these estimates. Inventory – Inventory consists of mainly bulk and bottled wine and is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out method. Costs associated with winemaking, and other costs associated with the manufacturing of products for resale, are recorded as inventory. In accordance with general practice within the wine industry, wine inventories are included in current assets, although a portion of such inventories may be aged for periods longer than one year. As required, the Company reduces the carrying value of inventories that are obsolete or in excess of estimated usage to estimated net realizable value. The Company’s estimates of net realizable value are based on analyses and assumptions including, but not limited to, historical usage, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of sales. If future demand and/or pricing for the Company’s products are less than previously estimated, then the carrying value of the inventories may be required to be reduced, resulting in additional expense and reduced profitability. Inventory write-downs of $6.4 million and $2.0 million were recorded during the years ended December 31, 2020 and 2019, respectively. The majority of the increase in inventory write-downs for the 2020 period as compared to the 2019 period was related to the $3.5 million recognized for the 2020 vintage with smoke taint exposure from the 2020 wildfires. In a strategic effort to maximize asset utilization in 2019, the Company increased focus on supply chain management. The Company reduced planned production in an effort to re-align supply with changes in forecasted demand. In the third quarter of 2019, the Company finalized a review of standard overhead applied to bulk wine inventory and bulk wine inventory reserves in the current market and subsequently increased its reserve estimate from 50% to 75% of total projected bulk wine sale losses. As a result of this change in estimate, bulk wine inventory was reduced by $1.2 million, resulting in a decrease to net income of $1.2 million or $0.05 per diluted share for fiscal year 2019. Vineyard Development Costs – The Company capitalizes internal vineyard development costs when developing new vineyards or replacing or improving existing vineyards. These costs consist primarily of the costs of the vines and expenditures related to labor and materials to prepare the land and construct vine trellises. Amortization of such costs is recorded on a straight-line basis over the estimated economic useful life of the vineyard, which can be up to 25 years. As circumstances warrant, the Company re-evaluates the recoverability of capitalized costs, and will record impairment charges if required. The Company has not recorded any significant impairment charges for its vineyards unless related to the sale of an asset during the two year period ended December 31, 2020. Review of Long-lived Assets for Impairment – For intangible assets with definite lives, impairment testing is required if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and for goodwill, impairment testing is required at least annually or more frequently if events or circumstances indicate that these assets might be impaired. Other than goodwill, the Company currently has no intangible assets with indefinite lives. All of the Company’s goodwill and substantially all definite-lived intangible assets resulted from the acquisitions of Seghesio Family Vineyards in May 2011 and Seven Hills Winery in January 2016. Amortization of definite-lived intangible assets is recorded on a straight-line basis over the estimated useful lives of the assets, which range from 7 to 20 years. The Company evaluates goodwill for impairment at the end of each year or more often if a triggering event occurs, and has concluded that goodwill is not impaired. The Company evaluates long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Long-lived assets consist primarily of property and equipment and intangible assets with definite lives. Circumstances that might cause the Company to evaluate its long-lived assets for impairment could include a significant decline in the prices the Company or the industry can charge for its products, which could be caused by general economic or other factors, changes in laws or regulations that make it difficult or more costly for the Company to distribute its products to its markets at prices which generate adequate returns, natural disasters, significant decrease in demand for the Company’s products or significant increase in the costs to manufacture the Company’s products. Recoverability of long-lived assets is measured using a comparison of the carrying amount of an asset group to the fair value or future undiscounted net cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). This would typically be at the property level which is described in Note 1 above. During the years ended December 31, 2020 and 2019, the Company recorded impairment charges of $1.3 million and $2.2 million, respectively, to write-down the carrying value of a portion of construction in progress expenses no longer viable to the long-term project related to renovations of tasting rooms, right-of-use lease asset related to the relocation of our administrative offices, vineyards and apple orchards held for sale to fair value less cost to sell. Depletion allowances – The Company pays depletion allowances to its distributors based on their sales to their customers. These allowances are estimated on a monthly basis by the Company, and allowances are accrued as a reduction of sales. Subsequently, distributors will bill the Company for actual depletions, which may be different from the Company’s estimate. Any such differences are recognized in sales when the bill is received. The Company has historically been able to estimate depletion allowances without any material differences between actual and estimated expense. (b) Consolidation policy: The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions are eliminated in consolidation. Certain reclassifications have been made to the prior period consolidated statement of cash flows to conform to the current period presentation. The reclassifications had no impact on previously reported net income, equity or cash flows. (c) Cash and cash equivalents: The Company considers short-term investments, which have maturities of less than three months at the time of acquisition, to be cash equivalents. The Company had no short-term investments considered to be cash and cash equivalents at December 31, 2020 and 2019. (d) Financial instruments and fair value: Investments available for sale include a U.S. Treasury Note and Certificates of Deposit at December 31, 2020 and 2019. All of the Company’s available for sale securities are classified as either Level 1 or Level 2 (see ‘Fair value hierarchy’ section below) and are recorded at fair value. Available for sale securities that mature greater than 12 months from original investment are recorded as short-term because the securities represent the investment of funds that are available for current operations. Net unrealized gains and losses, net of tax, on available for sale securities are recorded in accumulated other comprehensive income (loss). Unrealized losses that are considered other than temporary are recorded in other income (expense), net, with the corresponding reduction to the carrying basis of the investment. No other than temporary losses were recorded during the two year period ended December 31, 2020. Fair value hierarchy: In determining fair value, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company applies a hierarchy to categorize its fair value measurements which is broken down into three levels based on the transparency of inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities at the reported date. Level 2: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 3: Instruments that have little to no pricing observability at the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets the Company’s best estimate of fair value. The Company uses prices and inputs that are current at the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument from period to period, this condition may cause a transfer of an instrument among the fair value hierarchy levels. Transfers among the levels are recognized at the beginning of each period. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. (e) Accounts receivable: Accounts receivable are reported at net realizable value. The Company’s accounts receivable balance is net of an allowance for doubtful accounts of $0.2 million and $0.1 million at December 31, 2020 and 2019, respectively. Interest is not accrued on past-due amounts. Accounts are charged against the allowance to bad debt as they are deemed uncollectable based upon a periodic review of the accounts. In evaluating the collectability of individual receivable balances, the Company considers several factors, including the age of the balance, the customer’s historical payment history, its current credit worthiness and current economic trends. (f) Property and equipment: Property and equipment are stated at cost net of accumulated depreciation and amortization and are depreciated using the straight-line method over the related assets estimated useful lives. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. Costs incurred developing vineyards are capitalized until the vineyard becomes commercially productive. Interest is capitalized during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is depreciated over the useful lives of those assets. During the years ended December 31, 2020 and 2019, capitalized interest was less than $0.1 million. (g) Loan fees: Fees incurred with the issuance of the Company’s debt are recorded in the consolidated balance sheets as a reduction to associated debt balances, consistent with the short-term or long-term classification of the related debt outstanding at the end of the reporting period. The Company amortizes debt discount to interest expense over the contractual or expected term of the debt using the effective interest method. (h) Concentrations of risk: The Company sells the majority of its wine through distributors and retailers. Receivables arising from these sales are not collateralized. During the year ended December 31, 2020, sales to three customers accounted for approximately 15%, 13%, and 11% of total sales. Amounts due from these three customers represented approximately 17%, 18%, and 10% of net accounts receivable as of December 31, 2020. During the year ended December 31, 2019, sales to one customer accounted for approximately 10% of total sales. Amounts due from this customer represented approximately 14% of net accounts receivable as of December 31, 2019. The Company maintains its cash in bank deposit accounts that, at times, may exceed FDIC insurance thresholds. (i) Revenue recognition: Revenue is recognized once performance obligations under the terms of the Company’s contracts with its customers have been satisfied; this occurs at a point in time when control of the promised product or service is transferred to customers. Generally, the majority of the Company’s contracts with its customers have a single performance obligation and are short term in nature. Revenue is measured in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company accounts for shipping and handling activities as costs to fulfill its promise to transfer the associated products. Accordingly, the Company records amounts billed for shipping and handling costs as a component of net sales, and classifies such costs as a component of costs of sales. The Company’s products are generally not sold with a right of return unless the product is spoiled or damaged. Historically, returns have not been material to the Company. For additional information on the Company's revenue recognition policies, refer to Note 3 “Revenue Recognition.” (j) Cost of sales: Includes grape, juice and bulk wine costs, whether purchased or grown, crush costs, winemaking and processing costs, bottling, packaging, warehousing, property costs, and shipping and handling costs. For vineyard produced grapes, grape costs include annual farming costs and depreciation of vineyard development expenditures. For wines that age longer than one year, winemaking and processing costs continue to be incurred and capitalized to the cost of wine, which can range from 3 to 36 months. No further costs are allocated to inventory once the product is bottled and available for sale. (k) Taxes not on income: Excise taxes are levied by government agencies on the sale of alcoholic beverages, including wine. These taxes are not collected from customers but are instead the responsibility of the Company. Excise taxes of $0.6 million and $0.7 million in the years ended December 31, 2020 and 2019, respectively, were recognized as a reduction to wine sales. Sales taxes that are collected from customers and remitted to governmental agencies are not reflected as revenues. (l) Advertising costs: Advertising costs are expensed as incurred and were $0.4 million and $0.2 million for the years ended December 31, 2020 and 2019, respectively. (m) Website and internal-use software costs: The Company capitalizes certain qualifying costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, consultants and payroll and payroll-related costs for employees during the application development stage. Internal and external costs incurred during the preliminary project stage and post implementation-operation stage, mainly training and maintenance costs, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized. Once the application is substantially complete and ready for its intended use, qualifying costs are amortized on a straight-line basis over the software’s estimated useful life. (n) Business combinations: Business combinations are accounted for using the acquisition method of accounting. The acquisition method of accounting requires an acquirer to record the assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. To determine the fair values, the Company utilizes third parties for certain valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related costs are expensed as incurred. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, which could be up to one year after the acquisition date, subsequent adjustments are recorded to the Company’s consolidated statements of operations. (o) Income taxes: Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enacted date. Net tax assets are recorded to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial results of operations. The Company does not have any unrecognized tax benefits; however, if it did, the Company would record accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company records deferred income tax liabilities and assets as noncurrent in its consolidated balance sheets. See Note 12 for more detail on income tax for the Company. (p) Recent accounting pronouncements: Standard Description Date of adoption Effect on the financial statements or other significant matters Standards that are not yet adopted Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifies the accounting for income taxes by removing certain Codification exceptions and others to be discussed. January 1, 2021, early adoption is permitted for the Company. Management is currently evaluating the potential impact of this guidance on the Company’s unaudited interim condensed consolidated financial statements and does not predict there to be a material impact. Standards that were adopted 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 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. ASU 2018-13, Fair Value Measurement (Topic 820) Improves the disclosures related to fair value by removing, modifying or adding disclosure requirements related to recurring and non-recurring fair value measurements. January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. Standard Description Date of adoption Effect on the financial statements or other significant matters ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirement of capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition Revenue is recognized once performance obligations under the terms of the Company’s contracts with its customers have been satisfied; this occurs at a point in time when control of the promised product or service is transferred to customers. Generally, the majority of the Company’s contracts with its customers have a single performance obligation and are short term in nature. Revenue is measured in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company accounts for shipping and handling activities as costs to fulfill its promise to transfer the associated products. Accordingly, the Company records amounts billed for shipping and handling costs as a component of net sales, and classifies such costs as a component of costs of sales. The Company’s products are generally not sold with a right of return unless the product is spoiled or damaged. Historically, returns have not been material to the Company. Wholesale Segment The Company sells its wine to wholesale distributors under purchase orders. The Company transfers control and recognizes revenue for these orders upon shipment of the wine from the Company’s third-party warehouse facilities. Payment terms to wholesale distributors typically range from 30 to 120 days. The Company pays depletion allowances to its wholesale distributors based on their sales to their customers. The Company estimates these depletion allowances and records such estimates in the same period the related revenue is recognized, resulting in a reduction of wholesale product revenue and the establishment of a current liability. Subsequently, wholesale distributors will bill the Company for actual depletions, which may be different from the Company’s estimate. Any such differences are recognized in sales when the bill is received. The Company has historically been able to estimate depletion allowances without significant differences between actual and estimated expense. Direct to Consumer Segment The Company sells its wine and other merchandise directly to consumers through wine club memberships, at the wineries’ tasting rooms and through the internet. Wine club membership sales are made under contracts with customers, which specify the quantity and timing of future wine shipments. Customer credit cards are charged in advance of quarterly wine shipments in accordance with each contract. The Company transfers control and recognizes revenue for these contracts upon shipment of the wine to the customer. Tasting room and internet wine sales are paid for at the time of sale. The Company transfers control and recognizes revenue for this wine when the product is either received by the customer (on-site tasting room sales) or upon shipment to the customer (internet sales). Other From time to time, the Company sells grapes or bulk wine because the wine does not meet the quality standards for the Company’s products, market conditions have changed resulting in reduced demand for certain products, or because the Company may have produced more of a particular varietal than it can use. Grape and bulk sales are made under contracts with customers which include product specification requirements, pricing and payment terms. Payment terms under grape contracts are generally structured around the timing of the harvest of the grapes and are generally due 30 days from the time the grapes are delivered. Payment terms under bulk wine contracts are generally 30 days from the date of shipment and may include an upfront payment upon signing of the sales agreement. The Company transfers control and recognizes revenue for grape sales when product specification has been met and title to the grapes has transferred, which is generally on the date the grapes are harvested, weighed and shipped. The Company transfers control and recognizes revenue for bulk wine contracts upon shipment. The Company provides custom winemaking services at Double Canyon’s state-of-the-art winemaking facility (“Washington Winemaking Facility”). Custom winemaking services are made under contracts with customers which include specific protocols, pricing, and payment terms and generally have a duration of less than one year. The customer retains title and control of the wine during the winemaking process. The Company recognizes revenue when contract specific performance obligations are met. Estates hold various public and private events for customers and their wine club members. Upfront consideration received from the sale of tickets or under private event contracts for future events is recorded as deferred revenue. The balance of payments are due on the date of the event. The Company recognizes event revenue on the date the event is held. Other revenue also includes tasting fees and retail sales, which are paid for and received or consumed at the time of sale. The Company transfers control and recognizes revenue at the time of sale. Refer to Note 14 “Business Segment Information,” for revenue by sales channel amounts for the years ended December 31, 2020 and 2019. Contract Balances When the Company receives payments from customers prior to transferring goods or services under the terms of a contract, the Company records deferred revenue, which it classifies as customer deposits on its consolidated balance sheets, and represents a contract liability. The following tables reflect changes in the contract liability balance during the years ended December 31, 2020 and 2019 (in thousands): Outstanding at December 31, 2019 $ 405 Increase (decrease) attributed to: Upfront payments 32,027 Revenue recognized (32,162) Outstanding at December 31, 2020 $ 270 Outstanding at December 31, 2018 $ 375 Increase (decrease) attributed to: Upfront payments 50,642 Revenue recognized (50,612) Outstanding at December 31, 2019 $ 405 Revenue recognized during the years ended December 31, 2020 and 2019, which was included in the opening contract liability balances for those periods, consisted primarily of wine club revenue, grape and bulk sales and event fees. Accounts Receivable |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During 2018, the Company committed to various restructuring activities (the “2018 Restructuring Program”) including the termination of a vineyard operating lease agreement in Oregon and certain departmental reorganizations. Restructuring charges of $0.1 million and $1.3 million were incurred in the years ended December 31, 2019 and 2018, respectively. The Company has incurred $1.4 million of restructuring charges since the inception of the restructuring plan consisting of $0.9 million employee related costs, $0.4 million of asset impairment charges associated with leasehold improvements under the terminated vineyard operating lease agreement, and $0.1 million of other restructuring costs associated with departmental reorganization activities. The fair value of impaired leasehold improvements was determined using the undiscounted cash flows expected to result from the use and eventual disposition of the assets. The Company’s restructuring activities under the 2018 Restructuring Program were substantially complete as of March 31, 2019. During 2020, the Company committed to various restructuring activities (the “2020 Restructuring Program”) including the closure of the Double Canyon Vineyards tasting room, restructuring of management, changes in sales, marketing, and Direct to Consumer organizational structure, and transitioning of information technology services and export fulfillment to outsourced support models. For the year ended December 31, 2020, the Company incurred $1.4 million of restructuring charges, consisting of $1.1 million employee related costs, $0.2 million of asset impairment charges associated with the tasting room assets upon closure, and $0.1 of other restructuring costs associated with departmental reorganization activities. The Company’s restructuring activities under the 2020 Restructuring Program were substantially complete as of September 30, 2020. The Company recorded costs of $1.2 million for employee related restructuring activities and paid $1.2 million during the year ended December 31, 2020. The liability related to restructuring activities was $0.3 million at December 31, 2020 and 2019. A roll forward of the liability recognized for employee related restructuring activities as of December 31, 2020 is as follows (in thousands): Balance at December 31, 2019 Additions Payments Balance at December 31, 2020 Employee related restructuring activity $ 308 $ 1,242 $ (1,241) $ 309 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory A summary of inventory at December 31, 2020 and 2019 is as follows (in thousands): December 31, 2020 December 31, 2019 Finished goods $ 34,970 $ 38,694 In-process goods 21,498 30,102 Packaging and bottling supplies 1,086 668 Total inventory $ 57,554 $ 69,464 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment A summary of property and equipment at December 31, 2020 and 2019 and depreciation and amortization for the years ended December 31, 2020 and 2019, is as follows (in thousands): Depreciable Lives (in years) December 31, 2020 December 31, 2019 Land and improvements N/A $ 44,912 $ 44,928 Buildings and improvements 20-40 59,265 59,948 Winery and vineyard equipment 3-25 35,350 42,210 Vineyards, orchards and improvements 7-25 33,651 32,293 Caves 20-40 5,639 5,639 Vineyards under development N/A 2,565 3,476 Construction in progress N/A 2,169 2,537 Total 183,551 191,031 Accumulated depreciation and amortization (69,868) (71,919) Total property and equipment, net $ 113,683 $ 119,112 Year ended December 31, Depreciation and amortization: 2020 2019 Capitalized into inventory $ 5,331 $ 5,780 Expensed to general and administrative 1,650 1,840 Total depreciation and amortization $ 6,981 $ 7,620 During 2018, the Company began actively marketing 36 acres of fallow apple orchards in Umatilla County, Oregon for sale as it does not intend to replant these orchards with vineyards and subsequently reclassified $0.6 million from property and equipment to assets held for sale. In the twelve months ended December 31, 2019, the Company recorded an impairment charge of less than $0.1 million to write-down the carrying value of the fallow apple orchards to fair value less cost to sell. In March 2021, the Company finalized a sales agreement to sell the land for $0.6 million. In accordance with ASC 360-10, this subsequent event revealed evidence of fair value and conditions existing as of the balance sheet date, December 31, 2020. Subsequently, for the twelve months ended December 31, 2020, the Company recorded an additional impairment charge of less than $0.1 million to write-down the carrying value of the fallow apple orchards to fair value less cost to sell. The impairment charges were recorded to other income (expense), net in the consolidated statements of operations. During the second quarter of 2019, the Company placed 124 acres of land in Benson County, Washington, composed of 15 acres of vineyards and 109 acres of fallow land, for sale and reclassified an additional $1.2 million from property and equipment to assets held for sale. In October 2019, the Company finalized a sales agreement to sell the land for $0.7 million and recorded an impairment charge of $0.5 million to write-down the carrying value to the price in the sales agreement less cost to sell. In the third quarter of 2019, the impairment charge was recorded to loss from operations, net in the consolidated statements of operations. The sale of the land closed in October 2019. In the third quarter of 2019, the Company placed 181 acres of land in Klickitat County, Washington, of which 93 acres were planted with wine grapes, for sale. As part of the process to determine the sale price of the property, the Company obtained an appraisal of the property in the second quarter of 2019. As a result, the Company recorded an impairment charge of $1.2 million to write-down the carrying value of the vineyard to the appraised fair value less cost to sell in the second quarter of 2019. The Company recorded an additional impairment of $0.1 million in the third quarter of 2019 due to the write-down of in progress vineyard development. These impairments were recorded to loss from operations, net in the consolidated statements of operations. The Company reclassified $2.1 million from property and equipment to assets held for sale related to the vineyard as of September 30, 2019. In November 2019, the Company finalized a sales agreement to sell the land for $1.9 million and recorded a final impairment charge of $0.3 million to write-down the carrying value to the price in the sales agreement less cost to sell. These impairment charges were recorded to loss from operations, net in the consolidated statements of operations. The sale of the land closed in January 2020. In the fourth quarter of 2020, the Company recorded impairment charges totaling $1.1 million to write-down assets within construction in progress related to tasting room renovation projects. As of December 31, 2020, the Company had $0.6 million of assets held for sale classified as current assets on its consolidated balance sheet. The Company expects to complete the sale of the fallow apple orchards within the next twelve months. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments The Company’s material financial instruments include cash and cash equivalents, investments classified as available for sale and short-term and long-term debt; investments classified as available for sale are the only assets or liabilities that are measured at fair value on a recurring basis. All of the Company’s investments mature within two years or less. The par value, amortized cost, gross unrealized gains and losses and estimated fair value of investments classified as available for sale as of December 31, 2020 and December 31, 2019 were as follows (in thousands): December 31, 2020 Par Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Level 1 Level 2 Total Fair Value Measurements Certificates of Deposit $ 8,500 $ 8,500 $ 7 $ — $ — $ 8,507 $ 8,507 December 31, 2019 Par Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Level 1 Level 2 Total Fair Value Measurements Certificates of Deposit $ 10,000 $ 10,000 $ 8 $ (2) $ — $ 10,006 $ 10,006 Gross unrealized gains on available for sale securities were less than $0.1 million as of December 31, 2020. The Company believes the gross unrealized gains are temporary as it does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before the recovery of their amortized cost basis. As of December 31, 2020 and 2019, other than the assets and liabilities related to Seven Hills Winery acquired in 2016, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis. For cash and cash equivalents, the carrying amounts of such financial instruments approximate their fair values. For short-term debt, the carrying amounts of such financial instruments approximate their fair values. As of December 31, 2020, the Company has estimated the fair value of its outstanding debt to be approximately $29.0 million compared to its carrying value of $24.7 million, based upon discounted cash flows with Level 3 inputs, such as the terms that management believes would currently be available to the Company for similar issues of debt, taking into account the current credit risk of the Company and other factors. Level 3 inputs include market rates obtained from American AgCredit, FLCA (“Lender”) as of December 31, 2020 of 3.80%, 3.63%, and 1.00% for the 2015 Term Loan, 2017 Term Loan, and 2020 PPP Term Loan respectively, as further discussed in Note 10, “Debt.” The Company does not invest in any derivatives or engage in any hedging activities. |
Intangible and Other Non-Curren
Intangible and Other Non-Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible and Other Non-Current Assets | Intangible and Other Non-Current Assets A summary of intangible and other non-current assets at December 31, 2020 and 2019, and amortization expense for the years ended December 31, 2020 and 2019, is as follows (in thousands): December 31, 2020 December 31, 2019 Amortizable lives Gross carrying amount Accumulated amortization Net book value Gross carrying amount Accumulated amortization Net book value Brand 15 - 17 $ 18,000 $ 10,030 $ 7,970 $ 18,000 $ 8,967 $ 9,033 Distributor relationships 10 - 14 2,700 1,829 871 2,700 1,634 1,066 Customer relationships 7 1,900 1,900 — 1,900 1,900 — Legacy permits 14 250 171 79 250 153 97 Trademark 20 200 123 77 200 113 87 Total $ 23,050 $ 14,053 $ 8,997 $ 23,050 $ 12,767 $ 10,283 Other non-current assets 241 667 Total intangible and other non-current assets, net $ 9,238 $ 10,950 Year Ended Amortization expense 2020 2019 Total amortization expense $ 1,286 $ 1,287 The estimated aggregate future amortization of intangible assets as of December 31, 2020 is identified below (in thousands): Years Remaining: Amortization 2021 $ 1,286 2022 1,286 2023 1,286 2024 1,286 2025 1,168 Thereafter 2,685 Total $ 8,997 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Accounts payable and accrued grape liabilities $ 4,064 $ 5,469 Accrued compensation related expenses 1,349 2,753 Sales and marketing 575 302 Acquisition of property and equipment — 34 Accrued interest 26 297 Depletion allowance 1,514 813 Production and farming 1,188 75 Operating lease liability, current 161 171 Other accrued expenses 542 454 Total accounts payable and other accrued liabilities $ 9,419 $ 10,368 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Credit Facility In March 2013, Crimson and its subsidiaries entered into a $60.0 million revolving credit facility (the “2013 Revolving Credit Facility”) with American AgCredit, FLCA, as agent for the lenders identified in the 2013 Revolving Credit Facility, comprised of a revolving loan facility (the “Revolving Loan”) and a term revolving loan facility (the “Term Revolving Loan”), which together are secured by substantially all of Crimson’s assets. In March 2018, Crimson and its subsidiaries entered into the second amendment to the 2013 Revolving Credit Facility with American AgCredit, FLCA (the “Second Amendment”). The Second Amendment modified certain provisions of the 2013 Revolving Credit Facility, including, among other things, extending the Revolving Loan and Term Revolving Loan termination dates to March 31, 2023, extending the Term Revolving Loan conversion date to March 31, 2023 and extending the Term Revolving Loan maturity date to March 31, 2033. The Revolving Loan is for up to $10.0 million in the aggregate for a five year term, and the Term Revolving Loan is for up to $50.0 million in the aggregate for a fifteen year term. All obligations of Crimson under the 2013 Revolving Credit Facility are collateralized by certain real property, including vineyards and certain winery facilities of Crimson, accounts receivable, inventory and intangible assets. In addition to unused line fees ranging from 0.15% to 0.25%, rates for the borrowings are priced based on a performance grid tied to certain financial ratios and the London Interbank Offered Rate. The 2013 Revolving Credit Facility can be used to fund acquisitions, capital projects and other general corporate purposes. Covenants include the maintenance of specified debt and equity ratios, limitations on the incurrence of additional indebtedness, limitations on dividends and other distributions to shareholders and restrictions on certain mergers, consolidations and sales of assets. No amounts have been borrowed under the 2013 Revolving Credit Facility to date. Details of the Company’s debt as of December 31, 2020 and 2019 are as follows (dollars in thousands): December 31, 2020 December 31, 2019 Current Long-term Total Current Long-term Total Interest Rate Maturity Date 2015 Term Loan $ 480 $ 12,160 $ 12,640 $ 640 $ 12,800 $ 13,440 5.24% October 1, 2040 2017 Term Loan 375 7,875 8,250 500 8,375 8,875 5.39% July 1, 2037 2020 PPP Term Loan 2,546 1,274 3,820 — — — 1.00% April 1, 2022 Total debt 3,401 21,309 24,710 1,140 21,175 22,315 Unamortized loan fees (13) (108) (121) (13) (121) (134) Total debt, net of unamortized loan fees $ 3,388 $ 21,201 $ 24,589 $ 1,127 $ 21,054 $ 22,181 Term Loans Term loans consist of the following: (i) On November 10, 2015, Pine Ridge Winery, LLC (“PRW Borrower”), a wholly-owned subsidiary of Crimson, entered into a senior secured term loan agreement (the “2015 Term Loan”) with American AgCredit, FLCA (“Lender”) for an aggregate principal amount of $16.0 million. Amounts outstanding under the 2015 Term Loan bear a fixed interest rate of 5.24% per annum. The 2015 Term Loan will mature on October 1, 2040 (the "2015 Term Loan Maturity Date"). On the first day of each January, April, July and October, commencing January 1, 2016, PRW Borrower is required to make a principal payment in the amount of $160,000 and an interest payment equal to the amount of all interest accrued through the previous day. A final payment of all unpaid principal, interest and any other charges with respect to the 2015 Term Loan shall be due and payable on the 2015 Loan Maturity Date. The Company incurred debt issuance costs of approximately $0.1 million related to the 2015 Term Loan. These costs are recorded as a reduction from short-term or long-term debt based on the timeframe in which the fees will be expensed, and as such, amounts to be expensed within 12 months shall be classified against short-term debt. The costs are being amortized to interest expense using the effective interest method over the contractual term of the loan. The full $16.0 million was drawn at closing and the 2015 Term Loan can be used to fund acquisitions, capital projects and other general corporate purposes. As of December 31, 2020, $12.6 million in principal was outstanding on the 2015 Term Loan, and unamortized loan fees were less than $0.1 million. (ii) On June 29, 2017, Double Canyon Vineyards, LLC (the “DCV Borrower” and, individually and collectively with the PRW Borrower, “Borrower”), a wholly-owned subsidiary of Crimson, entered into a senior secured term loan agreement (the “2017 Term Loan”) with the Lender for an aggregate principal amount of $10.0 million. Amounts outstanding under the 2017 Term Loan bear a fixed interest rate of 5.39% per annum. The 2017 Term Loan will mature on July 1, 2037 (the "2017 Loan Maturity Date"). On the first day of each January, April, July and October, commencing October 1, 2017, DCV Borrower is required to make a principal payment in the amount of $125,000 and an interest payment equal to the amount of all interest accrued through the previous day. A final payment of all unpaid principal, interest and any other charges with respect to the 2017 Term Loan shall be due and payable on the 2017 Loan Maturity Date. The Company incurred debt issuance costs of approximately $0.1 million related to the 2017 Term Loan. These costs were recorded using the same treatment as described for the 2015 Term Loan debt issuance costs. The full $10.0 million was drawn at closing and the 2017 Term Loan can be used to fund acquisitions, capital projects and other general corporate purposes. As of December 31, 2020, $8.3 million in principal was outstanding on the 2017 Term Loan, and unamortized loan fees were less than $0.1 million. Borrower’s obligations under the 2015 Term Loan and 2017 Term Loan are guaranteed by the Company. All obligations of Borrower under the 2015 Term Loan and 2017 Term Loan are collateralized by certain real property of the Company. Borrower’s covenants include the maintenance of a specified debt service coverage ratio and certain customary affirmative and negative covenants, including limitations on the incurrence of additional indebtedness; limitations on distributions to shareholders; and restrictions on certain investments, sale of assets and merging or consolidating with other parties. (iii) In March 2020, in light of the global outbreak of the COVID-19 virus, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act included a small business stimulus program called the Paycheck Protection Program (“PPP”), which is intended to provide loans to qualified businesses to, as originally implemented, support eight weeks of payroll and other identified costs. PPP loans are eligible for partial or full forgiveness. On June 3, 2020, Congress passed the Paycheck Protection Program Flexibility Act of 2020 which, among other things, extended the loan forgiveness period for PPP loans from eight weeks to 24 weeks and increased the cap on usage of the loan on non-payroll costs from 25% to 40%. In April 2020, the Company successfully secured a $3.8 million PPP loan. Under the CARES Act, the loan is eligible for forgiveness for the portion used to cover payroll costs and other specified non-payroll costs, including interest on mortgage obligations, rent and utilities (provided any non-payroll costs do not exceed 40% of the forgiven amount) over an eight-week or 24-week period after the loan is made if employee and compensation levels are maintained. The Company intends to apply for forgiveness of amounts received under the PPP in accordance with the requirements of the CARES Act, as amended. Any loan amounts forgiven will be removed from liabilities recorded. While the Company used the proceeds of the PPP Loan only for permissible purposes, there can be no assurance that it will be eligible for forgiveness of the PPP Loan, in full or in part. On April 22, 2020, Crimson entered into an unsecured term loan agreement (the “2020 PPP Term Loan”) with the Lender for an aggregate principal amount of $3.8 million. Amounts outstanding under the 2020 PPP Term Loan bear a fixed interest rate of 1.00% per annum. If all or a portion of the 2020 PPP Term Loan is not forgiven, any accrued and unpaid interest shall be added to the outstanding balance (“Adjusted Loan Balance”). The 2020 PPP Term Loan will mature on April 1, 2022 (the “2020 Loan Maturity Date”). Based on the current terms of the loan, there are two scenarios of payment. The first scenario calls for the payments on the loan to commence on the first day of the month following the date on which the Lender receives the applicable forgiveness amount, if any, from the Small Business Administration (“SBA”), if a balance on the loan remains after the forgiveness amount has been applied. If all obligations under the loan are forgiven by the SBA, no payments will be required. The second scenario applies if Crimson fails to timely apply for forgiveness of the 2020 PPP Term Loan. In this second scenario, the payments on the loan will commence on the first day of the month that is 10 months after the end of the eight-week period following the date of loan origination, April 22, 2020. Crimson is required to make payments of equal monthly principal and interest based on the Adjusted Loan Balance. A final payment of all unpaid principal, interest and any other charges with respect to the 2020 PPP Term Loan shall be due and payable on the 2020 Loan Maturity Date. The amortization period of equal monthly principal and interest will be adjusted based on which payment scenario is triggered. While the loan currently has a two-year maturity, the amended law permits the borrower to request a five-year maturity from its lender. The full $3.8 million was drawn at closing and the 2020 PPP Term Loan can be used for the purposes authorized and approved in the CARES Act. As of December 31, 2020, $3.8 million in principal was outstanding on the 2020 PPP Term Loan. On December 22, 2020, the Company concluded that its Quarterly Reports on Form 10-Q for the first three quarters of the year ending December 31, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019 can no longer be relied upon as the result of material accounting errors identified by management. As a result, as of December 31, 2020, this constituted a breach of covenants in the Company’s credit and loan agreements as a result of the untimely delivery of accurate consolidated financial statements prepared in accordance with GAAP. On March 17, 2021, the Lender provided the Company a waiver for the aforementioned breach of covenants with the understanding that restated covenant certificates will be submitted on or before April 30, 2021. Other than what is discussed above, the Company was in compliance with all debt covenants related to financial ratios, limitations and restrictions as of December 31, 2020. A summary of debt maturities as of December 31, 2020 is as follows (in thousands): Principal due in 2021 $ 3,401 Principal due in 2022 2,414 Principal due in 2023 1,140 Principal due in 2024 1,140 Principal due in 2025 1,140 Principal due thereafter 15,475 Total $ 24,710 |
Stockholders' Equity and Equity
Stockholders' Equity and Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity and Equity Incentive Plan | Stockholders’ Equity and Equity Incentive Plan Share Repurchase Program In December 2018, the Company commenced a share repurchase program (the “2019 Winter Repurchase Program”) that provided for the repurchase of up to $2.0 million of outstanding common stock. Under the 2019 Winter Repurchase Program, any repurchased shares were constructively retired. On April 30, 2019, the 2019 Winter Repurchase Program was completed. Under the total 2019 Winter Repurchase Program, the Company repurchased 253,324 shares at a repurchase price of $2.0 million . In September 2019, the Company commenced a share repurchase program (the "2019 Summer Repurchase Program") that provided for the repurchase of up to $2.0 million of outstanding common stock. Under the 2019 Summer Repurchase Program, any repurchased shares are constructively retired. On December 12, 2019, the 2019 Summer Repurchase Program was completed. Under the total 2019 Summer Repurchase Program, the Company repurchased 283,208 shares at a repurchase price of $2.0 million. Stock-Based Compensation The Company is authorized to issue 15,000,000 shares of one or more series of preferred stock; no preferred stock has been issued. There were no dilutive or complex equity instruments or securities outstanding at any time during the periods presented. In February 2013, the Company adopted the 2013 Omnibus Incentive Plan, which provides for the granting of up to 1,000,000 stock options or other common stock-based awards. The terms of awards that may be granted, including vesting and performance criteria, if any, will be determined by the Company’s board of directors. In December 2019, option grants for 89,000 shares were issued. The options vest annually over five years, expire in seven years and have an exercise price of $6.87, the market value at the date of grant. The share-based compensation expense for these grants was $141,000, the grant date fair value, which will be recorded over the vesting period. Estimates of share-based compensation expense require a number of complex and subjective assumptions, including the selection of an option pricing model. The Company determined the grant date fair value of the awards using the Black-Scholes-Merton option-pricing valuation model, with the following assumptions and values: stock price volatility, 22%; employee exercise patterns and expected life, 5 years; dividend yield, 0%; and risk-free interest rate, 1.6%. A summary of stock option activity in 2020 is presented below: 2020 Shares Weighted-Average Exercise Price Outstanding at beginning of year 89,000 $ 6.87 Granted — $ — Exercised — $ — Forfeited or expired — $ — Outstanding at end of year 89,000 $ 6.87 Exercisable at end of year 17,800 $ 6.87 ($ in thousands) 2020 2019 Stock-based compensation expense $ 28 $ 2 Income tax benefit $ (9) $ (1) Total fair value of options vested during the year $ 28 $ — Total intrinsic value of options outstanding at end of year $ — $ 47 Total intrinsic value of options exercisable at end of year $ — $ — Total weighted-average remaining vesting period in years 3.92 years 4.93 years Total weighted-average remaining contractual life period in years (options outstanding) 5.92 years 6.92 years Total weighted-average remaining contractual life period in years (options exercisable) 5.92 years As of December 31, 2020, the total stock-based compensation expense not yet recognized is $113,000, which will be amortized through the remaining vesting periods through December 2024. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the U.S. enacted tax legislation the Tax Cut and Jobs Act (Public Law 115-97, “TCJA” or “tax reform” or "Tax Act"), which significantly revised the U.S. tax code by, among other things, lowering the corporate income tax rate from 34% to 21%, limiting the deductibility of interest expense, implementing full cost recovery, and imposing further limitations on meals and entertainment. We reasonably estimated the effects of the Tax Act and recorded provisional amounts in our financial statements as of December 31, 2017. We recorded a provisional tax benefit for the impact of the Tax Act of approximately $2.7 million as a result of revaluing our net deferred tax liability. In 2018 and 2019, we completed our determination of the accounting implications of the U.S. Tax Act. The provision (benefit) for income taxes for years ended December 31, 2020 and 2019 is as follows (in thousands): 2020 2019 State income tax (benefit) provision Current $ 51 $ (27) Deferred (671) (514) Total state income tax (benefit) provision (620) (541) Federal income tax (benefit) provision Current (525) (328) Deferred (1,942) (1,204) Total federal income tax (benefit) provision (2,467) (1,532) Total income tax (benefit) provision $ (3,087) $ (2,073) The Company's income tax returns are subject to examination in the U.S. federal and state jurisdictions. To the extent the Company has unutilized net operating loss (“NOL”) carryforwards, the statute of limitations does not begin to run until the NOL carryforwards are utilized. Therefore, for federal and state tax purposes, the Company has tax years open dating back to 2006. The Company currently has no unrecognized tax benefits, and it is not reasonably possible to estimate the amount by which that could increase in the next twelve months since the timing of examinations, if any, is unknown. The principal components of deferred taxes at December 31, 2020 and 2019 are as follows (in thousands): 2020 2019 Deferred tax asset California NOL carryforward $ 2,127 $ 1,243 Inventory (121) 1,727 Federal NOL carryforward 4,373 1,538 Accrued vacation 153 167 Accrued severance 62 120 California alternative minimum tax credit 107 107 Other 409 38 Total deferred tax asset 7,110 4,940 Deferred tax liability Property and equipment (6,244) (6,889) Intangible assets and goodwill (1,246) (1,032) Other (97) (109) Total deferred tax liability (7,587) (8,030) Net deferred tax liability, non-current $ (477) $ (3,090) As of December 31, 2020, the amount and expiration dates of the Company’s NOL carryforwards are as follows (in thousands): Federal Carried forward indefinitely $ 15,238 State 2027-2043 $ 29,280 Under certain circumstances, the ability to use the NOL carryforwards and credits could be substantially reduced if certain changes in ownership were to occur. In order to reduce this possibility, the Company’s certificate of incorporation includes a charter restriction that prohibits transfers of the Company’s common stock under certain circumstances. On June 29, 2020, California signed AB 85 suspending California NOL utilization for tax year 2020, 2021 and 2022 for corporations with net business income of $1 million or more. In the event the Company is precluded from utilizing its NOLs during such years, the Company’s suspended NOLs in California will be extended an additional three years. The table below reconciles the expected statutory income tax rate to the actual income tax provision (benefit) (in thousands): 2020 2019 Expected federal income tax benefit $ (1,994) $ (1,625) State income tax benefit (631) (446) NOL carryback - CARES Act (182) — True-up to fixed assets (239) — Other, net (41) (2) Total $ (3,087) $ (2,073) |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanA 401(k) profit sharing plan is provided to all employees who meet certain service requirements. The Company matches 25% of a participant’s salary deferral, subject to regulatory limitations. Total Company contributions to the plan were $0.3 million for each of the years ended December 31, 2020 and 2019. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company has identified two operating segments, Wholesale net sales and Direct to Consumer net sales, which are reportable segments for financial statement reporting purposes, based upon their different distribution channels, margins and selling strategies. Wholesale net sales include all sales through a third party where prices are given at a wholesale rate, whereas Direct to Consumer net sales include retail sales in the tasting room, remote sites and on-site events, wine club net sales, direct phone sales, and other sales made directly to the consumer without the use of an intermediary. The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. Selling expenses that can be directly attributable to the segment are allocated accordingly. However, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income information for the respective segments is not available. Based on the nature of the Company’s business, revenue generating assets are utilized across segments. Therefore, discrete financial information related to segment assets and other balance sheet data is not available and that information continues to be aggregated. The following table outlines the net sales, cost of sales, gross profit (loss), directly attributable selling expenses and operating income (loss) for the Company’s reportable segments for the years ended December 31, 2020 and 2019, and also includes a reconciliation of consolidated income (loss) from operations. Other/Non-allocable net sales and gross profit include bulk wine and grape sales, event fees and non-wine retail sales. Other/Non-allocable expenses include centralized corporate expenses not specific to an identified reporting segment. Sales figures are net of related excise taxes. Year Ended December 31, Wholesale Direct to Consumer Other/Non-Allocable Total (in thousands) 2020 2019 2020 2019 2020 2019 2020 2019 Net sales $ 33,849 $ 33,020 $ 26,415 $ 26,839 $ 3,844 $ 7,276 $ 64,108 $ 67,135 Cost of sales 22,694 22,635 10,205 8,853 11,517 10,538 44,416 42,026 Gross profit (loss) 11,155 10,385 16,210 17,986 (7,673) (3,262) 19,692 25,109 Operating expenses: Sales and marketing 5,108 6,635 6,067 7,163 3,075 4,158 14,250 17,956 General and administrative — — — — 11,369 11,792 11,369 11,792 Total operating expenses 5,108 6,635 6,067 7,163 14,444 15,950 25,619 29,748 Net (gain) loss on disposal of property and equipment — (2) — — 175 205 175 203 Restructuring costs — — — — 1,424 76 1,424 76 Impairment charges — — — — 1,347 2,193 1,347 2,193 Income (loss) from operations $ 6,047 $ 3,752 $ 10,143 $ 10,823 $ (25,063) $ (21,686) $ (8,873) $ (7,111) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company has leased retail and office space and has entered into various other agreements in conducting its business. At inception, the Company determines whether an agreement represents a lease, and at commencement the Company evaluates each lease agreement to determine whether the lease is an operating or financing lease. Some of the Company’s lease agreements have contained renewal options, tenant improvement allowances and rent escalation clauses. Pursuant to ASU 2016-02, all of the Company’s leases outstanding on January 1, 2019 continued to be classified as operating leases. With the adoption of ASU 2016-02, the Company recorded an operating lease right-of-use asset and an operating lease liability on its consolidated balance sheet beginning January 1, 2019. Right-of-use lease assets represent the Company’s right to use the underlying asset for the lease term and the lease obligation represents the Company’s commitment to make the lease payments arising from the lease. Right-of-use lease assets and obligations are recognized at the commencement date based on the present value of remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company has used an estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The right-of-use lease asset includes any lease payments made prior to commencement and excludes any lease incentives. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area costs and property taxes are expensed as incurred. For all lease agreements, the Company combines lease and non-lease components, and leases with an initial term of 12 months or less are not recorded on the balance sheet. During the fourth quarter of 2020, the Company completed the relocation of its administrative offices from the leased location at 2700 Napa Valley Corporate Drive, Suite B, Napa, California 94558 to its wholly-owned winery, Pine Ridge Vineyards, located at 5901 Silverado Trail, Napa, CA 94558. As a result, the Company recorded a full impairment of the carrying value of the associated right-of-use lease asset component as of December 31, 2020. The lease obligations remained on the balance sheet as of December 31, 2020 and will continue to be amortized through the lease end date or earlier if the Company and the lessor reach an agreement for an early lease termination. Supplemental balance sheet information related to leases is as follows (in thousands): December 31, 2020 December 31, 2019 Assets: Other non-current assets $ — $ 407 Liabilities: Accounts payable and accrued liabilities $ 161 $ 171 Other non-current liabilities 94 255 Total operating lease liabilities $ 255 $ 426 Weighted Average Remaining Lease Term Operating leases 1.50 years 2.50 years Weighted Average Discount Rate Operating leases 5.22 % 5.46 % Maturities of lease liabilities are as follows (in thousands): Amortization 2021 $ 161 2022 94 Total $ 255 Base rent expense was $0.2 million and $0.3 million for each of the years ended December 31, 2020 and 2019, respectively. Of the bases rent expense for each of the years ended December 31, 2020 and 2019, $0.2 million relates to the lease liability referred to in this footnote for the years December 31, 2020 and 2019. Cash paid for amounts included in the measurement of operating lease liabilities as part of operating cash flows was $0.2 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively. Supply Contracts The Company has entered into long-term contracts to purchase grapes and bulk wine from certain third parties and related parties of employees within the Company. Total estimated commitments under these agreements are as follows (in thousands):. Third Party Related Party 2021 $ 4,855 $ 630 2022 3,426 315 2023 1,825 — 2024 1,336 — 2025 957 — Thereafter 694 — Total $ 13,093 $ 945 The Company also purchases additional grapes and bulk wine under one-time purchase or short-term agreements. The total of all grapes and bulk wine purchased was $4.7 million and $7.6 million for the years ended December 31, 2020 and 2019, respectively. Included in the totals of all grapes and bulk wine purchased are related party purchases of less than $0.1 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively. Litigation The Company and its subsidiaries may become parties to legal proceedings that are considered to be either ordinary, routine litigation incidental to their business or not significant to the Company’s consolidated financial position or liquidity. The Company does not believe that there is any pending litigation that could have a significant adverse impact on its consolidated financial position, liquidity or results of operations. 2017 and 2020 Wildfires In October 2017, significant wildfires broke out in Napa, Sonoma, and surrounding counties in Northern California. Operations at two of the Company’s properties, Pine Ridge Vineyards and Seghesio Family Vineyards, were temporarily impacted due to these wildfires and then resumed shortly thereafter. At the time of the wildfires, both properties had already harvested substantially all of their 2017 estate grapes. Certain inventory on hand was impacted by power losses and smoke damage which was covered under existing insurance policies. During 2018, the Company recognized $1.1 million in insurance proceeds of which $0.6 million was offset against inventory losses and $0.5 million was included in other income, net. In October 2019 and August 2020, the Company received an additional $0.2 million and $0.1 million, respectively, from insurance proceeds related to the October 2017 wildfires. The Company recorded both of the proceeds amounts in other income, net. In August and September 2020, a series of major wildfires broke out in regions across the Western United States, including Napa and Sonoma counties in California, as well as Umatilla and Yamhill Counties in Oregon, where the Company has Direct to Consumer tasting rooms, farming operations, and wine-making facilities. Operations at some of the Company’s properties were impacted by smoke which caused damage to grapes at the vineyard properties and traffic reduction at the Company’s tasting rooms. In order to assess grape inventory losses, the Company sent grape samples to independent testing labs for evaluations. The Company has recognized $3.5 million in inventory losses for the 2020 vintage for the twelve months ended December 31, 2020. The Company was careful and selective in its evaluations of grape inventory for smoke taint damages in order to maintain its high standards for quality of wine. Some of the inventory losses and smoke damage to grapes are partially covered under existing crop insurance policies for which the Company currently has open claims pending. Although the Company anticipates settlements of insurance proceeds from the Company’s insurance policies, these amounts cannot be reasonably estimated at this time. COVID-19 In March 2020, the coronavirus disease (“COVID-19”) outbreak was declared a national public health emergency which continues to affect the world and has adversely impacted global activity and contributed to significant economic declines and volatility in financial markets. The outbreak could have a continued material adverse impact on economic and market conditions and be followed by a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the coronavirus outbreak. The outbreak has adversely impacted the Company’s tasting room visitations, On-Premise business, and special events. The outbreak presents uncertainty and risk with respect to the Company, its future performance and financial results. As of March 16, 2020, with the exception of key operations personnel, the Company has shifted its home office staff to remote workstations, which has been an effective transition to date. The Company will continue to operate remotely until management determines it is safe for employees to return to offices. The Company has not experienced nor does it anticipate significant impact or disruptions to its supply chain network. On March 16, 2020, the Company temporarily closed all of its tasting rooms, which are located in California, Oregon, and Washington, in compliance with shelter-in-place orders issued by local government offices. Following months of closures, each of the aforementioned states issued reopening guidelines and metrics that counties must achieve prior to business reopening. After remaining closed for nearly all of the second quarter and complying with reopening guidelines, the Company’s tasting rooms reopened during June 2020 in limited capacity and operating hours, and with additional safety measures in place. In the first several weeks of July 2020, businesses located in several Northern California counties were required to shut down indoor dining and winery tasting rooms. In late July 2020, the State of Washington required the shutdown of wineries, regardless of whether food is served. During this period, while the State of Oregon allowed indoor wine tastings with noted restrictions, the Company's Oregon-based tasting room, Archery Summit, operated almost entirely outdoors. Although outdoor operations were allowed to resume in August, COVID-19 containment measures and the 2020 wildfires limited the amount of traffic at the Company's tasting rooms. In mid-November 2020, further government restrictions and shutdown orders were issued for the State of Oregon with California and Washington following suit in December 2020, resulting in either shutdowns or outdoor-only tastings for all of the Company's tasting rooms. All of the Company’s tasting rooms have been impacted by government orders and restrictions to significant and varying degrees at times. Much of the aforementioned restrictions or shutdowns of the operations of winery tasting rooms remain in place. Management and staff at all estate locations have taken the appropriate steps to continue accommodations for outdoor tastings, when permitted, to ensure the safety of all guests and staff. In addition to limiting the number of guests and requiring reservations, the Company has implemented various measures to prevent the spread of the virus including using available forms of PPE, assigning tasting room staff to discrete guest parties to limit contact exposure, screening workers before they enter facilities, practicing social distancing, implementing COVID-19 protocols and travel guidelines, and advising employees to adhere to prevention measures recommended by the Center for Disease Control (“CDC”). The extent of COVID-19’s impact on the Company's financials and results of operations will depend on the length of time that the pandemic continues, the effect of governmental regulations imposed in response to the pandemic, its effect on the demand for the Company’s products and supply chain, and uncertainties surrounding the aforementioned. The Company cannot at this time predict the full impact of COVID-19, but it could have a larger impact on the Company’s financial and operational results beyond what is discussed within this Report. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Form 10-K, and except for the following, determined no other events have occurred that would require adjustments to our disclosures in the consolidated financial statements: In March 2021, the Company finalized a sales agreement to sell the 36 acres of fallow apple orchards in Umatilla County, Oregon for $0.6 million. For additional information, please see Note 6, “Property and Equipment.” |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Critical Accounting Estimates | Critical Accounting Estimates: The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates all of these estimates and assumptions. The following areas have been identified as critical accounting estimates because they have the potential to have a significant impact on the Company’s consolidated financial statements, and because they are based on assumptions which are used in the accounting records to reflect, at a specific point in time, events whose ultimate outcome will not be known until a later date. Actual results could differ from these estimates. |
Inventory | Inventory – Inventory consists of mainly bulk and bottled wine and is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out method. Costs associated with winemaking, and other costs associated with the manufacturing of products for resale, are recorded as inventory. In accordance with general practice within the wine industry, |
Vineyard Development Costs | Vineyard Development Costs – The Company capitalizes internal vineyard development costs when developing new vineyards or replacing or improving existing vineyards. These costs consist primarily of the costs of the vines and expenditures related to labor and materials to prepare the land and construct vine trellises. Amortization of such costs is recorded on a straight-line basis over the estimated economic useful life of the vineyard, which can be up to 25 years. As circumstances warrant, the Company re-evaluates the recoverability of capitalized costs, and will record impairment charges if required. |
Review of Long-lived Assets for Impairment | Review of Long-lived Assets for Impairment – For intangible assets with definite lives, impairment testing is required if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and for goodwill, impairment testing is required at least annually or more frequently if events or circumstances indicate that these assets might be impaired. Other than goodwill, the Company currently has no intangible assets with indefinite lives. All of the Company’s goodwill and substantially all definite-lived intangible assets resulted from the acquisitions of Seghesio Family Vineyards in May 2011 and Seven Hills Winery in January 2016. Amortization of definite-lived intangible assets is recorded on a straight-line basis over the estimated useful lives of the assets, which range from 7 to 20 years. The Company evaluates goodwill for impairment at the end of each year or more often if a triggering event occurs, and has concluded that goodwill is not impaired. The Company evaluates long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Long-lived assets consist primarily of property and equipment and intangible assets with definite lives. Circumstances that might cause the Company to evaluate its long-lived assets for impairment could include a significant decline in the prices the Company or the industry can charge for its products, which could be caused by general economic or other factors, changes in laws or regulations that make it difficult or more costly for the Company to distribute its products to its markets at prices which generate adequate returns, natural disasters, significant decrease in demand for the Company’s products or significant increase in the costs to manufacture the Company’s products. |
Depletion allowances | Depletion allowances – The Company pays depletion allowances to its distributors based on their sales to their customers. These allowances are estimated on a monthly basis by the Company, and allowances are accrued as a reduction of sales. Subsequently, distributors will bill the Company for actual depletions, which may be different from the Company’s estimate. |
Consolidation policy | Consolidation policy: The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances and transactions are eliminated in consolidation. |
Reclassifications | Certain reclassifications have been made to the prior period consolidated statement of cash flows to conform to the current period presentation. The reclassifications had no impact on previously reported net income, equity or cash flows. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers short-term investments, which have maturities of less than three months at the time of acquisition, to be cash equivalents. |
Financial instruments and fair value | Financial instruments and fair value: Investments available for sale include a U.S. Treasury Note and Certificates of Deposit at December 31, 2020 and 2019. All of the Company’s available for sale securities are classified as either Level 1 or Level 2 (see ‘Fair value hierarchy’ section below) and are recorded at fair value. Available for sale securities that mature greater than 12 months from original investment are recorded as short-term because the securities represent the investment of funds that are available for current operations. Net unrealized gains and losses, net of tax, on available for sale securities are recorded in accumulated other comprehensive income (loss). Unrealized losses that are considered other than temporary are recorded in other income (expense), net, with the corresponding reduction to the carrying basis of the investment. No other than temporary losses were recorded during the two year period ended December 31, 2020. Fair value hierarchy: In determining fair value, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The Company applies a hierarchy to categorize its fair value measurements which is broken down into three levels based on the transparency of inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities at the reported date. Level 2: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 3: Instruments that have little to no pricing observability at the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. Financial instruments are valued at quoted market prices, if available. Certain financial instruments have bid and ask prices that can be observed in the marketplace. For financial instruments whose inputs are based on bid-ask prices, the financial instrument is valued at the point within the bid-ask range that meets the Company’s best estimate of fair value. The Company uses prices and inputs that are current at the measurement date. For financial instruments that do not have readily determinable fair values using quoted market prices, the determination of fair value is based upon consideration of available information, including types of financial instruments, current financial information, restrictions on dispositions, fair values of underlying financial instruments and quotations for similar instruments. The valuation of financial instruments may include the use of valuation models and other techniques. Adjustments to valuations derived from valuation models may be made when, in management’s judgment, features of the financial instrument such as its complexity, the market in which the financial instrument is traded and risk uncertainties about market conditions require that an adjustment be made to the value derived from the models. Adjustments from the price derived from a valuation model reflect management’s judgment that other participants in the market for the financial instrument being measured at fair value would also consider in valuing that same financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of financial instrument and market conditions. As the observability of prices and inputs may change for a financial instrument |
Accounts receivable | Accounts receivable: Accounts receivable are reported at net realizable value. The Company’s accounts receivable balance is net of an allowance for doubtful accounts of $0.2 million and $0.1 million at December 31, 2020 and 2019, respectively. Interest is not accrued on past-due amounts. Accounts are charged against the allowance to bad debt as they are deemed uncollectable based upon a periodic review of the accounts. In evaluating the collectability of individual receivable balances, the Company considers several factors, including the age of the balance, the customer’s historical payment history, its current credit worthiness and current economic trends. |
Property and equipment | Property and equipment: Property and equipment are stated at cost net of accumulated depreciation and amortization and are depreciated using the straight-line method over the related assets estimated useful lives. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. Costs incurred developing vineyards are capitalized until the vineyard becomes commercially productive. Interest is capitalized during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is depreciated over the useful lives of those assets. |
Loan fees | Loan fees: Fees incurred with the issuance of the Company’s debt are recorded in the consolidated balance sheets as a reduction to associated debt balances, consistent with the short-term or long-term classification of the related debt outstanding at the end of the reporting period. The Company amortizes debt discount to interest expense over the contractual or expected term of the debt using the effective interest method. |
Concentrations of risk | Concentrations of risk: The Company sells the majority of its wine through distributors and retailers. Receivables arising from these sales are not collateralized. |
Revenue recognition/Cost of sales | Revenue recognition: Revenue is recognized once performance obligations under the terms of the Company’s contracts with its customers have been satisfied; this occurs at a point in time when control of the promised product or service is transferred to customers. Generally, the majority of the Company’s contracts with its customers have a single performance obligation and are short term in nature. Revenue is measured in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company accounts for shipping and handling activities as costs to fulfill its promise to transfer the associated products. Accordingly, the Company records amounts billed for shipping and handling costs as a component of net sales, and classifies such costs as a component of costs of sales. The Company’s products are generally not sold with a right of return unless the product is spoiled or damaged. Historically, returns have not been material to the Company. For additional information on the Company's revenue recognition policies, refer to Note 3 “Revenue Recognition.” (j) Cost of sales: Includes grape, juice and bulk wine costs, whether purchased or grown, crush costs, winemaking and processing costs, bottling, packaging, warehousing, property costs, and shipping and handling costs. For vineyard produced grapes, grape costs include annual farming costs and depreciation of vineyard development expenditures. For wines that age longer than one year, winemaking and processing costs continue to be incurred and capitalized to the cost of wine, which can range from 3 to 36 months. No further costs are allocated to inventory once the product is bottled and available for sale. |
Taxes not on income | Taxes not on income: Excise taxes are levied by government agencies on the sale of alcoholic beverages, including wine. These taxes are not collected from customers but are instead the responsibility of the Company. |
Advertising costs | Advertising costs: Advertising costs are expensed as incurred |
Website and internal-use software costs | Website and internal-use software costs: The Company capitalizes certain qualifying costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, consultants and payroll and payroll-related costs for employees during the application development stage. Internal and external costs incurred during the preliminary project stage and post implementation-operation stage, mainly training and maintenance costs, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized. Once the application is substantially complete and ready for its intended use, qualifying costs are amortized on a straight-line basis over the software’s estimated useful life. |
Business combinations | Business combinations: Business combinations are accounted for using the acquisition method of accounting. The acquisition method of accounting requires an acquirer to record the assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. To determine the fair values, the Company utilizes third parties for certain valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related costs are expensed as incurred. During the measurement period, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, which could be up to one year after the acquisition date, subsequent adjustments are recorded to the Company’s consolidated statements of operations. |
Income taxes | Income taxes: Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enacted date.Net tax assets are recorded to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial results of operations.The Company does not have any unrecognized tax benefits; however, if it did, the Company would record accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company records deferred income tax liabilities and assets as noncurrent in its consolidated balance sheets. |
Recent accounting pronouncements | Recent accounting pronouncements: Standard Description Date of adoption Effect on the financial statements or other significant matters Standards that are not yet adopted Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifies the accounting for income taxes by removing certain Codification exceptions and others to be discussed. January 1, 2021, early adoption is permitted for the Company. Management is currently evaluating the potential impact of this guidance on the Company’s unaudited interim condensed consolidated financial statements and does not predict there to be a material impact. Standards that were adopted 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 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. ASU 2018-13, Fair Value Measurement (Topic 820) Improves the disclosures related to fair value by removing, modifying or adding disclosure requirements related to recurring and non-recurring fair value measurements. January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. Standard Description Date of adoption Effect on the financial statements or other significant matters ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirement of capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Recent accounting pronouncements: Standard Description Date of adoption Effect on the financial statements or other significant matters Standards that are not yet adopted Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740) Simplifies the accounting for income taxes by removing certain Codification exceptions and others to be discussed. January 1, 2021, early adoption is permitted for the Company. Management is currently evaluating the potential impact of this guidance on the Company’s unaudited interim condensed consolidated financial statements and does not predict there to be a material impact. Standards that were adopted 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 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. ASU 2018-13, Fair Value Measurement (Topic 820) Improves the disclosures related to fair value by removing, modifying or adding disclosure requirements related to recurring and non-recurring fair value measurements. January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. Standard Description Date of adoption Effect on the financial statements or other significant matters ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirement of capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). January 1, 2020 The adoption of this standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Liability | The following tables reflect changes in the contract liability balance during the years ended December 31, 2020 and 2019 (in thousands): Outstanding at December 31, 2019 $ 405 Increase (decrease) attributed to: Upfront payments 32,027 Revenue recognized (32,162) Outstanding at December 31, 2020 $ 270 Outstanding at December 31, 2018 $ 375 Increase (decrease) attributed to: Upfront payments 50,642 Revenue recognized (50,612) Outstanding at December 31, 2019 $ 405 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Rollforward of Restructuring Activities | A roll forward of the liability recognized for employee related restructuring activities as of December 31, 2020 is as follows (in thousands): Balance at December 31, 2019 Additions Payments Balance at December 31, 2020 Employee related restructuring activity $ 308 $ 1,242 $ (1,241) $ 309 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | A summary of inventory at December 31, 2020 and 2019 is as follows (in thousands): December 31, 2020 December 31, 2019 Finished goods $ 34,970 $ 38,694 In-process goods 21,498 30,102 Packaging and bottling supplies 1,086 668 Total inventory $ 57,554 $ 69,464 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | A summary of property and equipment at December 31, 2020 and 2019 and depreciation and amortization for the years ended December 31, 2020 and 2019, is as follows (in thousands): Depreciable Lives (in years) December 31, 2020 December 31, 2019 Land and improvements N/A $ 44,912 $ 44,928 Buildings and improvements 20-40 59,265 59,948 Winery and vineyard equipment 3-25 35,350 42,210 Vineyards, orchards and improvements 7-25 33,651 32,293 Caves 20-40 5,639 5,639 Vineyards under development N/A 2,565 3,476 Construction in progress N/A 2,169 2,537 Total 183,551 191,031 Accumulated depreciation and amortization (69,868) (71,919) Total property and equipment, net $ 113,683 $ 119,112 Year ended December 31, Depreciation and amortization: 2020 2019 Capitalized into inventory $ 5,331 $ 5,780 Expensed to general and administrative 1,650 1,840 Total depreciation and amortization $ 6,981 $ 7,620 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available for Sale Securities | The par value, amortized cost, gross unrealized gains and losses and estimated fair value of investments classified as available for sale as of December 31, 2020 and December 31, 2019 were as follows (in thousands): December 31, 2020 Par Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Level 1 Level 2 Total Fair Value Measurements Certificates of Deposit $ 8,500 $ 8,500 $ 7 $ — $ — $ 8,507 $ 8,507 December 31, 2019 Par Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Level 1 Level 2 Total Fair Value Measurements Certificates of Deposit $ 10,000 $ 10,000 $ 8 $ (2) $ — $ 10,006 $ 10,006 |
Intangible and Other Non-Curr_2
Intangible and Other Non-Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | A summary of intangible and other non-current assets at December 31, 2020 and 2019, and amortization expense for the years ended December 31, 2020 and 2019, is as follows (in thousands): December 31, 2020 December 31, 2019 Amortizable lives Gross carrying amount Accumulated amortization Net book value Gross carrying amount Accumulated amortization Net book value Brand 15 - 17 $ 18,000 $ 10,030 $ 7,970 $ 18,000 $ 8,967 $ 9,033 Distributor relationships 10 - 14 2,700 1,829 871 2,700 1,634 1,066 Customer relationships 7 1,900 1,900 — 1,900 1,900 — Legacy permits 14 250 171 79 250 153 97 Trademark 20 200 123 77 200 113 87 Total $ 23,050 $ 14,053 $ 8,997 $ 23,050 $ 12,767 $ 10,283 Other non-current assets 241 667 Total intangible and other non-current assets, net $ 9,238 $ 10,950 Year Ended Amortization expense 2020 2019 Total amortization expense $ 1,286 $ 1,287 |
Amortization Expense for Intangible Assets | The estimated aggregate future amortization of intangible assets as of December 31, 2020 is identified below (in thousands): Years Remaining: Amortization 2021 $ 1,286 2022 1,286 2023 1,286 2024 1,286 2025 1,168 Thereafter 2,685 Total $ 8,997 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses | Accounts payable and accrued liabilities consisted of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Accounts payable and accrued grape liabilities $ 4,064 $ 5,469 Accrued compensation related expenses 1,349 2,753 Sales and marketing 575 302 Acquisition of property and equipment — 34 Accrued interest 26 297 Depletion allowance 1,514 813 Production and farming 1,188 75 Operating lease liability, current 161 171 Other accrued expenses 542 454 Total accounts payable and other accrued liabilities $ 9,419 $ 10,368 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Details of the Company’s debt as of December 31, 2020 and 2019 are as follows (dollars in thousands): December 31, 2020 December 31, 2019 Current Long-term Total Current Long-term Total Interest Rate Maturity Date 2015 Term Loan $ 480 $ 12,160 $ 12,640 $ 640 $ 12,800 $ 13,440 5.24% October 1, 2040 2017 Term Loan 375 7,875 8,250 500 8,375 8,875 5.39% July 1, 2037 2020 PPP Term Loan 2,546 1,274 3,820 — — — 1.00% April 1, 2022 Total debt 3,401 21,309 24,710 1,140 21,175 22,315 Unamortized loan fees (13) (108) (121) (13) (121) (134) Total debt, net of unamortized loan fees $ 3,388 $ 21,201 $ 24,589 $ 1,127 $ 21,054 $ 22,181 |
Summary of Debt Maturity | A summary of debt maturities as of December 31, 2020 is as follows (in thousands): Principal due in 2021 $ 3,401 Principal due in 2022 2,414 Principal due in 2023 1,140 Principal due in 2024 1,140 Principal due in 2025 1,140 Principal due thereafter 15,475 Total $ 24,710 |
Stockholders' Equity and Equi_2
Stockholders' Equity and Equity Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stock Option Activity | A summary of stock option activity in 2020 is presented below: 2020 Shares Weighted-Average Exercise Price Outstanding at beginning of year 89,000 $ 6.87 Granted — $ — Exercised — $ — Forfeited or expired — $ — Outstanding at end of year 89,000 $ 6.87 Exercisable at end of year 17,800 $ 6.87 ($ in thousands) 2020 2019 Stock-based compensation expense $ 28 $ 2 Income tax benefit $ (9) $ (1) Total fair value of options vested during the year $ 28 $ — Total intrinsic value of options outstanding at end of year $ — $ 47 Total intrinsic value of options exercisable at end of year $ — $ — Total weighted-average remaining vesting period in years 3.92 years 4.93 years Total weighted-average remaining contractual life period in years (options outstanding) 5.92 years 6.92 years Total weighted-average remaining contractual life period in years (options exercisable) 5.92 years |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes for years ended December 31, 2020 and 2019 is as follows (in thousands): 2020 2019 State income tax (benefit) provision Current $ 51 $ (27) Deferred (671) (514) Total state income tax (benefit) provision (620) (541) Federal income tax (benefit) provision Current (525) (328) Deferred (1,942) (1,204) Total federal income tax (benefit) provision (2,467) (1,532) Total income tax (benefit) provision $ (3,087) $ (2,073) |
Principal Components of Deferred Taxes | The principal components of deferred taxes at December 31, 2020 and 2019 are as follows (in thousands): 2020 2019 Deferred tax asset California NOL carryforward $ 2,127 $ 1,243 Inventory (121) 1,727 Federal NOL carryforward 4,373 1,538 Accrued vacation 153 167 Accrued severance 62 120 California alternative minimum tax credit 107 107 Other 409 38 Total deferred tax asset 7,110 4,940 Deferred tax liability Property and equipment (6,244) (6,889) Intangible assets and goodwill (1,246) (1,032) Other (97) (109) Total deferred tax liability (7,587) (8,030) Net deferred tax liability, non-current $ (477) $ (3,090) |
Schedule of Operating Loss Carryforwards | As of December 31, 2020, the amount and expiration dates of the Company’s NOL carryforwards are as follows (in thousands): Federal Carried forward indefinitely $ 15,238 State 2027-2043 $ 29,280 |
Schedule of Effective Income Tax Reconciliation | The table below reconciles the expected statutory income tax rate to the actual income tax provision (benefit) (in thousands): 2020 2019 Expected federal income tax benefit $ (1,994) $ (1,625) State income tax benefit (631) (446) NOL carryback - CARES Act (182) — True-up to fixed assets (239) — Other, net (41) (2) Total $ (3,087) $ (2,073) |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | The following table outlines the net sales, cost of sales, gross profit (loss), directly attributable selling expenses and operating income (loss) for the Company’s reportable segments for the years ended December 31, 2020 and 2019, and also includes a reconciliation of consolidated income (loss) from operations. Other/Non-allocable net sales and gross profit include bulk wine and grape sales, event fees and non-wine retail sales. Other/Non-allocable expenses include centralized corporate expenses not specific to an identified reporting segment. Sales figures are net of related excise taxes. Year Ended December 31, Wholesale Direct to Consumer Other/Non-Allocable Total (in thousands) 2020 2019 2020 2019 2020 2019 2020 2019 Net sales $ 33,849 $ 33,020 $ 26,415 $ 26,839 $ 3,844 $ 7,276 $ 64,108 $ 67,135 Cost of sales 22,694 22,635 10,205 8,853 11,517 10,538 44,416 42,026 Gross profit (loss) 11,155 10,385 16,210 17,986 (7,673) (3,262) 19,692 25,109 Operating expenses: Sales and marketing 5,108 6,635 6,067 7,163 3,075 4,158 14,250 17,956 General and administrative — — — — 11,369 11,792 11,369 11,792 Total operating expenses 5,108 6,635 6,067 7,163 14,444 15,950 25,619 29,748 Net (gain) loss on disposal of property and equipment — (2) — — 175 205 175 203 Restructuring costs — — — — 1,424 76 1,424 76 Impairment charges — — — — 1,347 2,193 1,347 2,193 Income (loss) from operations $ 6,047 $ 3,752 $ 10,143 $ 10,823 $ (25,063) $ (21,686) $ (8,873) $ (7,111) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases is as follows (in thousands): December 31, 2020 December 31, 2019 Assets: Other non-current assets $ — $ 407 Liabilities: Accounts payable and accrued liabilities $ 161 $ 171 Other non-current liabilities 94 255 Total operating lease liabilities $ 255 $ 426 Weighted Average Remaining Lease Term Operating leases 1.50 years 2.50 years Weighted Average Discount Rate Operating leases 5.22 % 5.46 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities are as follows (in thousands): Amortization 2021 $ 161 2022 94 Total $ 255 |
Schedule Of Purchase Commitments | The Company has entered into long-term contracts to purchase grapes and bulk wine from certain third parties and related parties of employees within the Company. Total estimated commitments under these agreements are as follows (in thousands):. Third Party Related Party 2021 $ 4,855 $ 630 2022 3,426 315 2023 1,825 — 2024 1,336 — 2025 957 — Thereafter 694 — Total $ 13,093 $ 945 |
Nature of Operations (Details)
Nature of Operations (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)acountrywineryl | Dec. 31, 2016trailer | Sep. 30, 2017a | |
Nature of Operations [Line Items] | |||
Price per bottle | $ | $ 16 | ||
Volume of liquid (per bottle of wine) | l | 0.75 | ||
Number of wineries owned | winery | 7 | ||
Acreage owned (acres) | 2 | ||
Number of airstream trailers owned (in trailers) | trailer | 2 | ||
Number of countries where wine is available (countries) | country | 30 | ||
Pine Ridge Vineyards | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 154 | ||
Number of appellations | winery | 5 | ||
Acreage currently planted and producing grapes (acres) | 132 | ||
Archery Summit | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 92 | ||
Acreage currently planted and producing grapes (acres) | 68 | ||
Double Canyon Vineyards | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 47,000 | ||
Chamisal Vineyards | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 92 | ||
Acreage currently planted and producing grapes (acres) | 66 | ||
Seghesio Family Vineyards | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 311 | ||
Number of appellations | winery | 2 | ||
Acreage currently planted and producing grapes (acres) | 276 | ||
Seven Hills Winery | |||
Nature of Operations [Line Items] | |||
Acreage owned (acres) | 108 | ||
Acreage currently planted and producing grapes (acres) | 51 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Significant Accounting Policies [Line Items] | ||||
Inventory write-down | $ 6,434,000 | $ 2,038,000 | ||
Inventory reserve estimate | 75.00% | 50.00% | ||
Decrease in net income | $ (1,200,000) | |||
Decrease in diluted earnings per share due to change in reserve estimate (in dollars per share) | $ 0.05 | |||
Impairment charges | 1,347,000 | $ 2,193,000 | ||
Short-term investments | $ 0 | 0 | 0 | |
Other than temporary losses on investments available-for-sale securities | 0 | 0 | ||
Allowance for doubtful accounts | 100,000 | 200,000 | 100,000 | |
Capitalized interest | $ 100,000 | 100,000 | 100,000 | |
Excise taxes | 600,000 | 700,000 | ||
Advertising costs | 400,000 | $ 200,000 | ||
Natural Disasters and Other Casualty Events | ||||
Significant Accounting Policies [Line Items] | ||||
Inventory losses | $ 3,500,000 | |||
Total sales | Customer One | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 15.00% | 10.00% | ||
Total sales | Customer Two | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 13.00% | |||
Total sales | Customer Three | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 11.00% | |||
Accounts Receivable | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 14.00% | |||
Accounts Receivable | Customer One | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 17.00% | |||
Accounts Receivable | Customer Two | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 18.00% | |||
Accounts Receivable | Customer Three | ||||
Significant Accounting Policies [Line Items] | ||||
Major customer percentage of sales | 10.00% | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Intangible assets useful life | 7 years | |||
Period which costs are capitalized | 3 months | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Intangible assets useful life | 20 years | |||
Period which costs are capitalized | 36 months | |||
Vineyard | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Depreciable lives | 25 years | |||
Bulk Wine Inventory | ||||
Significant Accounting Policies [Line Items] | ||||
Inventory write-down | $ 1,200,000 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ 0.2 | $ 0.1 |
Wholesale Distributor Sales | Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 30 days | |
Wholesale Distributor Sales | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 120 days | |
Grape Contracts | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 30 days | |
Bulk wine Sales | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 30 days |
Revenue (Contract Balances) (De
Revenue (Contract Balances) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Outstanding, Beginning | $ 405 | $ 375 |
Increase (decrease) attributed to: | ||
Upfront payments | 32,027 | 50,642 |
Revenue recognized | (32,162) | (50,612) |
Outstanding, Ending | $ 270 | $ 405 |
Restructuring (Narrative) (Deta
Restructuring (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 1,242 | $ 100 | $ 1,300 |
Restructuring charges incurred to date | 1,400 | 1,400 | |
Employee related restructuring reserve | 1,241 | ||
Restructuring reserve | 309 | 308 | |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 1,100 | 900 | |
Asset Impairment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 200 | 400 | |
Other Restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 100 | $ 100 |
Restructuring (Rollforward of R
Restructuring (Rollforward of Restructuring Activities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 308 | ||
Additions | 1,242 | $ 100 | $ 1,300 |
Payments | (1,241) | ||
Ending balance | $ 309 | $ 308 |
Inventory (Summary of Inventory
Inventory (Summary of Inventory) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 34,970 | $ 38,694 |
In-process goods | 21,498 | 30,102 |
Packaging and bottling supplies | 1,086 | 668 |
Total inventory | $ 57,554 | $ 69,464 |
Property and Equipment (Summary
Property and Equipment (Summary Of Property And Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 183,551 | $ 191,031 |
Accumulated depreciation and amortization | (69,868) | (71,919) |
Total property and equipment, net | 113,683 | 119,112 |
Capitalized into inventory | 5,331 | 5,780 |
Expensed to general and administrative | 1,650 | 1,840 |
Total depreciation and amortization | 6,981 | 7,620 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 44,912 | 44,928 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 59,265 | 59,948 |
Buildings and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 20 years | |
Buildings and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 40 years | |
Winery and vineyard equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 35,350 | 42,210 |
Winery and vineyard equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 3 years | |
Winery and vineyard equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 25 years | |
Vineyards, orchards and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 33,651 | 32,293 |
Vineyards, orchards and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 7 years | |
Vineyards, orchards and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 25 years | |
Caves | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,639 | 5,639 |
Caves | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 20 years | |
Caves | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable lives | 40 years | |
Vineyards under development | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,565 | 3,476 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,169 | $ 2,537 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021USD ($)a | Nov. 30, 2019USD ($) | Oct. 31, 2019USD ($) | Dec. 31, 2020USD ($)a | Sep. 30, 2019USD ($)a | Jun. 30, 2019USD ($)a | Dec. 31, 2020USD ($)a | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)a | |
Property, Plant and Equipment [Line Items] | |||||||||
Acreage owned (acres) | a | 2 | 2 | |||||||
Assets held for sale | $ 555 | $ 555 | $ 2,383 | ||||||
Impairment charges | 1,380 | 2,244 | |||||||
Property and equipment to assets held for sale | 600 | $ 1,200 | 600 | ||||||
Impairment charges | $ 300 | $ 500 | $ 1,100 | 1,347 | 2,193 | ||||
Proceeds from sale of land | $ 1,900 | ||||||||
Other Current Assets | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property and equipment to assets held for sale | $ 700 | ||||||||
Land | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Area of land held for sale | a | 124 | ||||||||
Land | Subsequent Event | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Proceeds from sale of property held-for-sale | $ 600 | ||||||||
Vineyards | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Assets held for sale | $ 2,100 | ||||||||
Area of land held for sale | a | 181 | 15 | |||||||
Disposal group loss (gain) on write-down | $ 100 | $ 1,200 | |||||||
Fallow Land | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Area of land held for sale | a | 109 | ||||||||
Grape Vineyards | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Area of land held for sale | a | 93 | ||||||||
Apple Orchards | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Acreage owned (acres) | a | 36 | ||||||||
Assets held for sale | $ 600 | ||||||||
Impairment charges | $ 100 | $ 100 | |||||||
Apple Orchards | Subsequent Event | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Acreage owned (acres) | a | 36 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
Investment maturity period, maximum | 2 years |
Gross unrealized gains on available for sale securities | $ 100 |
Fair value of outstanding debt | 29,000 |
Carrying value of debt | 24,710 |
2015 Term Loan | |
Debt Instrument [Line Items] | |
Carrying value of debt | $ 12,600 |
Interest rate (as a percent) | 3.80% |
2017 Term Loan | |
Debt Instrument [Line Items] | |
Carrying value of debt | $ 8,300 |
Interest rate (as a percent) | 3.63% |
2020 PPP Term Loan | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 1.00% |
Financial Instruments (Schedule
Financial Instruments (Schedule Of Available For Sale Securities) (Details) - Certificates of Deposit - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||
Par Value | $ 8,500 | $ 10,000 |
Amortized Cost | 8,500 | 10,000 |
Gross Unrealized Gains | 7 | 8 |
Gross Unrealized Losses | 0 | (2) |
Total Fair Value Measurements | 8,507 | 10,006 |
Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 0 | 0 |
Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | $ 8,507 | $ 10,006 |
Intangible and Other Non-Curr_3
Intangible and Other Non-Current Assets (Summary Of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 23,050 | $ 23,050 |
Accumulated amortization | 14,053 | 12,767 |
Net book value | 8,997 | 10,283 |
Other non-current assets | 241 | 667 |
Total intangible and other non-current assets, net | 9,238 | 10,950 |
Total amortization expense | $ 1,286 | 1,287 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 7 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 20 years | |
Brand | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 18,000 | 18,000 |
Accumulated amortization | 10,030 | 8,967 |
Net book value | $ 7,970 | 9,033 |
Brand | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 15 years | |
Brand | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 17 years | |
Distributor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,700 | 2,700 |
Accumulated amortization | 1,829 | 1,634 |
Net book value | $ 871 | 1,066 |
Distributor relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 10 years | |
Distributor relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 14 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 7 years | |
Gross carrying amount | $ 1,900 | 1,900 |
Accumulated amortization | 1,900 | 1,900 |
Net book value | $ 0 | 0 |
Legacy permits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 14 years | |
Gross carrying amount | $ 250 | 250 |
Accumulated amortization | 171 | 153 |
Net book value | $ 79 | 97 |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortizable lives (in years) | 20 years | |
Gross carrying amount | $ 200 | 200 |
Accumulated amortization | 123 | 113 |
Net book value | $ 77 | $ 87 |
Intangible and Other Non-Curr_4
Intangible and Other Non-Current Assets (Amortization expense for Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 1,286 | |
2022 | 1,286 | |
2023 | 1,286 | |
2024 | 1,286 | |
2025 | 1,168 | |
Thereafter | 2,685 | |
Net book value | $ 8,997 | $ 10,283 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Schedule of Other Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued grape liabilities | $ 4,064 | $ 5,469 |
Accrued compensation related expenses | 1,349 | 2,753 |
Sales and marketing | 575 | 302 |
Acquisition of property and equipment | 0 | 34 |
Accrued interest | 26 | 297 |
Depletion allowance | 1,514 | 813 |
Production and farming | 1,188 | 75 |
Operating lease liability, current | 161 | 171 |
Other accrued expenses | 542 | 454 |
Total accounts payable and other accrued liabilities | $ 9,419 | $ 10,368 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Jun. 03, 2020 | Apr. 22, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 29, 2017 | Nov. 10, 2015 | Mar. 31, 2013 |
Line of Credit Facility [Line Items] | ||||||||
Carrying value of outstanding debt | $ 24,710,000 | |||||||
Proceeds from 2020 PPP Term Loan | $ 3,820,000 | $ 0 | ||||||
Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unused line fee | 0.15% | |||||||
Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unused line fee | 0.25% | |||||||
2015 Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Carrying value of outstanding debt | $ 12,600,000 | |||||||
2017 Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Carrying value of outstanding debt | $ 8,300,000 | |||||||
2020 PPP Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest Rate | 1.00% | |||||||
Carrying value of outstanding debt | $ 3,820,000 | 0 | ||||||
Outstanding amount | 3,800,000 | |||||||
Secured Debt | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unamortized loan fees | 121,000 | 134,000 | ||||||
Carrying value of outstanding debt | 24,710,000 | 22,315,000 | ||||||
Outstanding amount | $ 24,589,000 | 22,181,000 | ||||||
Secured Debt | 2015 Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Principal amount | $ 16,000,000 | |||||||
Interest Rate | 5.24% | 5.24% | ||||||
Principal payment | $ 160,000 | |||||||
Debt issuance cost | 100,000 | |||||||
Unamortized loan fees | 100,000 | |||||||
Carrying value of outstanding debt | $ 12,640,000 | 13,440,000 | ||||||
Secured Debt | 2017 Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Principal amount | $ 10,000,000 | |||||||
Interest Rate | 5.39% | 5.39% | ||||||
Principal payment | $ 125,000 | |||||||
Debt issuance cost | 100,000 | |||||||
Unamortized loan fees | 100,000 | |||||||
Carrying value of outstanding debt | 8,250,000 | $ 8,875,000 | ||||||
Small Business Association Loan | 2020 PPP Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Payroll Protection Program loan, maximum percentage allocation of non-payroll costs | 40.00% | 25.00% | ||||||
Proceeds from 2020 PPP Term Loan | $ 3,800,000 | |||||||
Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility borrowing capacity | $ 10,000,000 | |||||||
Credit facility term | 5 years | |||||||
Revolving Credit Facility | 2015 Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility borrowing capacity | $ 60,000,000 | |||||||
Borrowed amount | $ 0 | |||||||
Term Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility borrowing capacity | $ 50,000,000 | |||||||
Credit facility term | 15 years |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 29, 2017 | Nov. 10, 2015 |
Debt Instrument [Line Items] | ||||
Total | $ 24,710 | |||
Current portion of long-term debt, net of unamortized loan fees | 3,388 | $ 1,127 | ||
Long-term debt, net of current portion and unamortized loan fees | 21,201 | 21,054 | ||
2015 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total | 12,600 | |||
2017 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total | 8,300 | |||
2020 PPP Term Loan | ||||
Debt Instrument [Line Items] | ||||
Current | 2,546 | 0 | ||
Long-term | 1,274 | 0 | ||
Total | 3,820 | 0 | ||
Total | $ 3,800 | |||
Interest Rate | 1.00% | |||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Current | $ 3,401 | 1,140 | ||
Long-term | 21,309 | 21,175 | ||
Total | 24,710 | 22,315 | ||
Unamortized loan fees, current portion | (13) | (13) | ||
Unamortized loan fees, noncurrent portion | (108) | (121) | ||
Unamortized loan fees, total | (121) | (134) | ||
Current portion of long-term debt, net of unamortized loan fees | 3,388 | 1,127 | ||
Long-term debt, net of current portion and unamortized loan fees | 21,201 | 21,054 | ||
Total | 24,589 | 22,181 | ||
Secured Debt | 2015 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Current | 480 | 640 | ||
Long-term | 12,160 | 12,800 | ||
Total | 12,640 | 13,440 | ||
Unamortized loan fees, total | $ (100) | |||
Interest Rate | 5.24% | 5.24% | ||
Secured Debt | 2017 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Current | $ 375 | 500 | ||
Long-term | 7,875 | 8,375 | ||
Total | 8,250 | $ 8,875 | ||
Unamortized loan fees, total | $ (100) | |||
Interest Rate | 5.39% | 5.39% |
Debt (Summary of Debt Maturity)
Debt (Summary of Debt Maturity) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
Principal due in 2021 | $ 3,401 |
Principal due in 2022 | 2,414 |
Principal due in 2023 | 1,140 |
Principal due in 2024 | 1,140 |
Principal due in 2025 | 1,140 |
Principal due thereafter | 15,475 |
Total | $ 24,710 |
Stockholders_ Equity And Equity
Stockholders’ Equity And Equity Incentive Plan - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 12, 2019 | Apr. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | Feb. 28, 2013 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Preferred shares, authorized (in shares) | 15,000,000 | ||||||
Preferred shares, issued (in shares) | 0 | ||||||
Dilutive or complex equity instruments or securities (in shares) | $ 0 | ||||||
Stock options or other common stock based awards available for grant (in shares) | 1,000,000 | ||||||
Stock based awards granted (in shares) | 89,000 | 0 | |||||
Award vesting period (in years) | 5 years | ||||||
Award expiration period (in years) | 7 years | ||||||
Exercise price of grants (in dollar per share) | $ 6.87 | $ 6.87 | |||||
Share-based compensation expense | $ 141,000 | ||||||
Stock price volatility | 22.00% | ||||||
Dividend yield rate | 0.00% | ||||||
Risk-free interest rate | 1.60% | ||||||
Stock-based compensation expense not yet recognized | $ 113,000 | ||||||
2019 Repurchase Program | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share repurchase program amount authorized | $ 2,000,000 | ||||||
Repurchased shares retired (in shares) | 283,208 | 253,324 | |||||
Shares retired repurchase cost | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Stockholders' Equity and Equi_3
Stockholders' Equity and Equity Incentive Plan - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option Activity | |||
Outstanding at beginning of year (in shares) | 89,000 | ||
Granted (in shares) | 89,000 | 0 | |
Exercised (in shares) | 0 | ||
Forfeited or expired (in shares) | 0 | ||
Outstanding at end of year (in shares) | 89,000 | 89,000 | 89,000 |
Exercisable at end of year (in shares) | 17,800 | ||
Weighted-Average Exercise Price | |||
Options outstanding, weighted-average exercise price, beginning of year (in dollars per share) | $ 6.87 | ||
Granted, weighted-average exercise price (in dollars per share) | 0 | ||
Exercised, weighted-average exercise price (in dollars per share) | 0 | ||
Forfeited or expired, weighted-average exercise price (in dollars per share) | 0 | ||
Options outstanding, weighted-average exercise price, end of year (in dollars per share) | $ 6.87 | 6.87 | $ 6.87 |
Exercisable, weighted-average exercise price (in dollars per share) | $ 6.87 | $ 6.87 | $ 6.87 |
Additional Disclosures | |||
Stock-based compensation | $ 28 | $ 2 | |
Income tax benefit | (9) | (1) | |
Total fair value of options vested during the year | 28 | 0 | |
Total intrinsic value of options outstanding at end of year | $ 47 | 0 | 47 |
Total intrinsic value of options exercisable at end of year | $ 0 | $ 0 | $ 0 |
Total weighted-average remaining vesting period in years | 3 years 11 months 1 day | 4 years 11 months 4 days | |
Total weighted-average remaining contractual life period in years (options outstanding) | 5 years 11 months 1 day | 6 years 11 months 1 day | |
Total weighted-average remaining contractual life period in years (options exercisable) | 5 years 11 months 1 day |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit from TCJA | $ 2,700,000 | |
Unrecognized tax benefits | $ 0 |
Income Taxes (Provision (Benefi
Income Taxes (Provision (Benefit) For Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
State income tax (benefit) provision | ||
Current | $ 51 | $ (27) |
Deferred | (671) | (514) |
Total state income tax (benefit) provision | (620) | (541) |
Federal income tax (benefit) provision | ||
Current | (525) | (328) |
Deferred | (1,942) | (1,204) |
Total federal income tax (benefit) provision | (2,467) | (1,532) |
Total income tax (benefit) provision | $ (3,087) | $ (2,073) |
Income Taxes (Principal Compone
Income Taxes (Principal Components Of Deferred Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax asset | ||
California NOL carryforward | $ 2,127 | $ 1,243 |
Inventory | (121) | 1,727 |
Federal NOL carryforward | 4,373 | 1,538 |
Accrued vacation | 153 | 167 |
Accrued severance | 62 | 120 |
California alternative minimum tax credit | 107 | 107 |
Other | 409 | 38 |
Total deferred tax asset | 7,110 | 4,940 |
Deferred tax liability | ||
Property and equipment | (6,244) | (6,889) |
Intangible assets and goodwill | (1,246) | (1,032) |
Other | (97) | (109) |
Total deferred tax liability | (7,587) | (8,030) |
Net deferred tax liability, non-current | $ (477) | $ (3,090) |
Income Taxes (Schedule Of Opera
Income Taxes (Schedule Of Operating Loss Carryforwards) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Carried forward indefinitely | $ 15,238 |
State | |
Operating Loss Carryforwards [Line Items] | |
2027-2043 | $ 29,280 |
Income Taxes (Schedule Of Effec
Income Taxes (Schedule Of Effective Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Expected federal income tax benefit | $ (1,994) | $ (1,625) |
State income tax benefit | (631) | (446) |
NOL carryback - CARES Act | (182) | 0 |
True-up to fixed assets | (239) | 0 |
Other, net | (41) | (2) |
Total income tax (benefit) provision | $ (3,087) | $ (2,073) |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Percentage of participant’s salary eligible for match | 25.00% | |
Total company contributions | $ 0.3 | $ 0.3 |
Business Segment Information (N
Business Segment Information (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments (in segments) | 2 |
Business Segment Information (S
Business Segment Information (Schedule Of Segment Reporting) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 64,108 | $ 67,135 | |||
Cost of sales | 44,416 | 42,026 | |||
Gross profit | 19,692 | 25,109 | |||
Sales and marketing | 14,250 | 17,956 | |||
General and administrative | 11,369 | 11,792 | |||
Total operating expenses | 25,619 | 29,748 | |||
Net (gain) loss on disposal of property and equipment | 175 | 203 | |||
Restructuring costs | 1,424 | 76 | |||
Impairment charges | $ 300 | $ 500 | $ 1,100 | 1,347 | 2,193 |
Loss from operations | (8,873) | (7,111) | |||
Operating Segments | Wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 33,849 | 33,020 | |||
Cost of sales | 22,694 | 22,635 | |||
Gross profit | 11,155 | 10,385 | |||
Sales and marketing | 5,108 | 6,635 | |||
General and administrative | 0 | 0 | |||
Total operating expenses | 5,108 | 6,635 | |||
Net (gain) loss on disposal of property and equipment | 0 | (2) | |||
Restructuring costs | 0 | 0 | |||
Impairment charges | 0 | 0 | |||
Loss from operations | 6,047 | 3,752 | |||
Operating Segments | Direct to Consumer | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 26,415 | 26,839 | |||
Cost of sales | 10,205 | 8,853 | |||
Gross profit | 16,210 | 17,986 | |||
Sales and marketing | 6,067 | 7,163 | |||
General and administrative | 0 | 0 | |||
Total operating expenses | 6,067 | 7,163 | |||
Net (gain) loss on disposal of property and equipment | 0 | 0 | |||
Restructuring costs | 0 | 0 | |||
Impairment charges | 0 | 0 | |||
Loss from operations | 10,143 | 10,823 | |||
Corporate and reconciling items | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 3,844 | 7,276 | |||
Cost of sales | 11,517 | 10,538 | |||
Gross profit | (7,673) | (3,262) | |||
Sales and marketing | 3,075 | 4,158 | |||
General and administrative | 11,369 | 11,792 | |||
Total operating expenses | 14,444 | 15,950 | |||
Net (gain) loss on disposal of property and equipment | 175 | 205 | |||
Restructuring costs | 1,424 | 76 | |||
Impairment charges | 1,347 | 2,193 | |||
Loss from operations | $ (25,063) | $ (21,686) |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule of Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Intangible assets and other non-current assets, net | Intangible assets and other non-current assets, net |
Operating lease, right-of-use asset | $ 0 | $ 407 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued liabilities | Accounts payable and accrued liabilities |
Operating lease liability, current | $ 161 | $ 171 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities |
Operating lease, liability, noncurrent | $ 94 | $ 255 |
Total operating lease liabilities | $ 255 | $ 426 |
Weighted average remaining lease term, operating leases | 1 year 6 months | 2 years 6 months |
Weighted average discount rate, operating leases | 5.22% | 5.46% |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Maturities of Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 161 |
2022 | 94 |
Total | $ 255 |
Commitments and Contingencies_4
Commitments and Contingencies (Narrative) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2017winery | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Base rent expense | $ 0.2 | $ 0.3 | ||||
Rent expense related to lease liability | 0.2 | 0.2 | ||||
Cash paid for operating lease liabilities | 0.2 | 0.3 | ||||
Amounts purchased under agreements | 4.7 | 7.6 | ||||
Number of wineries affected by wildfires (in wineries) | winery | 2 | |||||
Related Party | ||||||
Operating Leased Assets [Line Items] | ||||||
Amounts purchased under agreements | 0.1 | $ 0.6 | ||||
Natural Disasters and Other Casualty Events | ||||||
Operating Leased Assets [Line Items] | ||||||
Insurance proceeds | $ 0.1 | $ 0.2 | $ 1.1 | |||
Inventory losses | $ 3.5 | |||||
Natural Disasters and Other Casualty Events | Cost of Sales | ||||||
Operating Leased Assets [Line Items] | ||||||
Insurance proceeds | 0.6 | |||||
Natural Disasters and Other Casualty Events | Other Income, Net | ||||||
Operating Leased Assets [Line Items] | ||||||
Insurance proceeds | $ 0.5 |
Commitments and Contingencies_5
Commitments and Contingencies (Schedule Of Purchase Commitments) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Third Party | |
Long-term Purchase Commitment [Line Items] | |
2021 | $ 4,855 |
2022 | 3,426 |
2023 | 1,825 |
2024 | 1,336 |
2025 | 957 |
Thereafter | 694 |
Total | 13,093 |
Related Party | |
Long-term Purchase Commitment [Line Items] | |
2021 | 630 |
2022 | 315 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total | $ 945 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 1 Months Ended | ||
Mar. 31, 2021USD ($)a | Dec. 31, 2020a | Dec. 31, 2018a | |
Subsequent Event [Line Items] | |||
Acreage owned (acres) | 2 | ||
Apple Orchards | |||
Subsequent Event [Line Items] | |||
Acreage owned (acres) | 36 | ||
Subsequent Event | Apple Orchards | |||
Subsequent Event [Line Items] | |||
Acreage owned (acres) | 36 | ||
Land | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from sale of property held-for-sale | $ | $ 0.6 |