Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Sep. 14, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | Truett-Hurst, Inc. | |
Entity Central Index Key | 1,564,709 | |
Current Fiscal Year End Date | --06-30 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 4,856,018 | |
Trading Symbol | THST | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,426,789 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 783 | $ 4,043 |
Accounts receivable | 1,932 | 2,678 |
Inventories, net | 20,609 | 19,918 |
Bulk wine deposits | 0 | 271 |
Other current assets | 505 | 125 |
Total current assets | 23,829 | 27,035 |
Property and equipment, net | 5,426 | 5,583 |
Intangible assets, net | 506 | 496 |
Other assets, net | 277 | 391 |
Total assets | 30,038 | 33,505 |
Current liabilities: | ||
Lines of credit | 7,290 | 10,311 |
Accounts payable | 1,994 | 1,351 |
Accrued expenses | 546 | 820 |
Depletion allowance and accrual for sales returns | 495 | 1,138 |
Current portion of capital lease obligation | 11 | |
Current maturities of long term debt | 491 | 475 |
Total current liabilities | 10,827 | 14,095 |
Long term debt, net of current maturities | 3,002 | 3,189 |
Capital lease obligation, net of current portion | 63 | |
Total liabilities | 13,892 | 17,284 |
Commitments and contingencies (Note 7) | ||
Shareholders’ equity: | ||
Preferred stock, par value of $0.001 per share, 5,000,000 shares authorized, none issued and outstanding at June 30, 2017 and June 30, 2016 | 0 | 0 |
Additional paid-in capital | 16,082 | 15,794 |
Accumulated deficit | (5,651) | (5,600) |
Total Truett-Hurst, Inc. shareholders' equity | 10,435 | 10,198 |
Noncontrolling interest | 5,711 | 6,023 |
Total equity | 16,146 | 16,221 |
Total liabilities and equity | 30,038 | 33,505 |
Common Class A [Member] | ||
Shareholders’ equity: | ||
Common stock, value | 4 | 4 |
Total equity | 4 | 4 |
Common Class B [Member] | ||
Shareholders’ equity: | ||
Common stock, value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Jun. 30, 2017 | Jun. 30, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 4,426,789 | 4,306,609 |
Common stock, shares outstanding | 4,426,789 | 4,306,609 |
Common Class B [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 7 | 7 |
Common stock, shares outstanding | 7 | 7 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||
Sales | $ 22,153 | $ 26,517 |
Less excise tax | (617) | (734) |
Net sales | 21,536 | 25,783 |
Cost of sales | 14,314 | 17,496 |
Gross profit | 7,222 | 8,287 |
Operating expenses: | ||
Sales and marketing | 4,986 | 5,286 |
General and administrative | 2,985 | 3,062 |
Loss on disposal of assets | 62 | 17 |
Total operating expenses | 8,033 | 8,365 |
Net loss from operations | (811) | (78) |
Other income (expense): | ||
Interest expense, net | (331) | (317) |
Gain on lease termination, net | 844 | |
Gain (loss) on fair value of interest rate swap | 131 | (143) |
Other expense | (35) | (8) |
Total other income (expense) | 609 | (468) |
Net loss before income taxes | (202) | (546) |
Income tax expense | (2) | (2) |
Net loss from continuing operations | (204) | (548) |
Income from discontinued operations, net of tax | 45 | |
Net loss attributable to Truett-Hurst, Inc. and H.D.D. LLC | (204) | (503) |
Net loss attributable to noncontrolling interest: H.D.D. LLC | (153) | (259) |
Net loss attributable to Truett-Hurst, Inc. | $ (51) | $ (244) |
Net loss per share: | ||
Basic per share | $ (0.01) | $ (0.06) |
Weighted average shares used in computing net loss per share: | ||
Basic and diluted weighted average shares | 4,377,994 | 4,155,151 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Class A [Member] | Common Class B [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] |
Balance at Jun. 30, 2015 | $ 16,349 | $ 4 | $ 14,618 | $ (5,356) | $ 7,083 | |
Balance (in shares) at Jun. 30, 2015 | 4,010,120 | 7 | ||||
Vesting of Class A restricted stock (in shares) | 140,277 | |||||
Conversion of LLC Units for Class A common stock | 801 | (801) | ||||
Conversion of LLC Units for Class A common stock (in shares) | 156,212 | |||||
Stock-based compensation expense | 375 | 375 | ||||
Net loss | (503) | (244) | (259) | |||
Balance at Jun. 30, 2016 | 16,221 | $ 4 | 15,794 | (5,600) | 6,023 | |
Balance (in shares) at Jun. 30, 2016 | 4,306,609 | 7 | ||||
Vesting of Class A restricted stock (in shares) | 45,180 | |||||
Conversion of LLC Units for Class A common stock | 159 | (159) | ||||
Conversion of LLC Units for Class A common stock (in shares) | 75,000 | |||||
Stock-based compensation expense | 129 | 129 | ||||
Net loss | (204) | (51) | (153) | |||
Balance at Jun. 30, 2017 | $ 16,146 | $ 4 | $ 16,082 | $ (5,651) | $ 5,711 | |
Balance (in shares) at Jun. 30, 2017 | 4,426,789 | 7 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss attributable to Truett-Hurst, Inc. and H.D.D. LLC | $ (204) | $ (503) |
Income from discontinued operations, net of tax | (45) | |
Net loss from continuing operations | (204) | (548) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 851 | 707 |
Stock-based compensation | 129 | 375 |
(Gain) loss on fair value of interest rate swap | (131) | 143 |
Gain on lease termination, net | (844) | |
Proceeds received on lease termination | 955 | |
Loss on disposal of assets | 92 | 17 |
Changes in operating assets and liabilities, net | ||
Accounts receivable | 746 | 105 |
Inventories | (691) | 2,162 |
Bulk wine deposits | 271 | 74 |
Other current assets | (372) | 166 |
Accounts payable | 643 | (1,538) |
Accrued expenses | (151) | 28 |
Depletion allowance and accrual for sales returns | (643) | 90 |
Due to related parties | (134) | |
Net cash provided by net operating assets and liabilities of discontinued operations | 78 | |
Net cash provided by operating activities | 651 | 1,725 |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (674) | (428) |
Acquisition of intangible and other assets | (50) | (137) |
Proceeds from sale of assets | 5 | 4 |
Net cash used in investing activities | (719) | (561) |
Cash flows from financing activities: | ||
Net (payments on) proceeds from lines of credit | (3,021) | 1,277 |
Proceeds from long term debt | 387 | 500 |
Payments on long term debt | (558) | (476) |
Net cash (used in) provided by financing activities | (3,192) | 1,301 |
Net change in cash and cash equivalents | (3,260) | 2,465 |
Cash and cash equivalents at beginning of year | 4,043 | 1,578 |
Cash and cash equivalents at end of year | 783 | 4,043 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 327 | 324 |
Cash paid for income taxes | 2 | $ 1 |
Non-cash investing and financing activities: | ||
Equipment financed with capital lease obligation | $ 74 |
Business
Business | 12 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | NOTE 1 - Business Business Truett-Hurst, Inc. (“Truett-Hurst”, the “Company”, or “THI”) is a holding company formed in Delaware and its sole asset is a controlling interest in H.D.D. LLC (“LLC”). The audited consolidated financial statements as of and for the years ended June 30, 2017 and June 30, 2016 include the results of Truett-Hurst, Inc. and its subsidiary, the LLC. Truett-Hurst consolidates the financial results of the LLC and records a noncontrolling interest for the economic interest in the LLC that is not attributable to Truett-Hurst, Inc. The Company operates and controls all of the business and affairs and consolidates the financial results of the LLC. In addition, pursuant to the limited liability company agreement of the LLC, the Company has the right to determine when distributions will be made to the members of the LLC and the amount of distributions. If a distribution is authorized, such distribution will be made to the members of the LLC pro rata in accordance with the percentages of their respective limited liability company interests. Quantities or results referred to as “to date” or “as of this date” mean as of or to June 30, 2017, unless otherwise specifically noted. References to “FY” or “fiscal year” refer to the fiscal year ending on June 30th of the designated year. For example, “FY17” and “fiscal year 2017” each refer to the fiscal year ended June 30, 2017. This Annual Report on Form 10-K references certain trademarks and registered trademarks of products or service names of other companies mentioned in this Annual Report on Form 10-K that may be trademarks or registered trademarks of its respective owners. Capital Structure The Company has two classes of stock with shares outstanding: Class A common stock and Class B common stock. As of June 30, 2017, there were 4,426,789 shares of Class A common stock and 7 shares of Class B common stock outstanding. One share of Class B common stock is issued to each holder of LLC units which, on matters presented for shareholder vote, provides its owner one vote for each LLC unit held. The 7 shares of Class B common stock were associated with 2.76 million LLC units (the entire amount of LLC units held by parties other than THI) and represents 41% of the voting power of the combined outstanding Class A and Class B common stock. The Company maintains an exchange agreement with holders of LLC units, several of whom are directors and/or officers, under which each LLC member may exchange their LLC units for shares of Class A common stock on a one-to-one basis. Through ownership of Class A and Class B common stock, individuals who are officers and/or directors of the Company control 41% of the voting power of the combined outstanding Class A and Class B common stock. Tax Receivable Agreement Prior to the completion of the IPO, the Company entered into a tax receivable agreement with the LLC members. The agreement provides for the payment from time to time, as “corporate taxpayer,” to holders of LLC Units of 90% of the amount of the benefits, if any, that the corporate taxpayer is deemed to realize as a result of the exchange of LLC Units (current and future) and certain other tax benefits related to the Company entering into the agreement. These payment obligations are obligations of the corporate taxpayer and not of the LLC. |
Critical Accounting Policies an
Critical Accounting Policies and Estimates | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies and Estimates | NOTE 2 - Critical Accounting Policies and Estimates These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP” or “GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities. Estimates are based on historical experience and on various other assumptions that management believes are reasonable under the given circumstances. These estimates could be materially different under different conditions and assumptions. Additionally, the actual amounts could differ from the estimates made. The Company periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness and prospectively applies appropriate adjustments, if any, to these estimates. The Company’s critical accounting policies include: Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity date when purchased of three months or less, and are stated at cost, which approximates fair value. Accounts Receivable Accounts receivable consists primarily of trade receivables from customers who tend to be large distributors. Accounts receivable are reviewed regularly and estimates are made for allowance for doubtful accounts when there is doubt as to the collectability of individual balances. No allowance for doubtful accounts was considered necessary as of June 30, 2017 and June 30, 2016. Inventories Inventories consist primarily of bulk and bottled wine and purchased grapes valued at the lower of cost or market using the first-in, first-out or specific identification method. In accordance with general wine industry practice, bulk and bottled wine inventories are included in current assets, although a portion of such inventories may be aged for a period longer than one year. Costs associated with winemaking and the production of wine are reflected in inventories as bulk wine until the wine has been bottled and is available for sale. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value. Net realizable value of such inventories is estimated 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. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the useful lives of the asset, principally twenty to forty years for building and improvements, five years for machinery and equipment, seven to fifteen years for vineyard development, ten to twenty years for vineyard equipment, five to ten years for furniture and fixtures, the shorter of estimated useful life or lease term, generally five years for leasehold improvements and five years for vehicles. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included as a component of loss from operations. Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted cash flows, an impairment loss is recognized to the extent of such difference. Intangible Assets Indefinite lived intangible assets consist of trademarks and are reviewed for impairment during the fourth fiscal quarter of each year, or sooner, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Finite lived intangible assets consist of patents and are amortized over their estimated legal lives. Patents begin amortizing at the granting of the patent. Other Assets Other assets consist of label design and website design costs and are amortized over their estimated useful lives, principally five years for both label design and website costs. Label designs are evaluated for impairment in accordance with the policy on impairment of long-lived assets. Revenue Recognition Wine sales are recognized when the product is shipped and title passes to the customer. Standard terms are ‘FOB’ shipping point, with no customer acceptance provisions. The cost of price promotions and discounts are treated as reductions of sales. No products are sold on consignment. Credit sales are recorded as trade accounts receivable and no collateral is required. Net sales from items sold direct to consumer are recognized at the time of sale. Sales Discounts and Depletion Allowances Sales discounts and depletion allowances are recorded as a reduction of sales at the time of the sale. For FY17 and FY16, sales discounts and depletion allowances totaled $3.9 million and $4.7 million, respectively. Cost of Sales Cost of sales includes costs associated with grape growing, grapes purchased from vineyards not owned by the Company, bulk wine and finished goods purchases, packaging materials, winemaking and production costs, vineyard and production administrative support and overhead costs, purchasing and receiving costs and certain warehousing costs. No further costs are allocated to inventory once the product is bottled and available for sale. Inventory reserves and provisions are included in cost of sales. Expense Allocation The LLC Operating Agreement provides that substantially all expenses incurred by or attributable to the Company are borne by the LLC, except the Company’s income tax payments. Sales and Marketing Expense Sales and marketing expenses consist primarily of personnel costs, advertising and other costs for marketing and promoting the Company’s products. Advertising costs are expensed as incurred. For FY17 and FY16, advertising expense totaled approximately $0.3 million and $0.4 million, respectively. General and Administrative Expenses General and administrative expenses include the costs associated with personnel, professional fees, insurance and other expenses related to administrative and compliance functions. For FY17 and FY16, total general and administrative expenses totaled approximately $3.0 million and $3.1 million, respectively. Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling are recorded as sales, and the costs incurred for shipping and handling are recorded as a sales and marketing expense. Gross margins may not be comparable to other companies in the same industry as other companies may record shipping and handling costs as cost of sales. For FY17 and FY16, shipping costs were $1.0 million and $0.9 million, respectively. Income Taxes and Deferred Tax Asset Valuation Truett-Hurst, Inc. is subject to U.S. federal, state, and local taxes with respect to its allocable share of any taxable income of H.D.D. LLC and will be taxed at the prevailing corporate rates. The LLC is treated as a partnership under the Internal Revenue Code of 1986, as amended (the “Code”). The members separately account for their pro-rata share of income, deductions, losses, and credits. Therefore, no provision is made for the LLC’s share of net income (loss) in the consolidated financial statements for liabilities for federal, state, or local income taxes which liabilities are the responsibility of the individual members. The LLC is subject to entity level taxation in the state of California. As a result, the accompanying consolidated statements of operations include tax expense related to this state. The provision for income taxes is calculated using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized based on the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The net deferred tax asset is evaluated at the end of each year considering all available positive and negative evidence, including reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. When the Company does not believe the realization of a deferred tax asset is likely, a valuation allowance is recorded. Stock-Based Compensation Stock-based compensation is recognized based on the estimated fair values at the grant date for equity classified awards and the recognition of the related compensation expense over the appropriate vesting period. Compensation expense is based on, among other things, (i) the classification of an award, (ii) assumptions relating to fair value measurement such as the value of the stock of Truett-Hurst and its volatility, the expected term of the award and forfeiture rates, and (iii) whether performance criteria, if any, have been met. Both internal and external data is used to assess compensation expense. Changes in these estimates could significantly impact stock-based compensation expense in the future. The expected term of the option is based upon the contractual term, expected employee exercise and expected post-vesting employment termination behavior. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic market adjustments as the underlying equity instruments vest. Earnings per Share Basic earnings per share is computed by dividing the earnings attributable to the Company by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potential dilutive common shares, including convertible LLC units and restricted stock unless this calculation would have an anti-dilutive effect in which case basic and diluted earnings per share are calculated similarly. Reclassifications Certain prior period amounts in the consolidated financial statements and notes thereto have been reclassified to conform to the current year presentation. These reclassifications had no effect on the reported consolidated results of continuing operations. Accounting Pronouncements In November 2015, the FASB issued ASU No. 2015-17: Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842). In March 2016, the FASB issued ASU No. 2016-09: Improvements to Employee Share-Based Payment Accounting Compensation - Stock Compensation. In August 2016, the FASB issued ASU No. 2016-15: Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments In 2015, the FASB issued ASU 2015-11: Inventory (Topic 330) In 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In 2016, the FASB issued ASU 2016-08: Revenue from Contracts with Customers (Topic 606) In 2016, the FASB issued ASU 2016-10: Revenue from Contracts with Customers (Topic 606) |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 - INVENTORIES Inventories comprise: June 30, 2017 June 30, 2016 (in thousands) Grapes and bulk wine $ 5,933 $ 8,413 Bottled wine 14,495 11,262 Bottling materials and other 268 322 20,696 19,997 Less: inventory reserves (87 ) (79 ) Total inventories, net $ 20,609 $ 19,918 See Note 14, “Subsequent Events”. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jun. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment comprise: June 30, 2017 June 30, 2016 (in thousands) Land and land improvements $ 3,260 $ 3,231 Building and improvements 1,420 1,380 Machinery and equipment 2,189 1,935 Vineyard development 554 554 Vineyard equipment 88 88 Furniture and fixtures 293 262 Leasehold improvements 79 190 Vehicles 113 85 7,996 7,725 Less: accumulated depreciation and amortization (2,570 ) (2,142 ) Total property and equipment, net $ 5,426 $ 5,583 Total depreciation and amortization expense for the fiscal years ended June 30, 2017 and June 30, 2016 was $0.9 million and $0.7 million, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 5 - INTANGIBLE ASSETS Intangible assets comprise: June 30, 2017 June 30, 2016 (in thousands) Finite lives: Patents $ 44 $ 44 Less: accumulated amortization (1 ) (1 ) 43 43 Indefinite lives: Trademarks 463 453 Total intangible assets, net $ 506 $ 496 Amortization expense related to intangible assets was negligible during FY17 and FY16. The expected future amortization of patents is $0.04 million for the life of the patents. Patents begin amortizing at the granting of the patent. |
Borrowings
Borrowings | 12 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | NOTE 6 - BORROWINGS The Company’s indebtedness is comprised primarily of bank loans including lines of credit and long term debt. Lines of Credit On August 17, 2017, the Company completed the renewal process of the revolving line of credit. Below is a description of the lines of credit as of June 30, 2017 as well as the line put in place as of August 17, 2017. • Line of Credit Note - As of June 30, 2017, the Company had a $10.0 million revolving line of credit with an outstanding balance of $7.3 million and a maturity date of July 31, 2017. The outstanding balance accrued interest at an annual interest rate of 2.25% above LIBOR. On August 17, 2017 the line of credit was renewed with the maturity date extended to July 31, 2018. Pricing on the loan was unchanged. • Equipment Purchase Line of Credit Note - As of June 30, 2017, the Company had a $0.5 million equipment purchase line of credit note with an outstanding balance of $0.3 million. The outstanding balance accrued interest at a rate of 2.25% above the floating One-Month LIBOR Rate. This equipment purchase line of credit matured July 31, 2017 and converted to a $0.3 million term loan with a 36-month amortization schedule. The Company chose not to request a new equipment purchase line of credit note from the lender. • Foreign Exchange Note - As of June 30, 2017, the Company had a foreign exchange note in the principal amount of $0.1 million from the bank due on or before July 31, 2017 that carried a 15% credit percentage and permitted the Company to enter into any spot or forward transaction to purchase from or sell to the bank a foreign currency of an agreed amount. There was no balance outstanding on the foreign exchange note as of June 30, 2017. The Company chose not to extend the maturity date of the foreign exchange note. Long Term Debt Long term debt comprises: June 30, 2017 June 30, 2016 (in thousands except payment Long term debt: Note 1 (1 ) $ 2,716 $ 2,851 Note 2 (2 ) 45 120 Note 3 (3 ) 158 244 Note 4 (4 ) 270 392 Note 5 (5 ) — 57 Note 6 (6 ) 304 — Total notes payable 3,493 3,664 Less: current maturities (491 ) (475 ) Total long term debt $ 3,002 $ 3,189 (1) Note payable to a bank, secured by a deed of trust on property, payable monthly with principal payments of $11,270 plus interest, matures May 31, 2022, variable interest of 2.25% above LIBOR. (2) (3) (4) (5) The note was repaid in July 2016. (6) Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $8,729, matures July 1, 2020; at 3.95% interest. Future principal and interest payments for the long term debt as of June 30, 2017 are as follows: Years ending June 30, (in thousands) 2018 $ 491 2019 434 2020 249 2021 144 2022 2,175 3,493 Add: estimated interest payments 507 Total $ 4,000 Covenants The bank borrowings contain usual and customary covenants, including, among others, limitations on incurrence of senior indebtedness, the making of loans and advances, investments, acquisitions, and capital expenditures, the incurrence of liens, and the consummation of mergers and asset sales. The loan maintains the minimum current assets to current liabilities ratio covenant (measured quarterly) and the maximum debt to effective tangible net worth ratio covenant (measured quarterly). When the line of credit was renewed on August 17, 2017, the previous debt service coverage ratio (measured quarterly on a trailing twelve-month basis) was replaced with a minimum quarterly EBITDA covenant. The Company was out of compliance with the debt service coverage ratio for the quarters ended December 31, 2016, March 31, 2017, and June 30, 2017, but received waivers for those periods from the Company’s lender. The Company was in compliance with all other covenants at June 30, 2017. Security Agreements and Limited Guaranties The bank borrowings (as in place at June 30, 2017 and subsequently renewed) are collateralized by substantially all of the Company’s assets. Additionally, certain LLC members who are also executive officers and/or directors of the Company, as well as certain trusts and other entities under their control (together the “Guarantors”), have entered into limited guarantee agreements which guarantee the payment to the bank of all sums presently due and owning and all sums which shall in the future become due and owning. The liability of the individual Guarantors ranges from 23% to 61% of the sum of all obligations due plus the costs, expenses and interest associated with the collection of amounts recoverable under the guaranties. Capital Lease In June 2017, the Company entered into a 72-month capital lease related to wine production equipment. The future lease commitments are $0.02 million per year for fiscal years 2018 through 2023. |
Depletion Allowance and Accrual
Depletion Allowance and Accrual for Sales Returns | 12 Months Ended |
Jun. 30, 2017 | |
Depletion Allowance And Accrual For Sales Returns [Abstract] | |
Depletion Allowance and Accrual for Sales Returns | NOTE 7 – DEPLETION ALLOWANCE AND ACCRUAL FOR SALES RETURNS The depletion allowance was $0.5 million and $0.6 million as of June 30, 2017 and June 30, 2016, respectively. In a prior year, the accrual for sales returns was established for the return of product that had oxidized. The initial accrual amount was $0.5 million. In June 2016, a final settlement was reached with the last distributor with remaining material financial exposure associated with the oxidized products. As of June 30, 2017, approximately $0.03 million of case goods remain to be shipped compared to a remaining accrual of $0.5 million as of June 30, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 - COMMITMENTS AND CONTINGENCIES Leases The Company leases space for wine production within a custom crush facility located in Santa Rosa, California. The lease, which relates to the 2017 harvest, commenced April 15, 2017 and terminates on June 15, 2018. The initial 14-month term may be renewed for additional periods as agreed to by both parties. The future lease commitments as presented below include amounts for this lease. The Company leases approximately 2,500 square feet for administrative offices at 125 Foss Creek Circle, Healdsburg, California. In June 2016, the Company renewed the lease for an additional three years. The renewed lease term is November 1, 2016 through October 31, 2019. The Company also leases approximately 1,600 square feet for executive and administrative offices at 165 Foss Creek Circle, Healdsburg, California. The lease commenced on September 1, 2016 and ends on October 31, 2019. The future lease commitments as presented below include amounts for these two leases. Rent payments for these facilities were $0.4 million for the fiscal year ended June 30, 2017 compared to $0.3 million for the fiscal year ended June 30, 2016. Future lease commitments are: Years ending June 30, (in thousands) 2018 $ 293 2019 90 2020 31 Thereafter — Total future rent payments $ 414 Supply Contracts The Company enters into short and long term contracts with third-parties and related party growers to supply a portion of its future grape and bulk wine inventory requirements. Future minimum grape and bulk wine inventory purchase commitments are as follows: Years ending June 30, Third-Parties Related Total (in thousands) 2018 $ 3,993 $ 57 $ 4,050 2019 2,312 — 2,312 2020 1,567 — 1,567 Thereafter 101 — 101 Total $ 7,973 $ 57 $ 8,030 At June 30, 2017, total future purchase commitments for finished goods are approximately $1.0 million and are expected to be fulfilled during fiscal 2018. Production & Storage The Company enters into various contracts with third-party service providers for grape crushing, wine storage, and bottling. The costs are recorded in the period for which the service is provided. The actual costs related to custom crush services are based on volume. The Company’s current contracts for custom crush services cover the 2017 harvest. The current bottling contract requires a minimum of 120,000 cases at $2.85 per case to be bottled in a one-year period. For FY17, the monthly average percentage of the Company’s bulk wine stored at a related-party storage facility was 60%. Litigation From time to time, the Company may be subject to various litigation matters arising in the ordinary course of business. Other than discussed below, the Company is not aware of any current pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows. In January 2016, Mendocino Wine Group (“MWG”) filed a complaint against Phil Hurst and the LLC. The complaint alleges that, prior to January 2012, Phil Hurst and the LLC aided and abetted Paul Dolan in his alleged breach of fiduciary duties to MWG and that they interfered with Paul Dolan’s contract with Thornhill Management Company (the manager of MWG), and aided and abetted Paul Dolan’s interference with MWG’s economic advantage. Phil Hurst and the LLC deny the claims, deny all wrongdoing, and deny that they caused any harm to MWG. In November 2016, the Sonoma County Superior Court granted MWG’s Motion to Consolidate the Hurst/LLC case with a second complaint MWG filed against a law firm for legal malpractice and breach of fiduciary duty. The Court ruled the cases were sufficiently related and should be tried together. A new trial date has been set for November 2017. No amount has been recorded in the consolidated financial statements related to this suit. In October 2017, the Sonoma County Superior Court granted the Company’s summary judgement motion and dismissed the case against Phil Hurst and the LLC. The plaintiff, MWG, has 60 days to appeal the Court’s decision. If such an appeal is filed, the process may take 9 to 18 months to obtain a final resolution. In June 2016, the Company settled outstanding litigation with the Hambrecht Wine Group, L.P. related to the lease of one of its tasting rooms and a winery production facility located at 4035 Westside Road, Healdsburg, California, in exchange for payment of $1.0 million to the LLC, quitclaimed certain rights, and modified its lease such that the Company vacated the tasting room portion of the property prior to December 31, 2016, and vacated the winery production portion prior to May 31, 2017. The Company received a series of settlement payments totaling $1.0 million in fiscal year 2017 and recorded a net gain of $0.8 million related to the lease termination in the Company’s consolidated statement of operations for the fiscal year ended June 30, 2017. Exchange and Tax Receivable Agreement The Company has an exchange agreement with the existing owners of the LLC, several of whom are directors and/or officers. Under the exchange agreement, each LLC member (and certain permitted transferees thereof) may (subject to the terms of the exchange agreement), exchange their LLC Units for shares of Class A common stock of the Company on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or for cash, at the Company’s election. In connection with the exchange agreement, the Company has tax receivable agreement (“TRA”) with the LLC members. The agreement provides for the payment from time to time, as “corporate taxpayer,” to holders of LLC Units of 90% of the amount of the benefits, if any, that the corporate taxpayer is deemed to realize as a result of (i) increases in tax basis resulting from the exchange of LLC Units and (ii) certain other tax benefits related to the Company entering into the agreement, including tax benefits attributable to payments under the agreement. These payment obligations are obligations of the corporate taxpayer and not of the LLC. The term of the agreement will continue until all such tax benefits have been utilized or expired, unless the corporate taxpayer exercises its right to terminate the agreement for an amount based on the agreed payments remaining to be made under the agreement or the corporate taxpayer breaches any of its material obligations under the agreement in which case all obligations will generally be accelerated and due as if the corporate taxpayer had exercised its right to terminate the agreement. In addition, the tax receivable agreement provides that upon certain mergers, asset sales, or other forms of business combinations, substantial payment obligations to the Founders and Affiliates will accelerate. Indemnification From time to time the Company enters into certain types of contracts that contingently require it to indemnify various parties against claims from third-parties. Historically, the Company has not been required to make payments under these obligations, and no liabilities have been recorded at June 30, 2017 and June 30, 2016 for these obligations on the consolidated balance sheets. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 9 - DISCONTINUED OPERATIONS On January 25, 2016, the LLC sold its fifty percent interest in The Wine Spies, LLC (“Wine Spies”) with an effective date of December 31, 2015. The results from Wine Spies, which were previously consolidated, have been deconsolidated in the Company’s FY16 audited consolidated financial statements. The gain on sale has been recorded in the consolidated statements of operations on the discontinued operations line. The Company has no continuing relationship with Wine Spies. Discontinued operations comprise: Fiscal Year Ended June 30, 2016 (in thousands, except share data) Net income from operations of discontinued operations $ 30 Gain on sale 15 Net income from discontinued operations, net of tax $ 45 Earnings Per Share Basic and diluted weighted average shares 4,155,151 Basic and diluted net income per share $ 0.01 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 10 - STOCK-BASED COMPENSATION Equity Incentive Plan The Company has granted restricted stock awards, stock options and restricted stock units to employees, directors and non-employees under its 2012 Stock Incentive Plan. As of June 30, 2017, the 2012 Plan has 1.0 million shares reserved for issuance and a total of 0.251 million granted equity incentive shares outstanding. In accordance with the Company’s board of director’s compensation policy, restricted stock units totaling 45,180 and 140,277 vested during FY17 and FY16, respectively, and resulted in the noncash issuance of the Company’s Class A common shares. A summary of the activity for restricted stock awards is presented below: Number of Shares Weighted Avg Grant Date Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 97,329 $ 3.24 — $ 148 Granted — — — — Exercised — — — — Released (92,066 ) — — 140 Vested — — — — Forfeited, cancelled or expired — — — — Outstanding at June 30, 2016 5,263 $ 3.80 1.46 $ 8 Granted — — — — Exercised (2,632 ) — — — Released — — — — Vested — — — — Forfeited, cancelled or expired — — — — Outstanding at June 30, 2017 2,631 $ 3.80 0.49 $ 5 Expected to vest at June 30, 2017 2,631 $ — — $ — A summary of the activity for restricted stock units is presented below: Number of Shares Weighted Avg Grant Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 87,500 $ 5.00 — $ 134 Granted 45,180 1.66 — 69 Exercised (43,750 ) — — — Released — — — — Vested — — — — Forfeited, cancelled or expired — 3.30 — — Outstanding at June 30, 2016 88,930 $ 3.30 2.22 $ 135 Granted 33,334 2.25 — — Exercised (45,180 ) 1.66 — — Released — — — — Vested — — — — Forfeited, cancelled or expired (43,750 ) 5.00 — — Outstanding at June 30, 2017 33,334 $ 2.25 0.50 $ 69 Expected to vest at June 30, 2017 33,334 $ — — $ — A summary of the activity for stock options is presented below: Number of Shares Weighted Avg Grant Date Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 220,000 $ 4.35 — $ — Granted 340,000 1.87 — — Vested 87,500 — — — Forfeited, cancelled or expired (95,000 ) — — — Outstanding at June 30, 2016 465,000 $ 2.95 9.04 $ — Options Vested 125,000 $ 4.01 — — Options Non-Vested 340,000 $ 2.56 — $ — Options Exercisable 125,000 $ 4.01 — — Granted 100,000 1.78 — — Vested — — — — Forfeited, cancelled or expired (350,000 ) — — — Outstanding at June 30, 2017 215,000 $ 1.67 9.04 $ — Options Vested 50,000 $ 1.61 8.90 Options Non-Vested 165,000 $ 1.69 9.07 $ — Options Exercisable 50,000 $ 1.61 8.90 — The following table summarizes stock-based compensation included in the consolidated statements of operations for the fiscal years ended June 30, 2017 and 2016, respectively: Fiscal Year Ended June 30, (in thousands) 2017 2016 Sales and marketing $ 33 $ 49 General and administrative 96 326 Total stock-based compensation $ 129 $ 375 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | NOTE 11 - FINANCIAL INSTRUMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities are all categorized as Level 1. They include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which approximated their fair values due to the short term nature of these financial assets and liabilities. The carrying amount of the Company’s debt approximates its fair value based on prevailing interest rates and time to maturity. In October 2012, the Company executed an interest rate swap obligation that was measured using observable inputs such as the LIBOR and Ten-year Treasury interest rates, and therefore has been categorized as Level 2. This derivative is not designated as a hedging instrument and has been recorded at fair value on the consolidated balance sheets. Changes in the fair value of this instrument have been recognized in the consolidated statements of operations in other expense. The maturity date of the swap is May 31, 2022. The following tables set forth the interest rate swap fair values at June 30, 2017 and at June 30, 2016: Fair reporting date (in thousands) Fair value as June 30, 2017 Significant other observable (Level 2) Assets Interest rate swap (1) $ 8 $ 8 Total $ 8 $ 8 (1) Included in “Other current assets” in the Balance Sheet Fair value measurements at reporting date (in thousands) Fair value as of June 30, 2016 Significant other observable inputs (Level 2) Liabilities Interest rate swap (2) $ (123 ) $ (123 ) Total $ (123 ) $ (123 ) (2) Included in “Accrued expenses” in the Balance Sheet |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12 - INCOME TAXES THI is subject to entity level taxation in certain states and is subject to U.S. Federal and state income taxes with respect to its allocable share of any taxable income of the LCC. THI will be taxed at the prevailing corporate tax rates. All income before taxes is recognized domestically. Income tax expense for FY17 and FY16 consists of: Fiscal Year Ended June 30, 2017 (in thousands) Current Deferred Total U.S. Federal $ — $ — $ — State and Local 2 — 2 $ 2 $ — $ 2 Fiscal Year Ended June 30, 2016 (in thousands) Current Deferred Total U.S. Federal $ — $ — $ — State and Local 2 — 2 $ 2 $ — $ 2 The difference between income taxes computed using the 34% statutory federal income tax rate and the Company’s effective tax rate are summarized as follows: June 30, 2017 June 30, 2016 (in thousands) Computed tax at statutory rate $ (68 ) $ (170 ) State taxes, net of federal benefit (12 ) (29 ) Rate benefit as a LLC 52 88 Meals and entertainment 14 7 Stock-based compensation 22 88 Other permanent differences — 1 Valuation allowance (6 ) 17 Income tax expense $ 2 $ 2 Components of deferred tax assets (liabilities) consist of the following: June 30, 2017 June 30, 2016 (in thousands) Deferred tax assets: Accrued compensation $ 10 $ 24 Stock-based compensation 44 49 Intangible assets 2,568 3,146 Sales returns — 121 Net operating losses 1,354 1,193 Inventories 84 Unrealized loss — 28 Other 6 96 Gross deferred tax assets 4,066 4,657 Valuation allowance (3,867 ) (4,128 ) Total deferred tax assets, net of valuation allowance 199 529 Deferred tax liabilities: Inventories — (254 ) Unrealized gain (2 ) — Property and equipment (197 ) (275 ) Total deferred tax liability (199 ) (529 ) Net deferred taxes $ — $ — In FY16, a valuation allowance of $4.1 million was recorded after assessing all the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The assessment of future income of the Company did not change in FY17 and a valuation allowance continues to be recorded on the deferred tax assets in the amount of $3.9 million. The Company’s possible liability associated with the tax receivable agreement will not be recognized until the valuation allowance is partially or fully reversed. THI and the LLC are subject to annual California franchise tax. Truett-Hurst, Inc. files U.S. Federal and California income tax returns. The Company has gross federal and state net operating losses of $3.4 million and $3.5 million, respectively. Both jurisdictions have expiration dates beginning in 2035. For Truett-Hurst, Inc., U.S. federal and state tax returns associated with fiscal years 2014 through 2016 are currently open to examination. U.S. federal and state tax returns for LLC associated with calendar years ended 2013 through 2014 and fiscal years ended 2015 through 2016 are currently open to examination. There were no material uncertain tax positions and the Company does not expect major changes in the next twelve months. |
Significant Customer Informatio
Significant Customer Information, Segment Reporting and Geographic Information | 12 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Significant Customer Information, Segment Reporting and Geographic Information | NOTE 13 - SIGNIFICANT CUSTOMER INFORMATION, SEGMENT REPORTING AND GEOGRAPHIC INFORMATION The Company’s primary reporting segments are identified as wholesale and direct to consumer. Wholesale sales include the retail exclusive brand label model and other brands sold through the three-tier distribution system. Direct to consumer sales occur through the Company’s tasting rooms and wine clubs. Operating and other expenses are not allocated between operating segments; therefore, operating and net income information for the respective segments is not available. In addition, discrete financial information related to segment specific assets is not available. Sales and cost of sales are reported by segment. The following tables reflect net sales, cost of sales and gross profit by segment for continuing operations for each of the fiscal years ended June 30, 2017 and 2016, respectively: Fiscal Years Ended June 30, (in thousands) Wholesale Direct to Consumer Total 2017 2016 2017 2016 2017 2016 Net Sales $ 15,576 $ 20,011 $ 5,960 $ 5,772 $ 21,536 $ 25,783 Cost of Sales 12,161 15,450 2,153 2,046 14,314 17,496 Gross Profit $ 3,415 $ 4,561 $ 3,807 $ 3,726 $ 7,222 $ 8,287 Gross Profit % 21.9 % 22.8 % 63.9 % 64.6 % 33.5 % 32.1 % Significant Customer Information: The following tables set forth concentrations of wholesale sales and accounts receivable as a percent of each total: Percentage of Wholesale Sales Percentage of Total Accounts Receivable Fiscal Year Ended Fiscal Year Ended June 30, June 30, 2017 2016 2017 2016 Customer A 29 % 18 % 19 % 10 % Customer B 24 % 37 % 8 % 26 % Customer C 4 % 3 % 34 % 27 % International sales were $0.8 million and $0.9 million for the fiscal years ended June 30, 2017 and June 30, 2016, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 - SUBSEQUENT EVENTS On August 17, 2017, the Company entered into a Modification Agreement to its Loan and Security agreement with Bank of the West that the Company had entered into on July 15, 2015. With respect to the complaint filed in January 2016 by the Mendocino Wine Group (“MWG”) against Phil Hurst and the LLC, in October 2017, the Sonoma County Superior Court granted the Company’s summary judgement motion and dismissed the case against Phil Hurst and the LLC. The The Company was out of compliance with the minimum EBITDA covenant on its revolving line of credit for the fiscal first quarter ended September 30, 2017, but received a waiver in October 2017 for that period from the Company’s lender. If the Company was unable to obtain any necessary waivers and the debt was accelerated, it would have a material adverse effect on the financial condition and future operating performance, and the Company may be required to limit activities. On October 8, 2017 and for several days thereafter, significant wildfires broke out in Napa, Sonoma, and surrounding counties in Northern California. Certain of the Company’s inventory, primarily juice pressed from grapes picked during the 2017 harvest and maintained at outside production and storage facilities, may be subject to spoilage. The Company believes that any loss of inventory related to the fires is substantially covered under the Company’s insurance policies. Additionally, there may be future negative impacts on the Company’s outside production and operating arrangements, including bottling and warehousing of case goods. The Company has evaluated all subsequent event activity through the issue date of these consolidated financial statements and concluded that, other than the items discussed above, no additional subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements. |
Critical Accounting Policies 21
Critical Accounting Policies and Estimates (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity date when purchased of three months or less, and are stated at cost, which approximates fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable consists primarily of trade receivables from customers who tend to be large distributors. Accounts receivable are reviewed regularly and estimates are made for allowance for doubtful accounts when there is doubt as to the collectability of individual balances. No allowance for doubtful accounts was considered necessary as of June 30, 2017 and June 30, 2016. |
Inventories | Inventories Inventories consist primarily of bulk and bottled wine and purchased grapes valued at the lower of cost or market using the first-in, first-out or specific identification method. In accordance with general wine industry practice, bulk and bottled wine inventories are included in current assets, although a portion of such inventories may be aged for a period longer than one year. Costs associated with winemaking and the production of wine are reflected in inventories as bulk wine until the wine has been bottled and is available for sale. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value. Net realizable value of such inventories is estimated 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. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the useful lives of the asset, principally twenty to forty years for building and improvements, five years for machinery and equipment, seven to fifteen years for vineyard development, ten to twenty years for vineyard equipment, five to ten years for furniture and fixtures, the shorter of estimated useful life or lease term, generally five years for leasehold improvements and five years for vehicles. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included as a component of loss from operations. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted cash flows, an impairment loss is recognized to the extent of such difference. |
Intangible Assets | Intangible Assets Indefinite lived intangible assets consist of trademarks and are reviewed for impairment during the fourth fiscal quarter of each year, or sooner, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Finite lived intangible assets consist of patents and are amortized over their estimated legal lives. Patents begin amortizing at the granting of the patent. |
Other Assets | Other Assets Other assets consist of label design and website design costs and are amortized over their estimated useful lives, principally five years for both label design and website costs. Label designs are evaluated for impairment in accordance with the policy on impairment of long-lived assets. |
Revenue Recognition | Revenue Recognition Wine sales are recognized when the product is shipped and title passes to the customer. Standard terms are ‘FOB’ shipping point, with no customer acceptance provisions. The cost of price promotions and discounts are treated as reductions of sales. No products are sold on consignment. Credit sales are recorded as trade accounts receivable and no collateral is required. Net sales from items sold direct to consumer are recognized at the time of sale. |
Sales Discounts and Depletion Allowances | Sales Discounts and Depletion Allowances Sales discounts and depletion allowances are recorded as a reduction of sales at the time of the sale. For FY17 and FY16, sales discounts and depletion allowances totaled $3.9 million and $4.7 million, respectively. |
Cost of Sales | Cost of Sales Cost of sales includes costs associated with grape growing, grapes purchased from vineyards not owned by the Company, bulk wine and finished goods purchases, packaging materials, winemaking and production costs, vineyard and production administrative support and overhead costs, purchasing and receiving costs and certain warehousing costs. No further costs are allocated to inventory once the product is bottled and available for sale. Inventory reserves and provisions are included in cost of sales. |
Expense Allocation | Expense Allocation The LLC Operating Agreement provides that substantially all expenses incurred by or attributable to the Company are borne by the LLC, except the Company’s income tax payments. |
Sales and Marketing Expense | Sales and Marketing Expense Sales and marketing expenses consist primarily of personnel costs, advertising and other costs for marketing and promoting the Company’s products. Advertising costs are expensed as incurred. For FY17 and FY16, advertising expense totaled approximately $0.3 million and $0.4 million, respectively. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses include the costs associated with personnel, professional fees, insurance and other expenses related to administrative and compliance functions. For FY17 and FY16, total general and administrative expenses totaled approximately $3.0 million and $3.1 million, respectively. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs Amounts billed to customers for shipping and handling are recorded as sales, and the costs incurred for shipping and handling are recorded as a sales and marketing expense. Gross margins may not be comparable to other companies in the same industry as other companies may record shipping and handling costs as cost of sales. For FY17 and FY16, shipping costs were $1.0 million and $0.9 million, respectively. |
Income Taxes and Deferred Tax Asset Valuation | Income Taxes and Deferred Tax Asset Valuation Truett-Hurst, Inc. is subject to U.S. federal, state, and local taxes with respect to its allocable share of any taxable income of H.D.D. LLC and will be taxed at the prevailing corporate rates. The LLC is treated as a partnership under the Internal Revenue Code of 1986, as amended (the “Code”). The members separately account for their pro-rata share of income, deductions, losses, and credits. Therefore, no provision is made for the LLC’s share of net income (loss) in the consolidated financial statements for liabilities for federal, state, or local income taxes which liabilities are the responsibility of the individual members. The LLC is subject to entity level taxation in the state of California. As a result, the accompanying consolidated statements of operations include tax expense related to this state. The provision for income taxes is calculated using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized based on the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The net deferred tax asset is evaluated at the end of each year considering all available positive and negative evidence, including reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. When the Company does not believe the realization of a deferred tax asset is likely, a valuation allowance is recorded. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is recognized based on the estimated fair values at the grant date for equity classified awards and the recognition of the related compensation expense over the appropriate vesting period. Compensation expense is based on, among other things, (i) the classification of an award, (ii) assumptions relating to fair value measurement such as the value of the stock of Truett-Hurst and its volatility, the expected term of the award and forfeiture rates, and (iii) whether performance criteria, if any, have been met. Both internal and external data is used to assess compensation expense. Changes in these estimates could significantly impact stock-based compensation expense in the future. The expected term of the option is based upon the contractual term, expected employee exercise and expected post-vesting employment termination behavior. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic market adjustments as the underlying equity instruments vest. |
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing the earnings attributable to the Company by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potential dilutive common shares, including convertible LLC units and restricted stock unless this calculation would have an anti-dilutive effect in which case basic and diluted earnings per share are calculated similarly. |
Reclassifications | Reclassifications Certain prior period amounts in the consolidated financial statements and notes thereto have been reclassified to conform to the current year presentation. These reclassifications had no effect on the reported consolidated results of continuing operations. |
Accounting Pronouncements | Accounting Pronouncements In November 2015, the FASB issued ASU No. 2015-17: Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842). In March 2016, the FASB issued ASU No. 2016-09: Improvements to Employee Share-Based Payment Accounting Compensation - Stock Compensation. In August 2016, the FASB issued ASU No. 2016-15: Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments In 2015, the FASB issued ASU 2015-11: Inventory (Topic 330) In 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In 2016, the FASB issued ASU 2016-08: Revenue from Contracts with Customers (Topic 606) In 2016, the FASB issued ASU 2016-10: Revenue from Contracts with Customers (Topic 606) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories comprise: June 30, 2017 June 30, 2016 (in thousands) Grapes and bulk wine $ 5,933 $ 8,413 Bottled wine 14,495 11,262 Bottling materials and other 268 322 20,696 19,997 Less: inventory reserves (87 ) (79 ) Total inventories, net $ 20,609 $ 19,918 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment comprise: June 30, 2017 June 30, 2016 (in thousands) Land and land improvements $ 3,260 $ 3,231 Building and improvements 1,420 1,380 Machinery and equipment 2,189 1,935 Vineyard development 554 554 Vineyard equipment 88 88 Furniture and fixtures 293 262 Leasehold improvements 79 190 Vehicles 113 85 7,996 7,725 Less: accumulated depreciation and amortization (2,570 ) (2,142 ) Total property and equipment, net $ 5,426 $ 5,583 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets comprise: June 30, 2017 June 30, 2016 (in thousands) Finite lives: Patents $ 44 $ 44 Less: accumulated amortization (1 ) (1 ) 43 43 Indefinite lives: Trademarks 463 453 Total intangible assets, net $ 506 $ 496 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long term debt comprises: June 30, 2017 June 30, 2016 (in thousands except payment Long term debt: Note 1 (1 ) $ 2,716 $ 2,851 Note 2 (2 ) 45 120 Note 3 (3 ) 158 244 Note 4 (4 ) 270 392 Note 5 (5 ) — 57 Note 6 (6 ) 304 — Total notes payable 3,493 3,664 Less: current maturities (491 ) (475 ) Total long term debt $ 3,002 $ 3,189 (1) Note payable to a bank, secured by a deed of trust on property, payable monthly with principal payments of $11,270 plus interest, matures May 31, 2022, variable interest of 2.25% above LIBOR. (2) (3) (4) (5) The note was repaid in July 2016. (6) Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $8,729, matures July 1, 2020; at 3.95% interest. |
Schedule of Future Principal and Interest Payments | Future principal and interest payments for the long term debt as of June 30, 2017 are as follows: Years ending June 30, (in thousands) 2018 $ 491 2019 434 2020 249 2021 144 2022 2,175 3,493 Add: estimated interest payments 507 Total $ 4,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Lease Commitments | Future lease commitments are: Years ending June 30, (in thousands) 2018 $ 293 2019 90 2020 31 Thereafter — Total future rent payments $ 414 |
Schedule of Future Minimum Grape and Bulk Wine Inventory Purchase Commitments | Future minimum grape and bulk wine inventory purchase commitments are as follows: Years ending June 30, Third-Parties Related Total (in thousands) 2018 $ 3,993 $ 57 $ 4,050 2019 2,312 — 2,312 2020 1,567 — 1,567 Thereafter 101 — 101 Total $ 7,973 $ 57 $ 8,030 |
Discontinued Operations(Tables)
Discontinued Operations(Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations [Member] | |
Schedule of Discontinued Operations | Discontinued operations comprise: Fiscal Year Ended June 30, 2016 (in thousands, except share data) Net income from operations of discontinued operations $ 30 Gain on sale 15 Net income from discontinued operations, net of tax $ 45 Earnings Per Share Basic and diluted weighted average shares 4,155,151 Basic and diluted net income per share $ 0.01 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Summary of Activity of Restricted Stock Awards, Restricted Stock Units and Stock Options | A summary of the activity for stock options is presented below: Number of Shares Weighted Avg Grant Date Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 220,000 $ 4.35 — $ — Granted 340,000 1.87 — — Vested 87,500 — — — Forfeited, cancelled or expired (95,000 ) — — — Outstanding at June 30, 2016 465,000 $ 2.95 9.04 $ — Options Vested 125,000 $ 4.01 — — Options Non-Vested 340,000 $ 2.56 — $ — Options Exercisable 125,000 $ 4.01 — — Granted 100,000 1.78 — — Vested — — — — Forfeited, cancelled or expired (350,000 ) — — — Outstanding at June 30, 2017 215,000 $ 1.67 9.04 $ — Options Vested 50,000 $ 1.61 8.90 Options Non-Vested 165,000 $ 1.69 9.07 $ — Options Exercisable 50,000 $ 1.61 8.90 — |
Summary of Stock-based Compensation | The following table summarizes stock-based compensation included in the consolidated statements of operations for the fiscal years ended June 30, 2017 and 2016, respectively: Fiscal Year Ended June 30, (in thousands) 2017 2016 Sales and marketing $ 33 $ 49 General and administrative 96 326 Total stock-based compensation $ 129 $ 375 |
Restricted Stock [Member] | |
Summary of Activity of Restricted Stock Awards, Restricted Stock Units and Stock Options | A summary of the activity for restricted stock units is presented below: Number of Shares Weighted Avg Grant Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 87,500 $ 5.00 — $ 134 Granted 45,180 1.66 — 69 Exercised (43,750 ) — — — Released — — — — Vested — — — — Forfeited, cancelled or expired — 3.30 — — Outstanding at June 30, 2016 88,930 $ 3.30 2.22 $ 135 Granted 33,334 2.25 — — Exercised (45,180 ) 1.66 — — Released — — — — Vested — — — — Forfeited, cancelled or expired (43,750 ) 5.00 — — Outstanding at June 30, 2017 33,334 $ 2.25 0.50 $ 69 Expected to vest at June 30, 2017 33,334 $ — — $ — |
Restricted Stock [Member] | Discontinued Operations [Member] | |
Summary of Activity of Restricted Stock Awards, Restricted Stock Units and Stock Options | A summary of the activity for restricted stock awards is presented below: Number of Shares Weighted Avg Grant Date Fair Value per Share Weighted Avg Contractual Term in Years Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 97,329 $ 3.24 — $ 148 Granted — — — — Exercised — — — — Released (92,066 ) — — 140 Vested — — — — Forfeited, cancelled or expired — — — — Outstanding at June 30, 2016 5,263 $ 3.80 1.46 $ 8 Granted — — — — Exercised (2,632 ) — — — Released — — — — Vested — — — — Forfeited, cancelled or expired — — — — Outstanding at June 30, 2017 2,631 $ 3.80 0.49 $ 5 Expected to vest at June 30, 2017 2,631 $ — — $ — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Interest Rate Swap Fair Values | The following tables set forth the interest rate swap fair values at June 30, 2017 and at June 30, 2016: Fair reporting date (in thousands) Fair value as June 30, 2017 Significant other observable (Level 2) Assets Interest rate swap (1) $ 8 $ 8 Total $ 8 $ 8 (1) Included in “Other current assets” in the Balance Sheet Fair value measurements at reporting date (in thousands) Fair value as of June 30, 2016 Significant other observable inputs (Level 2) Liabilities Interest rate swap (2) $ (123 ) $ (123 ) Total $ (123 ) $ (123 ) (2) Included in “Accrued expenses” in the Balance Sheet |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense for FY17 and FY16 consists of: Fiscal Year Ended June 30, 2017 (in thousands) Current Deferred Total U.S. Federal $ — $ — $ — State and Local 2 — 2 $ 2 $ — $ 2 Fiscal Year Ended June 30, 2016 (in thousands) Current Deferred Total U.S. Federal $ — $ — $ — State and Local 2 — 2 $ 2 $ — $ 2 |
Schedule of Effective Income Tax Rate Reconciliation | The difference between income taxes computed using the 34% statutory federal income tax rate and the Company’s effective tax rate are summarized as follows: June 30, 2017 June 30, 2016 (in thousands) Computed tax at statutory rate $ (68 ) $ (170 ) State taxes, net of federal benefit (12 ) (29 ) Rate benefit as a LLC 52 88 Meals and entertainment 14 7 Stock-based compensation 22 88 Other permanent differences — 1 Valuation allowance (6 ) 17 Income tax expense $ 2 $ 2 |
Schedule of Deferred Tax Assets and Liabilities | Components of deferred tax assets (liabilities) consist of the following: June 30, 2017 June 30, 2016 (in thousands) Deferred tax assets: Accrued compensation $ 10 $ 24 Stock-based compensation 44 49 Intangible assets 2,568 3,146 Sales returns — 121 Net operating losses 1,354 1,193 Inventories 84 Unrealized loss — 28 Other 6 96 Gross deferred tax assets 4,066 4,657 Valuation allowance (3,867 ) (4,128 ) Total deferred tax assets, net of valuation allowance 199 529 Deferred tax liabilities: Inventories — (254 ) Unrealized gain (2 ) — Property and equipment (197 ) (275 ) Total deferred tax liability (199 ) (529 ) Net deferred taxes $ — $ — |
Significant Customer Informat31
Significant Customer Information, Segment Reporting and Geographic Information (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales, Cost of Sales and Gross Profit by Segment | The following tables reflect net sales, cost of sales and gross profit by segment for continuing operations for each of the fiscal years ended June 30, 2017 and 2016, respectively: Fiscal Years Ended June 30, (in thousands) Wholesale Direct to Consumer Total 2017 2016 2017 2016 2017 2016 Net Sales $ 15,576 $ 20,011 $ 5,960 $ 5,772 $ 21,536 $ 25,783 Cost of Sales 12,161 15,450 2,153 2,046 14,314 17,496 Gross Profit $ 3,415 $ 4,561 $ 3,807 $ 3,726 $ 7,222 $ 8,287 Gross Profit % 21.9 % 22.8 % 63.9 % 64.6 % 33.5 % 32.1 % |
Schedule of Concentrations of Wholesale Sales and Accounts Receivable Percentage | The following tables set forth concentrations of wholesale sales and accounts receivable as a percent of each total: Percentage of Wholesale Sales Percentage of Total Accounts Receivable Fiscal Year Ended Fiscal Year Ended June 30, June 30, 2017 2016 2017 2016 Customer A 29 % 18 % 19 % 10 % Customer B 24 % 37 % 8 % 26 % Customer C 4 % 3 % 34 % 27 % |
Business - Additional Informati
Business - Additional Information (Details) - shares | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Nature of Operations [Line Items] | ||
Tax receivable agreement description | The agreement provides for the payment from time to time, as “corporate taxpayer,” to holders of LLC Units of 90% of the amount of the benefits, if any, that the corporate taxpayer is deemed to realize as a result of the exchange of LLC Units (current and future) and certain other tax benefits related to the Company entering into the agreement. | |
Percentage of payment obligations of corporate taxpayer under agreement | 90.00% | |
Director [Member] | ||
Nature of Operations [Line Items] | ||
Percentage of voting power in common stock | 41.00% | |
Common Class A [Member] | ||
Nature of Operations [Line Items] | ||
Common stock, shares outstanding | 4,426,789 | 4,306,609 |
Common Class A [Member] | Director [Member] | ||
Nature of Operations [Line Items] | ||
Description of share exchange ratio under exchange agreement | one-to-one | |
Common Class B [Member] | ||
Nature of Operations [Line Items] | ||
Common stock, shares outstanding | 7 | 7 |
Description of share exchange ratio under exchange agreement | One share | |
Common units, outstanding | 2,760,000 | |
Noncontrolling Interest [Member] | ||
Nature of Operations [Line Items] | ||
Percentage of voting power in common stock | 41.00% |
Critical Accounting Policies 33
Critical Accounting Policies and Estimates - Additional Information (Details) | 12 Months Ended | |
Jun. 30, 2017USD ($)Product | Jun. 30, 2016USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Property and equipment, depreciation method | straight-line basis | |
Number of products sold on consignment | Product | 0 | |
Sales discounts and depletion allowances | $ 3,900,000 | 4,700,000 |
Advertising expense | 300,000 | 400,000 |
General and administrative expense | 2,985,000 | 3,062,000 |
Shipping, handling and transportation costs | $ 1,000,000 | $ 900,000 |
Machinery and Equipment [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 5 years | |
Leasehold Improvements [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 5 years | |
Vehicles [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 5 years | |
Label Design [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Website design [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Minimum [Member] | Building and Improvements [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 20 years | |
Minimum [Member] | Vineyard Development [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 7 years | |
Minimum [Member] | Vineyard Equipment [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 10 years | |
Minimum [Member] | Furniture and Fixtures [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 5 years | |
Maximum [Member] | Building and Improvements [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 40 years | |
Maximum [Member] | Vineyard Development [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 15 years | |
Maximum [Member] | Vineyard Equipment [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 20 years | |
Maximum [Member] | Furniture and Fixtures [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, useful life | 10 years |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Grapes and bulk wine | $ 5,933 | $ 8,413 |
Bottled wine | 14,495 | 11,262 |
Bottling materials and other | 268 | 322 |
Inventory, Gross | 20,696 | 19,997 |
Less: inventory reserves | (87) | (79) |
Total inventories, net | $ 20,609 | $ 19,918 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,996 | $ 7,725 |
Less: accumulated depreciation and amortization | (2,570) | (2,142) |
Total property and equipment, net | 5,426 | 5,583 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,260 | 3,231 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,420 | 1,380 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,189 | 1,935 |
Vineyard Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 554 | 554 |
Vineyard Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 88 | 88 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 293 | 262 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 79 | 190 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 113 | $ 85 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense | $ 0.9 | $ 0.7 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Finite lives: | ||
Patents | $ 44 | $ 44 |
Less: accumulated amortization | (1) | (1) |
Total patents, net | 43 | 43 |
Indefinite lives: | ||
Trademarks | 463 | 453 |
Total intangible assets, net | $ 506 | $ 496 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2017USD ($) | |
Patents [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Amortization of Intangible Assets | $ 40 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Aug. 17, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
Debt Instrument [Line Items] | |||
Future lease commitments for fiscal year 2018 | $ 293,000 | $ 293,000 | |
Future lease commitments for fiscal year 2019 | 90,000 | 90,000 | |
Future lease commitments for fiscal year 2020 | $ 31,000 | 31,000 | |
Wine Production Equipment [Member] | |||
Debt Instrument [Line Items] | |||
Capital lease agreement term | 72 months | ||
Future lease commitments for fiscal year 2018 | $ 20,000 | 20,000 | |
Future lease commitments for fiscal year 2019 | 20,000 | 20,000 | |
Future lease commitments for fiscal year 2020 | 20,000 | 20,000 | |
Future lease commitments for fiscal year 2021 | 20,000 | 20,000 | |
Future lease commitments for fiscal year 2022 | 20,000 | 20,000 | |
Future lease commitments for fiscal year 2023 | 20,000 | $ 20,000 | |
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of liability of individual guarantors | 23.00% | ||
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of liability of individual guarantors | 61.00% | ||
Equipment Line Of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 500,000 | $ 500,000 | |
Long-term line of credit outstanding balance | 300,000 | $ 300,000 | |
Line of credit, maturity date | Jul. 31, 2017 | ||
Line of credit facility, interest rate description | interest at a rate of 2.25% above the floating One-Month LIBOR Rate. | ||
Debt instrument, accrued interest rate | 2.25% | ||
Foreign Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Long-term line of credit outstanding balance | 100,000 | $ 100,000 | |
Line of credit, maturity date | Jul. 31, 2017 | ||
Debt instrument, accrued interest rate | 15.00% | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 10,000,000 | $ 10,000,000 | |
Long-term line of credit outstanding balance | $ 7,300,000 | $ 7,300,000 | |
Line of credit, maturity date | Jul. 31, 2017 | ||
Line of credit facility, accrued interest rate | 2.25% | ||
Line of credit facility, interest rate description | interest at an annual interest rate of 2.25% above LIBOR. | ||
Line of Credit [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit, maturity date | Jul. 31, 2018 |
Borrowings - Schedule of Long T
Borrowings - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | |||
Total notes payable | $ 3,493 | $ 3,664 | |
Less: current maturities | (491) | (475) | |
Total long term debt | 3,002 | 3,189 | |
Notes Payable One [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [1] | 2,716 | 2,851 |
Notes Payable Two [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [2] | 45 | 120 |
Notes Payable Three [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [3] | 158 | 244 |
Notes Payable Four [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [4] | 270 | 392 |
Notes Payable Five [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [5] | $ 57 | |
Notes Payable Six [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [6] | $ 304 | |
[1] | Note payable to a bank, secured by a deed of trust on property, payable monthly with principal payments of $11,270 plus interest, matures May 31, 2022, variable interest of 2.25% above LIBOR. | ||
[2] | Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $6,535, matures November 1, 2018 at 3.75% interest. | ||
[3] | Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $7,783, matures March 15, 2019 at 3.75% interest. | ||
[4] | Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $11,267, matures July 1, 2019; at 3.90% interest. | ||
[5] | The note was repaid in July 2016. | ||
[6] | Note payable to a bank, secured by equipment, payable monthly with principal and interest payments of $8,729, matures July 1, 2020; at 3.95% interest. |
Borrowings - Schedule of Long41
Borrowings - Schedule of Long Term Debt (Parenthetical) (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2017USD ($) | |
Notes Payable One [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | May 31, 2022 |
Debt Instrument, principal payments | $ 11,270 |
Debt instrument, variable interest rate | 2.25% |
Notes Payable Two [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | Nov. 1, 2018 |
Debt Instrument, principal payments | $ 6,535 |
Debt instrument, variable interest rate | 3.75% |
Notes Payable Three [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | Mar. 15, 2019 |
Debt Instrument, principal payments | $ 7,783 |
Debt instrument, variable interest rate | 3.75% |
Notes Payable Four [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | Jul. 1, 2019 |
Debt Instrument, principal payments | $ 11,267 |
Debt instrument, variable interest rate | 3.90% |
Notes Payable Five [Member] | |
Debt Instrument [Line Items] | |
Debt instrument repayment date | 2016-07 |
Notes Payable Six [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | Jul. 1, 2020 |
Debt Instrument, principal payments | $ 8,729 |
Debt instrument, variable interest rate | 3.95% |
Borrowings - Schedule of Future
Borrowings - Schedule of Future Principal and Interest Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 491 | |
2,019 | 434 | |
2,020 | 249 | |
2,021 | 144 | |
2,022 | 2,175 | |
Total notes payable | 3,493 | $ 3,664 |
Add: estimated interest payments | 507 | |
Total | $ 4,000 |
Depletion Allowance and Accru43
Depletion Allowance and Accrual for Sales Returns - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Depletion Allowance And Accrual For Sales Returns [Abstract] | ||
Depletion allowance | $ 500 | $ 600 |
Settlement of case goods | $ 30 | |
Accrual for sales return | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Oct. 13, 2017 | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)ft²BottelCase$ / Case | Jun. 30, 2016USD ($) |
Commitments And Contingencies [Line Items] | ||||
Rent payments for leased facilities | $ 400,000 | $ 300,000 | ||
Future purchase commitments for finished goods | $ 1,000,000 | |||
Service agreement description | The Company enters into various contracts with third-party service providers for grape crushing, wine storage, and bottling. The costs are recorded in the period for which the service is provided. The actual costs related to custom crush services are based on volume. The Company’s current contracts for custom crush services cover the 2017 harvest. The current bottling contract requires a minimum of 120,000 cases at $2.85 per case to be bottled in a one-year period. | |||
Monthly average percentage of inventory storage | 60.00% | |||
Cost of per case bottled | $ / Case | 2.85 | |||
Number of minimum cases for bottling contract | BottelCase | 120,000 | |||
Current bottling contract period | 1 year | |||
Tax benefit tax receivable percent | 90.00% | |||
Indemnification [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Contractual obligations | $ 0 | $ 0 | $ 0 | |
Common Class A [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Exchange basis | one-for-one basis | |||
Exchange of units for shares ratio | 1 | |||
Mendocino Wine Group [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Trial commencement date | 2017-11 | |||
Litigation amount recorded | $ 0 | |||
Mendocino Wine Group [Member] | Subsequent Event [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Litigation, date of dismissal | 2017-10 | |||
Litigation period for appeal after judgment | 60 days | |||
Mendocino Wine Group [Member] | Subsequent Event [Member] | Minimum [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Litigation period for final resolution after appeal | 9 months | |||
Mendocino Wine Group [Member] | Subsequent Event [Member] | Maximum [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Litigation period for final resolution after appeal | 18 months | |||
Hambrecht Wine Group L.P [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Litigation settlement amount | $ 1,000,000 | |||
Proceeds from legal settlements | 1,000,000 | |||
Hambrecht Wine Group L.P [Member] | Other Income [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Net gain related to lease termination | $ 800,000 | |||
Space for Wine Production within a Custom Crush Facility [Member] | Santa Rosa, California [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Lease commencement date | Apr. 15, 2017 | |||
Lease expiration date | Jun. 15, 2018 | |||
Lease agreement term | 14 months | |||
Description of lease option to extend | The initial 14-month term may be renewed for additional periods as agreed to by both parties. | |||
Administrative Offices [Member] | Healdsburg, California [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Area of office space under lease | ft² | 2,500 | |||
Additional lease term | 3 years | |||
Renewed lease commencement date | Nov. 1, 2016 | |||
Renewed lease expiration date | Oct. 31, 2019 | |||
Executive and Administrative Offices [Member] | Healdsburg, California [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Lease commencement date | Sep. 1, 2016 | |||
Lease expiration date | Oct. 31, 2019 | |||
Area of office space under lease | ft² | 1,600 |
Commitments and Contingencies45
Commitments and Contingencies - Schedule of Future Lease Commitments (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 293 |
2,019 | 90 |
2,020 | 31 |
Thereafter | 0 |
Total future rent payments | $ 414 |
Commitments and Contingencies46
Commitments and Contingencies - Schedule of Future Minimum Grape and Bulk Wine Inventory Purchase Commitments (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2,018 | $ 4,050 |
2,019 | 2,312 |
2,020 | 1,567 |
Thereafter | 101 |
Total | 8,030 |
Third-Parties [Member] | |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2,018 | 3,993 |
2,019 | 2,312 |
2,020 | 1,567 |
Thereafter | 101 |
Total | 7,973 |
Related Parties [Member] | |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2,018 | 57 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Total | $ 57 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) | Jan. 25, 2016 |
Wine Spies, LLC [Member] | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Sale of ownership interest percentage | 50.00% |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Net income from discontinued operations, net of tax | $ 45 | |
Earnings Per Share | ||
Basic and diluted weighted average shares | 4,377,994 | 4,155,151 |
Discontinued Operations [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Net income from operations of discontinued operations | $ 30 | |
Gain on sale | 15 | |
Net income from discontinued operations, net of tax | $ 45 | |
Earnings Per Share | ||
Basic and diluted weighted average shares | 4,155,151 | |
Basic and diluted net income per share | $ 0.01 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - shares | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total restricted units vested and issued | 0 | 0 |
Restricted Stock Units [Member] | Director [Member] | Common Class A [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total restricted units vested and issued | 45,180 | 140,277 |
2012 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares reserved for issuance | 1,000,000 | |
Granted equity incentive shares outstanding | 251,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Activity of Restricted Stock Awards, Restricted Stock Units and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock Options [Member] | |||
Number of Shares, Outstanding, Beginning Balance | 465,000 | 220,000 | |
Number of Shares, Granted | 100,000 | 340,000 | |
Number of Shares, Vested | 0 | 87,500 | |
Number of Shares, Forfeited, cancelled or expired | (350,000) | (95,000) | |
Number of Shares, Outstanding, Ending Balance | 215,000 | 465,000 | 220,000 |
Number of Shares, Expected to vest at June 30, 2017 | 50,000 | 125,000 | |
Number of Shares, Options Non-Vested | 165,000 | 340,000 | |
Number of Shares, Options Exercisable | 50,000 | 125,000 | |
Weighted Avg Grant Date Fair Value per Share, Outstanding, Beginning Balance | $ 2.95 | $ 4.35 | |
Weighted Avg Grant Date Fair Value per Share, Granted | 1.78 | 1.87 | |
Weighted Avg Grant Date Fair Value per Share, Vested | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Forfeited, cancelled or expired | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Outstanding, Ending Balance | 1.67 | 2.95 | $ 4.35 |
Weighted Avg Grant Date Fair Value per Share, Expected to vest at June 30, 2017 | 1.61 | 4.01 | |
Weighted Avg Grant Date Fair Value per Share, Options Non-Vested | 1.69 | 2.56 | |
Weighted Avg Grant Date Fair Value per Share, Options Exercisable | $ 1.61 | $ 4.01 | |
Weighted Avg Contractual Term in Years, Outstanding | 9 years 15 days | 9 years 15 days | 0 years |
Weighted Avg Contractual Term in Years, Granted | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Vested | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Forfeited, cancelled or expired | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Expected to vest at June 30, 2017 | 8 years 10 months 25 days | 0 years | |
Weighted Avg Contractual Term in Years, Options Non-Vested | 9 years 26 days | 0 years | |
Weighted Avg Contractual Term in Years, Options Exercisable | 8 years 10 months 25 days | 0 years | |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 0 | $ 0 | |
Aggregate Intrinsic Value, Granted | 0 | 0 | |
Aggregate Intrinsic Value, Vested | 0 | 0 | |
Aggregate Intrinsic Value, Forfeited, cancelled or expired | 0 | 0 | |
Aggregate Intrinsic Value, Outstanding, Ending Balance | 0 | 0 | $ 0 |
Aggregate Intrinsic Value, Options Vested | 0 | 0 | |
Aggregate Intrinsic Value, Options Non-Vested | 0 | 0 | |
Aggregate Intrinsic Value, Options Exercisable | $ 0 | $ 0 | |
Restricted Stock Awards [Member] | |||
Number of Shares, Outstanding, Beginning Balance | 5,263 | 97,329 | |
Number of Shares, Granted | 0 | 0 | |
Number of Shares, Exercised | (2,632) | 0 | |
Number of Shares, Released | 0 | (92,066) | |
Number of Shares, Vested | 0 | 0 | |
Number of Shares, Forfeited, cancelled or expired | 0 | 0 | |
Number of Shares, Outstanding, Ending Balance | 2,631 | 5,263 | 97,329 |
Number of Shares, Expected to vest at June 30, 2017 | 2,631 | ||
Weighted Avg Grant Date Fair Value per Share, Outstanding, Beginning Balance | $ 3.80 | $ 3.24 | |
Weighted Avg Grant Date Fair Value per Share, Granted | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Exercised | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Released | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Vested | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Forfeited, cancelled or expired | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Outstanding, Ending Balance | 3.80 | $ 3.80 | $ 3.24 |
Weighted Avg Grant Date Fair Value per Share, Expected to vest at June 30, 2017 | $ 0 | ||
Weighted Avg Contractual Term in Years, Outstanding | 5 months 27 days | 1 year 5 months 16 days | 0 years |
Weighted Avg Contractual Term in Years, Granted | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Released | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Vested | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Forfeited, cancelled or expired | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Expected to vest at June 30, 2017 | 0 years | ||
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 8 | $ 148 | |
Aggregate Intrinsic Value, Granted | 0 | 0 | |
Aggregate Intrinsic Value, Exercised | 0 | ||
Aggregate Intrinsic Value, Released | 0 | 140 | |
Aggregate Intrinsic Value, Vested | 0 | 0 | |
Aggregate Intrinsic Value, Forfeited, cancelled or expired | 0 | 0 | |
Aggregate Intrinsic Value, Outstanding, Ending Balance | 5 | $ 8 | $ 148 |
Aggregate Intrinsic Value, Expected to vest at June 30, 2017 | $ 0 | ||
Restricted Stock Units [Member] | |||
Number of Shares, Outstanding, Beginning Balance | 88,930 | 87,500 | |
Number of Shares, Granted | 33,334 | 45,180 | |
Number of Shares, Exercised | (45,180) | (43,750) | |
Number of Shares, Released | 0 | 0 | |
Number of Shares, Vested | 0 | 0 | |
Number of Shares, Forfeited, cancelled or expired | (43,750) | 0 | |
Number of Shares, Outstanding, Ending Balance | 33,334 | 88,930 | 87,500 |
Number of Shares, Expected to vest at June 30, 2017 | 33,334 | ||
Weighted Avg Grant Date Fair Value per Share, Outstanding, Beginning Balance | $ 3.30 | $ 5 | |
Weighted Avg Grant Date Fair Value per Share, Granted | 2.25 | 1.66 | |
Weighted Avg Grant Date Fair Value per Share, Exercised | 1.66 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Released | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Vested | 0 | 0 | |
Weighted Avg Grant Date Fair Value per Share, Forfeited, cancelled or expired | 5 | 3.30 | |
Weighted Avg Grant Date Fair Value per Share, Outstanding, Ending Balance | 2.25 | $ 3.30 | $ 5 |
Weighted Avg Grant Date Fair Value per Share, Expected to vest at June 30, 2017 | $ 0 | ||
Weighted Avg Contractual Term in Years, Outstanding | 6 months | 2 years 2 months 19 days | 0 years |
Weighted Avg Contractual Term in Years, Granted | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Exercised | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Released | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Vested | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Forfeited, cancelled or expired | 0 years | 0 years | |
Weighted Avg Contractual Term in Years, Expected to vest at June 30, 2017 | 0 years | ||
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 135 | $ 134 | |
Aggregate Intrinsic Value, Granted | 0 | 69 | |
Aggregate Intrinsic Value, Exercised | 0 | 0 | |
Aggregate Intrinsic Value, Released | 0 | 0 | |
Aggregate Intrinsic Value, Vested | 0 | 0 | |
Aggregate Intrinsic Value, Forfeited, cancelled or expired | 0 | 0 | |
Aggregate Intrinsic Value, Outstanding, Ending Balance | 69 | $ 135 | $ 134 |
Aggregate Intrinsic Value, Expected to vest at June 30, 2017 | $ 0 |
Stock-Based Compensation - Su51
Stock-Based Compensation - Summary of Stock-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 129 | $ 375 |
Sales and Marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 33 | 49 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 96 | $ 326 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2017 | |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | |
Derivative [Line Items] | |
Derivative, maturity date | May 31, 2022 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Interest Rate Swap Fair Values - (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 | |
Assets | |||
Total | $ 8 | ||
Liabilities | |||
Total | $ (123) | ||
Interest Rate Swap [Member] | |||
Assets | |||
Total | [1] | 8 | |
Liabilities | |||
Total | [2] | (123) | |
Fair Value, Inputs, Level 2 [Member] | |||
Assets | |||
Total | 8 | ||
Liabilities | |||
Total | (123) | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | |||
Assets | |||
Total | [1] | $ 8 | |
Liabilities | |||
Total | [2] | $ (123) | |
[1] | Included in “Other current assets” in the Balance Sheet | ||
[2] | Included in “Accrued expenses” in the Balance Sheet |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Current | ||
U.S. Federal | $ 0 | $ 0 |
State and Local | 2 | 2 |
Total | 2 | 2 |
Deferred | ||
U.S. Federal | 0 | 0 |
State and Local | 0 | 0 |
Total | 0 | 0 |
Total | ||
U.S. Federal | 0 | 0 |
State and Local | 2 | 2 |
Total | $ 2 | $ 2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate reconciliation, at statutory federal income tax rate, percent | 34.00% | |
Deferred tax assets, valuation allowance | $ 3,867 | $ 4,128 |
Operating loss carryforwards | $ 3,400 | $ 3,500 |
Operating losses expiration period | beginning in 2035 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Computed tax at statutory rate | $ (68) | $ (170) |
State taxes, net of federal benefit | (12) | (29) |
Rate benefit as a LLC | 52 | 88 |
Meals and entertainment | 14 | 7 |
Stock-based compensation | 22 | 88 |
Other permanent differences | 1 | |
Valuation allowance | (6) | 17 |
Total | $ 2 | $ 2 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred tax assets: | ||
Accrued compensation | $ 10 | $ 24 |
Stock-based compensation | 44 | 49 |
Intangible assets | 2,568 | 3,146 |
Sales returns | 0 | 121 |
Net operating losses | 1,354 | 1,193 |
Inventories | 84 | 0 |
Unrealized loss | 0 | 28 |
Other | 6 | 96 |
Gross deferred tax assets | 4,066 | 4,657 |
Valuation allowance | (3,867) | (4,128) |
Total deferred tax assets, net of valuation allowance | 199 | 529 |
Deferred tax liabilities: | ||
Inventories | 0 | (254) |
Unrealized gain | (2) | 0 |
Property and equipment | (197) | (275) |
Total deferred tax liability | (199) | (529) |
Net deferred taxes | $ 0 | $ 0 |
Significant Customer Informat58
Significant Customer Information, Segment Reporting and Geographic Information - Schedule of Net Sales, Cost of Sales and Gross Profit by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 21,536 | $ 25,783 |
Cost of sales | 14,314 | 17,496 |
Gross Profit | $ 7,222 | $ 8,287 |
Gross Profit % | 33.50% | 32.10% |
Wholesale [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 15,576 | $ 20,011 |
Cost of sales | 12,161 | 15,450 |
Gross Profit | $ 3,415 | $ 4,561 |
Gross Profit % | 21.90% | 22.80% |
Direct to Consumer [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 5,960 | $ 5,772 |
Cost of sales | 2,153 | 2,046 |
Gross Profit | $ 3,807 | $ 3,726 |
Gross Profit % | 63.90% | 64.60% |
Significant Customer Informat59
Significant Customer Information, Segment Reporting and Geographic Information - Schedule of Concentrations of Wholesale Sales and Accounts Receivable Percentage (Details) - Customer Concentration Risk | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Customer A [Member] | Wholesale [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 29.00% | 18.00% |
Customer A [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 19.00% | 10.00% |
Customer B [Member] | Wholesale [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 24.00% | 37.00% |
Customer B [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 8.00% | 26.00% |
Customer C [Member] | Wholesale [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 4.00% | 3.00% |
Customer C [Member] | Accounts Receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk Percentage | 34.00% | 27.00% |
Significant Customer Informat60
Significant Customer Information, Segment Reporting and Geographic Information - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenue, net, total | $ 21,536 | $ 25,783 |
International Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue, net, total | $ 800 | $ 900 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Oct. 13, 2017 | Jun. 30, 2017 |
Bank of West [Member] | ||
Subsequent Event [Line Items] | ||
Loan and security agreement date | Jul. 15, 2015 | |
Loan and security modification agreement date | Aug. 17, 2017 | |
Mendocino Wine Group [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Litigation, date of dismissal | 2017-10 | |
Litigation period for appeal after judgment | 60 days | |
Mendocino Wine Group [Member] | Subsequent Event [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Litigation period for final resolution after appeal | 9 months | |
Mendocino Wine Group [Member] | Subsequent Event [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Litigation period for final resolution after appeal | 18 months |