Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 21,428,933 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Entity Central Index Key | 0001562151 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 9,604 | $ 25,705 |
Investments available for sale | 23,822 | 11,673 |
Accounts receivable, net | 6,638 | 6,849 |
Inventory | 51,467 | 51,716 |
Other current assets | 2,155 | 1,653 |
Total current assets | 93,686 | 97,596 |
Property and equipment, net | 112,888 | 113,421 |
Goodwill | 1,262 | 1,262 |
Intangible and other non-current assets, net | 6,147 | 6,481 |
Total non-current assets | 120,297 | 121,164 |
Total assets | 213,983 | 218,760 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 7,231 | 11,460 |
Customer deposits | 853 | 392 |
Current portion of long-term debt, net of unamortized loan fees | 1,128 | 1,128 |
Total current liabilities | 9,212 | 12,980 |
Long-term debt, net of current portion and unamortized loan fees | 17,389 | 17,671 |
Deferred tax liability, net | 864 | 1,100 |
Other non-current liabilities | 9 | 9 |
Total non-current liabilities | 18,262 | 18,780 |
Total liabilities | 27,474 | 31,760 |
Contingencies (Note 12) | ||
Stockholders’ Equity | ||
Common shares, par value $0.01 per share, authorized 150,000,000 shares; 21,447,712 and 21,448,212 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 214 | 214 |
Additional paid-in capital | 278,199 | 278,083 |
Accumulated other comprehensive loss | (41) | (49) |
Accumulated deficit | (91,863) | (91,248) |
Total stockholders’ equity | 186,509 | 187,000 |
Total liabilities and stockholders’ equity | $ 213,983 | $ 218,760 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
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) | 21,447,712 | 21,448,212 |
Common shares, shares outstanding (in shares) | 21,447,712 | 21,448,212 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 15,221 | $ 18,623 |
Cost of sales | 8,287 | 11,528 |
Gross profit | 6,934 | 7,095 |
Operating expenses: | ||
Sales and marketing | 4,310 | 3,739 |
General and administrative | 3,468 | 3,298 |
Total operating expenses | 7,778 | 7,037 |
Net loss on disposal of property and equipment | 49 | 20 |
(Loss) income from operations | (893) | 38 |
Other (expense) income: | ||
Interest expense, net | (259) | (283) |
Other income, net | 300 | 27 |
Total other income (expense), net | 41 | (256) |
Loss before income taxes | (852) | (218) |
Income tax benefit | (240) | (61) |
Net loss | $ (612) | $ (157) |
Basic weighted-average shares outstanding (in shares) | 21,448 | 22,524 |
Fully diluted weighted-average shares outstanding (in shares) | 21,448 | 22,524 |
Basic loss per share (in dollars per share) | $ (0.03) | $ (0.01) |
Fully diluted loss per share (in dollars per share) | $ (0.03) | $ (0.01) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (612) | $ (157) |
Other comprehensive loss: | ||
Net unrealized holding gains (losses) on investments arising during the period, net of tax | 8 | (6) |
Comprehensive loss | $ (604) | $ (163) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net cash flows from operating activities: | ||
Net loss | $ (612) | $ (157) |
Adjustments to reconcile net loss to net cash from operations: | ||
Depreciation and amortization of property and equipment | 1,507 | 1,489 |
Amortization of intangible assets | 321 | 321 |
Loss on write-down of inventory | 297 | 741 |
Net loss on disposal of property and equipment | 49 | 20 |
Benefit for deferred income taxes | (240) | (61) |
Stock-based compensation | 116 | 57 |
Net change in operating assets and liabilities: | ||
Accounts receivable | 211 | (677) |
Inventory | (48) | 3,948 |
Other current assets | (502) | (360) |
Other non-current assets | 13 | 10 |
Accounts payable and accrued liabilities | (4,786) | (5,450) |
Customer deposits | 464 | 593 |
Net cash (used in) provided by operating activities | (3,210) | 474 |
Net cash flows from investing activities: | ||
Purchase of investments available for sale | (14,137) | (250) |
Redemptions of investments available for sale | 2,000 | 6,750 |
Acquisition of property and equipment | (473) | (280) |
Proceeds from disposals of property and equipment | 7 | 8 |
Net cash (used in) provided by investing activities | (12,603) | 6,228 |
Net cash flows from financing activities: | ||
Principal payments on long-term debt | (285) | (285) |
Repurchase of common stock | (3) | (59) |
Net cash used in financing activities | (288) | (344) |
Net (decrease) increase in cash and cash equivalents | (16,101) | 6,358 |
Cash and cash equivalents - beginning of period | 25,705 | 32,732 |
Cash and cash equivalents - end of period | 9,604 | 39,090 |
Cash paid during the period for: | ||
Interest, net of capitalized interest | 260 | 288 |
Non-cash investing and financing activity: | ||
Unrealized holding gains (losses) on investments, net of tax | 8 | (6) |
Acquisition of property and equipment accrued but not yet paid | $ 557 | $ 454 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss)Income | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2021 | 22,524,185 | ||||
Balance at Dec. 31, 2021 | $ 192,603 | $ 225 | $ 277,719 | $ 2 | $ (85,343) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (157) | (157) | |||
Other comprehensive income (loss) | (6) | (6) | |||
Stock-based compensation | 57 | 57 | |||
Repurchase of common stock (in shares) | (7,303) | ||||
Repurchase of common stock | (59) | $ 0 | (59) | ||
Balance (in shares) at Mar. 31, 2022 | 22,516,882 | ||||
Balance at Mar. 31, 2022 | 192,438 | $ 225 | 277,776 | (4) | (85,559) |
Balance (in shares) at Dec. 31, 2022 | 21,448,212 | ||||
Balance at Dec. 31, 2022 | 187,000 | $ 214 | 278,083 | (49) | (91,248) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (612) | (612) | |||
Other comprehensive income (loss) | 8 | 8 | |||
Stock-based compensation | 116 | 116 | |||
Repurchase of common stock (in shares) | (500) | ||||
Repurchase of common stock | (3) | $ 0 | (3) | ||
Balance (in shares) at Mar. 31, 2023 | 21,447,712 | ||||
Balance at Mar. 31, 2023 | $ 186,509 | $ 214 | $ 278,199 | $ (41) | $ (91,863) |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Background Crimson Wine Group, Ltd. and its subsidiaries (collectively, “Crimson” or the “Company”) is a Delaware corporation that has been conducting business since 1991. Crimson is in the business of producing and selling luxury wines (i.e., wines that retail for over $15 per 750ml bottle). Crimson is headquartered in Napa, California and through its 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. Financial Statement Preparation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The unaudited interim condensed consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Significant Accounting Policies and recent accounting pronouncements under such Note) included in the Company’s audited consolidated financial statements for the year ended December 31, 2022, as filed with the SEC on Form 10-K (the “2022 Report”). Results of operations for interim periods are not necessarily indicative of annual results of operations. The unaudited condensed consolidated balance sheet at December 31, 2022 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by GAAP for annual financial statements. Significant Accounting Policies There were no changes to the Company’s significant accounting policies during the three months ended March 31, 2023. See Note 2 of the 2022 Report for a description of the Company’s significant accounting policies. Recent Accounting Pronouncements Subsequent to the filing of the 2022 Report, the Company evaluated Accounting Standards Update (“ASU”) 2023-01 through 2023-02 issued by the Financial Accounting Standards Board (“FASB”) and concluded none of the accounting pronouncements would have a material effect or are applicable to Crimson’s unaudited interim condensed consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
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 cost 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 depletion allowances, 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 its website, third-party websites, direct phone calls, and other online sales (“Ecommerce”). 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 Ecommerce 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 (“Ecommerce sales”). Other From time to time, the Company sells grapes or bulk wine because the grapes or wine do 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 purchased or 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, Chamisal Vineyards, and Pine Ridge Vineyard’s winemaking facilities. 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 merchandise 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 11, “Business Segment Information,” for revenue by sales channel amounts for the three months ended March 31, 2023 and 2022. 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 unaudited condensed consolidated balance sheets and represents a contract liability. Customer deposits are liquidated when revenue is recognized. Revenue that was included in the contract liability balance at the beginning of each of the 2023 and 2022 years consisted primarily of wine club revenue, grape and bulk sales, and event fees. Changes in the contract liability balance during the three-month periods ended March 31, 2023 and 2022 were not materially impacted by any other factors. The outstanding contract liability balance was $0.9 million at March 31, 2023 and $0.4 million at December 31, 2022. Of the amounts included in the opening contract liability balances at the beginning of each period, approximately $0.3 million and $0.1 million were recognized as revenue during the three-month periods ended March 31, 2023 and 2022, respectively. Accounts Receivable, Net Accounts receivable are reported net of an allowance for doubtful accounts. Credit is extended based on an evaluation of the customer’s financial condition. Accounts are charged against the allowance for bad debt as they are deemed uncollectible based on 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. The Company’s accounts receivable balance is net of an allowance for doubtful accounts of $0.2 million at both March 31, 2023 and December 31, 2022. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory A summary of inventory at March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 Finished goods $ 21,677 $ 17,896 In-process goods 29,134 32,849 Packaging and bottling supplies 656 971 Total inventory $ 51,467 $ 51,716 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, projected future demand, and market requirements. Reductions to the carrying value of inventories are recorded in cost of sales. If future demand and/or profitability 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. The Company’s inventory write-downs may consist of reductions to bottled or bulk wine inventory. Crop insurance proceeds from farming losses may be recorded as offsets against previously recognized write-downs. Inventory write-downs of $0.3 million and $0.7 million were recorded during the three-month periods ended March 31, 2023 and 2022, respectively. The Company’s inventory balances are presented at the lower of cost or net realizable value. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment A summary of property and equipment at March 31, 2023 and December 31, 2022, and depreciation and amortization for the three months ended March 31, 2023 and 2022, is as follows (in thousands): Depreciable Lives (in years) March 31, 2023 December 31, 2022 Land and improvements N/A $ 44,912 $ 44,912 Buildings and improvements 20-40 61,215 61,260 Winery and vineyard equipment 3-25 36,190 35,998 Vineyards and improvements 7-25 34,591 34,221 Caves 20-40 5,639 5,639 Vineyards under development N/A 2,450 2,489 Construction in progress N/A 3,804 3,479 Total 188,801 187,998 Accumulated depreciation and amortization (75,913) (74,577) Total property and equipment, net $ 112,888 $ 113,421 Three Months Ended March 31, Depreciation and amortization: 2023 2022 Capitalized into inventory $ 1,136 $ 1,124 Expensed to general and administrative 371 365 Total depreciation and amortization $ 1,507 $ 1,489 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
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 one year 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 March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Par Value Amortized Cost Gross Gross Level 1 Level 2 Total Fair Value U.S. Treasury Bill $ 5,000 $ 4,887 $ 6 $ — $ 4,893 $ — $ 4,893 Certificates of Deposit 19,000 19,000 4 (75) — 18,929 18,929 Total $ 24,000 $ 23,887 $ 10 $ (75) $ 4,893 $ 18,929 $ 23,822 December 31, 2022 Par Value Amortized Cost Gross Gross Level 1 Level 2 Total Fair Value Certificates of Deposit $ 11,750 $ 11,750 $ — $ (77) $ — $ 11,673 $ 11,673 The Company believes the gross unrealized losses 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 March 31, 2023 and December 31, 2022, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis. For cash and cash equivalents and short-term debt, the carrying amounts of such financial instruments approximate their fair values. As of March 31, 2023, the Company has estimated the fair value of its outstanding debt to be approximately $14.4 million compared to its carrying value of $18.6 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 as of March 31, 2023 of 7.81% and 7.74% for the 2015 Term Loan (as defined below) and 2017 Term Loan (as defined below), respectively, as further discussed in Note 8, “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 | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022, and amortization expense for the three months ended March 31, 2023 and 2022, is as follows (in thousands): March 31, 2023 December 31, 2022 Amortizable lives Gross carrying amount Accumulated amortization Net book value Gross carrying amount Accumulated amortization Net book value Brand 15-17 $ 18,000 $ (12,420) $ 5,580 $ 18,000 $ (12,155) $ 5,845 Distributor relationships 10-14 2,700 (2,269) 431 2,700 (2,220) 480 Legacy permits 14 250 (211) 39 250 (207) 43 Trademark 20 200 (146) 54 200 (143) 57 Total $ 21,150 $ (15,046) $ 6,104 $ 21,150 $ (14,725) $ 6,425 Other non-current assets 43 56 Total intangible and other non-current assets, net $ 6,147 $ 6,481 Three Months Ended March 31, 2023 2022 Total amortization expense $ 321 $ 321 The estimated aggregate future amortization of intangible assets as of March 31, 2023 is identified below (in thousands): Amortization Remainder of 2023 $ 965 2024 1,286 2025 1,168 2026 1,073 2027 1,073 Thereafter 539 Total $ 6,104 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Accounts payable and accrued grape liabilities $ 2,502 $ 5,120 Accrued compensation related expenses 2,035 3,287 Sales and marketing 617 227 Acquisition of property and equipment 264 709 Accrued interest 247 250 Depletion allowance 701 1,176 Production and farming 356 202 Other accrued expenses 509 489 Total accounts payable and accrued liabilities $ 7,231 $ 11,460 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt A summary of debt at March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 Revolving Credit Facility (1) $ — $ — Senior Secured Term Loan Agreement due 2040, with an interest rate of 5.24% (2) 11,360 11,520 Senior Secured Term Loan Agreement due 2037, with an interest rate of 5.39% (3) 7,250 7,375 Unamortized loan fees (93) (96) Total debt 18,517 18,799 Less current portion of long-term debt 1,128 1,128 Long-term debt due after one year, net $ 17,389 $ 17,671 ______________________________________ (1) The Revolving Credit Facility, a $60.0 million revolving credit facility between the Company and American AgCredit, FLCA, as agent for the lenders thereunder, is 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. The Revolving Loan is for up to $10.0 million of availability 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 (2) Pine Ridge Winery, LLC, a wholly-owned subsidiary of Crimson, is party to a senior secured term loan agreement due on October 1, 2040 (the “2015 Term Loan”). Principal and interest are payable in quarterly installments. (3) Double Canyon Vineyards, LLC, a wholly-owned subsidiary of Crimson, is party to a senior secured term loan agreement due on July 1, 2037 (the “2017 Term Loan”). Principal and interest are payable in quarterly installments. Debt covenants include the maintenance of specified debt and equity ratios, a specified debt service coverage ratio, and certain customary affirmative and negative covenants, including limitations on the incurrence of additional indebtedness, limitations on dividends and other distributions to shareholders and restrictions on certain investments, certain mergers, consolidations and sales of assets. The Company was in compliance with all existing debt covenants as of March 31, 2023. A summary of debt maturities as of March 31, 2023 is as follows (in thousands): Principal due the remainder of 2023 $ 855 Principal due in 2024 1,140 Principal due in 2025 1,140 Principal due in 2026 1,140 Principal due in 2027 1,140 Principal due thereafter 13,195 Total $ 18,610 |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | Stockholders ’ Equity and Stock-Based Compensation Share Repurchase In March 2022, the Company commenced a share repurchase program (the “2022 Repurchase Program”) that provided for the repurchase of up to $4.0 million of outstanding common stock. Under the 2022 Repurchase Program, any repurchased shares are constructively retired. During the three months ended March 31, 2022, the Company repurchased 7,303 shares of its common stock at an average purchase price of $8.08 per share for an aggregate purchase price of $0.1 million. The Company’s repurchase was funded through cash on hand, and the shares were retired. In March 2023, the Company commenced a share repurchase program (the “2023 Repurchase Program”) that provided for the repurchase of up to 2,000,000 shares of outstanding common stock. Under the 2023 Repurchase Program, any repurchased shares are constructively retired. During the three months ended March 31, 2023, the Company repurchased 500 shares of its common stock at an average purchase price of $6.15 per share for an aggregate purchase price of $3 thousand. The Company’s repurchase was funded through cash on hand, and the shares were retired. Stock-Based Compensation In February 2013, the Company adopted the 2013 Omnibus Incentive Plan (the “2013 Plan”), which provides for the granting of up to 1,000,000 stock options or other common stock-based awards. In July 2022, upon the approval of the Board of Directors and the Company’s stockholders, the Company adopted the 2022 Omnibus Incentive Plan (the “2022 Plan”) to supersede and replace the 2013 Plan. The 2022 Plan provides for the granting of up to 678,000 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 Board of Directors. In December 2019, under the Company’s 2013 Omnibus Incentive Plan, option grants for 89,000 shares were issued. The options vest annually over five years and expire seven years from the date of grant. In July 2021, stock option awards for an additional 233,000 shares were issued to certain members of management. Subject to the terms of the respective option award agreements, the options vest in four equal increments in January 2022, January 2023, January 2024 and January 2025, and the options will expire seven years from the date of grant. In March 2022, stock option awards for an additional 500,000 shares were granted to the Company’s Chief Executive Officer. Such options are divided into four tranches, are subject to both performance-based vesting requirements and time-based vesting requirements, and expire ten years from the date of grant. In March 2023, stock option awards for an additional 500,000 shares were granted to certain officers and employees of the Company. Such options are divided into five tranches, are subject to both performance-based vesting requirements and time-based vesting requirements, and expire ten years from the date of grant. The performance-based vesting requirements for the grants made in March 2022 and March 2023 are tied to annual or cumulative Adjusted EBITDA targets, as defined within the respective underlying option award agreements. The Company believes it will achieve the listed targets for each agreement and has recorded the related stock-based compensation expense for the three months ended March 31, 2023. The exercise price for all respective options was either the closing price or average trading price on the date of grant. Estimates of stock-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. During the three months ended March 31, 2023, the Company granted stock options in respect of 500,000 shares. The fair value of these grants was computed based on the following assumptions: March 2023 Grants Shares issued 500,000 Expected term 7.42 - 9.42 years Expected dividend yield — % Risk-free interest rate 4.08 % Expected stock price volatility 27 - 29% Stock price $ 5.95 Weighted-average grant date fair value $ 2.64 Grant date fair value (in thousands) $ 1,319 As of March 31, 2023, stock options in respect of 1,322,000 shares remained outstanding with no stock option exercises or expirations during the quarter. The stock-based compensation expense for these grants is based on the grant date fair value, which will be recorded over the respective vesting periods. $116 thousand and $57 thousand were recorded as stock-based compensation expense for the three months ended March 31, 2023 and 2022, respectively. Stock-based compensation expense was recorded to general and administrative expense in the unaudited interim condensed consolidated statements of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The consolidated income tax benefit for the three months ended March 31, 2023 and 2022, was determined based upon the Company’s estimated consolidated effective income tax rates calculated without discrete items for the years ending December 31, 2023 and 2022, respectively. The Company’s effective tax rates for the three months ended March 31, 2023 and 2022 were 28.2% and 28.7%, respectively. The difference between the consolidated effective income tax rate and the U.S. federal statutory rate for the three months ended March 31, 2023 was primarily attributable to state income taxes and other permanent items. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
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 tasting rooms, remote sites and on-site events, wine club sales, direct phone sales, Ecommerce 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 tables outline 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 three months ended March 31, 2023 and 2022, 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, tasting 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. Three Months Ended March 31, Wholesale Direct to Consumer Other/Non-Allocable Total (in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Net sales $ 8,320 $ 11,550 $ 5,947 $ 6,227 $ 954 $ 846 $ 15,221 $ 18,623 Cost of sales 5,275 7,913 2,019 2,105 993 1,510 8,287 11,528 Gross profit (loss) 3,045 3,637 3,928 4,122 (39) (664) 6,934 7,095 Operating expenses: Sales and marketing 1,594 1,341 1,725 1,683 991 715 4,310 3,739 General and administrative — — — — 3,468 3,298 3,468 3,298 Total operating expenses 1,594 1,341 1,725 1,683 4,459 4,013 7,778 7,037 Net loss on disposal of property and equipment — — — — 49 20 49 20 Income (loss) from operations $ 1,451 $ 2,296 $ 2,203 $ 2,439 $ (4,547) $ (4,697) $ (893) $ 38 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies 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 Wildfires In October 2017, significant wildfires impacted the Company’s operations and damaged its inventory. The Company has settled on several insurance claims since the time of the wildfires but anticipates additional settlements for insurance proceeds for amounts that cannot be reasonably estimated at this time. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table reconciles the weighted-average common shares outstanding used in the calculations of the Company’s basic and diluted loss per share: Three Months Ended March 31, ($ and shares in thousands, except per share amounts) 2023 2022 Net loss $ (612) $ (157) Common shares: Weighted-average number of common shares outstanding - basic 21,448 22,524 Dilutive effect of stock options outstanding — — Weighted-average number of common shares outstanding - diluted 21,448 22,524 Loss per share: Basic $ (0.03) $ (0.01) Diluted $ (0.03) $ (0.01) Antidilutive stock options (1) 1,322 822 __________________________________________ (1) Amounts represent stock options that are excluded from the diluted earnings per share calculations because the options are antidilutive. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsNone. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Preparation | Financial Statement PreparationThe accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The unaudited interim condensed consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Significant Accounting Policies and recent accounting pronouncements under such Note) included in the Company’s audited consolidated financial statements for the year ended December 31, 2022, as filed with the SEC on Form 10-K (the “2022 Report”). Results of operations for interim periods are not necessarily indicative of annual results of operations. The unaudited condensed consolidated balance sheet at December 31, 2022 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by GAAP for annual financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Subsequent to the filing of the 2022 Report, the Company evaluated Accounting Standards Update (“ASU”) 2023-01 through 2023-02 issued by the Financial Accounting Standards Board (“FASB”) and concluded none of the accounting pronouncements would have a material effect or are applicable to Crimson’s unaudited interim condensed consolidated financial statements. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | A summary of inventory at March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 Finished goods $ 21,677 $ 17,896 In-process goods 29,134 32,849 Packaging and bottling supplies 656 971 Total inventory $ 51,467 $ 51,716 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | A summary of property and equipment at March 31, 2023 and December 31, 2022, and depreciation and amortization for the three months ended March 31, 2023 and 2022, is as follows (in thousands): Depreciable Lives (in years) March 31, 2023 December 31, 2022 Land and improvements N/A $ 44,912 $ 44,912 Buildings and improvements 20-40 61,215 61,260 Winery and vineyard equipment 3-25 36,190 35,998 Vineyards and improvements 7-25 34,591 34,221 Caves 20-40 5,639 5,639 Vineyards under development N/A 2,450 2,489 Construction in progress N/A 3,804 3,479 Total 188,801 187,998 Accumulated depreciation and amortization (75,913) (74,577) Total property and equipment, net $ 112,888 $ 113,421 Three Months Ended March 31, Depreciation and amortization: 2023 2022 Capitalized into inventory $ 1,136 $ 1,124 Expensed to general and administrative 371 365 Total depreciation and amortization $ 1,507 $ 1,489 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Par Value Amortized Cost Gross Gross Level 1 Level 2 Total Fair Value U.S. Treasury Bill $ 5,000 $ 4,887 $ 6 $ — $ 4,893 $ — $ 4,893 Certificates of Deposit 19,000 19,000 4 (75) — 18,929 18,929 Total $ 24,000 $ 23,887 $ 10 $ (75) $ 4,893 $ 18,929 $ 23,822 December 31, 2022 Par Value Amortized Cost Gross Gross Level 1 Level 2 Total Fair Value Certificates of Deposit $ 11,750 $ 11,750 $ — $ (77) $ — $ 11,673 $ 11,673 |
Intangible and Other Non-Curr_2
Intangible and Other Non-Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | A summary of intangible and other non-current assets at March 31, 2023 and December 31, 2022, and amortization expense for the three months ended March 31, 2023 and 2022, is as follows (in thousands): March 31, 2023 December 31, 2022 Amortizable lives Gross carrying amount Accumulated amortization Net book value Gross carrying amount Accumulated amortization Net book value Brand 15-17 $ 18,000 $ (12,420) $ 5,580 $ 18,000 $ (12,155) $ 5,845 Distributor relationships 10-14 2,700 (2,269) 431 2,700 (2,220) 480 Legacy permits 14 250 (211) 39 250 (207) 43 Trademark 20 200 (146) 54 200 (143) 57 Total $ 21,150 $ (15,046) $ 6,104 $ 21,150 $ (14,725) $ 6,425 Other non-current assets 43 56 Total intangible and other non-current assets, net $ 6,147 $ 6,481 Three Months Ended March 31, 2023 2022 Total amortization expense $ 321 $ 321 |
Schedule of Amortization Expense for Intangible Assets | The estimated aggregate future amortization of intangible assets as of March 31, 2023 is identified below (in thousands): Amortization Remainder of 2023 $ 965 2024 1,286 2025 1,168 2026 1,073 2027 1,073 Thereafter 539 Total $ 6,104 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Expenses | Accounts payable and accrued liabilities consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Accounts payable and accrued grape liabilities $ 2,502 $ 5,120 Accrued compensation related expenses 2,035 3,287 Sales and marketing 617 227 Acquisition of property and equipment 264 709 Accrued interest 247 250 Depletion allowance 701 1,176 Production and farming 356 202 Other accrued expenses 509 489 Total accounts payable and accrued liabilities $ 7,231 $ 11,460 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of debt at March 31, 2023 and December 31, 2022 is as follows (in thousands): March 31, 2023 December 31, 2022 Revolving Credit Facility (1) $ — $ — Senior Secured Term Loan Agreement due 2040, with an interest rate of 5.24% (2) 11,360 11,520 Senior Secured Term Loan Agreement due 2037, with an interest rate of 5.39% (3) 7,250 7,375 Unamortized loan fees (93) (96) Total debt 18,517 18,799 Less current portion of long-term debt 1,128 1,128 Long-term debt due after one year, net $ 17,389 $ 17,671 ______________________________________ (1) The Revolving Credit Facility, a $60.0 million revolving credit facility between the Company and American AgCredit, FLCA, as agent for the lenders thereunder, is 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. The Revolving Loan is for up to $10.0 million of availability 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 (2) Pine Ridge Winery, LLC, a wholly-owned subsidiary of Crimson, is party to a senior secured term loan agreement due on October 1, 2040 (the “2015 Term Loan”). Principal and interest are payable in quarterly installments. (3) Double Canyon Vineyards, LLC, a wholly-owned subsidiary of Crimson, is party to a senior secured term loan agreement due on July 1, 2037 (the “2017 Term Loan”). Principal and interest are payable in quarterly installments. |
Schedule of Maturities of Long-term Debt | A summary of debt maturities as of March 31, 2023 is as follows (in thousands): Principal due the remainder of 2023 $ 855 Principal due in 2024 1,140 Principal due in 2025 1,140 Principal due in 2026 1,140 Principal due in 2027 1,140 Principal due thereafter 13,195 Total $ 18,610 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Fair Value Assumptions of Share-based Compensation | The fair value of these grants was computed based on the following assumptions: March 2023 Grants Shares issued 500,000 Expected term 7.42 - 9.42 years Expected dividend yield — % Risk-free interest rate 4.08 % Expected stock price volatility 27 - 29% Stock price $ 5.95 Weighted-average grant date fair value $ 2.64 Grant date fair value (in thousands) $ 1,319 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting | The following tables outline 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 three months ended March 31, 2023 and 2022, 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, tasting 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. Three Months Ended March 31, Wholesale Direct to Consumer Other/Non-Allocable Total (in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Net sales $ 8,320 $ 11,550 $ 5,947 $ 6,227 $ 954 $ 846 $ 15,221 $ 18,623 Cost of sales 5,275 7,913 2,019 2,105 993 1,510 8,287 11,528 Gross profit (loss) 3,045 3,637 3,928 4,122 (39) (664) 6,934 7,095 Operating expenses: Sales and marketing 1,594 1,341 1,725 1,683 991 715 4,310 3,739 General and administrative — — — — 3,468 3,298 3,468 3,298 Total operating expenses 1,594 1,341 1,725 1,683 4,459 4,013 7,778 7,037 Net loss on disposal of property and equipment — — — — 49 20 49 20 Income (loss) from operations $ 1,451 $ 2,296 $ 2,203 $ 2,439 $ (4,547) $ (4,697) $ (893) $ 38 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss Per Common Share | The following table reconciles the weighted-average common shares outstanding used in the calculations of the Company’s basic and diluted loss per share: Three Months Ended March 31, ($ and shares in thousands, except per share amounts) 2023 2022 Net loss $ (612) $ (157) Common shares: Weighted-average number of common shares outstanding - basic 21,448 22,524 Dilutive effect of stock options outstanding — — Weighted-average number of common shares outstanding - diluted 21,448 22,524 Loss per share: Basic $ (0.03) $ (0.01) Diluted $ (0.03) $ (0.01) Antidilutive stock options (1) 1,322 822 __________________________________________ (1) Amounts represent stock options that are excluded from the diluted earnings per share calculations because the options are antidilutive. |
Background and Basis of Prese_3
Background and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) winery | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Price per bottle, low range | $ | $ 15 |
Number of wineries owned (in wineries) | winery | 7 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Outstanding contract liability | $ 853 | $ 392 | |
Revenue recognized | 300 | $ 100 | |
Allowance for doubtful accounts | $ 200 | $ 200 | |
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 | ||
Bulk wine sales | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 30 days |
Inventory (Summary of Inventory
Inventory (Summary of Inventory) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 21,677 | $ 17,896 |
In-process goods | 29,134 | 32,849 |
Packaging and bottling supplies | 656 | 971 |
Total inventory | $ 51,467 | $ 51,716 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | ||
Loss on write-down of inventory | $ 297 | $ 741 |
Property and Equipment (Summary
Property and Equipment (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 188,801 | $ 187,998 | |
Accumulated depreciation and amortization | (75,913) | (74,577) | |
Total property and equipment, net | 112,888 | 113,421 | |
Capitalized into inventory | 1,136 | $ 1,124 | |
Expensed to general and administrative | 371 | 365 | |
Total depreciation and amortization | 1,507 | $ 1,489 | |
Land and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 44,912 | 44,912 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 61,215 | 61,260 | |
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 | $ 36,190 | 35,998 | |
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 and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 34,591 | 34,221 | |
Vineyards and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Depreciable Lives | 7 years | ||
Vineyards 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 | $ 2,450 | 2,489 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,804 | $ 3,479 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Investment maturity period | 1 year | |
Fair value of outstanding debt | $ 14,400 | |
Carrying value of outstanding debt | 18,610 | |
Term Loan Due 2040 | ||
Debt Instrument [Line Items] | ||
Carrying value of outstanding debt | $ 11,360 | $ 11,520 |
Interest rate (as a percent) | 7.81% | |
Term Loan Due 2037 | ||
Debt Instrument [Line Items] | ||
Carrying value of outstanding debt | $ 7,250 | $ 7,375 |
Interest rate (as a percent) | 7.74% |
Financial Instruments (Schedule
Financial Instruments (Schedule of Available for Sale Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Securities, Available-for-sale [Line Items] | ||
Par Value | $ 24,000 | |
Amortized Cost | 23,887 | |
Gross Unrealized Gains | 10 | |
Gross Unrealized Losses | (75) | |
Total Fair Value Measurements | 23,822 | |
Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 4,893 | |
Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 18,929 | |
U.S. Treasury Bill | ||
Debt Securities, Available-for-sale [Line Items] | ||
Par Value | 5,000 | |
Amortized Cost | 4,887 | |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | 0 | |
Total Fair Value Measurements | 4,893 | |
U.S. Treasury Bill | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 4,893 | |
U.S. Treasury Bill | Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 0 | |
Certificates of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Par Value | 19,000 | $ 11,750 |
Amortized Cost | 19,000 | 11,750 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (75) | (77) |
Total Fair Value Measurements | 18,929 | 11,673 |
Certificates of Deposit | Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | 0 | 0 |
Certificates of Deposit | Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Fair Value Measurements | $ 18,929 | $ 11,673 |
Intangible and Other Non-Curr_3
Intangible and Other Non-Current Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 21,150 | $ 21,150 | |
Accumulated amortization | (15,046) | (14,725) | |
Net book value | 6,104 | 6,425 | |
Other non-current assets | 43 | 56 | |
Total intangible and other non-current assets, net | 6,147 | 6,481 | |
Total amortization expense | 321 | $ 321 | |
Brand | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 18,000 | 18,000 | |
Accumulated amortization | (12,420) | (12,155) | |
Net book value | $ 5,580 | 5,845 | |
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 | (2,269) | (2,220) | |
Net book value | $ 431 | 480 | |
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 | ||
Legacy permits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortizable lives (in years) | 14 years | ||
Gross carrying amount | $ 250 | 250 | |
Accumulated amortization | (211) | (207) | |
Net book value | $ 39 | 43 | |
Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortizable lives (in years) | 20 years | ||
Gross carrying amount | $ 200 | 200 | |
Accumulated amortization | (146) | (143) | |
Net book value | $ 54 | $ 57 |
Intangible and Other Non-Curr_4
Intangible and Other Non-Current Assets (Amortization Expense for Intangible Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 965 | |
2024 | 1,286 | |
2025 | 1,168 | |
2026 | 1,073 | |
2027 | 1,073 | |
Thereafter | 539 | |
Net book value | $ 6,104 | $ 6,425 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued grape liabilities | $ 2,502 | $ 5,120 |
Accrued compensation related expenses | 2,035 | 3,287 |
Sales and marketing | 617 | 227 |
Acquisition of property and equipment | 264 | 709 |
Accrued interest | 247 | 250 |
Depletion allowance | 701 | 1,176 |
Production and farming | 356 | 202 |
Other accrued expenses | 509 | 489 |
Total accounts payable and accrued liabilities | $ 7,231 | $ 11,460 |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Carrying value of outstanding debt | $ 18,610,000 | |
Unamortized loan fees | (93,000) | $ (96,000) |
Total debt | 18,517,000 | 18,799,000 |
Less current portion of long-term debt | 1,128,000 | 1,128,000 |
Long-term debt due after one year, net | $ 17,389,000 | 17,671,000 |
Minimum | ||
Debt Instrument [Line Items] | ||
Unused line fee (as a percent) | 0.15% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Unused line fee (as a percent) | 0.25% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility | $ 0 | 0 |
Credit facility borrowing capacity | 60,000,000 | |
Term Revolving Loan | ||
Debt Instrument [Line Items] | ||
Credit facility borrowing capacity | $ 10,000,000 | |
Term of debt | 5 years | |
Term Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility borrowing capacity | $ 50,000,000 | |
Term of debt | 15 years | |
Term Loan Due 2040 | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 5.24% | |
Carrying value of outstanding debt | $ 11,360,000 | 11,520,000 |
Term Loan Due 2037 | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 5.39% | |
Carrying value of outstanding debt | $ 7,250,000 | $ 7,375,000 |
Debt (Long-term Debt Maturities
Debt (Long-term Debt Maturities) (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Maturities of Long-term Debt [Abstract] | |
Principal due the remainder of 2023 | $ 855 |
Principal due in 2024 | 1,140 |
Principal due in 2025 | 1,140 |
Principal due in 2026 | 1,140 |
Principal due in 2027 | 1,140 |
Principal due thereafter | 13,195 |
Total | $ 18,610 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Mar. 31, 2023 USD ($) tranche shares | Mar. 31, 2022 USD ($) tranche shares | Jul. 31, 2021 increment shares | Dec. 31, 2019 shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) $ / shares shares | Jul. 31, 2022 shares | Feb. 28, 2013 shares | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Repurchased common stock (in shares) | 7,303 | |||||||
Purchase price (in dollars per share) | $ / shares | $ 6.15 | $ 8.08 | ||||||
Repurchase of common stock | $ | $ 3 | $ 59 | ||||||
Options outstanding under share-based compensation arrangement (in shares) | 1,322,000 | 1,322,000 | ||||||
Share-based compensation arrangement by share-based payment award, options, exercises in period (in shares) | 0 | |||||||
Stock-based compensation | $ | $ 116 | 57 | ||||||
December 2019 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Units issued under share-based compensation arrangement (in shares) | 89,000 | |||||||
Vesting period (in years) | 5 years | |||||||
Expiration period (in years) | 7 years | |||||||
July 2021 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Units issued under share-based compensation arrangement (in shares) | 233,000 | |||||||
Expiration period (in years) | 7 years | |||||||
Number of vesting tranches | increment | 4 | |||||||
March 2022 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Units issued under share-based compensation arrangement (in shares) | 500,000 | |||||||
Expiration period (in years) | 10 years | |||||||
Number of vesting tranches | tranche | 4 | |||||||
March 2023 Grants | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Units issued under share-based compensation arrangement (in shares) | 500,000 | |||||||
Expiration period (in years) | 10 years | |||||||
Number of vesting tranches | tranche | 5 | |||||||
Options outstanding under share-based compensation arrangement (in shares) | 500,000 | 500,000 | ||||||
2013 Plan | Stock Option | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 1,000,000 | |||||||
2022 Plan | Stock Option | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 678,000 | |||||||
2022 Repurchase Program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Share repurchase program amount authorized (up to) | $ | $ 2,000 | $ 4,000 | $ 2,000 | $ 4,000 | ||||
Repurchased common stock (in shares) | 500 | |||||||
Repurchase of common stock | $ | $ 3 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-Based Compensation (Grant Date Fair Value of the Awards) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Equity, Class of Treasury Stock [Line Items] | |
Shares issued (shares) | shares | 1,322 |
March 2023 Grants | |
Equity, Class of Treasury Stock [Line Items] | |
Shares issued (shares) | shares | 500 |
Expected dividend yield (as a percent) | 0% |
Risk-free interest rate (as a percent) | 4.08% |
Expected Stock price volatility, minimum (as a percent) | 27% |
Expected Stock price volatility, maximum (as a percent) | 29% |
Stock price (in dollars per share) | $ / shares | $ 5.95 |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 2.64 |
Grant date fair value | $ | $ 1,319 |
Minimum | March 2023 Grants | |
Equity, Class of Treasury Stock [Line Items] | |
Expected term (in years) | 7 years 5 months 1 day |
Maximum | March 2023 Grants | |
Equity, Class of Treasury Stock [Line Items] | |
Expected term (in years) | 9 years 5 months 1 day |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 28.20% | 28.70% |
Business Segment Information (N
Business Segment Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segment Information (S
Business Segment Information (Schedule Of Segment Reporting) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 15,221 | $ 18,623 |
Cost of sales | 8,287 | 11,528 |
Gross profit (loss) | 6,934 | 7,095 |
Operating expenses: | ||
Sales and marketing | 4,310 | 3,739 |
General and administrative | 3,468 | 3,298 |
Total operating expenses | 7,778 | 7,037 |
Net loss on disposal of property and equipment | 49 | 20 |
Income (loss) from operations | (893) | 38 |
Operating Segments | Wholesale | ||
Segment Reporting Information [Line Items] | ||
Net sales | 8,320 | 11,550 |
Cost of sales | 5,275 | 7,913 |
Gross profit (loss) | 3,045 | 3,637 |
Operating expenses: | ||
Sales and marketing | 1,594 | 1,341 |
General and administrative | 0 | 0 |
Total operating expenses | 1,594 | 1,341 |
Net loss on disposal of property and equipment | 0 | 0 |
Income (loss) from operations | 1,451 | 2,296 |
Operating Segments | Direct to Consumer | ||
Segment Reporting Information [Line Items] | ||
Net sales | 5,947 | 6,227 |
Cost of sales | 2,019 | 2,105 |
Gross profit (loss) | 3,928 | 4,122 |
Operating expenses: | ||
Sales and marketing | 1,725 | 1,683 |
General and administrative | 0 | 0 |
Total operating expenses | 1,725 | 1,683 |
Net loss on disposal of property and equipment | 0 | 0 |
Income (loss) from operations | 2,203 | 2,439 |
Other/Non-Allocable | ||
Segment Reporting Information [Line Items] | ||
Net sales | 954 | 846 |
Cost of sales | 993 | 1,510 |
Gross profit (loss) | (39) | (664) |
Operating expenses: | ||
Sales and marketing | 991 | 715 |
General and administrative | 3,468 | 3,298 |
Total operating expenses | 4,459 | 4,013 |
Net loss on disposal of property and equipment | 49 | 20 |
Income (loss) from operations | $ (4,547) | $ (4,697) |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss | $ (612) | $ (157) |
Common shares: | ||
Weighted-average number of common shares outstanding - basic (in shares) | 21,448 | 22,524 |
Dilutive effect of stock options outstanding (in shares) | 0 | 0 |
Weighted-average number of common shares outstanding - diluted (in shares) | 21,448 | 22,524 |
Loss per share: | ||
Basic (in dollars per share) | $ (0.03) | $ (0.01) |
Diluted (in dollars per share) | $ (0.03) | $ (0.01) |
Stock Option | ||
Loss per share: | ||
Antidilutive stock options (in shares) | 1,322 | 822 |