Cover
Cover - shares | 12 Months Ended | |
Jul. 31, 2021 | Sep. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Document Annual Report | true | |
Document Period End Date | Jul. 31, 2021 | |
Current Fiscal Year End Date | --07-31 | |
Document Transition Report | false | |
Entity File Number | 001-40240 | |
Entity Registrant Name | The Duckhorn Portfolio, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-3866305 | |
Entity Address, Address Line One | 1201 Dowdell Lane | |
Entity Address, City or Town | Saint Helena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94574 | |
City Area Code | 707 | |
Local Phone Number | 302-2658 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | NAPA | |
Security Exchange Name | NYSE | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
ICFR Auditor Attestation Flag | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 115,046,793 | |
Entity Central Index Key | 0001835256 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Current assets | ||
Cash | $ 4,244 | $ 6,252 |
Accounts receivable trade, net | 33,253 | 26,464 |
Inventories | 267,737 | 245,311 |
Prepaid expenses and other current assets | 9,167 | 2,686 |
Total current assets | 314,401 | 280,713 |
Long-term assets | ||
Property and equipment, net | 240,939 | 242,751 |
Intangible assets, net | 200,547 | 208,230 |
Goodwill | 425,209 | 425,209 |
Other long-term assets | 2,021 | 1,688 |
Total other long-term assets | 868,716 | 877,878 |
Total assets | 1,183,117 | 1,158,591 |
Current liabilities | ||
Accounts payable | 3,556 | 3,733 |
Accrued expenses | 21,557 | 15,511 |
Accrued compensation | 16,845 | 8,674 |
Deferred revenue | 3,102 | 4,148 |
Derivative instrument | 0 | 5,376 |
Current maturities of long-term debt | 11,324 | 13,430 |
Other current liabilities | 397 | 935 |
Total current liabilities | 56,781 | 51,807 |
Long-term liabilities | ||
Revolving line of credit, net | 121,348 | 239,674 |
Long-term debt, net of current maturities and debt issuance costs | 114,625 | 125,844 |
Deferred income taxes | 86,667 | 84,638 |
Other long-term liabilities | 1,458 | 2,024 |
Total long-term liabilities | 324,098 | 452,180 |
Total liabilities | 380,879 | 503,987 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Common stock, $0.01 par value; 500,000,000 shares authorized, 115,046,793 issued and outstanding at July 31, 2021 and 200,000,000 shares authorized, 101,713,460 issued and outstanding at July 31, 2020 | 1,150 | 1,017 |
Additional paid-in capital | 726,903 | 535,372 |
Retained earnings | 73,634 | 117,658 |
Total The Duckhorn Portfolio, Inc. equity | 801,687 | 654,047 |
Non-controlling interest | 551 | 557 |
Total equity | 802,238 | 654,604 |
Total liabilities and equity | $ 1,183,117 | $ 1,158,591 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement [Abstract] | |||
Net sales (net of excise taxes of $4,855, $3,220 and $2,564 respectively) | $ 336,613 | $ 270,648 | $ 241,207 |
Cost of sales | 169,265 | 133,766 | 128,204 |
Gross profit | 167,348 | 136,882 | 113,003 |
Selling, general and administrative expenses | 89,816 | 65,908 | 65,741 |
Impairment loss (Note 7) | 0 | 11,830 | 0 |
Casualty gain, net (Note 17) | (6,559) | (4,047) | (8,606) |
Income from operations | 84,091 | 63,191 | 55,868 |
Interest expense | 13,618 | 17,924 | 20,937 |
Other (income) expense, net | (6,505) | 2,457 | 4,988 |
Total other expenses | 7,113 | 20,381 | 25,925 |
Income before income taxes | 76,978 | 42,810 | 29,943 |
Income tax expense | 21,008 | 10,432 | 7,842 |
Net income | 55,970 | 32,378 | 22,101 |
Less: Net loss (income) attributable to non-controlling interest | 6 | (1) | (4) |
Net income attributable to The Duckhorn Portfolio, Inc. | $ 55,976 | $ 32,377 | $ 22,097 |
Net income per share of common stock: | |||
Basic (in dollars per share) | $ 0.52 | $ 0.32 | $ 0.22 |
Diluted (in dollars per share) | $ 0.52 | $ 0.32 | $ 0.22 |
Weighted average shares of common stock outstanding: | |||
Basic (in shares) | 106,681,496 | 101,713,460 | 101,713,460 |
Diluted (in shares) | 106,934,853 | 101,713,460 | 101,713,460 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Total The Duckhorn Portfolio, Inc. equity | Common stock | Additional paid-in capital | Retained earnings | Non-controlling interest |
Shares, outstanding, beginning balance at Jul. 31, 2018 | 101,713,460 | |||||
Beginning balance at Jul. 31, 2018 | $ 486,353 | $ 486,353 | $ 1,017 | $ 422,147 | $ 63,189 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 22,101 | 22,097 | 22,097 | 4 | ||
Equity-based compensation (Note 15) | 1,126 | 1,126 | 1,126 | |||
Non-controlling interest (Note 4) | 552 | 552 | ||||
Contribution of capital (Note 4) | 111,000 | 111,000 | 111,000 | |||
Shares, outstanding, ending balance at Jul. 31, 2019 | 101,713,460 | |||||
Ending balance at Jul. 31, 2019 | 621,132 | 620,576 | $ 1,017 | 534,273 | 85,286 | 556 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 32,378 | 32,377 | 32,377 | 1 | ||
Equity-based compensation (Note 15) | 1,154 | 1,154 | 1,154 | |||
Other | (60) | (60) | (55) | (5) | ||
Shares, outstanding, ending balance at Jul. 31, 2020 | 101,713,460 | |||||
Ending balance at Jul. 31, 2020 | 654,604 | 654,047 | $ 1,017 | 535,372 | 117,658 | 557 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 55,970 | 55,976 | 55,976 | (6) | ||
Dividend to parent | (100,000) | (100,000) | (100,000) | |||
Initial public offering, net of issuance costs (shares) | 13,333,333 | |||||
Initial public offering, net of issuance costs | 180,842 | 180,842 | $ 133 | 180,709 | ||
Equity-based compensation (Note 15) | 10,822 | 10,822 | 10,822 | |||
Shares, outstanding, ending balance at Jul. 31, 2021 | 115,046,793 | |||||
Ending balance at Jul. 31, 2021 | $ 802,238 | $ 801,687 | $ 1,150 | $ 726,903 | $ 73,634 | $ 551 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Cash flows from operating activities | |||
Net income (loss) | $ 55,970 | $ 32,378 | $ 22,101 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Deferred income taxes | 2,029 | (5,001) | (5,165) |
Depreciation and amortization | 21,343 | 22,755 | 25,070 |
Loss on disposal of assets | 7 | 187 | 1,859 |
Change in fair value of derivatives | (5,848) | 2,340 | 4,902 |
Amortization of debt issuance costs | 1,623 | 2,121 | 2,131 |
Loss on debt extinguishment (Note 9) | 272 | 0 | 163 |
Impairment loss | 0 | 11,830 | 0 |
Equity-based compensation | 10,822 | 1,154 | 1,126 |
Change in operating assets and liabilities, net of effects of acquisition (Note 4): | |||
Accounts receivable trade, net | (6,789) | (3,997) | 2,696 |
Inventories | (22,426) | (10,658) | (12,785) |
Prepaid expenses and other current assets | (6,593) | (573) | 428 |
Other long-term assets | (333) | (29) | (597) |
Accounts payable | (45) | 1,365 | (2,861) |
Accrued expenses | 7,627 | (1,733) | 1,034 |
Accrued compensation | 8,171 | 2,295 | (2,193) |
Deferred revenue | (1,045) | 285 | 3,824 |
Other current and long-term liabilities | (513) | 460 | 733 |
Net cash provided by operating activities | 64,272 | 55,179 | 42,466 |
Cash flows from investing activities | |||
Purchases of property and equipment | (13,689) | (13,624) | (18,395) |
Business acquisition, net of cash acquired (Note 4) | 0 | 0 | (203,074) |
Proceeds from sales of property and equipment | 122 | 89 | 57 |
Net cash used in investing activities | (13,567) | (13,535) | (221,412) |
Cash flows from financing activities | |||
Dividend to parent | (100,000) | 0 | 0 |
Proceeds from issuance of common stock pursuant to the initial public offering, net of underwriters' discounts and commissions | 187,500 | 0 | 0 |
Payments of deferred offering costs | (6,658) | 0 | 0 |
Capital contribution from parent | 0 | 0 | 111,000 |
Payments under revolving line of credit | (263,000) | (99,000) | (69,600) |
Borrowings under revolving line of credit | 143,500 | 59,500 | 78,100 |
Extinguishment of long-term debt | (38,131) | 0 | (50,000) |
Issuance of long-term debt | 38,131 | 13,100 | 73,100 |
Payments of long-term debt | (13,787) | (12,741) | (10,569) |
Repayment of capital leases | (8) | (16) | (429) |
Debt issuance costs | (260) | 0 | (2,055) |
Net cash (used in) provided by financing activities | (52,713) | (39,157) | 129,547 |
Net (decrease) increase in cash | (2,008) | 2,487 | (49,399) |
Cash - Beginning of year | 6,252 | 3,765 | 53,164 |
Cash - End of year | 4,244 | 6,252 | 3,765 |
Supplemental cash-flow information | |||
Interest, net of amount capitalized | 12,620 | 15,594 | 19,269 |
Income taxes | 22,743 | 15,604 | 11,691 |
Non cash investing and financing activities | |||
Property and equipment additions in accounts payable and accrued expenses | 1,369 | 3,081 | 2,534 |
Capital lease additions | $ 0 | $ 0 | $ 452 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - $ / shares | Jul. 31, 2021 | Jul. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 200,000,000 |
Common stock, shares issued | 115,046,793 | 101,713,460 |
Common stock, shares outstanding | 115,046,793 | 101,713,460 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement [Abstract] | |||
Excise taxes | $ 4,855 | $ 3,220 | $ 2,564 |
Description of business
Description of business | 12 Months Ended |
Jul. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of business | Description of business The Duckhorn Portfolio, Inc. (formerly known as Mallard Intermediate, Inc. until its name change, on February 23, 2021) and its subsidiaries (the "Company" or "Management") headquartered in St. Helena, CA, produces luxury and ultra-luxury wine across a portfolio of winery brands, including Duckhorn Vineyards, Paraduxx, Goldeneye, Migration, Decoy, Canvasback, Calera, Kosta Browne, Greenwing and Postmark. Unless the context indicates otherwise, references to the “Company” or “Management” refer to The Duckhorn Portfolio, Inc. and its subsidiaries, which include Mallard Buyer Corp., Heritage Wine, LLC, Duckhorn Wine Company, Inc., Canvasback Wine LLC, Waterfowl Wine LLC, Heritage Vineyard LLC, KB Wines Corporation, Selway Wine Company and Domaine M.B., LLC, which wholly owns Chenoweth Graham LLC, an entity holding a majority interest in Bootlegger’s Hill, LLC (“Bootlegger’s”). On February 23, 2021, the Company changed its legal name from Mallard Intermediate Inc. to The Duckhorn Portfolio, Inc. This legal name change did not result in any other changes to the Company's subsidiaries, structure or operations. The Company’s revenue is comprised of wholesale and DTC sales. Wholesale revenue is generated through sales directly to California retailers and restaurants, sales to distributors and agents located in other states throughout the U.S. and sales to export distributors that sell internationally. DTC revenue results from individual consumers purchasing wine directly from the Company through club membership, the Company’s website or tasting rooms located in Napa Valley, California; Anderson Valley, California; Sebastopol, California; Hollister, California; and Walla Walla, Washington. The Company owns or controls through long-term leases certain high-quality vineyards throughout Northern and Central California and Washington. Vinification takes place at wineries owned, leased or under contract with third parties predominately located in Napa Valley, California; Anderson Valley, California; Hopland, California; Hollister, California; Sebastopol, California; and Walla Walla, Washington. Fiscal year The Company's fiscal year ends on July 31. Initial public offering In March 2021, the Company completed its IPO of common stock, in which it sold 13.3 million shares. The shares began trading on the NYSE on March 18, 2021. The shares were sold at an IPO price of $15.00 per share, resulting in net proceeds to the Company of approximately $180.8 million, after deducting underwriting discounts and commissions of $12.5 million and deferred offering costs of approximately $6.7 million. |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and significant accounting policies | Basis of presentation and significant accounting policies Basis of presentation The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP and regulation of the SEC. Principles of consolidation The consolidated financial statements include the accounts of The Duckhorn Portfolio, Inc. and its subsidiaries, including a consolidated VIE of which the Company has determined it is the primary beneficiary. All intercompany balances and transactions are eliminated in consolidation. Functional currency The Company and all subsidiary legal entities are domiciled in the U.S. The functional and reporting currency of the Company and its subsidiaries is the U.S. dollar. Accounting estimates The preparation of consolidated financial statements requires Management to make estimates and assumptions that affect the reported amounts of 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. Such estimates include, but are not limited to, the following: useful lives and recoverability of long-lived assets, inventory obsolescence and reserves, capitalized indirect inventory costs, allowance for doubtful accounts receivable, calculation of accrued liabilities, customer incentive reserves, uncertain tax positions, contingent liabilities, fair value of assets and liabilities acquired in connection with business combinations, equity-based compensation and deferred revenues. Actual results could differ from those estimates. Operating segment The Company has one operating segment and one reportable segment. The Company's Chief Operating Decision Maker reviews operating performance and makes decisions to allocate resources at the consolidated company level. Revenue The Company’s net sales reflect the sale of wine domestically in the U.S. to wholesale distributors, wholesale accounts or DTC, as well as sales of wine to export distributors that sell internationally. The Company recognizes revenue when control of the promised good is transferred to the customer in an amount that reflects the consideration for which the Company is expected to be entitled to receive in exchange for those products. Each contract includes a single performance obligation to transfer control of the product to the customer. Control is transferred when the product is either shipped or delivered, depending on the shipping terms, at which point the Company recognizes the transaction price for the product as revenue. The Company has elected to account for shipping and handling as a fulfillment activity, with amounts billed to customers for shipping and handling included in net sales. The Company has elected to record excise taxes as a reduction to revenue, which are recognized in the Consolidated Statements of Operations when the related product sale is recognized. The transaction price includes reductions attributable to consideration given to customers through various incentive programs, including depletion-based incentives paid to distributors, volume discounts and pricing discounts on single transactions. This variable consideration is recognized as a reduction to the transaction price based on the expected amounts at the time revenue for the corresponding product is recognized. The determination of the reduction of the transaction price for variable consideration requires certain estimates and judgements that affect the amounts of revenue recognized and if a change to an estimate occurs in a future period, it is recorded as identified. The Company estimates this variable consideration using the expected value method by taking into account factors such as the nature of the incentive program, historical information, current consumer product trends and availability of actual results. Due to the nature of the arrangements, certain estimates may be constrained if it is probable that a significant reversal of revenue will occur when the uncertainty is resolved. Consideration given to customers totaled $63.8 million, $44.5 million and $33.4 million for the years ended July 31, 2021, 2020 and 2019, respectively, and there were no material constraints on estimates for the periods then ended. • The Company pays depletion-based incentives to its distributors for meeting specific depletion targets and reviews the allowances using a portfolio approach, grouping contracts with similar attributes, which does not result in a materially different outcome than would be obtained by applying assumptions to each individual contract within the portfolio. The allowances are reassessed at each reporting date to reflect changes in facts and circumstances that could impact allowance estimates. • Volume pricing discounts are given for meeting volume levels on an individual contract basis. Each incentive is treated as a reduction to the transaction price at the time of revenue recognition. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30-90 days of delivery or shipment, as dictated by the terms of each agreement. The Company has elected the practical expedient to not account for significant financing components as its payment terms are less than one year, and the Company determines the terms at contract inception. The Company’s sales terms do not allow for the right of return except for matters related to manufacturing defects, which are not material. When the Company receives payment from a customer prior to transferring the product under the terms of a contract, the Company records deferred revenue, which represents a contract liability. The Company’s deferred revenue is primarily comprised of cash collected from DTC members for purchases ahead of the wine shipment date. The Company does not recognize revenue until control of the wine is transferred and the performance obligation is met. The Company has elected the practical expedient to expense the cost of obtaining a contract that is short term in nature when incurred. The Company does not have any contract costs capitalized as of July 31, 2021 and 2020. Cost of sales Cost of sales includes all bulk wine production costs, winemaking, bottling, packaging, warehousing, and shipping and handling costs. Costs associated with the Company’s leased vineyards or owned estates include annual farming costs and amortization of vineyard development expenditures. Costs incurred for wines that age longer than one year prior to sale, including winemaking and processing costs, continue to be capitalized into inventory until the wine is bottled and available for sale. Advertising costs Advertising costs, including promotional discounts, are expensed as incurred and were $6.0 million, $4.5 million and $3.9 million for the years ended July 31, 2021, 2020 and 2019, respectively. Cash and cash equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. There were no cash equivalents as of July 31, 2021 and 2020. Accounts receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Interest is accrued on past-due amounts when required by trade laws in a given jurisdiction. The Company maintains an allowance for doubtful accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company determines this allowance based on review of the level of gross receivables, the aging of accounts receivable at the date of the consolidated financial statements, the financial condition of the Company's customers and the economic risks for certain customers. The allowance for doubtful accounts as of July 31, 2021 and 2020 was $0.8 million and $0.3 million, respectively. The increase in the Fiscal 2021 is shown as a charge to bad debt expense included in selling, general and administrative expenses on the Consolidated Statements of Operation and is partially driven by uncertainties related to COVID-19 which has increased the risk of uncollectible accounts. Additionally, growth in export sales where customer credit information differs from what is available for domestic companies and potentially more challenging collection processes in the event of past-due receivables has further increased the overall allowance balance as compared to historical years. The Company writes-off uncollectible customer accounts receivable balances following a systematic investigation of delinquent accounts and Management review of accounts. Inventories Inventory primarily includes bulk and bottled wine and is carried at the lower of cost (calculated using the first-in-first-out method) or net realizable value. On an ongoing basis, the Company evaluates the estimate and assumptions. As required, the Company reduces the carrying value of inventories that are obsolete or in excess of estimated usage to estimated net realizable value. The cost basis for inventory includes the costs related to winemaking. Consistent with industry practices, the Company classifies inventory as a current asset, although a substantial portion of inventory may be aged for periods longer than one year prior to being sold due to the specific aging requirements for a given wine varietal and vintage. Aging inventory, prior to bottling, is classified as work in process. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of sales in the period Management determines the conditions first arise which indicate the cost may not be recoverable. Inventory also includes deferred crop costs, which consist of vineyard and related farming costs incurred each harvest season. Such costs begin aggregating when one harvest is completed and end at the completion of the next harvest, spanning a period that can range from November to October of the subsequent calendar year, but may vary due to the variable nature of agriculture, including weather and other events. Property and equipment Property and equipment are reported at cost and are depreciated using the straight-line method over the expected useful lives of the assets, with the exception of leasehold improvements, which are depreciated over the term of the lease. Expenditures for major repairs and maintenance which extend the useful lives of property and equipment are capitalized. All other maintenance expenditures, including planned major maintenance activities, are expensed as incurred. Gains or losses from property disposals are included in income or loss from operations. The Company capitalizes vineyard development costs when developing new vineyards or improving existing vineyards, whether owned or leased. These costs principally consist of the costs of the vines and expenditures related to labor and materials to prepare the vineyard and construct vine trellises. Amortization of such costs is recorded on a straight-line basis over the estimated economic useful life of the vineyard, which can range from 15 to 25 years. Interest is capitalized during the active construction period for major capital projects. The Company evaluates the recoverability of capitalized costs and records impairment charges if conditions or events indicate that such costs will not be recovered. No such impairment charges were required to be recorded during the years ended July 31, 2021, 2020 or 2019. Goodwill and other intangible assets Goodwill arising from business combinations is determined as the excess of the fair value of consideration transferred, plus the fair value of any non-controlling interests in an acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets determined to have an indefinite useful life are not amortized but are tested for impairment at least annually or as events and circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Management may elect not to perform the qualitative assessment and perform only a quantitative impairment test as of the measurement date. The Company selected June 30 of each fiscal year as the date to perform annual impairment testing. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Intangible assets outside of goodwill include trade names, customer relationships, leasehold interests and lane rights. The Company determined that trade names and lane rights have indefinite useful lives. The Company believes that trade names provide value from the utility of the brands for the foreseeable future. Lane rights represent the Company's rights to storage capacity at the Wine Service Cooperative for the life of the facility at guaranteed pricing. Customer relationships and leasehold interests are amortized on a straight-line basis over their estimated useful lives and that amortization is recognized in selling, general and administrative expenses. For the fiscal year ended July 31, 2020, the Company recognized a non-cash impairment charge for certain trade name intangible assets as described in Note 7 (Goodwill and other intangible assets). The charges were primarily the result of market impacts associated with the COVID-19 pandemic. The charges were determined in connection with the Company’s annual impairment test. No other impairments were identified through July 31, 2020, nor were any impairments identified related to goodwill or other intangible assets for the year ended July 31, 2021 or 2019. Long-lived assets Long-lived assets deemed to have definite lives, which principally consist of property and equipment and certain intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The assessment of impairment is based on the estimated undiscounted future cash flows from operating activities compared with the carrying value of the asset. If the undiscounted future cash flows of an asset are less than the carrying value, a write-down will be recorded, measured by the amount of the difference between the carrying value and the fair value of the asset. No impairments were identified related to definite-lived assets for the years ended July 31, 2021, 2020 or 2019. All of the Company's long-lived assets are located in the U.S. Deferred offering costs The Company capitalizes, within other assets, certain legal, accounting, underwriting fees and other third-party fees that are directly related to in-process equity financings until such financings are consummated. Upon closing, these costs are recorded as a reduction of the proceeds received from the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately recognized in operating expenses. Upon completion of the offering in March 2021, the Company charged deferred offering costs totaling $6.7 million to stockholders' equity. There were no deferred offering costs as of July 31, 2020 or 2019. Debt issuance costs The Company incurred debt issuance costs associated with the debt facilities, including the revolving line of credit, further described in Note 9 (Debt). The Company treats the revolving line of credit debt issuance costs consistent with its term debt facilities as it does not intend to repay the revolving line of credit in full prior to its maturity. Debt issuance costs are presented as a reduction from the corresponding liability. These costs are amortized to interest expense over the life of the loan to maturity using the straight-line method, which is not materially different from the effective interest method. Business combinations Assets acquired and liabilities assumed in a business combination are recorded at their acquisition date fair values, in accordance with ASC Topic 805, Business Combinations. The amount of consideration transferred in excess of the acquisition date fair value of net assets acquired is recognized as goodwill. The Company, with the assistance of third-party valuation experts, applies estimates and assumptions based on the information available to estimate the fair value of net assets acquired. Some of these estimates can be uncertain and subject to refinement during the measurement period, which generally ends on the earlier of one year following the transaction date or when all information is available to complete the fair value measurement. Adjustments made during the measurement period are typically reflected in goodwill, while subsequent adjustments are recognized in the post-acquisition Consolidated Statements of Operations. Transaction costs directly associated with a business combination are expensed as incurred. Derivative instruments The Company recognizes derivative instruments as assets or liabilities on the Consolidated Statements of Financial Position and measures these instruments at fair value. The Company enters into derivative instruments to manage exposure to changes in interest rates and foreign currency fluctuations. The Company has certain derivative instruments subject to master netting agreements that provide for net-settlement of amounts payable or receivable related to multiple derivative transactions with the same counterparty. The Company presents all derivatives on a gross basis in the Consolidated Statements of Financial Position. Collateral is generally not required of the Company or of the counterparties to the master netting agreements, and no cash collateral was received or pledged under such agreements as of July 31, 2021 and 2020. Management has neither designated these instruments as cash-flow hedges nor elected hedge accounting. Changes in the consolidated fair value of these financial instruments are recognized in current period income from operations, see Note 10 (Derivative instruments) and Note 11 (Fair value measurements). The Company does not enter into derivative agreements for trading or speculative purposes. Fair value measurements 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. Financial instruments are measured in the financial statements in accordance with an established fair value hierarchy, which emphasizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. See Note 11 (Fair value measurements) for the valuation methodologies used for instruments measured at fair value. Income taxes Income taxes are recognized using enacted tax rates and are accounted for based on the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the consolidated financial statement and tax bases of assets and liabilities at the applicable statutory tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include the Company’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. Tax benefits from uncertain tax positions are recognized if it is more likely than not the tax positions will be sustained on examination by the applicable taxing authorities based on the technical merits of the position. The tax benefit is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest related to income tax matters is recognized in interest expense and penalties are reported in operating expenses. See Note 12 (Income taxes) for further discussion. Leases The Company has contractual leases for certain vineyards, production or administrative facilities and equipment. Rent expense is recognized on a straight-line basis over the term of the lease, beginning on the earlier of the lease commencement date or the date the Company takes possession of the leased property. When operating leases contain renewal options, predetermined escalation clauses, rent holidays, or other features which cause the straight-line expense to differ from the amounts paid under the lease, the differences between the straight-line expense and amounts paid under the lease are recorded as deferred rent and are included in current assets or liabilities (for payments due within one year) or shown as long-term assets or liabilities (for payments exceeding one year) as presented on the face of the Consolidated Statements of Financial Position. When the Company receives tenant incentives or allowances upon entering or renewing leases, these transactions are recorded as liabilities and amortized on a straight-line basis as a reduction of rent expense over the lease term. Some of the operating leases have contingent rental payments that trigger rental increases based on changes in a consumer price index or production in excess of a specified capacity. Contingent rent expense is recognized in the period incurred. Stock split On March 9, 2021, the Company's Board of Managers approved a 1,017,134.6-for-1 stock split to the Company's common stock, which was immediately effective. All share and per share data included in these consolidated financial statements give effect to the stock split and have been retroactively adjusted for all periods presented. Preferred stock The Company has 100,000,000 shares of $0.01 par value preferred stock authorized, none of which are issued and outstanding. Net income per share In accordance with ASC Topic 260, Earnings Per Share, net income per share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period, excluding forfeitures. Diluted earnings per common share is computed using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock option and upon the vesting of restricted stock Variable interest entities The Company evaluates its ownership, contractual relationships and other interests in entities to determine the nature and extent of the interests, whether such interests are variable interests and whether the entities are VIEs in accordance with ASC Topic 810, Consolidations. These evaluations can be complex and involve Management judgment as well as the use of estimates and assumptions based on available historical information, among other factors. Based on these evaluations, if the Company determines that it is the primary beneficiary of a VIE, the entity is consolidated into the financial statements. For the years ended July 31, 2021 and 2020, the Company determined that Bootlegger's Hill, which was acquired as part of the Kosta Browne acquisition, is a VIE and that the Company is the primary beneficiary of that VIE. This conclusion considers the Company's ownership percentage, which entitles the Company to receive most of the benefits and absorb most of the risk, as well as the ability to exercise significant influence over the operating and financial decisions of the VIE. The Company recorded the fair value of acquired net assets of the VIE during purchase accounting for the Kosta Browne acquisition, pursuant to ASC Topic 805, Business Combinations. At July 31, 2021 and 2020, the Company's ownership percentage of the sole identified VIE was 76.2%. The total net assets of the VIE included on the Consolidated Statements of Financial Position were $2.2 million at both July 31, 2021 and 2020. The assets and liabilities, which may only be used to settle its own obligations, are primarily related to property, equipment and working capital accounts, which generally represent the amounts owed by or to the Company for the goods under current contracts. Significant customers and concentrations of credit risk The Company’s five largest customers, which are each wholesale customers, represented in total approximately 48%, 43% and 40% of net sales for the years ended July 31, 2021, 2020 and 2019, respectively. There were no significant concentrations of revenue or credit risk related to DTC sales. Of the largest five customers, three wholesale customers each represented 10% or more of the Company's net sales. The percentages for each of these significant customers for the periods presented are as follows: Net sales Fiscal years ended July 31, 2021 2020 2019 Customer A 16 % 15 % 14 % Customer B 15 % 13 % 11 % Customer C 10 % 8 % 7 % Financial instruments potentially subjecting the Company to concentrations of credit risk consist primarily of bank demand deposits in excess of Federal Deposit Insurance Corporation limits, as well as trade receivables. The majority of the Company’s wine sales are made through distributors. Receivables associated with such sales are not collateralized. The Company monitors credit risk associated with its customers on a regular basis and management is of the opinion that any risk of significant loss is reduced due to the diversity of our customers and geographic sales area. The same three wholesale customers, shown in the net sales table above, represent 10% or more of the Company's trade accounts receivable balance for the periods presented. The percentages for each of these significant customers as of the periods presented are as follows: Accounts receivable trade July 31, 2021 2020 Customer A 11 % 13 % Customer B 23 % 12 % Customer C 14 % 15 % Equity-based compensation Equity awards issued in exchange for services rendered by the Company's employees, officers or directors are accounted for pursuant to ASC Topic 718, Compensation-Stock Compensation . The Company measures equity awards at fair value at their grant date. Compensation cost is recognized in selling, general and administrative expenses or is capitalized into inventory over the requisite service period (generally the vesting period), net of actual forfeitures as incurred. For awards with performance-based conditions impacting the timing or number of awards vesting, compensation cost is recognized when a performance condition is probable of being met. If a performance condition is not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company estimates the fair value of certain awards using a Black-Scholes option pricing model. The Company's policy for shares purchased under the ESPP is to value the shares using a Black-Scholes option valuation model. See Note 15 (Equity-based compensation) for further discussion. Accounting pronouncements As an “emerging growth company” as established by the JOBS Act, the Company is permitted to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates available to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Recently adopted accounting pronouncements: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The objective of the standard was to reduce complexity and diversity in practice by simplifying the methodology for calculating interim taxes, as well as by simplifying aspects of recognition of enacted changes in tax laws, accounting for acquisitions, and accounting for changes in ownership of certain entities or investments. Early adoption is permitted. The Company early adopted this standard as of the third quarter of the current fiscal year, which is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. There were no material impacts to the financial statements or disclosures as a result of the early adoption of this ASU. In June 2018, the FASB issued ASU 2018-07 to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. The Company adopted this standard in the current fiscal year. There were no material impacts to the financial statements or disclosures as a result of the adoption of this ASU. Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), and several amendments, codified as ASC 842, which supersedes prior guidance on accounting for leases under FASB ASC 840, Leases. ASU No. 2016-02, among other provisions, (i) requires lessees to classify leases as either finance or operating leases, (ii) generally requires all leases to be recorded on the Consolidated Statements of Financial Position through the recognition of right-of-use assets and corresponding lease liabilities and (iii) expands mandatory qualitative and quantitative disclosures regarding leasing activities. The FASB issued ASU No. 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective dates for certain entities”, which extends the effective date for all other entities, for annual reporting periods beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022. The amended standard is effective for the Company beginning with the year ended July 31, 2023. Early adoption is permitted. The Company’s assessment of the lease standard’s impact on the consolidated financial statements is ongoing, and is expected to result in the recognition of right of use assets and lease liabilities related to the Company’s operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, and also issued subsequent amendments to the initial guidance, collectively, ASC 326, to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that requires the reflection of expected credit losses and will also require consideration of a broader range of reasonable and supportable information to determine credit loss estimates. For many entities with financial instruments, the standard will require the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which may result in the earlier recognition of credit losses on financial instruments. This guidance will be effective for the Company beginning with the year ended July 31, 2024, with early adoption permitted. The Company is currently evaluating the impact this standard could have on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), and further issued subsequent amendments to the initial guidance. In order to ease the potential burden in accounting for reference rate reform, A |
Revenue
Revenue | 12 Months Ended |
Jul. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated revenue information The following table presents the percentages of consolidated net sales disaggregated by sales channels: Fiscal years ended July 31, 2021 2020 2019 Wholesale - Distributors 65.3 % 60.0 % 59.4 % Wholesale - California direct to retail (a) 16.9 18.9 17.8 DTC (b) 17.8 21.1 22.8 Net sales 100.0 % 100.0 % 100.0 % ________________________________________________ (a) Includes bulk and grape sales of $0.6 million, $1.1 million and $0.4 million for the years ended July 31, 2021, 2020 and 2019, respectively, and immaterial merchandise sales. (b) Includes shipping and handling revenue of $2.6 million, $2.4 million and $1.8 million for the years ended July 31, 2021, 2020 and 2019, respectively. The following table presents the percentages of consolidated net sales disaggregated by brand: Fiscal years ended July 31, 2021 2020 2019 Duckhorn Vineyards & Decoy 76.3 % 73.0 % 71.1 % Other winery brands 23.7 27.0 28.9 Net sales 100.0 % 100.0 % 100.0 % The following table presents the net sales disaggregated by geographic area: Fiscal years ended July 31, 2021 2020 2019 United States $ 318,389 $ 258,439 $ 228,797 Canada 5,355 3,723 3,584 Other international 12,869 8,486 8,826 Net sales $ 336,613 $ 270,648 $ 241,207 Contract balances The following table reflects the changes in the contract liability balance during the periods presented. Fiscal years ended July 31, (in thousands) 2021 2020 2019 Outstanding at beginning of period $ 4,148 $ 3,863 $ 39 Increase (decrease) attributable to: Acquisition (Note 4) — — 2,364 Upfront payments 33,257 34,836 30,756 Revenue recognized (34,069) (34,328) (28,738) Refund (234) (223) (558) Outstanding at end of period $ 3,102 $ 4,148 $ 3,863 Revenue recognized during the years ended July 31, 2021, 2020 and 2019, which was included in the opening contract liability balance for those periods, was primarily revenue from DTC sales. |
Acquisition
Acquisition | 12 Months Ended |
Jul. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Acquisition Kosta Browne On August 1, 2018, the Company purchased Kosta Browne by acquiring 100% of the equity in KB Wines Corporation in exchange for consideration of $203.2 million, including cash acquired but not including transaction expenses. Kosta Browne produces and sells ultra-luxury Pinot Noir and Chardonnay, primarily directly to customer list members. The addition of Kosta Browne to the Company's portfolio of winery brands expanded the Company’s ultra-luxury Pinot Noir offerings with an iconic brand and related assets, including a state of the art custom winemaking facility, tasting room and access to 170 acres of vineyards through ownership and long-term leases. The acquisition was accounted for as a business combination using the acquisition method in accordance with ASC 805, Business Combinations, as the acquired assets included inputs and processes that together significantly contribute to the Company’s ability to create outputs. The purchase price of $203.2 million was comprised of $111.0 million cash from Mallard Holdco, LLC, the Company’s parent and $92.2 million cash on hand, in addition to financing through Bank of the West. Success-based and other acquisition costs contingent on closing were recorded at the closing date on August 1, 2018. The operational results of the assets and liabilities acquired have been included in the Company’s consolidated financial statements from the date of acquisition. Transaction costs for services provided to the Company to facilitate the transaction were expensed to operating expenses as incurred and totaled $3.9 million for the year ended July 31, 2019. Additional transaction costs of $0.2 million related to the usage of certain net operating losses, which offset taxable income on the Company's completed 2019 tax return, were incurred for the year ended July 31, 2020. To secure a portion of funding for the Kosta Browne acquisition, the Company amended the terms of its syndicated Credit Agreement see Note 9 (Debt). The terms of the amendments, referenced as Amendment Three to the Credit Agreement, were finalized on August 1, 2018. The following table summarizes consideration transferred and the fair value of assets and liabilities acquired. Assets and liabilities acquired (in thousands) Cash $ 84 Accounts receivable, trade 492 Inventory 40,938 Prepaid and other assets 518 Trade names and other intangibles (Note 7) (a) 41,222 Property and equipment 25,079 Goodwill 113,182 Accounts payable and accrued expenses (4,070) Capital leases (426) Deferred taxes (13,309) Non-controlling interest (552) Total $ 203,158 ________________________________________________ (a) The weighted-average amortization period upon acquisition for customer relationships and leasehold interest were 10 years and 14.1 years, respectively. Intangible assets are recorded at estimated fair value, as determined by management based on available information. The fair value assigned to the customer relationships, which is included in other intangibles above, was determined using the income approach, specifically the excess earnings method. The fair value assigned to the leasehold interests was determined using the market approach. The fair value assigned to the trade names was determined using the income approach, specifically the relief from royalty method. Management applied significant judgment in determining the fair value of intangible assets, which involved the use of estimates and assumptions including future revenue and related operating profits, costs anticipated to fulfill remaining performance obligations, market rental rates, customer retention rates and other projected financial information. Goodwill related to the Kosta Browne acquisition includes the benefit of a skilled workforce, brand strength in the luxury Pinot Noir market and synergies from combined sales, operational and administrative functions. The goodwill is not deductible for tax purposes. Variable interest entity As part of the acquisition, the Company acquired a variable interest in the form of a 76.2% stake in Bootlegger's which was determined to be a variable interest entity. The Company consolidates 100% of the operational results of Bootlegger's, while also reflecting on the face of the Consolidated Statements of Operations and Financial Position the 23.8% non-controlling interest, which is held by outside investors. The total fair value of Bootlegger's was determined to be $2.3 million, with the portion related to non-controlling interest estimated to be $0.6 million. The fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as defined in ASC 820, Fair Value Measurement. |
Inventories
Inventories | 12 Months Ended |
Jul. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories were comprised of the following as of: July 31, (in thousands) 2021 2020 Finished goods Bottled wine $ 120,876 $ 100,272 Merchandise 547 408 Work in progress Bulk wine 130,693 128,436 Packaging 3,541 2,945 Overhead 613 2,225 Raw materials Deferred crop costs 11,467 11,025 Total $ 267,737 $ 245,311 The Company capitalizes into inventory depreciation related to property and equipment used in the production of inventory. For the years ended July 31, 2021 and 2020, the amount capitalized was $12.5 million and $13.9 million, respectively. |
Property and equipment
Property and equipment | 12 Months Ended |
Jul. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment was comprised of the following major components as of: July 31, (in thousands) Depreciable lives 2021 2020 Land N/A $ 120,063 $ 120,063 Buildings and improvements 4-42 68,616 66,057 Vineyards and improvements 5-20 29,164 27,430 Machinery and equipment 3-20 49,607 44,147 Barrels 1-2 26,349 25,889 Total depreciable property and equipment 293,799 283,586 Less: accumulated depreciation and amortization (58,542) (48,171) Total depreciable property and equipment, net 235,257 235,415 Construction in progress N/A 5,682 7,336 Property and equipment, net $ 240,939 $ 242,751 |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill At each of July 31, 2021 and July 31, 2020, the goodwill balance was $425.2 million. Other intangible assets Intangible assets were comprised of the following components: July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 34,274 $ — $ 58,446 Leasehold interests 1,572 371 — 1,201 Total definite-lived intangible assets 94,292 34,645 — 59,647 Indefinite-lived intangible assets Trade names 139,600 — — 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 140,900 — — 140,900 Total other intangible assets $ 235,192 $ 34,645 $ — $ 200,547 July 31, 2020 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 26,715 $ — $ 66,005 Leasehold interests 1,572 247 — 1,325 Total definite-lived intangible assets 94,292 26,962 — 67,330 Indefinite-lived intangible assets Trade names 151,430 — 11,830 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 152,730 — 11,830 140,900 Total other intangible assets $ 247,022 $ 26,962 $ 11,830 $ 208,230 Fiscal year 2020 impairment Pursuant to ASC 350, Intangibles—Goodwill and Other, the Company performs an annual impairment test for potential impairment of indefinite-lived intangible assets. Assets are tested more frequently if factors indicate impairment may exist. The Company’s annual impairment analysis performed as of June 30, 2020 identified impairments totaling $11.8 million for certain of the Company’s trade names. The impairments were primarily the result of changes to the Company’s sales forecasts for certain of the Company’s ultra-luxury brands experiencing sales channel and consumer spending disruption due to the COVID-19 pandemic, the effects of which were observable and quantifiable beginning in the fourth quarter of Fiscal 2020, the same period as Management’s annual assessment. The impairment charge was also impacted by an increase in the discount rate applied in the fair value calculations due to changes in economic outlook. The Company’s impairment testing of the trade name intangible assets compares the fair value of each trade name with its carrying value, with any excess of carrying value being recognized as an impairment loss. The Company estimates the fair value of the trade names using the market, cost and income approaches, primarily relying on the Relief-from-Royalty method. Management applies significant judgment in determining the fair value of intangible assets, which involves the use of estimates and assumptions including future revenues attributable to the trade names, selection of an appropriate royalty rate and discount rates. The carrying value of the trade name intangible assets totaled $151.4 million before the impairments, and $139.6 million after the impairments. The impairment charges were recognized in the Consolidated Statements of Operations in impairment loss within income from operations, as the assets are actively used in the Company’s ongoing operations. Amortization expense The Company’s amortization expense for each of the years ended July 31, 2021, 2020 and 2019 was $7.7 million. Estimated future amortization expense is as follows: Fiscal years ending July 31, (in thousands) 2022 $ 7,683 2023 7,683 2024 7,683 2025 7,683 2026 7,683 Thereafter (collectively) 21,232 Total $ 59,647 |
Accounts payable and accrued ex
Accounts payable and accrued expenses | 12 Months Ended |
Jul. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses The Company’s accounts payable balance consisted of the following amounts: July 31, (in thousands) 2021 2020 Distributor invoices $ 1,541 $ 881 Production supplies 447 515 Taxes 632 19 Grower purchases — 599 Other 936 1,719 Total $ 3,556 $ 3,733 The Company’s accrued expenses balance consisted of the following amounts: July 31, (in thousands) 2021 2020 Trade spend (a) $ 10,734 $ 6,246 Bulk wine and other received not invoiced 1,526 532 Barrel purchase 936 1,917 Deferred compensation liability (b) 2,096 1,576 Accrued invoices and other accrued expenses 6,265 5,240 Total $ 21,557 $ 15,511 ________________________________________________ (a) Trade spend refers to estimated amounts the Company owes to distributors for depletion-based incentives granted for meeting specific depletion targets. See further discussion in Note 2 (Basis of presentation and significant accounting policies). (b) See discussion in Note 13 (Employee benefit plans) regarding the Company's deferred compensation plan and related cash surrender value life insurance policies the Company intends to use in settling the plan liability. The cash surrender value of the life insurance policies was $1.7 million and $1.4 million at July 31, 2021 and 2020, respectively. |
Debt
Debt | 12 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Company borrowings outstanding consisted of the following: July 31, (in thousands) 2021 2020 Revolving line of credit $ 124,000 $ 243,500 Debt issuance costs (2,652) (3,826) Revolving line of credit, net $ 121,348 $ 239,674 Term loan, first lien 117,637 125,158 Capital expenditure loan 8,875 15,141 Total long-term debt 126,512 140,299 Current maturities of long-term debt (11,324) (13,430) Debt issuance costs (563) (1,025) Long-term debt, net of current maturities and debt issuance costs $ 114,625 $ 125,844 First lien loan and security agreement On October 14, 2016, the Company entered into the Credit Facility with a syndicated group of lenders. The debt is collateralized by substantially all of the Company’s cash, trade accounts receivable, real and personal property. The Credit Facility provides a combination of term loans, a capital expenditure loan and a revolving line of credit, which have variable interest rates (based primarily on LIBOR plus an applicable margin as defined in the First Lien Loan Agreement). Pursuant to the terms and conditions of the First Lien Loan Agreement, the Company issued the following instruments from the syndicated or individual lenders. Amendments to the first lien loan agreement On August 17, 2020, the Company entered into an agreement which amended the terms of the Credit Facility capital expenditure and term loans. This amendment extended the maturity dates of the capital expenditure loan and term loan (first tranche), and modified the interest rate margins in the Credit Facility to reflect market conditions. The transaction did not result in any additional cash proceeds and was assessed on a lender-specific level for all syndicated instruments and was accounted for primarily as a debt modification. Where the transaction was determined to be an extinguishment in accordance with ASC 470, Debt, the Company recognized a loss on early extinguishment of $0.3 million in total. On February 22, 2021, the Company amended the terms of its Credit Facility by executing Amendment No. 7. Pursuant to the terms of Amendment No. 7, Selway Wine Company, a wholly-owned subsidiary the Company formed in connection with Amendment No. 7, became the guarantor of all debt outstanding under the Credit Facility. Additional changes within this amendment included revisions to certain covenants of the Credit Facility related to reporting requirements and revisions to terms restricting certain liquidity events and distributions to the Company's equity holders. The transaction did not result in any additional cash proceeds. Consistent with previous amendments, the transaction was assessed on a lender-specific level for all syndicated instruments and was accounted for as a debt modification in accordance with ASC 470. The instruments described below include the impacts of amendments subsequent to the initial issuance of the Credit Facility. • Revolving Line of Credit – The revolving line of credit allows the Company to borrow up to a principal amount of $425.0 million (including a letter of credit sub-facility of the revolving loan facility in the aggregate of $15.0 million and a swingline sub-facility of the revolving loan facility in the aggregate of $15.0 million), with an incremental seasonal borrowing amount for harvest costs increasing the total amount to a maximum of $455.0 million. The revolving line of credit matures on August 1, 2023. The interest rate ranges from LIBOR plus 125 basis points to LIBOR plus 175 basis points depending on the average availability of the revolving line of credit. The weighted-average interest rate was 1.9%. at July 31, 2021. The amount available to borrow on the revolving line of credit is subject to a monthly borrowing base calculation, based primarily on the Company’s inventory and accounts receivable balances. At July 31, 2021, $301.0 million was available to draw under the revolving line of credit, excluding the incremental seasonal borrowing amount of an additional $30.0 million of capacity. At July 31, 2021, no amounts were outstanding on the letter of credit sub-facility or the swingline sub-facility. • Capital Expenditure Loan – The capital expenditure loan has a maximum, non-revolving draw-down limit of $25.0 million with quarterly principal payments and the remaining unpaid principal and interest due upon maturity on August 1, 2023. The loan has an interest rate of LIBOR plus 190 basis points and the weighted-average rate was 2.0% at July 31, 2021. • Term Loans – The Company has two tranches of term loans with varying terms and maturities. The first tranche was issued in 2016 for a principal balance of $135.0 million with quarterly principal payments and the remaining unpaid principal and interest due upon maturity on August 1, 2023. The second tranche, issued in August 2018, allowed for a principal balance up to $25.0 million with quarterly principal payments and the remaining unpaid principal and interest due upon maturity on August 1, 2023. The Company borrowed $16.4 million of the second tranche of the term loan in November 2018 to settle the residual amounts outstanding on the term loan issued as part of the Kosta Browne acquisition. The term loans have interest rates of LIBOR plus 190 basis points for the first tranche and LIBOR plus 163 basis points for the second tranche. The term loans have a weighted-average interest rate of 2.0% at July 31, 2021. On August 1, 2018, the Company entered into a Second Lien Loan Agreement with Bank of the West which was subordinate to the First Lien Loan Agreement and was collateralized by substantially all of The Duckhorn Portfolio, Inc. and its subsidiaries' cash, trade accounts receivable, real and personal property. The Second Lien Loan Agreement provides several interest rate options, based primarily on LIBOR plus an applicable margin. The Second Lien Loan Agreement allows the Company to convert portions of outstanding balances from variable to fixed interest rates for specified periods. In connection with and pursuant to the terms and conditions of the Second Lien Loan Agreement, the Company issued a bridge loan from Bank of the West described herein as "Bridge/Term Loan". • Bridge/Term Loan – The term loan was issued for $50.0 million, primarily to finance the Kosta Browne acquisition, with a scheduled maturity of January 31, 2024. The term loan was repaid in full in November 2018 with both operational funds and the second tranche of the term loan under the First Lien Loan agreement. The second lien was removed from all collateral in November at the time of payoff. As provided in the Credit Facility, the Company has entered into interest rate swaps that partially mitigate the risk to the Company due to potential future LIBOR movements by trading floating rate payments for fixed rate payments on an applicable notional amount of outstanding variable rate debt. See Note 10 (Derivative instruments) for additional information. The Credit Facility contains customary affirmative covenants, including delivery of audited financial statements and customary negative covenants that, among other things, limit our ability to incur additional indebtedness, pay dividends or to grant certain liens. The Company is subject to the requirements of various financial covenants pursuant to the term loans and revolving line of credit, including a debt to net worth maximum and a fixed charge coverage ratio as defined in the Credit Agreement. As of both July 31, 2021 and July 31, 2020, the Company was not in violation of any financial covenant. As of July 31, 2021, the required revolving line of credit and long-term debt repayments for each of the following five fiscal years and thereafter are as follows: (in thousands) 2022 $ 11,324 2023 8,942 2024 230,246 2025 — 2026 — Thereafter (collectively) — Total $ 250,512 Included in interest expense on the Consolidated Statements of Operations, and separately presented on the Consolidated Statement of Cash Flows, is amortization related to debt issuance costs of $1.6 million, $2.1 million and $2.1 million for the years ended July 31, 2021, 2020 and 2019. |
Derivative instruments
Derivative instruments | 12 Months Ended |
Jul. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments | Derivative instruments The Company manages exposure to interest rates and foreign currency movements by entering into derivative contracts from time to time, as movements in such markets could impact the financial results and Consolidated Statements of Financial Position. The changes in estimated fair values of derivative instruments result from changes in interest rates and foreign currency exchange rates. Such changes serve to offset exposure in related business assets or liabilities. The Company is exposed to credit loss in the event of nonperformance by a counterparty. Certain of the Company's derivative instruments are subject to master netting agreements. In certain circumstances, this arrangement allows the Company to net-settle amounts payable or receivable related to multiple derivative transactions with the same counterparty. The fair values of derivative instruments are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements. Collateral is generally not required of the Company or of the counterparties to the master netting agreements, and no cash collateral was received or pledged under such agreements as of July 31, 2021 or July 31, 2020. The Company does not enter into derivative instruments for trading or speculative purposes. The Company's accounting policies do not apply hedge accounting treatment to derivative instruments. On July 31, 2021, the Company had one interest rate swap with a notional value of $150.0 million mature thus, as of July 31, 2021, the Company held the following interest rate swap agreements, which fixed the interest rate on the applicable notional amount of outstanding variable rate debt: Notional amount Interest rate Effective date Expiration date $100,000 0.487% March 21, 2020 March 23, 2023 As discussed in Note 14 (Commitments and contingencies), the Company manages annual barrel purchases by engaging domestic and foreign cooperages to provide specified barrel quantities on agreed delivery dates. Some of these invoices are paid in Euros. In order to reduce the foreign exchange risk associated with the Euro to U.S. Dollar conversion rate, the Company enters into foreign currency forward contracts aligning settlement dates with expected barrel delivery and the anticipated payments to various coopers. The total notional amounts of the Company’s derivative instruments outstanding are as follows: July 31, (in thousands) 2021 2020 Derivative instruments not designated as hedging instruments Interest rate swap contracts $ 100,000 $ 300,000 Foreign currency forward contracts 2,369 2,240 Total derivative instruments not designated as hedging instruments $ 102,369 $ 302,240 Results of period derivative activity The estimated fair value and classification of derivative instruments on the accompanying Consolidated Statements of Financial Position are as follows for the years ended: July 31, (in thousands) 2021 2020 Derivative instruments not designated as hedging instruments Classification Interest rate swap contracts Derivative instrument Current liability $ — $ (5,376) Derivative instrument Other long-term liabilities (480) (1,065) Total interest rate swap contract liability $ (480) $ (6,441) Foreign currency forward contracts Derivative instrument Other current assets $ 5 $ 118 Total foreign currency contract asset $ 5 $ 118 The amounts and classification of the gains and losses in the Consolidated Statements of Operations related to derivative instruments not designated as hedging instruments are as follows: Fiscal years ended July 31, (in thousands) Classification 2021 2020 2019 Interest rate swap contracts Other (income) expense, net $ (5,961) $ 2,596 $ 4,945 Foreign currency forward contracts Other (income) expense, net 113 (256) (43) Total (gains) losses $ (5,848) $ 2,340 $ 4,902 |
Fair value measurements
Fair value measurements | 12 Months Ended |
Jul. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements The Company applies a fair value hierarchy pursuant to ASC 820, Fair Value Measurement, which consists of three levels of inputs that may be used to measure fair value: Level 1 Inputs to fair value are quoted prices in active markets for identical assets or liabilities; Level 2 Inputs to fair value are based on observable data other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data such as interest rates or yield curves for substantially the full term of the instrument; Level 3 Inputs to fair value are based on unobservable data for the instrument and are supported by little or no market activity. Following is a description of the valuation methodologies used for instruments measured at fair value in the consolidated financial statements, as well as the general classification of such instruments under the valuation hierarchy. Interest rate swap contracts: The fair value of the Company’s interest rate swap agreement is estimated with the assistance of a third party, using inputs that can be corroborated by observable market data (Level 2 of the fair value hierarchy). Foreign currency forward contracts: The fair value of the Company’s outstanding foreign currency forward contracts is estimated with the assistance of a third party, using inputs that can be corroborated by observable market data (Level 2 of the fair value hierarchy). Deferred compensation plan: Contributions to the Company’s deferred compensation plan are managed by a third-party administrative agent. The fair value of the total contributed plan assets and liabilities are based on inputs that can be corroborated by observable market data (Level 2 of the fair value hierarchy). The Company’s other financial instruments consist mainly of cash, accounts receivable, accounts payable, accrued expenses and debt. The carrying value of all other financial instruments, except debt, approximates fair value due to the short-term nature of these assets and liabilities. The carrying value of the Company's debt approximates fair value as the interest rates are variable and reflective of market rates. Debt is categorized as a Level 2 liability within the fair value hierarchy. The Company’s assets and liabilities measured and recorded at fair value on a recurring basis at July 31, 2021, were as follows: (in thousands) Fair value measurements using: Quoted prices in active markets (Level 1) Significant other observable inputs Significant unobservable inputs Total Assets Foreign currency forward contracts $ — $ 5 $ — $ 5 Deferred compensation plan asset — 1,719 — 1,719 Liabilities Interest rate swap contracts $ — $ 480 $ — $ 480 Deferred compensation liability — 2,096 — 2,096 The Company’s assets and liabilities measured and recorded at fair value on a recurring basis at July 31, 2020, were as follows: (in thousands) Fair value measurements using: Quoted prices in active markets (Level 1) Significant other observable inputs Significant unobservable inputs Total Assets Foreign currency forward contracts $ — $ 118 $ — $ 118 Deferred compensation plan asset — 1,416 — 1,416 Liabilities — Interest rate swap contracts $ — $ 6,441 $ — $ 6,441 Deferred compensation liability — 1,576 — 1,576 |
Income taxes
Income taxes | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The Company’s income tax provision represents U.S. federal and state income taxes. The provision for income taxes was as follows: Fiscal years ended July 31, (in thousands) 2021 2020 2019 Provision for income taxes Current Federal $ 14,431 $ 11,591 $ 9,539 State 4,549 3,842 3,468 18,980 15,433 13,007 Deferred Federal $ 2,809 $ (2,905) $ (2,667) State (781) (2,096) (2,498) Deferred income taxes 2,028 (5,001) (5,165) Income tax expense $ 21,008 $ 10,432 $ 7,842 The significant components of deferred tax assets (liabilities) were comprised of the following: July 31, (in thousands) 2021 2020 Deferred tax assets Accrued liabilities $ 2,001 $ 1,121 State taxes 998 846 Stock based compensation 284 — Interest rate swap 122 1,646 Other 221 — Total deferred tax assets 3,626 3,613 Deferred tax liabilities Inventory (7,291) (2,437) Property and equipment (34,114) (32,945) Intangible assets (47,759) (49,078) Prepaid expenses (1,129) — Casualty gain (Note 17) — (3,551) Other — (240) Total deferred tax liabilities (90,293) (88,251) Net deferred tax liabilities $ (86,667) $ (84,638) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Other significant temporary differences that impact the Company’s deferred taxes primarily relate to the tax basis of assets that were acquired in business combinations that remain at historical bases although the assets were recorded at fair value for financial reporting purposes. The differences primarily relate to inventory, property and equipment and intangible assets. Other temporary differences include differing depreciation and inventory costing methods. Goodwill associated with a prior period acquisition of the Company created a permanent difference. The Company considers the realizability of deferred tax assets, evaluating whether it is more likely than not that some or all of the deferred tax assets will not be realized. As of July 31, 2021 and 2020, the Company determined it is more likely than not that it will realize the benefits of these deductible differences. Accordingly, the Company has recorded no valuation allowances. The Company and its subsidiaries file a consolidated federal income tax return and individual or consolidated state tax returns based on the tax laws of each jurisdiction where the Company operates. The Company has no uncertain tax positions. The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. There were no interest or penalties for the years ended July 31, 2021, 2020 and 2019. The following table reconciles the Company's actual income tax provision to the expected statutory tax rate. Fiscal years ended July 31, 2021 2020 2019 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes 3.9 3.3 2.5 Equity-based compensation 2.6 — — Transaction expenses — 0.1 1.9 Other (0.2) — 0.7 Total 27.3 % 24.4 % 26.1 % |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Jul. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Employee benefit plans Defined contribution pension plan The Company sponsors a defined contribution 401(k) plan pursuant to which eligible employees may defer a portion of their compensation. The Company’s 401(k) plan provides for Company contributions not to exceed $29 thousand per eligible employee per year. All full-time, part-time and part-time temporary employees are eligible to participate. The 401(k) plan has a 3% mandatory safe harbor contribution requirement annually. These Company contributions vest upon completion of the second year of service. In addition, discretionary contributions, up to 7% annually, have historically been made by the Company as approved by the Company’s Board of Directors, and are subject to a graded vesting schedule over five years. Employee contributions vest immediately. All contributions are invested at the direction of the employee under the options offered in the 401(k) plan. Defined contribution pension expense includes the plan administration fees and is reduced by forfeitures. The Company made mandatory safe harbor and discretionary employer contributions during the year totaling 10% of eligible compensation, and no other profit-sharing contributions were approved for the year ended July 31, 2021. The Company contributed $3.8 million, $3.7 million and $3.1 million to the plan for the years ended July 31, 2021, 2020 and 2019, respectively. Deferred compensation retirement plan The Company offers to certain qualifying members of management, at the Company’s discretion, the ability to participate in the Company’s deferred compensation plan which is subject to Section 409(a) of the Internal Revenue Code. For such employees, when discretionary employer contributions to the 401(k) plan would exceed the maximum allowable 401(k) contribution, the balance of the contribution is made into the 409(a) plan. Participating employees may elect to defer compensation under the plan, and the Company may make discretionary contributions on participants’ behalf. Employee contributions vest immediately. Discretionary contributions are made by the Company as approved by the Company’s Board of Managers and are subject to a three-year cliff vesting schedule. Contributions track investments selected by the employee under the options offered in the plan. Company contributions to the plan totaled $1.1 million, $0.9 million and $0.2 million for the years ended July 31, 2021, 2020 and 2019, respectively. The deferred compensation liability was $2.1 million as of July 31, 2021 and $1.6 million as of July 31, 2020. Future payments related to the deferred compensation plan will be funded with cash surrender value life insurance contracts which are payable to the Company upon the death of a participating employee. These plan assets are general assets of the Company, which are subject to creditors. The cash surrender value of the life insurance policies totaled $1.7 million as of July 31, 2021 and $1.4 million as of July 31, 2020 and is included in other non-current assets on the Consolidated Statements of Financial Position. |
Commitment and contingencies
Commitment and contingencies | 12 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and contingencies | Commitments and contingencies Operating leases The Company leases approximately 150 acres of vineyard property in California under various third-party operating lease agreements, with terms ranging from two operating leases. Some lease agreements contain purchase options and many include renewal options at specified dates throughout the lease terms. Rental expense was $4.0 million, $4.1 million and $2.3 million for the years ended July 31, 2021, 2020 and 2019, respectively, the majority of which is capitalized into inventory. At July 31, 2021, the future minimum payments under the non-cancelable operating lease agreements are as follows: Fiscal years ending July 31, (in thousands) 2022 $ 4,079 2023 3,987 2024 3,727 2025 3,448 2026 2,046 Thereafter (collectively) 6,888 Total $ 24,175 Long-term purchase contracts The Company has entered into long-term grape purchase contracts with various growers to supply a significant portion of its future grape requirements. The lengths of the contracts typically vary from one eight Purchase commitments The Company has ongoing commitments to purchase approximately 6,000 barrels for a total of $6.4 million, of which approximately $4.8 million will be paid in Euros. In order to reduce the foreign exchange risk associated with the Euro to U.S. Dollar conversion rate, the Company entered into foreign currency forward contracts aligning settlement dates with expected barrel delivery and the anticipated payments to various coopers. The Company does not enter into these contracts for speculative purposes. Gains and losses on these contracts are recorded in the Consolidated Statements of Operations. See Note 10 (Derivative instruments) for the total notional value and impact on the current period consolidated financial statements due to foreign currency forward contracts. The Company enters into various contracts with third-parties for custom crush, storage and mobile bottling services. The costs related to these contracts are recorded in the period the service is provided. The contracts for custom crush services typically have minimums that the Company is required to pay if certain grape volume thresholds are not delivered. The Company does not record these minimums related to service contracts as contingent liabilities on the Consolidated Statements of Financial Position given the harvest yield size, resulting volumes and qualities of grape deliveries are not known or estimable until harvest, when all related contingencies would be resolved. COVID-19 In March 2020, the World Health Organization declared a global pandemic due to the spread of COVID-19, the disease caused by a novel strain of virus. During the pandemic, the Company incurred incremental costs during periods of capacity restrictions or mandatory closure totaling $0.7 million and $1.4 million for the years ended July 31, 2021 and 2020, respectively. These costs include tasting room expenses and other immaterial costs. No costs were incurred for the year ended July 31, 2019. The Company continues to monitor the impacts of the COVID-19 pandemic, as the situation continues to evolve. The estimates and assumptions made by Management to quantify the effect of COVID-19 disruption are based on available information at the time each assumption is made. At this time, the Company is unable to fully estimate the long-term impacts to the business, financial condition, operational results or future cash flows, as the pandemic is ongoing in all markets in which the Company operates. Contingent liabilities The Company evaluates pending or threatened litigation, operational events which could result in regulatory or civil penalties, environmental risks and other sources of potential contingent liabilities during the year. In accordance with applicable accounting guidance, the Company establishes an accrued liability when those matters present loss contingencies which are both probable and reasonably estimable. As of July 31, 2021, there were no material contingent obligations requiring accrual or disclosure. In the ordinary course of business, the Company enters into agreements containing standard indemnification provisions. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain, as these involve potential future claims against the Company that have not occurred. The Company expects the risk of any future obligations under these indemnification provisions to be remote. As of the years ended July 31, 2021 and 2020, no amounts have been accrued related to such indemnification provisions. |
Equity-based compensation
Equity-based compensation | 12 Months Ended |
Jul. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-based compensation | Equity-based compensation 2016 Equity incentive plan The Board of Managers of Mallard Holdco, LLC, the entity which wholly-owned The Duckhorn Portfolio, Inc. before the Company's IPO, approved the issuance of profit interest units ("Class M Common Units", "awards" or "units") to certain employees of the Company. The units, issued in accordance with the 2016 Plan, were considered equity awards for purposes of calculating compensation expense, and equity-classified in the Consolidated Statements of Financial Position. The units awarded in the first grant were subject to a service condition, vest ratably by 20% on each anniversary of the vesting date, and subject to continued service through each vesting date ("Time-Based Units"). The units awarded in the second grant were subject to both a service and a performance condition specific to the investors having achieved specified levels of return on investment ("Performance-Based Units"). Upon consummation of the IPO, several events occurred with respect to the previously awarded 2016 Plan units. The vesting conditions were considered probable at the time of the IPO and the acceleration clause in the awards was triggered, resulting in an acceleration of the requisite service period from five years to four years. One tranche of awards under the plan was accelerated by the Company's Board of Directors to align the vesting periods of all 2016 Plan awards. Lastly, the Class M Common Units were exchanged, on a value for value basis, for common shares of the Company post-IPO and further by unrestricted or restricted shares, depending on the satisfaction of the respective service period vesting. The changes to these awards were deemed to be Type I modification events under ASC Topic 718. Accordingly, the Company recognized catch-up equity-based compensation expense in the third quarter of Fiscal 2021, including incremental fair value resulting from the modification, as applicable to each award grant, amounting to a cumulative catch-up expense of $8.5 million presented in selling, general and administrative expenses. In connection with the adoption of the Company's 2021 Equity Plan, as discussed below, the Company will no longer grant additional awards under the 2016 Plan. However, the terms and conditions of the 2016 Plan will continue to govern the previously granted awards, to the extent applicable. Class M units Activity for the units is shown below: Time-based units Weighted-average grant-date fair value Unvested as of July 31, 2020 14,640,454 $ 0.16 Granted — — Vested 14,640,454 0.16 Forfeited — — Unvested as of July 31, 2021 — $ — Performance-based units Weighted-average grant-date fair value Outstanding as of July 31, 2020 7,203,820 $ 0.19 Granted — — Vested 2,881,528 0.19 Forfeited — — Exchanged (4,322,292) 0.19 Outstanding as of July 31, 2021 — $ — The total fair value of Class M Units that vested during the fiscal year ended July 31, 2021 was $2.9 million. Restricted shares As discussed above, the unvested Class M Units were exchanged for restricted shares of the Company. A summary of the restricted shares is shown below: Performance-based shares Weighted-average grant-date fair value Unvested as of July 31, 2020 — $ — Granted — — Vested 266,155 14.23 Forfeited — — Exchanged 665,389 14.23 Unvested as of July 31, 2021 399,234 $ 14.23 The total fair value of restricted shares that vested during the fiscal year ended July 31, 2021 was $3.8 million. The Company recognized equity compensation expense related to the 2016 Plan in selling, general and administrative expenses due to units vesting over their requisite service periods, excluding the incremental expense related to modification accounting disclosed above, in the aggregate amounts of $0.9 million, $1.2 million and $1.1 million for the fiscal year ended July 31, 2021, 2020 and 2019, respectively. The total unrecognized compensation expense related to the 2016 Plan was $0.5 million as of July 31, 2021, which is expected to be recognized over a weighted-average period of 0.8 years. 2021 Equity incentive plan The Board of Directors approved the 2021 Plan, which allows Management to grant various stock and stock-based awards. A total of 14,003,560 shares of the Company's common stock are available for issuance under the 2021 Plan. On March 17, 2021 restricted stock units and stock options were granted to certain employees of the Company, advisors and directors (collectively "grants"). The grants, are considered equity awards for purposes of calculating compensation expense, and are equity-classified in the Consolidated Statements of Financial Position. The grants awarded vest ratably by 25% on each anniversary of the vesting date, subject to continued service through each vesting date, consistent with the Company's policy related to the 2016 Plan, forfeitures will be recorded as they occur. Stock options granted under the 2021 Plan expire ten years from the date of the grant. The following assumptions were applied in the Black-Scholes option pricing model to estimate the grant-date fair value of the stock options granted in the fiscal year ended July 31, 2021. March grant June grant Expected term (in years) (a) 6.25 6.25 Expected dividend yield (b) — % — % Risk-free interest rate (c) 1.09 % 1.06 % Expected volatility (d) 25.0 % 25.0 % Stock price $ 15.00 $ 24.00 ________________________________________________ (a) Calculated as the midpoint between the weighted-average time to vest and the time to expiration. (b) The Company has not historically paid and does not expect to pay dividends in the foreseeable future. (c) The risk-free rate was estimated from the U.S. Constant Maturity Treasury Yield Curve for a period consistent with the expected term in effect at the grant date. (d) The expected volatility was estimated based on analysis of the historical and implied volatility of a group of guideline public companies deemed to be comparable public peers within the Company’s industry. Stock options Stock option activity and activity regarding shares available for grant under the 2021 Plan is shown below: Number of options outstanding Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value Balance as of July 31, 2020 — $ — — $ — Shares authorized — — — — Options granted 1,558,947 17.11 — — Restricted stock units granted — — — — Options vested — — — — Forfeited (6,299) 17.00 — — Balance as of July 31, 2021 1,552,648 $ 17.11 9.6 $ 7,552 The Company recognized equity compensation expense related to the 2021 Plan stock options in selling, general and administrative expense and capitalized a portion into inventory, as applicable, due to units vesting over their requisite service periods, of $0.5 million for the fiscal year ended July 31, 2021. The total unrecognized compensation expense related to the 2021 Plan stock options was $6.7 million as of July 31, 2021, which is expected to be recognized over a weighted-average period of 3.6 years. The weighted-average grant-date fair value of options granted for the fiscal year ended July 31, 2021 was $4.64. No options were vested and exercisable as of July 31, 2021. Restricted stock units RSU grant activity under the 2021 Plan is shown below: Number of shares Weighted-average grant-date fair value per share Unvested as of July 31, 2020 — $ — Granted 558,049 16.95 Vested — — Forfeited (2,099) 17.00 Unvested as of July 31, 2021 555,950 $ 16.95 The Company recognized equity compensation expense related to the 2021 Plan RSUs in selling, general and administrative expense and capitalized a portion into inventory, as applicable, due to units vesting over their requisite service periods, of $0.9 million for the fiscal year ended July 31, 2021. The total unrecognized compensation expense related to the 2021 Plan RSUs was $8.5 million as of July 31, 2021, which is expected to be recognized over a weighted-average period of 3.4 years. Employee stock purchase plan In connection with the IPO, the Company adopted the 2021 ESPP, through which eligible employees may purchase shares of the Company's common stock at a discount through accumulated payroll deductions. A total of 1,250,509 shares of the Company's common stock are available for issuance and sale to eligible employees under the ESPP. Each offering period and each purchase period will be approximately six months in duration. The last business date of each offering period will be an exercise date. The timing of an initial offering period has not yet been determined. |
Related party transactions
Related party transactions | 12 Months Ended |
Jul. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions In February 2021, the Company’s Board of Managers declared a $100.0 million cash dividend to the Company's parent at the time of the declaration and, prior to the IPO, the Company's sole stockholder. On February 24, 2021, the Company paid the dividend using funds drawn under the revolver line of credit. In August 2018, in order to partially fund the Kosta Browne acquisition, the Company received a $111.0 million contribution from Mallard Holdco, LLC, the Company's parent entity, as described further in Note 4 (Acquisition). |
Casualty gain
Casualty gain | 12 Months Ended |
Jul. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Casualty gain | Casualty gain Wildfires Several wildfires occurred in northern California in during the last quarter of Fiscal 2020 and through the first quarter of Fiscal 2021. Other than smoke exposure to unharvested grapes, the Company's owned vineyards did not sustain damage during the fires. Fire and smoke exposure related expenses offset by crop insurance proceeds received totaling of $1.3 million are reported on the casualty gain, net line in the Consolidated Statements of Operations. Smoke and fire damage to vineyards in the primary markets where the Company sources fruit rendered some of the available grapes unacceptable for the Company’s production needs. Based on our internal analysis of the impacts of these wildfires, we believe the potential future impact on our operational results to be immaterial. We intend to continue monitoring the ongoing effects on our business for any material changes to that conclusion. Flood The Company incurred losses in February 2019 due to a flood at a winery. The facilities include production, storage, hospitality and administrative spaces. The flood resulted in damage to inventory, machinery and equipment and site improvements. The Company also incurred incremental and direct remediation costs. The Company filed an insurance claim with respect to inventory, storage vessels and other related costs during the year ended July 31, 2019. On December 11, 2020, the Company entered into an agreement with its insurer to resolve the open flood insurance claim, pursuant to which the claim associated with the losses would be closed and the Company would receive an aggregate of $32.5 million. In January 2021, pursuant to such agreement, the Company received the remaining $8.1 million of cash proceeds, fully resolving the flood insurance claim. The Company incurred incremental charges in the fiscal year ended July 31, 2021, offset by insurance proceeds received, which were reported on the casualty gain, net line item in the Consolidated Statements of Operations. |
Earnings per share
Earnings per share | 12 Months Ended |
Jul. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic earnings per share is calculated by dividing the net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflects the dilution that would occur if any potentially dilutive instruments were exercised or converted into shares of common stock. The following is a reconciliation of the Company's basic and diluted income per share calculation: Fiscal years ended July 31, (in thousands, except share and per share amounts) 2021 2020 2019 Numerator - Net income attributable to The Duckhorn Portfolio, Inc. $ 55,976 $ 32,377 $ 22,097 Denominator: Weighted average number of shares of common stock outstanding - basic 106,681,496 101,713,460 101,713,460 Dilutive stock options and restricted stock (a) 253,357 — — Weighted average number of shares of common stock outstanding - assuming dilution 106,934,853 101,713,460 101,713,460 Earnings per share attributable to The Duckhorn Portfolio, Inc. Basic $ 0.52 $ 0.32 $ 0.22 Diluted $ 0.52 $ 0.32 $ 0.22 ________________________________________________ (a) Calculated using the treasury stock method. There were 2,465 outstanding common stock awards deemed anti-dilutive for the year ended July 31, 2021 and no outstanding awards deemed anti-dilutive for the years ended July 31, 2020 and 2019. |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP and regulation of the SEC. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of The Duckhorn Portfolio, Inc. and its subsidiaries, including a consolidated VIE of which the Company has determined it is the primary beneficiary. All intercompany balances and transactions are eliminated in consolidation. |
Accounting estimates | Accounting estimates The preparation of consolidated financial statements requires Management to make estimates and assumptions that affect the reported amounts of 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. Such estimates include, but are not limited to, the following: useful lives and recoverability of long-lived assets, inventory obsolescence and reserves, capitalized indirect inventory costs, allowance for doubtful accounts receivable, calculation of accrued liabilities, customer incentive reserves, uncertain tax positions, contingent liabilities, fair value of assets and liabilities acquired in connection with business combinations, equity-based compensation and deferred revenues. Actual results could differ from those estimates. |
Operating segment | Operating segment The Company has one operating segment and one reportable segment. The Company's Chief Operating Decision Maker reviews operating performance and makes decisions to allocate resources at the consolidated company level. |
Revenue | Revenue The Company’s net sales reflect the sale of wine domestically in the U.S. to wholesale distributors, wholesale accounts or DTC, as well as sales of wine to export distributors that sell internationally. The Company recognizes revenue when control of the promised good is transferred to the customer in an amount that reflects the consideration for which the Company is expected to be entitled to receive in exchange for those products. Each contract includes a single performance obligation to transfer control of the product to the customer. Control is transferred when the product is either shipped or delivered, depending on the shipping terms, at which point the Company recognizes the transaction price for the product as revenue. The Company has elected to account for shipping and handling as a fulfillment activity, with amounts billed to customers for shipping and handling included in net sales. The Company has elected to record excise taxes as a reduction to revenue, which are recognized in the Consolidated Statements of Operations when the related product sale is recognized. The transaction price includes reductions attributable to consideration given to customers through various incentive programs, including depletion-based incentives paid to distributors, volume discounts and pricing discounts on single transactions. This variable consideration is recognized as a reduction to the transaction price based on the expected amounts at the time revenue for the corresponding product is recognized. The determination of the reduction of the transaction price for variable consideration requires certain estimates and judgements that affect the amounts of revenue recognized and if a change to an estimate occurs in a future period, it is recorded as identified. The Company estimates this variable consideration using the expected value method by taking into account factors such as the nature of the incentive program, historical information, current consumer product trends and availability of actual results. Due to the nature of the arrangements, certain estimates may be constrained if it is probable that a significant reversal of revenue will occur when the uncertainty is resolved. Consideration given to customers totaled $63.8 million, $44.5 million and $33.4 million for the years ended July 31, 2021, 2020 and 2019, respectively, and there were no material constraints on estimates for the periods then ended. • The Company pays depletion-based incentives to its distributors for meeting specific depletion targets and reviews the allowances using a portfolio approach, grouping contracts with similar attributes, which does not result in a materially different outcome than would be obtained by applying assumptions to each individual contract within the portfolio. The allowances are reassessed at each reporting date to reflect changes in facts and circumstances that could impact allowance estimates. • Volume pricing discounts are given for meeting volume levels on an individual contract basis. Each incentive is treated as a reduction to the transaction price at the time of revenue recognition. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30-90 days of delivery or shipment, as dictated by the terms of each agreement. The Company has elected the practical expedient to not account for significant financing components as its payment terms are less than one year, and the Company determines the terms at contract inception. The Company’s sales terms do not allow for the right of return except for matters related to manufacturing defects, which are not material. When the Company receives payment from a customer prior to transferring the product under the terms of a contract, the Company records deferred revenue, which represents a contract liability. The Company’s deferred revenue is primarily comprised of cash collected from DTC members for purchases ahead of the wine shipment date. The Company does not recognize revenue until control of the wine is transferred and the performance obligation is met. The Company has elected the practical expedient to expense the cost of obtaining a contract that is short term in nature when incurred. The Company does not have any contract costs capitalized as of July 31, 2021 and 2020. |
Cost of sales | Cost of sales Cost of sales includes all bulk wine production costs, winemaking, bottling, packaging, warehousing, and shipping and handling costs. Costs associated with the Company’s leased vineyards or owned estates include annual farming costs and amortization of vineyard development expenditures. Costs incurred for wines that age longer than one year prior to sale, including winemaking and processing costs, continue to be capitalized into inventory until the wine is bottled and available for sale. |
Advertising costs | Advertising costs Advertising costs, including promotional discounts, are expensed as incurred and were $6.0 million, $4.5 million and $3.9 million for the years ended July 31, 2021, 2020 and 2019, respectively. |
Cash and cash equivalents | Cash and cash equivalentsThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts receivable | Accounts receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Interest is accrued on past-due amounts when required by trade laws in a given jurisdiction. The Company maintains an allowance for doubtful accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company determines this allowance based on review of the level of gross receivables, the aging of accounts receivable at the date of the consolidated financial statements, the financial condition of the Company's customers and the economic risks for certain customers. The allowance for doubtful accounts as of July 31, 2021 and 2020 was $0.8 million and $0.3 million, respectively. The increase in the Fiscal 2021 is shown as a charge to bad debt expense included in selling, general and administrative expenses on the Consolidated Statements of Operation and is partially driven by uncertainties related to COVID-19 which has increased the risk of uncollectible accounts. Additionally, growth in export sales where customer credit information differs from what is available for domestic companies and potentially more challenging collection processes in the event of past-due receivables has further increased the overall allowance balance as compared to historical years. The Company writes-off uncollectible customer accounts receivable balances following a systematic investigation of delinquent accounts and Management review of accounts. |
Inventories | Inventories Inventory primarily includes bulk and bottled wine and is carried at the lower of cost (calculated using the first-in-first-out method) or net realizable value. On an ongoing basis, the Company evaluates the estimate and assumptions. As required, the Company reduces the carrying value of inventories that are obsolete or in excess of estimated usage to estimated net realizable value. The cost basis for inventory includes the costs related to winemaking. Consistent with industry practices, the Company classifies inventory as a current asset, although a substantial portion of inventory may be aged for periods longer than one year prior to being sold due to the specific aging requirements for a given wine varietal and vintage. Aging inventory, prior to bottling, is classified as work in process. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of sales in the period Management determines the conditions first arise which indicate the cost may not be recoverable. Inventory also includes deferred crop costs, which consist of vineyard and related farming costs incurred each harvest season. Such costs begin aggregating when one harvest is completed and end at the completion of the next harvest, spanning a period that can range from November to October of the subsequent calendar year, but may vary due to the variable nature of agriculture, including weather and other events. |
Property and equipment | Property and equipment Property and equipment are reported at cost and are depreciated using the straight-line method over the expected useful lives of the assets, with the exception of leasehold improvements, which are depreciated over the term of the lease. Expenditures for major repairs and maintenance which extend the useful lives of property and equipment are capitalized. All other maintenance expenditures, including planned major maintenance activities, are expensed as incurred. Gains or losses from property disposals are included in income or loss from operations. |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill arising from business combinations is determined as the excess of the fair value of consideration transferred, plus the fair value of any non-controlling interests in an acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets determined to have an indefinite useful life are not amortized but are tested for impairment at least annually or as events and circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Management may elect not to perform the qualitative assessment and perform only a quantitative impairment test as of the measurement date. The Company selected June 30 of each fiscal year as the date to perform annual impairment testing. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Intangible assets outside of goodwill include trade names, customer relationships, leasehold interests and lane rights. The Company determined that trade names and lane rights have indefinite useful lives. The Company believes that trade names provide value from the utility of the brands for the foreseeable future. Lane rights represent the Company's rights to storage capacity at the Wine Service Cooperative for the life of the facility at guaranteed pricing. Customer relationships and leasehold interests are amortized on a straight-line basis over their estimated useful lives and that amortization is recognized in selling, general and administrative expenses. For the fiscal year ended July 31, 2020, the Company recognized a non-cash impairment charge for certain trade name intangible assets as described in Note 7 (Goodwill and other intangible assets). The charges were primarily the result of market impacts associated with the COVID-19 pandemic. The charges were determined in connection with the Company’s annual impairment test. No other impairments were identified through July 31, 2020, nor were any impairments identified related to goodwill or other intangible assets for the year ended July 31, 2021 or 2019. |
Long-lived assets | Long-lived assetsLong-lived assets deemed to have definite lives, which principally consist of property and equipment and certain intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The assessment of impairment is based on the estimated undiscounted future cash flows from operating activities compared with the carrying value of the asset. If the undiscounted future cash flows of an asset are less than the carrying value, a write-down will be recorded, measured by the amount of the difference between the carrying value and the fair value of the asset. |
Deferred offering costs | Deferred offering costsThe Company capitalizes, within other assets, certain legal, accounting, underwriting fees and other third-party fees that are directly related to in-process equity financings until such financings are consummated. Upon closing, these costs are recorded as a reduction of the proceeds received from the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately recognized in operating expenses. |
Debt issuance costs | Debt issuance costs The Company incurred debt issuance costs associated with the debt facilities, including the revolving line of credit, further described in Note 9 (Debt). The Company treats the revolving line of credit debt issuance costs consistent with its term debt facilities as it does not intend to repay the revolving line of credit in full prior to its maturity. Debt issuance costs are presented as a reduction from the corresponding liability. These costs are amortized to interest expense over the life of the loan to maturity using the straight-line method, which is not materially different from the effective interest method. |
Business combinations | Business combinations Assets acquired and liabilities assumed in a business combination are recorded at their acquisition date fair values, in accordance with ASC Topic 805, Business Combinations. The amount of consideration transferred in excess of the acquisition date fair value of net assets acquired is recognized as goodwill. The Company, with the assistance of third-party valuation experts, applies estimates and assumptions based on the information available to estimate the fair value of net assets acquired. Some of these estimates can be uncertain and subject to refinement during the measurement period, which generally ends on the earlier of one year following the transaction date or when all information is available to complete the fair value measurement. Adjustments made during the measurement period are typically reflected in goodwill, while subsequent adjustments are recognized in the post-acquisition Consolidated Statements of Operations. Transaction costs directly associated with a business combination are expensed as incurred. |
Derivative instruments | Derivative instruments The Company recognizes derivative instruments as assets or liabilities on the Consolidated Statements of Financial Position and measures these instruments at fair value. The Company enters into derivative instruments to manage exposure to changes in interest rates and foreign currency fluctuations. The Company has certain derivative instruments subject to master netting agreements that provide for net-settlement of amounts payable or receivable related to multiple derivative transactions with the same counterparty. The Company presents all derivatives on a gross basis in the Consolidated Statements of Financial Position. Collateral is generally not required of the Company or of the counterparties to the master netting agreements, and no cash collateral was received or pledged under such agreements as of July 31, 2021 and 2020. Management has neither designated these instruments as cash-flow hedges nor elected hedge accounting. Changes in the consolidated fair value of these financial instruments are recognized in current period income from operations, see Note 10 (Derivative instruments) and Note 11 (Fair value measurements). The Company does not enter into derivative agreements for trading or speculative purposes. |
Fair value measurements | Fair value measurements 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. Financial instruments are measured in the financial statements in accordance with an established fair value hierarchy, which emphasizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. See Note 11 (Fair value measurements) for the valuation methodologies used for instruments measured at fair value. The Company applies a fair value hierarchy pursuant to ASC 820, Fair Value Measurement, which consists of three levels of inputs that may be used to measure fair value: Level 1 Inputs to fair value are quoted prices in active markets for identical assets or liabilities; Level 2 Inputs to fair value are based on observable data other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data such as interest rates or yield curves for substantially the full term of the instrument; Level 3 Inputs to fair value are based on unobservable data for the instrument and are supported by little or no market activity. |
Income taxes | Income taxes Income taxes are recognized using enacted tax rates and are accounted for based on the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the consolidated financial statement and tax bases of assets and liabilities at the applicable statutory tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include the Company’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company’s effective tax rate on future earnings. |
Leases | Leases The Company has contractual leases for certain vineyards, production or administrative facilities and equipment. Rent expense is recognized on a straight-line basis over the term of the lease, beginning on the earlier of the lease commencement date or the date the Company takes possession of the leased property. When operating leases contain renewal options, predetermined escalation clauses, rent holidays, or other features which cause the straight-line expense to differ from the amounts paid under the lease, the differences between the straight-line expense and amounts paid under the lease are recorded as deferred rent and are included in current assets or liabilities (for payments due within one year) or shown as long-term assets or liabilities (for payments exceeding one year) as presented on the face of the Consolidated Statements of Financial Position. When the Company receives tenant incentives or allowances upon entering or renewing leases, these transactions are recorded as liabilities and amortized on a straight-line basis as a reduction of rent expense over the lease term. Some of the operating leases have contingent rental payments that trigger rental increases based |
Preferred stock | Preferred stockThe Company has 100,000,000 shares of $0.01 par value preferred stock authorized, none of which are issued and outstanding. |
Net income per share | Net income per share In accordance with ASC Topic 260, Earnings Per Share, net income per share is calculated by dividing net income by the weighted average number of ordinary shares outstanding during the period, excluding forfeitures. Diluted earnings per common share is computed using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock option and upon the vesting of restricted stock |
Variable interest entities | Variable interest entities The Company evaluates its ownership, contractual relationships and other interests in entities to determine the nature and extent of the interests, whether such interests are variable interests and whether the entities are VIEs in accordance with ASC Topic 810, Consolidations. These evaluations can be complex and involve Management judgment as well as the use of estimates and assumptions based on available historical information, among other factors. Based on these evaluations, if the Company determines that it is the primary beneficiary of a VIE, the entity is consolidated into the financial statements. For the years ended July 31, 2021 and 2020, the Company determined that Bootlegger's Hill, which was acquired as part of the Kosta Browne acquisition, is a VIE and that the Company is the primary beneficiary of that VIE. This conclusion considers the Company's ownership percentage, which entitles the Company to receive most of the benefits and absorb most of the risk, as well as the ability to exercise significant influence over the operating and financial decisions of the VIE. The Company recorded the fair value of acquired net assets of the VIE during purchase accounting for the Kosta Browne acquisition, pursuant to ASC Topic 805, Business Combinations. At July 31, 2021 and 2020, the Company's ownership percentage of the sole identified VIE was 76.2%. The total net assets of the VIE included on the Consolidated Statements of Financial Position were $2.2 million at both July 31, 2021 and 2020. The assets and liabilities, which may only be used to settle its own obligations, are primarily related to property, equipment and working capital accounts, which generally represent the amounts owed by or to the Company for the goods under current contracts. |
Significant customers and concentrations of credit risk | Significant customers and concentrations of credit risk The Company’s five largest customers, which are each wholesale customers, represented in total approximately 48%, 43% and 40% of net sales for the years ended July 31, 2021, 2020 and 2019, respectively. There were no significant concentrations of revenue or credit risk related to DTC sales. Of the largest five customers, three wholesale customers each represented 10% or more of the Company's net sales. The percentages for each of these significant customers for the periods presented are as follows: Net sales Fiscal years ended July 31, 2021 2020 2019 Customer A 16 % 15 % 14 % Customer B 15 % 13 % 11 % Customer C 10 % 8 % 7 % |
Equity-based compensation | Equity-based compensation Equity awards issued in exchange for services rendered by the Company's employees, officers or directors are accounted for pursuant to ASC Topic 718, Compensation-Stock Compensation . The Company measures equity awards at fair value at their grant date. Compensation cost is recognized in selling, general and administrative expenses or is capitalized into inventory over the requisite service period (generally the vesting period), net of actual forfeitures as incurred. For awards with performance-based conditions impacting the timing or number of awards vesting, compensation cost is recognized when a performance condition is probable of being met. If a performance condition is not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company estimates the fair value of certain awards using a Black-Scholes option pricing model. The Company's policy for shares purchased under the ESPP is to value the shares using a Black-Scholes option valuation model. See Note 15 (Equity-based compensation) for further discussion. |
Recent accounting pronouncements | Accounting pronouncements As an “emerging growth company” as established by the JOBS Act, the Company is permitted to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates available to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Recently adopted accounting pronouncements: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The objective of the standard was to reduce complexity and diversity in practice by simplifying the methodology for calculating interim taxes, as well as by simplifying aspects of recognition of enacted changes in tax laws, accounting for acquisitions, and accounting for changes in ownership of certain entities or investments. Early adoption is permitted. The Company early adopted this standard as of the third quarter of the current fiscal year, which is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. There were no material impacts to the financial statements or disclosures as a result of the early adoption of this ASU. In June 2018, the FASB issued ASU 2018-07 to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from non-employees. The Company adopted this standard in the current fiscal year. There were no material impacts to the financial statements or disclosures as a result of the adoption of this ASU. Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), and several amendments, codified as ASC 842, which supersedes prior guidance on accounting for leases under FASB ASC 840, Leases. ASU No. 2016-02, among other provisions, (i) requires lessees to classify leases as either finance or operating leases, (ii) generally requires all leases to be recorded on the Consolidated Statements of Financial Position through the recognition of right-of-use assets and corresponding lease liabilities and (iii) expands mandatory qualitative and quantitative disclosures regarding leasing activities. The FASB issued ASU No. 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective dates for certain entities”, which extends the effective date for all other entities, for annual reporting periods beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022. The amended standard is effective for the Company beginning with the year ended July 31, 2023. Early adoption is permitted. The Company’s assessment of the lease standard’s impact on the consolidated financial statements is ongoing, and is expected to result in the recognition of right of use assets and lease liabilities related to the Company’s operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, and also issued subsequent amendments to the initial guidance, collectively, ASC 326, to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that requires the reflection of expected credit losses and will also require consideration of a broader range of reasonable and supportable information to determine credit loss estimates. For many entities with financial instruments, the standard will require the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which may result in the earlier recognition of credit losses on financial instruments. This guidance will be effective for the Company beginning with the year ended July 31, 2024, with early adoption permitted. The Company is currently evaluating the impact this standard could have on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), and further issued subsequent amendments to the initial guidance. In order to ease the potential burden in accounting for reference rate reform, ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the LIBOR or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued. The standard is effective immediately and may be applied prospectively through December 31, 2022. The Company is currently evaluating the impact of reference rate reform and the optional expedients provided by this standard on its contracts. In May 2021, the FASB issued ASU No. 2021-04, Earnings per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity's Own Entity (Subtopic 815-40), to clarify the accounting for modifications or exchanges of equity-classified warrants. This amendment applies to freestanding stock options, which the Company granted in Fiscal 2021. In accordance with the ASU, if there is a modification and the option is still determined to be classified as equity, the modification should be accounted for as an exchange of the original option for a new option. This guidance will be effective for the Company beginning with the year ended July 31, 2023, with early adoption permitted. The Company is currently evaluating the impact of this update and will |
Basis of presentation and sig_3
Basis of presentation and significant accounting policies (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Of the largest five customers, three wholesale customers each represented 10% or more of the Company's net sales. The percentages for each of these significant customers for the periods presented are as follows: Net sales Fiscal years ended July 31, 2021 2020 2019 Customer A 16 % 15 % 14 % Customer B 15 % 13 % 11 % Customer C 10 % 8 % 7 % Accounts receivable trade July 31, 2021 2020 Customer A 11 % 13 % Customer B 23 % 12 % Customer C 14 % 15 % |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the percentages of consolidated net sales disaggregated by sales channels: Fiscal years ended July 31, 2021 2020 2019 Wholesale - Distributors 65.3 % 60.0 % 59.4 % Wholesale - California direct to retail (a) 16.9 18.9 17.8 DTC (b) 17.8 21.1 22.8 Net sales 100.0 % 100.0 % 100.0 % ________________________________________________ (a) Includes bulk and grape sales of $0.6 million, $1.1 million and $0.4 million for the years ended July 31, 2021, 2020 and 2019, respectively, and immaterial merchandise sales. (b) Includes shipping and handling revenue of $2.6 million, $2.4 million and $1.8 million for the years ended July 31, 2021, 2020 and 2019, respectively. The following table presents the percentages of consolidated net sales disaggregated by brand: Fiscal years ended July 31, 2021 2020 2019 Duckhorn Vineyards & Decoy 76.3 % 73.0 % 71.1 % Other winery brands 23.7 27.0 28.9 Net sales 100.0 % 100.0 % 100.0 % The following table presents the net sales disaggregated by geographic area: Fiscal years ended July 31, 2021 2020 2019 United States $ 318,389 $ 258,439 $ 228,797 Canada 5,355 3,723 3,584 Other international 12,869 8,486 8,826 Net sales $ 336,613 $ 270,648 $ 241,207 |
Schedule of Changes in Contract Liabilities | The following table reflects the changes in the contract liability balance during the periods presented. Fiscal years ended July 31, (in thousands) 2021 2020 2019 Outstanding at beginning of period $ 4,148 $ 3,863 $ 39 Increase (decrease) attributable to: Acquisition (Note 4) — — 2,364 Upfront payments 33,257 34,836 30,756 Revenue recognized (34,069) (34,328) (28,738) Refund (234) (223) (558) Outstanding at end of period $ 3,102 $ 4,148 $ 3,863 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes consideration transferred and the fair value of assets and liabilities acquired. Assets and liabilities acquired (in thousands) Cash $ 84 Accounts receivable, trade 492 Inventory 40,938 Prepaid and other assets 518 Trade names and other intangibles (Note 7) (a) 41,222 Property and equipment 25,079 Goodwill 113,182 Accounts payable and accrued expenses (4,070) Capital leases (426) Deferred taxes (13,309) Non-controlling interest (552) Total $ 203,158 ________________________________________________ (a) The weighted-average amortization period upon acquisition for customer relationships and leasehold interest were 10 years and 14.1 years, respectively. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories were comprised of the following as of: July 31, (in thousands) 2021 2020 Finished goods Bottled wine $ 120,876 $ 100,272 Merchandise 547 408 Work in progress Bulk wine 130,693 128,436 Packaging 3,541 2,945 Overhead 613 2,225 Raw materials Deferred crop costs 11,467 11,025 Total $ 267,737 $ 245,311 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment was comprised of the following major components as of: July 31, (in thousands) Depreciable lives 2021 2020 Land N/A $ 120,063 $ 120,063 Buildings and improvements 4-42 68,616 66,057 Vineyards and improvements 5-20 29,164 27,430 Machinery and equipment 3-20 49,607 44,147 Barrels 1-2 26,349 25,889 Total depreciable property and equipment 293,799 283,586 Less: accumulated depreciation and amortization (58,542) (48,171) Total depreciable property and equipment, net 235,257 235,415 Construction in progress N/A 5,682 7,336 Property and equipment, net $ 240,939 $ 242,751 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets were comprised of the following components: July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 34,274 $ — $ 58,446 Leasehold interests 1,572 371 — 1,201 Total definite-lived intangible assets 94,292 34,645 — 59,647 Indefinite-lived intangible assets Trade names 139,600 — — 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 140,900 — — 140,900 Total other intangible assets $ 235,192 $ 34,645 $ — $ 200,547 July 31, 2020 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 26,715 $ — $ 66,005 Leasehold interests 1,572 247 — 1,325 Total definite-lived intangible assets 94,292 26,962 — 67,330 Indefinite-lived intangible assets Trade names 151,430 — 11,830 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 152,730 — 11,830 140,900 Total other intangible assets $ 247,022 $ 26,962 $ 11,830 $ 208,230 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets were comprised of the following components: July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 34,274 $ — $ 58,446 Leasehold interests 1,572 371 — 1,201 Total definite-lived intangible assets 94,292 34,645 — 59,647 Indefinite-lived intangible assets Trade names 139,600 — — 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 140,900 — — 140,900 Total other intangible assets $ 235,192 $ 34,645 $ — $ 200,547 July 31, 2020 (in thousands) Gross carrying amount Accumulated amortization Impairment charges Net Definite-lived intangible assets Customer relationships $ 92,720 $ 26,715 $ — $ 66,005 Leasehold interests 1,572 247 — 1,325 Total definite-lived intangible assets 94,292 26,962 — 67,330 Indefinite-lived intangible assets Trade names 151,430 — 11,830 139,600 Lane rights 1,300 — — 1,300 Total indefinite-lived intangible assets 152,730 — 11,830 140,900 Total other intangible assets $ 247,022 $ 26,962 $ 11,830 $ 208,230 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense is as follows: Fiscal years ending July 31, (in thousands) 2022 $ 7,683 2023 7,683 2024 7,683 2025 7,683 2026 7,683 Thereafter (collectively) 21,232 Total $ 59,647 |
Accounts payable and accrued _2
Accounts payable and accrued expenses (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The Company’s accounts payable balance consisted of the following amounts: July 31, (in thousands) 2021 2020 Distributor invoices $ 1,541 $ 881 Production supplies 447 515 Taxes 632 19 Grower purchases — 599 Other 936 1,719 Total $ 3,556 $ 3,733 The Company’s accrued expenses balance consisted of the following amounts: July 31, (in thousands) 2021 2020 Trade spend (a) $ 10,734 $ 6,246 Bulk wine and other received not invoiced 1,526 532 Barrel purchase 936 1,917 Deferred compensation liability (b) 2,096 1,576 Accrued invoices and other accrued expenses 6,265 5,240 Total $ 21,557 $ 15,511 ________________________________________________ (a) Trade spend refers to estimated amounts the Company owes to distributors for depletion-based incentives granted for meeting specific depletion targets. See further discussion in Note 2 (Basis of presentation and significant accounting policies). (b) See discussion in Note 13 (Employee benefit plans) regarding the Company's deferred compensation plan and related cash surrender value life insurance policies the Company intends to use in settling the plan liability. The cash surrender value of the life insurance policies was $1.7 million and $1.4 million at July 31, 2021 and 2020, respectively. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Company borrowings outstanding consisted of the following: July 31, (in thousands) 2021 2020 Revolving line of credit $ 124,000 $ 243,500 Debt issuance costs (2,652) (3,826) Revolving line of credit, net $ 121,348 $ 239,674 Term loan, first lien 117,637 125,158 Capital expenditure loan 8,875 15,141 Total long-term debt 126,512 140,299 Current maturities of long-term debt (11,324) (13,430) Debt issuance costs (563) (1,025) Long-term debt, net of current maturities and debt issuance costs $ 114,625 $ 125,844 |
Schedule of Maturities of Long-term Debt | As of July 31, 2021, the required revolving line of credit and long-term debt repayments for each of the following five fiscal years and thereafter are as follows: (in thousands) 2022 $ 11,324 2023 8,942 2024 230,246 2025 — 2026 — Thereafter (collectively) — Total $ 250,512 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | On July 31, 2021, the Company had one interest rate swap with a notional value of $150.0 million mature thus, as of July 31, 2021, the Company held the following interest rate swap agreements, which fixed the interest rate on the applicable notional amount of outstanding variable rate debt: Notional amount Interest rate Effective date Expiration date $100,000 0.487% March 21, 2020 March 23, 2023 |
Schedule of Derivative Instruments | The total notional amounts of the Company’s derivative instruments outstanding are as follows: July 31, (in thousands) 2021 2020 Derivative instruments not designated as hedging instruments Interest rate swap contracts $ 100,000 $ 300,000 Foreign currency forward contracts 2,369 2,240 Total derivative instruments not designated as hedging instruments $ 102,369 $ 302,240 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The estimated fair value and classification of derivative instruments on the accompanying Consolidated Statements of Financial Position are as follows for the years ended: July 31, (in thousands) 2021 2020 Derivative instruments not designated as hedging instruments Classification Interest rate swap contracts Derivative instrument Current liability $ — $ (5,376) Derivative instrument Other long-term liabilities (480) (1,065) Total interest rate swap contract liability $ (480) $ (6,441) Foreign currency forward contracts Derivative instrument Other current assets $ 5 $ 118 Total foreign currency contract asset $ 5 $ 118 |
Derivative Instruments, Gain (Loss) | The amounts and classification of the gains and losses in the Consolidated Statements of Operations related to derivative instruments not designated as hedging instruments are as follows: Fiscal years ended July 31, (in thousands) Classification 2021 2020 2019 Interest rate swap contracts Other (income) expense, net $ (5,961) $ 2,596 $ 4,945 Foreign currency forward contracts Other (income) expense, net 113 (256) (43) Total (gains) losses $ (5,848) $ 2,340 $ 4,902 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s assets and liabilities measured and recorded at fair value on a recurring basis at July 31, 2021, were as follows: (in thousands) Fair value measurements using: Quoted prices in active markets (Level 1) Significant other observable inputs Significant unobservable inputs Total Assets Foreign currency forward contracts $ — $ 5 $ — $ 5 Deferred compensation plan asset — 1,719 — 1,719 Liabilities Interest rate swap contracts $ — $ 480 $ — $ 480 Deferred compensation liability — 2,096 — 2,096 The Company’s assets and liabilities measured and recorded at fair value on a recurring basis at July 31, 2020, were as follows: (in thousands) Fair value measurements using: Quoted prices in active markets (Level 1) Significant other observable inputs Significant unobservable inputs Total Assets Foreign currency forward contracts $ — $ 118 $ — $ 118 Deferred compensation plan asset — 1,416 — 1,416 Liabilities — Interest rate swap contracts $ — $ 6,441 $ — $ 6,441 Deferred compensation liability — 1,576 — 1,576 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The Company’s income tax provision represents U.S. federal and state income taxes. The provision for income taxes was as follows: Fiscal years ended July 31, (in thousands) 2021 2020 2019 Provision for income taxes Current Federal $ 14,431 $ 11,591 $ 9,539 State 4,549 3,842 3,468 18,980 15,433 13,007 Deferred Federal $ 2,809 $ (2,905) $ (2,667) State (781) (2,096) (2,498) Deferred income taxes 2,028 (5,001) (5,165) Income tax expense $ 21,008 $ 10,432 $ 7,842 |
Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets (liabilities) were comprised of the following: July 31, (in thousands) 2021 2020 Deferred tax assets Accrued liabilities $ 2,001 $ 1,121 State taxes 998 846 Stock based compensation 284 — Interest rate swap 122 1,646 Other 221 — Total deferred tax assets 3,626 3,613 Deferred tax liabilities Inventory (7,291) (2,437) Property and equipment (34,114) (32,945) Intangible assets (47,759) (49,078) Prepaid expenses (1,129) — Casualty gain (Note 17) — (3,551) Other — (240) Total deferred tax liabilities (90,293) (88,251) Net deferred tax liabilities $ (86,667) $ (84,638) |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the Company's actual income tax provision to the expected statutory tax rate. Fiscal years ended July 31, 2021 2020 2019 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes 3.9 3.3 2.5 Equity-based compensation 2.6 — — Transaction expenses — 0.1 1.9 Other (0.2) — 0.7 Total 27.3 % 24.4 % 26.1 % |
Commitment and contingencies (T
Commitment and contingencies (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | At July 31, 2021, the future minimum payments under the non-cancelable operating lease agreements are as follows: Fiscal years ending July 31, (in thousands) 2022 $ 4,079 2023 3,987 2024 3,727 2025 3,448 2026 2,046 Thereafter (collectively) 6,888 Total $ 24,175 |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Share Activity | Activity for the units is shown below: Time-based units Weighted-average grant-date fair value Unvested as of July 31, 2020 14,640,454 $ 0.16 Granted — — Vested 14,640,454 0.16 Forfeited — — Unvested as of July 31, 2021 — $ — Performance-based units Weighted-average grant-date fair value Outstanding as of July 31, 2020 7,203,820 $ 0.19 Granted — — Vested 2,881,528 0.19 Forfeited — — Exchanged (4,322,292) 0.19 Outstanding as of July 31, 2021 — $ — |
Nonvested Restricted Stock Shares Activity | As discussed above, the unvested Class M Units were exchanged for restricted shares of the Company. A summary of the restricted shares is shown below: Performance-based shares Weighted-average grant-date fair value Unvested as of July 31, 2020 — $ — Granted — — Vested 266,155 14.23 Forfeited — — Exchanged 665,389 14.23 Unvested as of July 31, 2021 399,234 $ 14.23 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following assumptions were applied in the Black-Scholes option pricing model to estimate the grant-date fair value of the stock options granted in the fiscal year ended July 31, 2021. March grant June grant Expected term (in years) (a) 6.25 6.25 Expected dividend yield (b) — % — % Risk-free interest rate (c) 1.09 % 1.06 % Expected volatility (d) 25.0 % 25.0 % Stock price $ 15.00 $ 24.00 ________________________________________________ (a) Calculated as the midpoint between the weighted-average time to vest and the time to expiration. (b) The Company has not historically paid and does not expect to pay dividends in the foreseeable future. (c) The risk-free rate was estimated from the U.S. Constant Maturity Treasury Yield Curve for a period consistent with the expected term in effect at the grant date. (d) The expected volatility was estimated based on analysis of the historical and implied volatility of a group of guideline public companies deemed to be comparable public peers within the Company’s industry. |
Share-based Payment Arrangement, Option, Activity | Stock option activity and activity regarding shares available for grant under the 2021 Plan is shown below: Number of options outstanding Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value Balance as of July 31, 2020 — $ — — $ — Shares authorized — — — — Options granted 1,558,947 17.11 — — Restricted stock units granted — — — — Options vested — — — — Forfeited (6,299) 17.00 — — Balance as of July 31, 2021 1,552,648 $ 17.11 9.6 $ 7,552 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | RSU grant activity under the 2021 Plan is shown below: Number of shares Weighted-average grant-date fair value per share Unvested as of July 31, 2020 — $ — Granted 558,049 16.95 Vested — — Forfeited (2,099) 17.00 Unvested as of July 31, 2021 555,950 $ 16.95 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method | The following is a reconciliation of the Company's basic and diluted income per share calculation: Fiscal years ended July 31, (in thousands, except share and per share amounts) 2021 2020 2019 Numerator - Net income attributable to The Duckhorn Portfolio, Inc. $ 55,976 $ 32,377 $ 22,097 Denominator: Weighted average number of shares of common stock outstanding - basic 106,681,496 101,713,460 101,713,460 Dilutive stock options and restricted stock (a) 253,357 — — Weighted average number of shares of common stock outstanding - assuming dilution 106,934,853 101,713,460 101,713,460 Earnings per share attributable to The Duckhorn Portfolio, Inc. Basic $ 0.52 $ 0.32 $ 0.22 Diluted $ 0.52 $ 0.32 $ 0.22 ________________________________________________ (a) Calculated using the treasury stock method. |
Description of business (Detail
Description of business (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 17, 2021 | Mar. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | ||||
Deferred offering costs | $ 6.7 | $ 0 | $ 0 | |
2016 Equity Incentive Plan | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Non-option equity instruments, outstanding, number (shares) | 42,579,137 | |||
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of stock, number of shares issued in transaction | 13,300,000 | |||
Sale of stock, price per share (in dollars per share) | $ 15 | |||
Sale of stock, consideration received on transaction | $ 180.8 | |||
Underwriting discounts and commissions | 12.5 | |||
Deferred offering costs | $ 6.7 |
Basis of presentation and sig_4
Basis of presentation and significant accounting policies - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 09, 2021 | Aug. 01, 2018 | Jul. 31, 2021USD ($)segment$ / sharesshares | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Mar. 17, 2021USD ($) |
Accounting Policies [Line Items] | ||||||
Number of operating segments | segment | 1 | |||||
Number of reportable segments | segment | 1 | |||||
Contract with customer, liability, consideration given to customers | $ 63,800 | $ 44,500 | $ 33,400 | |||
Advertising expense | 6,000 | 4,500 | 3,900 | |||
Accounts receivable, allowance for doubtful accounts | $ 800 | 300 | ||||
Deferred offering costs | 0 | $ 0 | $ 6,700 | |||
Stock split, conversion ratio | 1,017,134.6 | |||||
Preferred stock, shares authorized (shares) | shares | 100,000,000 | |||||
Preferred stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.01 | |||||
Preferred stock, shares issued (shares) | shares | 0 | |||||
Preferred stock, shares outstanding (shares) | shares | 0 | |||||
Assets | $ 1,183,117 | $ 1,158,591 | ||||
Revenue Benchmark | Five Largest Customers | Customer Concentration Risk | ||||||
Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 48.00% | 43.00% | 40.00% | |||
Minimum | ||||||
Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 15 years | |||||
Maximum | ||||||
Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 25 years | |||||
Variable Interest Entity, Primary Beneficiary | ||||||
Accounting Policies [Line Items] | ||||||
Variable interest entity, ownership percentage | 76.20% | 76.20% | 76.20% | |||
Assets | $ 2,200 | $ 2,200 |
Basis of presentation and sig_5
Basis of presentation and significant accounting policies - Schedule of Concentration Risk by Customer (Details) - Customer Concentration Risk | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Customer A | Net sales | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 16.00% | 15.00% | 14.00% |
Customer A | Accounts receivable trade | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 11.00% | 13.00% | |
Customer B | Net sales | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 15.00% | 13.00% | 11.00% |
Customer B | Accounts receivable trade | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 23.00% | 12.00% | |
Customer C | Net sales | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.00% | 8.00% | 7.00% |
Customer C | Accounts receivable trade | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 14.00% | 15.00% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 1 | 1 | 1 |
Revenue | $ 336,613 | $ 270,648 | $ 241,207 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 318,389 | 258,439 | 228,797 |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 5,355 | 3,723 | 3,584 |
Other international | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 12,869 | $ 8,486 | $ 8,826 |
Wholesale - Distributors | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.653 | 0.600 | 0.594 |
Wholesale - California direct to retail | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.169 | 0.189 | 0.178 |
DTC | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.178 | 0.211 | 0.228 |
Bulk and Grape Sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 600 | $ 1,100 | $ 400 |
Shipping and Handling | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 2,600 | $ 2,400 | $ 1,800 |
Duckhorn Vineyards & Decoy | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.763 | 0.730 | 0.711 |
Other winery brands | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.237 | 0.270 | 0.289 |
Revenue - Schedule of Change in
Revenue - Schedule of Change in Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Change in Contract with Customer, Liability [Abstract] | |||
Outstanding at beginning of period | $ 4,148 | $ 3,863 | $ 39 |
Acquisition (Note 4) | 0 | 0 | 2,364 |
Upfront payments | 33,257 | 34,836 | 30,756 |
Revenue recognized | (34,069) | (34,328) | (28,738) |
Refund | (234) | (223) | (558) |
Outstanding at end of period | $ 3,102 | $ 4,148 | $ 3,863 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) $ in Millions | Aug. 01, 2018USD ($)a | Jul. 31, 2021 | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||
Variable interest entity, fair value | $ 2.3 | |||
Noncontrolling interest in variable interest entity | $ 0.6 | |||
Variable Interest Entity, Primary Beneficiary | ||||
Business Acquisition [Line Items] | ||||
Variable interest entity, ownership percentage | 76.20% | 76.20% | 76.20% | |
Outside Investors | Bootlegger's | ||||
Business Acquisition [Line Items] | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 23.80% | |||
Kosta Browne Winery | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interest acquired | 100.00% | |||
Consideration transferred | $ 203.2 | |||
Area of land (in acres) | a | 170 | |||
Payments to acquire business, gross | $ 92.2 | |||
Acquisition related costs | $ 0.2 | $ 3.9 | ||
Kosta Browne Winery | Mallard Holdco, LLC | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business, gross | $ 111 |
Acquisition - Summary of Consid
Acquisition - Summary of Consideration Transferred and the Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Aug. 01, 2018 | Jul. 31, 2021 | Jul. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 425,209 | $ 425,209 | |
Kosta Browne Winery | |||
Business Acquisition [Line Items] | |||
Cash | $ 84 | ||
Accounts receivable, trade | 492 | ||
Inventory | 40,938 | ||
Prepaid and other assets | 518 | ||
Trade names and other intangibles (Note 7) | 41,222 | ||
Property and equipment | 25,079 | ||
Goodwill | 113,182 | ||
Accounts payable and accrued expenses | (4,070) | ||
Capital leases | (426) | ||
Deferred taxes | (13,309) | ||
Non-controlling interest | (552) | ||
Consideration transferred | $ 203,158 | ||
Kosta Browne Winery | Customer relationships | |||
Business Acquisition [Line Items] | |||
Acquired finite-lived intangible assets, weighted average useful life | 10 years | ||
Kosta Browne Winery | Leasehold interests | |||
Business Acquisition [Line Items] | |||
Acquired finite-lived intangible assets, weighted average useful life | 14 years 1 month 6 days |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Inventory [Line Items] | ||
Inventories | $ 267,737 | $ 245,311 |
Bottled wine | ||
Inventory [Line Items] | ||
Finished goods | 120,876 | 100,272 |
Merchandise | ||
Inventory [Line Items] | ||
Finished goods | 547 | 408 |
Bulk wine | ||
Inventory [Line Items] | ||
Work in progress | 130,693 | 128,436 |
Packaging | ||
Inventory [Line Items] | ||
Work in progress | 3,541 | 2,945 |
Overhead | ||
Inventory [Line Items] | ||
Work in progress | 613 | 2,225 |
Deferred crop costs | ||
Inventory [Line Items] | ||
Raw materials | $ 11,467 | $ 11,025 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventory, capitalized costs incurred | $ 12.5 | $ 13.9 |
Property and equipment - Schedu
Property and equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (58,542) | $ (48,171) |
Property and equipment, net | $ 240,939 | 242,751 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 15 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 25 years | |
Depreciable Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 293,799 | 283,586 |
Property and equipment, net | 235,257 | 235,415 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | 120,063 | 120,063 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 68,616 | 66,057 |
Buildings and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 4 years | |
Buildings and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 42 years | |
Vineyards and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 29,164 | 27,430 |
Vineyards and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Vineyards and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 20 years | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 49,607 | 44,147 |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 20 years | |
Barrels | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 26,349 | 25,889 |
Barrels | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 1 year | |
Barrels | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 2 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 5,682 | $ 7,336 |
Property and equipment - Narrat
Property and equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 1.2 | $ 1.2 | $ 1.3 |
Goodwill and other intangible_3
Goodwill and other intangible assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 425,209 | $ 425,209 | |
Impairment loss (Note 7) | 0 | 11,830 | $ 0 |
Gross carrying amount | 140,900 | 152,730 | |
Amortization of intangible assets | 7,700 | 7,700 | $ 7,700 |
Trade names | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment loss (Note 7) | 11,800 | ||
Gross carrying amount | $ 139,600 | $ 151,430 |
Goodwill and other intangible_4
Goodwill and other intangible assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 94,292 | $ 94,292 |
Accumulated amortization | 34,645 | 26,962 |
Net | 59,647 | 67,330 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 140,900 | 152,730 |
Impairment charges | 0 | 11,830 |
Net | 140,900 | 140,900 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount | 235,192 | 247,022 |
Impairment charges | 0 | 11,830 |
Net | 200,547 | 208,230 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 139,600 | 151,430 |
Impairment charges | 0 | 11,830 |
Net | 139,600 | 139,600 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Impairment charges | 0 | 11,830 |
Lane rights | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,300 | 1,300 |
Net | 1,300 | 1,300 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 92,720 | 92,720 |
Accumulated amortization | 34,274 | 26,715 |
Net | 58,446 | 66,005 |
Leasehold interests | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,572 | 1,572 |
Accumulated amortization | 371 | 247 |
Net | $ 1,201 | $ 1,325 |
Goodwill and other intangible_5
Goodwill and other intangible assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 7,683 | |
2023 | 7,683 | |
2024 | 7,683 | |
2025 | 7,683 | |
2026 | 7,683 | |
Thereafter (collectively) | 21,232 | |
Net | $ 59,647 | $ 67,330 |
Accounts payable and accrued _3
Accounts payable and accrued expenses - Schedule of Accounts Payable (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Payables and Accruals [Abstract] | ||
Distributor invoices | $ 1,541 | $ 881 |
Production supplies | 447 | 515 |
Taxes | 632 | 19 |
Grower purchases | 0 | 599 |
Other | 936 | 1,719 |
Total | $ 3,556 | $ 3,733 |
Accounts payable and accrued _4
Accounts payable and accrued expenses - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Payables and Accruals [Abstract] | ||
Trade spend | $ 10,734 | $ 6,246 |
Bulk wine and other received not invoiced | 1,526 | 532 |
Barrel purchase | 936 | 1,917 |
Deferred compensation liability | 2,096 | 1,576 |
Accrued invoices and other accrued expenses | 6,265 | 5,240 |
Accrued expenses | $ 21,557 | $ 15,511 |
Accounts payable and accrued _5
Accounts payable and accrued expenses - Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2021 | Jul. 31, 2020 |
Payables and Accruals [Abstract] | ||
Cash surrender value of life insurance | $ 1.7 | $ 1.4 |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt issuance costs | $ (563) | $ (1,025) |
Current maturities of long-term debt | (11,324) | (13,430) |
Long-term debt | 114,625 | 125,844 |
Long-Term Debt, Excluding Lines Of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 126,512 | 140,299 |
First Lien Loan Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 117,637 | 125,158 |
First Lien Loan Agreement | Capital expenditure loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 8,875 | 15,141 |
Revolving Credit Facility | First Lien Loan Agreement | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 124,000 | 243,500 |
Debt issuance costs | (2,652) | (3,826) |
Long-term debt | $ 121,348 | $ 239,674 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Aug. 17, 2020USD ($) | Oct. 14, 2016USD ($) | Jul. 31, 2021USD ($)tranche | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Nov. 30, 2018USD ($) | Aug. 31, 2018USD ($) | Aug. 01, 2018USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||||||||
Loss on debt extinguishment | $ 272,000 | $ 0 | $ 163,000 | ||||||
Amortization of debt issuance costs | $ 1,623,000 | $ 2,121,000 | $ 2,131,000 | ||||||
First Lien Loan Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on debt extinguishment | $ 300,000 | ||||||||
First Lien Loan Agreement | Capital expenditure loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Weighted average interest rate | 2.00% | ||||||||
Secured debt | $ 25,000,000 | ||||||||
First Lien Loan Agreement | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Weighted average interest rate | 2.00% | ||||||||
Number of tranches | tranche | 2 | ||||||||
First Lien Loan Agreement | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 425,000,000 | ||||||||
Line of credit facility, accordian feature | $ 455,000,000 | ||||||||
Weighted average interest rate | 1.90% | ||||||||
Remaining borrowing capacity | $ 301,000,000 | ||||||||
Additional borrowing capacity | 30,000,000 | ||||||||
First Lien Loan Agreement | Revolving Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.75% | ||||||||
First Lien Loan Agreement | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 15,000,000 | ||||||||
Long term line of credit | 0 | ||||||||
First Lien Loan Agreement | Swingline Sub-Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 15,000,000 | ||||||||
Long term line of credit | $ 0 | ||||||||
First Lien Loan Agreement, Tranche One | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Secured debt | $ 135,000,000 | ||||||||
First Lien Loan Agreement, Tranche Two | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Secured debt | $ 16,400,000 | $ 25,000,000 | |||||||
Second Lien Loan and Security Agreement | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Secured debt | $ 50,000,000 | ||||||||
London Interbank Offered Rate (LIBOR) | First Lien Loan Agreement | Capital expenditure loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.90% | ||||||||
London Interbank Offered Rate (LIBOR) | First Lien Loan Agreement | Revolving Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.25% | ||||||||
London Interbank Offered Rate (LIBOR) | First Lien Loan Agreement, Tranche One | Term Loan | Tranche One | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.90% | ||||||||
London Interbank Offered Rate (LIBOR) | First Lien Loan Agreement, Tranche Two | Term Loan | Tranche Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (percent) | 1.63% |
Debt - Schedule of Long Term _2
Debt - Schedule of Long Term Debt Repayment (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Debt Instrument [Line Items] | ||
Total | $ 114,625 | $ 125,844 |
Secured Debt and Lines of Credit | ||
Debt Instrument [Line Items] | ||
2022 | 11,324 | |
2023 | 8,942 | |
2024 | 230,246 | |
2025 | 0 | |
2026 | 0 | |
Thereafter (collectively) | 0 | |
Total | $ 250,512 |
Derivative instruments - Intere
Derivative instruments - Interest Rate Swaps (Details) - Interest Rate Swap Expiring March 2023 $ in Thousands | Jul. 31, 2021USD ($) |
Derivative [Line Items] | |
Notional amount | $ 100,000 |
Interest rate | 0.487% |
Derivative instruments - Narrat
Derivative instruments - Narrative (Details) $ in Millions | Jul. 31, 2021USD ($) |
Interest Rate Swap Expiring July 2021 | |
Derivative [Line Items] | |
Notional amount | $ 150 |
Derivative instruments - Total
Derivative instruments - Total Notional Amount (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Derivative [Line Items] | ||
Notional amount | $ 102,369 | $ 302,240 |
Interest rate swap contracts | ||
Derivative [Line Items] | ||
Notional amount | 100,000 | 300,000 |
Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 2,369 | $ 2,240 |
Derivative instruments - Estima
Derivative instruments - Estimated Fair Value and Classification of Derivative Instruments on the Condensed Consolidated Statements of Financial Position (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | $ (480) | $ (6,441) |
Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 5 | 118 |
Current Liability | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | 0 | (5,376) |
Other Noncurrent Liabilities | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | (480) | (1,065) |
Other Current Assets | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 5 | $ 118 |
Derivative instruments - Amount
Derivative instruments - Amounts and Classification of the Gains and Losses in the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Derivative [Line Items] | |||
Total (gains) losses | $ 5,848 | $ (2,340) | $ (4,902) |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Total (gains) losses | (5,848) | 2,340 | 4,902 |
Interest rate swap contracts | Not Designated as Hedging Instrument | Other (income) expense, net | |||
Derivative [Line Items] | |||
Total (gains) losses | (5,961) | 2,596 | 4,945 |
Foreign currency forward contracts | Not Designated as Hedging Instrument | Other (income) expense, net | |||
Derivative [Line Items] | |||
Total (gains) losses | $ 113 | $ (256) | $ (43) |
Fair value measurements - Asset
Fair value measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Assets | ||
Deferred compensation plan asset | $ 1,719 | $ 1,416 |
Liabilities | ||
Deferred compensation liability | 2,096 | 1,576 |
Interest rate swap contracts | ||
Liabilities | ||
Derivative liability | 480 | 6,441 |
Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 5 | 118 |
Quoted prices in active markets (Level 1) | ||
Assets | ||
Deferred compensation plan asset | 0 | 0 |
Liabilities | ||
Deferred compensation liability | 0 | 0 |
Quoted prices in active markets (Level 1) | Interest rate swap contracts | ||
Liabilities | ||
Derivative liability | 0 | 0 |
Quoted prices in active markets (Level 1) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Deferred compensation plan asset | 1,719 | 1,416 |
Liabilities | ||
Deferred compensation liability | 2,096 | 1,576 |
Significant other observable inputs (Level 2) | Interest rate swap contracts | ||
Liabilities | ||
Derivative liability | 480 | 6,441 |
Significant other observable inputs (Level 2) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 5 | 118 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Deferred compensation plan asset | 0 | 0 |
Liabilities | ||
Deferred compensation liability | 0 | 0 |
Significant unobservable inputs (Level 3) | Interest rate swap contracts | ||
Liabilities | ||
Derivative liability | 0 | 0 |
Significant unobservable inputs (Level 3) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | $ 0 | $ 0 |
Income taxes - Provision (Benef
Income taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Current | |||
Federal | $ 14,431 | $ 11,591 | $ 9,539 |
State | 4,549 | 3,842 | 3,468 |
Current income tax expense | 18,980 | 15,433 | 13,007 |
Deferred | |||
Federal | 2,809 | (2,905) | (2,667) |
State | (781) | (2,096) | (2,498) |
Deferred income taxes | 2,028 | (5,001) | (5,165) |
Income tax expense | $ 21,008 | $ 10,432 | $ 7,842 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2021 | Jul. 31, 2020 |
Deferred tax assets | ||
Accrued liabilities | $ 2,001 | $ 1,121 |
State taxes | 998 | 846 |
Stock based compensation | 284 | 0 |
Interest rate swap | 122 | 1,646 |
Other | 221 | 0 |
Gross deferred tax asset | 3,626 | 3,613 |
Deferred tax liabilities | ||
Inventory | (7,291) | (2,437) |
Property and equipment | (34,114) | (32,945) |
Intangible assets | (47,759) | (49,078) |
Prepaid expenses | (1,129) | 0 |
Casualty gain (Note 17) | 0 | (3,551) |
Other | 0 | (240) |
Gross deferred tax liability | (90,293) | (88,251) |
Net deferred tax liabilities | $ (86,667) | $ (84,638) |
Income taxes - Effective Income
Income taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate, percent | 21.00% | 21.00% | 21.00% |
State income taxes, percent | 3.90% | 3.30% | 2.50% |
Stock-based compensation, percent | 2.60% | 0.00% | 0.00% |
Transaction costs, percent | 0.00% | 0.10% | 1.90% |
Other, percent | (0.20%) | 0.00% | 0.70% |
Effective income tax rate, percent | 27.30% | 24.40% | 26.10% |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, maximum annual contributions per employee by employer, amount | $ 29,000 | ||
Defined contribution plan, employer matching contribution, percent of match | 3.00% | ||
Defined contribution plan, vesting period | 2 years | ||
Defined contribution plan, employer discretionary contribution, percent | 7.00% | ||
Defined contribution plan, employer discretionary contribution, vesting period | 5 years | ||
Defined contribution plan, employer matching and discretionary contribution, percent | 10.00% | ||
Defined contribution plan, cost | $ 3,800,000 | $ 3,700,000 | $ 3,100,000 |
Deferred compensation plan, vesting period | 3 years | ||
Deferred compensation arrangement with individual, contributions by employer | $ 1,100,000 | 900,000 | $ 200,000 |
Deferred compensation liability | 2,100,000 | 1,600,000 | |
Cash surrender value of life insurance | $ 1,700,000 | $ 1,400,000 |
Commitment and contingencies -
Commitment and contingencies - Narrative (Details) barrel in Thousands, T in Thousands, $ in Millions | 12 Months Ended | ||||
Oct. 31, 2021USD ($)T | Jul. 31, 2021USD ($)abarrel | Oct. 31, 2020USD ($)T | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | |
Commitments and Contingencies [Line Items] | |||||
Area of property (acre) | a | 150 | ||||
Operating lease, rent expense | $ 4 | $ 4.1 | $ 2.3 | ||
Long-term purchase contract, amount purchased, mass | T | 12 | ||||
Purchase commitment, quantity | barrel | 6 | ||||
Purchase commitment, remaining amount committed | $ 6.4 | ||||
COVID-19, incremental costs | 0.7 | $ 1.4 | |||
Forecast | |||||
Commitments and Contingencies [Line Items] | |||||
Long-term purchase contract, amount purchased, mass | T | 32 | ||||
Euro Member Countries, Euro | |||||
Commitments and Contingencies [Line Items] | |||||
Purchase commitment, remaining amount committed | $ 4.8 | ||||
Inventories | |||||
Commitments and Contingencies [Line Items] | |||||
Long-term purchase commitment, amount purchased, cost | $ 26.5 | ||||
Inventories | Forecast | |||||
Commitments and Contingencies [Line Items] | |||||
Long-term purchase commitment, amount purchased, cost | $ 69 | ||||
Minimum | |||||
Commitments and Contingencies [Line Items] | |||||
Lease, term of contract | 2 years | ||||
Long-term purchase contract, period | 1 year | ||||
Maximum | |||||
Commitments and Contingencies [Line Items] | |||||
Lease, term of contract | 30 years | ||||
Long-term purchase contract, period | 8 years |
Commitment and contingencies _2
Commitment and contingencies - Future Minimum Payments for Operating Leases (Details) $ in Thousands | Jul. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 4,079 |
2023 | 3,987 |
2024 | 3,727 |
2025 | 3,448 |
2026 | 2,046 |
Thereafter (collectively) | 6,888 |
Total | $ 24,175 |
Equity-based compensation - Nar
Equity-based compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2021 | Mar. 16, 2021 | Apr. 30, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2016 |
2016 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award requisite service period | 4 years | 5 years | |||||
Plan modification, incremental cost | $ 8,500 | ||||||
Share-based payment arrangement, expense | $ 900 | $ 1,200 | $ 1,100 | ||||
Unrecognized compensation expense | $ 500 | ||||||
Unrecognized compensation expense, period for recognition | 9 months 18 days | ||||||
2016 Equity Incentive Plan | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 20.00% | ||||||
2016 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 20.00% | ||||||
2016 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 20.00% | ||||||
2016 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Four | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 20.00% | ||||||
2016 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Five | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 20.00% | ||||||
2016 Equity Incentive Plan | Time-Based and Performance Based Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity instruments other than options, vested, fair value | $ 2,900 | ||||||
2016 Equity Incentive Plan | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity instruments other than options, vested, fair value | $ 3,800 | ||||||
2021 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grants (shares) | 14,003,560 | ||||||
Expiration period | 10 years | ||||||
Share-based payment arrangement, nonvested award, option, cost not yet recognized, amount | $ 6,700 | ||||||
Options, granted, weighted average grant date fair value (in dollars per share) | $ 4.64 | ||||||
Options vested and exercisable (shares) | 0 | ||||||
2021 Equity Incentive Plan | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25.00% | ||||||
2021 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25.00% | ||||||
2021 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25.00% | ||||||
2021 Equity Incentive Plan | Share-based Payment Arrangement, Tranche Four | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25.00% | ||||||
2021 Equity Incentive Plan | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based payment arrangement, expense | $ 500 | ||||||
Unrecognized compensation expense, period for recognition | 3 years 7 months 6 days | ||||||
2021 Equity Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based payment arrangement, expense | $ 900 | ||||||
Unrecognized compensation expense | $ 8,500 | ||||||
Unrecognized compensation expense, period for recognition | 3 years 4 months 24 days | ||||||
Employee Stock Purchase Plan | Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grants (shares) | 1,250,509 | ||||||
Purchase price of common stock, percent | 85.00% |
Equity-based compensation - Act
Equity-based compensation - Activity for Awards (Details) | 12 Months Ended |
Jul. 31, 2021$ / sharesshares | |
Time-Based Units | 2016 Equity Incentive Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 14,640,454 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 14,640,454 |
Forfeited (in shares) | shares | 0 |
Unvested as of ending of period (in shares) | shares | 0 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 0.16 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0.16 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 0 |
Performance Based Units | 2016 Equity Incentive Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 7,203,820 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 2,881,528 |
Forfeited (in shares) | shares | 0 |
Exchanged (in shares) | shares | 4,322,292 |
Unvested as of ending of period (in shares) | shares | 0 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 0.19 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0.19 |
Forfeited (in dollars per share) | $ / shares | 0 |
Exchanged (in dollars per share) | $ / shares | 0.19 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 0 |
Restricted Stock | 2016 Equity Incentive Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 266,155 |
Forfeited (in shares) | shares | 0 |
Exchanged (in shares) | shares | 665,389 |
Unvested as of ending of period (in shares) | shares | 399,234 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 14.23 |
Forfeited (in dollars per share) | $ / shares | 0 |
Exchanged (in dollars per share) | $ / shares | 14.23 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 14.23 |
Restricted Stock Units (RSUs) | 2021 Equity Incentive Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 558,049 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (2,099) |
Unvested as of ending of period (in shares) | shares | 555,950 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 16.95 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 17 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 16.95 |
Equity-based compensation - Val
Equity-based compensation - Valuation Assumptions (Details) | 12 Months Ended |
Jul. 31, 2021$ / shares | |
March Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 6 years 3 months |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.09% |
Expected volatility | 25.00% |
Stock price (in dollars per share) | $ 15 |
June Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 6 years 3 months |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.06% |
Expected volatility | 25.00% |
Stock price (in dollars per share) | $ 24 |
Equity-based compensation - Sto
Equity-based compensation - Stock Option Activity (Details) - 2021 Equity Incentive Plan $ / shares in Units, $ in Thousands | 12 Months Ended |
Jul. 31, 2021USD ($)$ / sharesshares | |
Shares Available for Grant | |
Balance as of July 31, 2020 (shares) | 0 |
Options granted (shares) | 1,558,947 |
Forfeited (shares) | (6,299) |
Balance as July 31, 2021 (shares) | 1,552,648 |
Number of Options Outstanding | |
Balance as of July 31, 2020 (shares) | 0 |
Options granted (shares) | 1,558,947 |
Forfeited (shares) | (6,299) |
Balance as July 31, 2021 (shares) | 1,552,648 |
Weighted-Average Exercise Price | |
Balance as of July 31, 2020 (in dollars per share) | $ / shares | $ 0 |
Options granted (in dollars per share) | $ / shares | 17.11 |
Forfeited (in dollars per share) | $ / shares | 17 |
Balance as of April 30, 2021 (in dollars per share) | $ / shares | $ 17.11 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted-Average Remaining Contractual Life (in years) | 9 years 7 months 6 days |
Aggregate Intrinsic Value | $ | $ 7,552 |
Related party transactions - Na
Related party transactions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 23, 2021 | Aug. 31, 2018 | Jul. 31, 2021 | |
Related Party Transactions [Abstract] | |||
Cash dividend | $ 100,000 | $ 100,000 | |
Capital contribution from related party | $ 111,000 |
Casualty gain - Narrative (Deta
Casualty gain - Narrative (Details) - USD ($) $ in Thousands | Dec. 11, 2020 | Jan. 31, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
Unusual or Infrequent Item, or Both [Line Items] | |||||
Casualty gain, net (Note 17) | $ (6,559) | $ (4,047) | $ (8,606) | ||
Fire | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
Casualty gain, net (Note 17) | $ 1,300 | ||||
Flood | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
Insurance proceeds | $ 32,500 | $ 8,100 |
Earnings per share - Reconcilia
Earnings per share - Reconciliation of Basic and Diluted Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Numerator - Net income attributable to The Duckhorn Portfolio, Inc. | $ 55,976 | $ 32,377 | $ 22,097 |
Denominator: | |||
Weighted average number of shares of common stock outstanding - basic (shares) | 106,681,496 | 101,713,460 | 101,713,460 |
Dilutive stock options and restricted stock (shares) | 253,357 | 0 | 0 |
Weighted average number of shares of common stock outstanding - assuming dilution (shares) | 106,934,853 | 101,713,460 | 101,713,460 |
Earnings per share attributable to The Duckhorn Portfolio, Inc. | |||
Basic (in dollars per share) | $ 0.52 | $ 0.32 | $ 0.22 |
Diluted (in dollars per share) | $ 0.52 | $ 0.32 | $ 0.22 |
Earnings per share - Narrative
Earnings per share - Narrative (Details) - shares | 12 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 2,465 | 0 | 0 |