Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Sep. 21, 2022 | Jan. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jul. 31, 2022 | ||
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 | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 734,185 | ||
Entity Common Stock, Shares Outstanding | 115,184,161 | ||
Documents Incorporated by Reference | Portions of the Definitive Proxy Statement for the registrant’s Fiscal 2023 Annual Meeting of Stockholders to be held on January 20, 2023 are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001835256 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Jul. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | San Francisco, California |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Current assets | ||
Cash | $ 3,167 | $ 4,244 |
Accounts receivable trade, net | 37,026 | 33,253 |
Inventories | 285,430 | 267,737 |
Prepaid expenses and other current assets | 13,898 | 9,167 |
Total current assets | 339,521 | 314,401 |
Long-term assets | ||
Property and equipment, net | 269,659 | 240,939 |
Intangible assets, net | 191,786 | 200,547 |
Operating lease right-of-use assets | 23,375 | 0 |
Goodwill | 425,209 | 425,209 |
Other long-term assets | 1,963 | 2,021 |
Total long-term assets | 911,992 | 868,716 |
Total assets | 1,251,513 | 1,183,117 |
Current liabilities | ||
Accounts payable | 3,382 | 3,556 |
Accrued expenses | 29,475 | 21,557 |
Accrued compensation | 12,893 | 16,845 |
Deferred revenue | 272 | 3,102 |
Current operating lease liabilities | 3,498 | |
Current maturities of long-term debt | 9,810 | 11,324 |
Other current liabilities | 672 | 397 |
Total current liabilities | 60,002 | 56,781 |
Long-term liabilities | ||
Revolving line of credit, net | 108,674 | 121,348 |
Long-term debt, net of current maturities and debt issuance costs | 105,074 | 114,625 |
Operating lease liabilities | 19,732 | |
Deferred income taxes | 90,483 | 86,667 |
Other long-term liabilities | 387 | 1,458 |
Total long-term liabilities | 324,350 | 324,098 |
Total liabilities | 384,352 | 380,879 |
Commitments and contingencies (Note 14) | ||
Equity | ||
#REF! | 1,152 | 1,150 |
Additional paid-in capital | 731,597 | 726,903 |
Retained earnings | 133,824 | 73,634 |
Total The Duckhorn Portfolio, Inc. equity | 866,573 | 801,687 |
Non-controlling interest | 588 | 551 |
Total equity | 867,161 | 802,238 |
Total liabilities and equity | $ 1,251,513 | $ 1,183,117 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales (net of excise taxes of $5,115, $4,855 and $3,220 respectively) | $ 372,510 | $ 336,613 | $ 270,648 |
Cost of sales | 187,330 | 169,265 | 133,766 |
Gross profit | 185,180 | 167,348 | 136,882 |
Selling, general and administrative expenses | 97,743 | 89,816 | 65,908 |
Impairment loss | 0 | 0 | 11,830 |
Casualty loss (gain), net (Note 17) | 123 | (6,559) | (4,047) |
Income from operations | 87,314 | 84,091 | 63,191 |
Interest expense | 6,777 | 13,618 | 17,924 |
Other (income) expense, net | (2,214) | (6,505) | 2,457 |
Total other expenses | 4,563 | 7,113 | 20,381 |
Income before income taxes | 82,751 | 76,978 | 42,810 |
Income tax expense | 22,524 | 21,008 | 10,432 |
Net income | 60,227 | 55,970 | 32,378 |
Less: Net (income) loss attributable to non-controlling interest | (37) | 6 | (1) |
Net income attributable to The Duckhorn Portfolio, Inc. | $ 60,190 | $ 55,976 | $ 32,377 |
Net income per share of common stock: | |||
Basic (in dollars per share) | $ 0.52 | $ 0.52 | $ 0.32 |
Diluted (in dollars per share) | $ 0.52 | $ 0.52 | $ 0.32 |
Weighted average shares of common stock outstanding: | |||
Basic (in shares) | 115,096,152 | 106,681,496 | 101,713,460 |
Diluted (in shares) | 115,363,578 | 106,934,853 | 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 |
Beginning balance (in shares) at Jul. 31, 2019 | 101,713,460 | |||||
Beginning 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 | 1,154 | 1,154 | 1,154 | |||
Other | (60) | (60) | (55) | (5) | ||
Ending balance (in shares) 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 | 10,822 | 10,822 | 10,822 | |||
Ending balance (in shares) at Jul. 31, 2021 | 115,046,793 | |||||
Ending balance at Jul. 31, 2021 | 802,238 | 801,687 | $ 1,150 | 726,903 | 73,634 | 551 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 60,227 | 60,190 | 60,190 | 37 | ||
Initial public offering, net of issuance costs | (270) | (270) | (270) | |||
Issuance of common stock under equity incentive plans (in shares) | 175,003 | |||||
Issuance of common stock under equity incentive plans | 1 | 1 | $ 3 | (2) | ||
Equity-based compensation | 5,523 | 5,523 | 5,523 | |||
Shares withheld related to net share settlement (in shares) | (53,677) | |||||
Shares withheld related to net share settlement | (845) | (845) | $ (1) | (844) | ||
Issuance of employee stock purchase plan (in shares) | 16,042 | |||||
Issuance of employee stock purchase plan | 287 | 287 | 287 | |||
Ending balance (in shares) at Jul. 31, 2022 | 115,184,161 | |||||
Ending balance at Jul. 31, 2022 | $ 867,161 | $ 866,573 | $ 1,152 | $ 731,597 | $ 133,824 | $ 588 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Cash flows from operating activities | |||
Net income (loss) | $ 60,227 | $ 55,970 | $ 32,378 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Deferred income taxes | 3,817 | 2,029 | (5,001) |
Depreciation and amortization | 23,427 | 21,343 | 22,755 |
(Gain) loss on disposal of assets | (528) | 7 | 187 |
Change in fair value of derivatives | (1,695) | (5,848) | 2,340 |
Amortization of debt issuance costs | 1,608 | 1,623 | 2,121 |
Loss on debt extinguishment (Note 9) | 0 | 272 | 0 |
Impairment loss | 0 | 0 | 11,830 |
Equity-based compensation | 5,523 | 10,822 | 1,154 |
Inventory reserve adjustments | 4,363 | 1,054 | 508 |
Change in operating assets and liabilities: | |||
Accounts receivable trade, net | (3,773) | (6,789) | (3,997) |
Inventories | (18,818) | (23,480) | (11,166) |
Prepaid expenses and other current assets | (3,293) | (6,593) | (573) |
Other long-term assets | 1,258 | (333) | (29) |
Accounts payable | (262) | (45) | 1,365 |
Accrued expenses | 7,681 | 7,627 | (1,733) |
Accrued compensation | (3,953) | 8,171 | 2,295 |
Deferred revenue | (2,830) | (1,045) | 285 |
Other current and long-term liabilities | (3,920) | (513) | 460 |
Net cash provided by operating activities | 68,832 | 64,272 | 55,179 |
Cash flows from investing activities | |||
Purchases of property and equipment | (44,644) | (13,689) | (13,624) |
Proceeds from sales of property and equipment | 910 | 122 | 89 |
Net cash used in investing activities | (43,734) | (13,567) | (13,535) |
Cash flows from financing activities | |||
Dividend to parent | 0 | (100,000) | 0 |
Proceeds from issuance of common stock pursuant to the initial public offering, net of underwriters' discounts and commissions | 0 | 187,500 | 0 |
Payments of deferred offering costs | (270) | (6,658) | 0 |
Payments under revolving line of credit | (98,000) | (263,000) | (99,000) |
Borrowings under revolving line of credit | 84,000 | 143,500 | 59,500 |
Extinguishment of long-term debt | 0 | (38,131) | 0 |
Issuance of long-term debt | 0 | 38,131 | 13,100 |
Payments of long-term debt | (11,347) | (13,787) | (12,741) |
Repayment of capital leases | (8) | (16) | |
Taxes paid related to net share settlement of equity awards | (845) | 0 | 0 |
Proceeds from employee stock purchase plan | 287 | 0 | 0 |
Debt issuance costs | 0 | (260) | 0 |
Net cash used in financing activities | (26,175) | (52,713) | (39,157) |
Net (decrease) increase in cash | (1,077) | (2,008) | 2,487 |
Cash - Beginning of year | 4,244 | 6,252 | 3,765 |
Cash - End of year | 3,167 | 4,244 | 6,252 |
Supplemental cash-flow information | |||
Interest, net of amount capitalized | 5,179 | 12,620 | 15,594 |
Income taxes | 17,674 | 22,743 | 15,604 |
Non cash investing and financing activities | |||
Property and equipment additions in accounts payable and accrued expenses | $ 1,694 | $ 1,369 | $ 3,081 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - $ / shares | Jul. 31, 2022 | Jul. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | |
Common stock, shares issued | 115,184,161 | 115,046,793 |
Common stock, shares outstanding | 115,184,161 | 115,046,793 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Statement [Abstract] | |||
Excise taxes | $ 5,115 | $ 4,855 | $ 3,220 |
Description of business
Description of business | 12 Months Ended |
Jul. 31, 2022 | |
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, Decoy, Goldeneye, Paraduxx, Migration, 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. Concurrently with the pricing of the IPO, the Company's Board of Directors approved the conversion of 42,579,137 Class M Units previously issued under the 2016 Equity Incentive Plan to shares of common stock previously owned by the Company's parent company, Mallard Holdco, Inc. See Note 15 (Equity-based compensation) for further discussion on the Company's equity incentive plans and the related financial statement impacts. Secondary offering In the first quarter of Fiscal 2022, the Company completed a secondary offering where certain existing shareholders sold 12,000,000 shares of common stock at a price of $20.50 per share. In November 2021, an additional 626,467 shares of common stock were sold pursuant to the partial exercise of the underwriters' option to purchase additional shares. The Company did not receive any of the proceeds from the sale of the shares by the existing stockholders. In connection with the offering, the Company incurred costs of $0.6 million and $0.4 million, respectively, for the fiscal years ended July 31, 2022 and 2021. |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 12 Months Ended |
Jul. 31, 2022 | |
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 credit losses, 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 recognition 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 that performance obligation is fulfilled and 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 costs that are billed to customers as a fulfillment activity rather than as separate performance obligations. Shipping and handling costs are 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. 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 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 estimated and recognized as a reduction of the transaction price based on the expected amounts at the time of revenue recognition for the related sale. 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 $66.3 million, $63.8 million and $44.5 million for the fiscal years ended July 31, 2022, 2021 and 2020, 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 does 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. The Company expenses 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, 2022 and 2021. 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 $6.6 million, $6.0 million and $4.5 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. Advertising costs are recognized in selling, general and administrative expenses. 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, 2022 and 2021. Accounts receivable trade, net 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 credit losses for estimated losses resulting from the inability of its customers to make required payments. The Company determines this allowance based on historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. Accounts receivable are written off when determined to be uncollectible. Recoveries of accounts receivable previously written off are recorded to income when received. Charges related to credit loss on accounts receivable were $0.5 million and $0.2 million in the fiscal years ended July 31, 2021 and 2020, respectively. Recoveries and reductions in the allowance for credit loss were $0.4 million in the fiscal year ended July 31, 2022. Charges related to credit loss in Fiscal 2022 and recoveries and reductions related to credit loss in Fiscal 2021 and 2020 were immaterial. The allowance for credit losses as of July 31, 2022 and 2021 was $0.4 million and $0.8 million, respectively. 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. 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. On an ongoing basis, the Company evaluates the cost estimate and assumptions. As required, the Company records valuation adjustments to the carrying value of its inventories based on periodic reviews of slow-moving, obsolete and excess inventory to determine the need for reserves by comparing inventory carrying values with their net realizable values upon ultimate sale or disposal. 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 estimates of net realizable value are based on analysis and assumptions including, but not limited to, historical experience, as well as Management's judgement with respect to future demand and market conditions. 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 5 to 20 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, 2022, 2021 or 2020. Goodwill and 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 identifiable 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 if 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 30th of each fiscal year as the date to perform annual impairment testing. Indefinite-lived intangible assets include trade names and lane rights. The Company's 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 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, 2022 or 2021. Long-lived asset impairment Long-lived assets deemed to have definite lives, which principally consist of property and equipment, customer relationships, and operating lease right-of-use 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 fiscal years ended July 31, 2022, 2021 and 2020. 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. In connection with the offering in March 2021, the Company charged deferred offering costs of $0.3 million and $6.7 million to stockholders' equity in Fiscal 2022 and 2021, respectively. There were no deferred offering costs as of July 31, 2020. 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. 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, 2022 and 2021. 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. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Company's income tax provision includes the net impact of changes in the liability for unrecognized tax benefits. 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 Effective August 1, 2021, the Company adopted ASU No. 2016-02, Leases (Topic 842) . See "Recently adopted accounting pronouncements" for further discussion. Service arrangements are evaluated to determine whether they contain a lease at inception. Leases are classified as either finance leases or operating leases based on criteria in Topic 842. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's secured incremental borrowing rate. The Company's incremental borrowing rate for a lease is the rate of interest it would pay to borrow on a collateralized basis over a similar term to the lease in a similar economic environment. The Company applied incremental borrowing rates on a lease-by-lease basis. Right-of-use assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term operating leases that have a term of one year or less. The Company recognizes expenses for short-term operating leases on a straight-line basis over the lease term. Certain of the Company's operating leases have variable rental payments based on changes in a consumer price index or a production index that trigger rental increases. Additionally, certain of the Company's operating leases include variable payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Certain grower purchase agreements under which we contract for grapes to meet our production needs contain variable payments based on tonnage yield, grape quality and grape prices. Variable lease payments are excluded from the calculations of the right-of-use assets and are recognized in the financial statements in the period in which the obligation is incurred and payment variability removed. Any variable payments related to grapes purchased for inventory production would generally be recognized during harvest as yield size and quality can be determined, and the Company accepts the grapes at a production facility. The cost of grapes we purchase to produce wine is recognized in inventory until the wine is sold , and amounted to $68.1 million in Fiscal 2022 and $26.5 million in Fiscal 2021 . The Company monitors for triggering events or conditions that require a reassessment of its leases. When the reassessment requires a re-measurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset. Additionally, the Company reviews relevant impairment indicators of its right-of-use assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets . 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 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. See Note 18 (Earnings per share) for further discussion. 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 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, 2022 and 2021, 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 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 at both July 31, 2022 and 2021. At July 31, 2022 and 2021, 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 $2.4 million and $2.2 million at July 31, 2022 and 2021, respectively. 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 . 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 46%, 48% and 43% of net sales for the years ended July 31, 2022, 2021 and 2020, respectively. There were no significant concentrations of revenue or credit risk related to DTC sales. Of the largest five customers, two 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, 2022 2021 2020 Customer A 16 % 15 % 13 % Customer B 14 % 16 % 15 % Customer C 9 % 10 % 8 % 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 two 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, 2022 2021 Customer A 22 % 23 % Customer B 14 % 11 % Customer C 8 % 14 % 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 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 values shares purchased under the ESPP 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 was permitted to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Prior to fiscal year ended July 31, 2022, the Company had elected to use the adoption dates available to private companies. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently adopted accounting pronouncements: 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 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 ("ROU") assets and corresponding lease liabilities and (iii) expands mandatory qualitative and quantitative disclosures regarding leasing activities. The Company adopted the standard effective August 1, 2021, the first day of fiscal year 2022, using the modified retrospective transition method. The guidance provides a number of optional practical expedients in adoption. The Company elected the package of practical expedients available for expired or existing contracts, which allowed it to carryforward historical assessments of (1) whether contracts are, or contain, leases, (2) lease classification and (3) initial direct costs. The Company did not elect the use-of-hindsight practical expedient. In addition, the Company elected an accounting policy to include both lease and non-lease components as a single component for all asset classes where it is the lessee. The most significant impact of adoption was the recognition as of August 1, 2021 of operating lease ROU assets of $27.2 million and corresponding operating lease liabilities of $26.9 million on the Consolidated Statement of Financial Position, along with certain incremental disclosures. The difference between the operating lease ROU assets and operating lease liabilities represents the existing deferred rent and tenant improvement allowance liabilities balance, resulting from historical straight-lining of operating leases, which were effectively reclassified upon adoption to reduce the measurement of leased assets. In addition, the difference represents favorable lease assets effectively reclassified upon adoption from intangible assets to increase the measurement of leased assets. Adoption of the new standard did not have a material impact on the Company's results of operations or liquidity. See Note 6 (Leases) for further discussion. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , and several amendments, collectively, ASC 326, to replace the incurred loss impairment method with a method that requires the reflection of expected credit losses on financial instruments. The Company adopted this standard as of July 31, 2022. As a result of adopting this ASU, the Company changed its method of estimating its allowance for doubtful accounts for accounts receivable to be based upon the Company's |
Revenue
Revenue | 12 Months Ended |
Jul. 31, 2022 | |
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, 2022 2021 2020 Wholesale - Distributors 66.3 % 65.3 % 60.0 % Wholesale - California direct to trade (a) 17.9 16.9 18.9 DTC (b) 15.8 17.8 21.1 Net sales 100.0 % 100.0 % 100.0 % ________________________________________________ (a) Includes bulk and grape sales of $2.6 million, $0.6 million and $1.1 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. (b) Includes shipping and handling revenue of $2.3 million, $2.6 million and $2.4 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. The following table presents the percentages of consolidated net sales disaggregated by brand: Fiscal years ended July 31, 2022 2021 2020 Duckhorn Vineyards & Decoy 78.5 % 76.3 % 73.0 % Other winery brands 21.5 23.7 27.0 Net sales 100.0 % 100.0 % 100.0 % Net sales disaggregated by geographic area comprised of the following: Fiscal years ended July 31, (in thousands) 2022 2021 2020 United States $ 348,910 $ 318,389 $ 258,439 Canada 7,769 5,355 3,723 Other international 15,831 12,869 8,486 Net sales $ 372,510 $ 336,613 $ 270,648 Contract balances Changes in the contract liability balance during the periods presented comprised of the following: Fiscal years ended July 31, (in thousands) 2022 2021 2020 Outstanding at beginning of period $ 3,102 $ 4,148 $ 3,863 Increase (decrease) attributable to: Upfront payments 30,018 33,257 34,836 Revenue recognized (32,179) (34,069) (34,328) Refund (669) (234) (223) Outstanding at end of period $ 272 $ 3,102 $ 4,148 |
Inventories
Inventories | 12 Months Ended |
Jul. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories were comprised of the following: July 31, (in thousands) 2022 2021 Finished goods $ 108,989 $ 121,423 Work in progress 162,337 134,847 Raw materials 14,104 11,467 Total $ 285,430 $ 267,737 In the period the Company determines a reserve is required, the Company recognizes a charge to cost of sales for the excess of the carrying value over net realizable value. As of July 31, 2022 and 2021, the Company's inventory reserve was $5.1 million and $1.2 million, respectively. During Fiscal 2022, the Company reserved excess inventory levels of seltzer products of approximately $4.3 million. The Company capitalizes into inventory depreciation related to property and equipment used in the production of inventory. For the fiscal years ended July 31, 2022 and 2021, the amount capitalized was $14.2 million and $12.5 million, respectively. The Company also capitalizes total lease costs related to leases used in the production of inventory. For the fiscal years ended July 31, 2022 and 2021, the amount capitalized was $4.2 million and $4.2 million, respectively. |
Property and equipment
Property and equipment | 12 Months Ended |
Jul. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment, net Property and equipment, net was comprised of the following: July 31, (in thousands) Depreciable lives 2022 2021 Land N/A $ 136,328 $ 120,063 Buildings and improvements 4-42 70,813 68,616 Vineyards and improvements 5-20 44,759 29,164 Machinery and equipment 3-20 52,619 49,607 Barrels 1-2 30,067 26,349 Total depreciable property and equipment 334,586 293,799 Less: accumulated depreciation and amortization (70,591) (58,542) Total depreciable property and equipment, net 263,995 235,257 Construction in progress N/A 5,664 5,682 Property and equipment, net $ 269,659 $ 240,939 Depreciation expense recognized in selling, general and administrative expenses was $1.7 million, $1.2 million, $1.2 million for the fiscal years ended July 31, 2022, 2021 and 2020. See Note 4 (Inventories) for depreciation expense capitalized into inventory. |
Leases
Leases | 12 Months Ended |
Jul. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company's operating leases are primarily for certain vineyards, office space, visitor centers, production facilities and certain grower purchase agreements associated with the purchase of grape tonnage yielded from specific vineyard blocks. As of July 31, 2022, the Company did not have any finance leases. The leases, excluding grower purchase agreements, include approximately 150 acres of vineyard property under various third-party operating lease agreements. The Company's leases have various terms with initial terms ranging from two (in thousands) Consolidated Statement of Financial Position July 31, 2022 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 23,375 Liabilities: Current: Operating lease liabilities Operating lease liabilities 3,498 Non-Current: Operating lease liabilities Operating lease liabilities, non-current 19,732 Total lease liabilities $ 23,230 Lease costs The components of lease cost reported in the Consolidated Financial Statements are reported in the following captions: (in thousands) July 31, 2022 Operating lease costs: Lease cost $ 4,239 Variable lease cost (a) 1,137 Short-term lease cost 96 Less: Sublease income (20) Total lease costs $ 5,452 ________________________________________________ (a) Variable lease cost includes payments for property taxes, insurance, maintenance, and grower purchase agreements. Variable lease cost is recorded in the period in which variability is removed. See Note 14 (Commitments and contingencies) for estimated variable cost of grower purchase agreements to be recognized in Fiscal 2023 related to the 2022 harvest, subject to grape yield sizes and the Company accepting grapes under its quality control provisions. See Note 4 (Inventories) for lease costs capitalized into inventory. Lease term and discount rate Weighted average remaining lease terms and discount rates consisted of the following: July 31, 2022 Operating leases: Weighted average remaining lease term (in years) 7.75 Weighted average discount rate 3.53 % Maturity of operating lease liabilities A summary of our remaining lease payments of operating lease liabilities (leases with terms in excess of one year) for the next five fiscal years and thereafter as of July 31, 2022 were as follows: (in thousands) Operating lease liabilities 2023 $ 4,191 2024 4,226 2025 4,152 2026 2,751 2027 2,718 Thereafter 8,706 Total lease payments 26,744 Less: interest (3,514) Total lease liabilities 23,230 Supplemental cash flow information Supplemental and other information related to leases comprised of the following: (in thousands) July 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,534 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 232 Comparative information as reported prior to the adoption of ASC 842 Rental expense, excluding related variable costs, was $4.0 million and $4.1 million for the years ended July 31, 2021 and 2020, respectively. See Note 4 (Inventories) for rental expense and related variable costs capitalized into inventory. The future minimum payments under operating leases in effect as of July 31, 2021 have a non-cancelable term in excess of one year as determined prior to the adoption of ASC 842, are as follows: (in thousands) July 31, 2021 2022 $ 4,079 2023 3,987 2024 3,727 2025 3,448 2026 2,046 Thereafter 6,888 Total lease payments $ 24,175 |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill At each of July 31, 2022 and July 31, 2021, the goodwill balance was $425.2 million. Other intangible assets Intangible assets were comprised of the following: July 31, 2022 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (41,834) $ 50,886 Total definite-lived intangible assets 92,720 (41,834) 50,886 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 $ 233,620 $ (41,834) $ 191,786 July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (34,274) $ 58,446 Leasehold interests (a) 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 ________________________________________________ (a) In accordance with guidance in ASC 842, upon adoption of the standard, the Company reclassified leasehold interests into the operating lease asset for the respective leases. Therefore, as of July 31, 2022, the leasehold interests intangible balance is zero. Impairment Analysis 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 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 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 Company did not record any impairment charges related to goodwill or trade names for the fiscal years ended July 31, 2022 and 2021. The Company’s annual impairment analysis performed as of June 30, 2020 for the fiscal year ended July 31, 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. Amortization expense The Company’s amortization expense was $7.6 million for fiscal year ended July 31, 2022 and $7.7 million for the fiscal years ended July 31, 2021 and 2020. Estimated future amortization expense is as follows: (in thousands) Fiscal years ended July 31, 2023 $ 7,560 2024 7,560 2025 7,560 2026 7,560 2027 7,560 Thereafter (collectively) 13,086 Total $ 50,886 |
Accrued expenses
Accrued expenses | 12 Months Ended |
Jul. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses Accrued expenses were comprised of the following: July 31, (in thousands) 2022 2021 Trade spend (a) $ 15,319 $ 10,734 Accrued professional fees 3,191 456 Deferred compensation liability (b) 2,142 2,096 Barrel purchase 988 936 Bulk wine 143 1,526 Other 7,692 5,809 Total $ 29,475 $ 21,557 ________________________________________________ (a) Trade spend refers to estimated amounts the Company owes to distributors for depletion-based incentives 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 $1.8 million and $1.7 million at July 31, 2022 and 2021, respectively. |
Debt
Debt | 12 Months Ended |
Jul. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt, net was comprised of the following: July 31, (in thousands) 2022 2021 Revolving line of credit $ 110,000 $ 124,000 Debt issuance costs (1,326) (2,652) Revolving line of credit, net 108,674 121,348 Term loan, first lien 110,117 117,637 Capital expenditure loan 5,049 8,875 Total long-term debt 115,166 126,512 Current maturities of long-term debt (9,810) (11,324) Debt issuance costs (282) (563) Long-term debt, net of current maturities and debt issuance costs $ 105,074 $ 114,625 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 for the fiscal year ended July 31, 2021. 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, Debt . On August 30, 2022, subsequent to fiscal year end, the Company entered into an eighth amendment to the First Lien Loan and Security Agreement to extend the maturity date of all facilities to November 1, 2023. The transaction did not result in any additional cash proceeds. See Note 19 (Subsequent events) to our Consolidated Financial Statements for additional information. 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 November 1, 2023. As of July 31, 2022, the interest rate ranged 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 2.1% at July 31, 2022. 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, 2022, $315.0 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, 2022, 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 November 1, 2023. As of July 31, 2022, the $25.0 million limit was fully drawn and had an interest rate of LIBOR plus 190 basis points. The weighted-average rate was 4.3% at July 31, 2022. • 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 November 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 November 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. As of July 31, 2022, the term loans had 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 4.2% at July 31, 2022. 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 term-SOFR rate 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) to our Consolidated Financial Statement 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 Facility. As of both July 31, 2022 and July 31, 2021, the Company was not in violation of any financial covenant. As of July 31, 2022, 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) 2023 $ 9,810 2024 215,356 2025 — 2026 — 2027 — Thereafter (collectively) — Total $ 225,166 Included in interest expense in 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, $1.6 million and $2.1 million for the fiscal years ended July 31, 2022, 2021 and 2020. |
Derivative instruments
Derivative instruments | 12 Months Ended |
Jul. 31, 2022 | |
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 agreement 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, 2022 or July 31, 2021. 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. As of July 31, 2022, 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) 2022 2021 Derivative instruments not designated as hedging instruments Interest rate swap contracts $ 100,000 $ 100,000 Foreign currency forward contracts 2,793 2,369 Total derivative instruments not designated as hedging instruments $ 102,793 $ 102,369 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) 2022 2021 Derivative instruments not designated as hedging instruments Classification Interest rate swap contracts Derivative instrument Long-term asset $ 1,443 $ — Derivative instrument Other long-term liabilities — 480 Total interest rate swap contract liability $ 1,443 $ 480 Foreign currency forward contracts Derivative instrument Other current assets — 5 Derivative instrument Other current liabilities 223 — Total foreign currency contract asset $ 223 $ 5 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 2022 2021 2020 Interest rate swap contracts Other (income) expense, net $ (1,923) $ (5,961) $ 2,596 Foreign currency forward contracts Other (income) expense, net 228 113 (256) Total (gains) losses $ (1,695) $ (5,848) $ 2,340 |
Fair value measurements
Fair value measurements | 12 Months Ended |
Jul. 31, 2022 | |
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 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; and 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, 2022, 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 Interest rate swap contracts $ — $ 1,443 $ — $ 1,443 Deferred compensation plan asset — 1,753 — 1,753 Liabilities Foreign currency forward contracts $ — $ 223 $ — $ 223 Deferred compensation liability — 2,142 — 2,142 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 |
Income taxes
Income taxes | 12 Months Ended |
Jul. 31, 2022 | |
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) 2022 2021 2020 Provision for income taxes Current Federal $ 13,844 $ 14,431 $ 11,591 State 4,864 4,549 3,842 18,708 18,980 15,433 Deferred Federal 2,080 2,809 (2,905) State 1,736 (781) (2,096) Deferred income taxes 3,816 2,028 (5,001) Income tax expense $ 22,524 $ 21,008 $ 10,432 The significant components of deferred tax assets (liabilities) were comprised of the following: July 31, (in thousands) 2022 2021 Deferred tax assets Operating lease liabilities $ 5,935 $ — Accrued liabilities 1,118 2,001 State taxes 1,136 998 Equity-based compensation 550 284 Interest rate swap — 122 Other 523 221 Total deferred tax assets 9,262 3,626 Deferred tax liabilities Inventory (1,116) (7,291) Property and equipment (41,658) (34,114) Intangible assets (46,018) (47,759) Operating lease asset (5,972) — Interest rate swap (368) — Prepaid expenses (2,156) (1,129) Casualty gain (Note 17) (2,457) — Total deferred tax liabilities (99,745) (90,293) Net deferred tax liabilities $ (90,483) $ (86,667) 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, 2022 and 2021, 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 following table reconciles the Company's actual income tax provision to the expected statutory tax rate. Fiscal years ended July 31, 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes 6.4 3.9 3.3 Equity-based compensation 0.1 2.6 — Other (0.3) (0.2) 0.1 Total 27.2 % 27.3 % 24.4 % 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 is subject to taxation in the jurisdictions in which it operates. The Company continues to remain subject to examination by U.S. federal authorities for the years 2018 through 2020 and for various state authorities for the years 2017 through 2020. The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. There was an immaterial amount of interest and penalties for the fiscal year ended July 31, 2022, and no interest or penalties for the fiscal years ended July 31, 2021 and 2020. In Fiscal 2022, the Company recorded an uncertain tax liability of $0.4 million as a result of certain research and development tax credits. As of July 31, 2022, the total amount of gross unrecognized tax benefits was $0.4 million, all of which if recognized, would impact the Company’s effective tax rate. The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for Fiscal 2022 is as follows: (in millions) July 31, 2022 Beginning balance $ — Gross increase related to prior year tax positions 0.4 Ending balance $ 0.4 |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Jul. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Employee benefit plans Defined contribution 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 $31 thousand for fiscal year ended July 31, 2022 and $29 thousand fiscal years ended July 31, 2021 and 2020 per eligible employee. All full-time and part-time 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 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 years ended July 31, 2022, 2021 and 2020. The Company contributed $4.6 million, $3.8 million and $3.7 million to the plan for the fiscal years ended July 31, 2022, 2021 and 2020, 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 Directors 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 $0.4 million, $1.1 million and $0.9 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. The deferred compensation liability was $2.1 million for the fiscal years ended July 31, 2022 and 2021. |
Commitment and contingencies
Commitment and contingencies | 12 Months Ended |
Jul. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and contingencies | Commitments and contingencies Long-term purchase contracts The Company has certain grape purchase contracts with various growers to supply a significant portion of its future grape requirements for wine production. The lengths of the contracts typically vary from one For the 2022 harvest, the Company contracted for approximately 32,000 tons of grapes at an estimated cost of approximately $68.7 million, subject to the final determination of yield quantities and our quality acceptance provisions being met. For the 2021 harvest, the Company purchased 34,000 tons of grapes at a cost of approximately $68.1 million, which was recognized in inventory during the year ended July 31, 2022. For the 2020 harvest, the Company purchased 12,000 tons of grapes at a cost of approximately $26.5 million, which was recognized in inventory during the year ended July 31, 2021. Purchase commitments The Company has ongoing commitments to purchase approximately 8,553 barrels for a total of $8.8 million, of which approximately $7.3 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 strain of virus. The Company incurred incremental costs during periods of capacity restrictions or mandatory closure totaling $0.7 million and $1.4 million for the fiscal years ended July 31, 2021 and 2020, respectively. These costs include tasting room expenses and other immaterial costs. The estimates and assumptions made by Management to quantify the effect of COVID-19 disruption were based on available information at the time each assumption was made. No costs were incurred for the year ended July 31, 2022. The COVID-19 pandemic, is an ongoing global pandemic which continues to evolve. 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. For the years ended July 31, 2022 and 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 fiscal years ended July 31, 2022 and 2021, no amounts have been accrued related to such indemnification provisions. |
Equity-based compensation
Equity-based compensation | 12 Months Ended |
Jul. 31, 2022 | |
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 718, Compensation-Stock Compensation . Accordingly, the Company recognized catch-up equity-based compensation expense in 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. Restricted shares As discussed above, the unvested Class M Units were exchanged for restricted shares of the Company in Fiscal 2021. The following table represents restricted shares activity: Performance-based shares Weighted-average grant-date fair value Unvested as of July 31, 2021 399,234 $ 14.23 Granted — — Vested (133,076) 14.23 Forfeited — — Unvested as of July 31, 2022 266,158 $ 14.23 The total fair value of restricted shares that vested during the fiscal years ended July 31, 2022 and 2021, was $1.9 million and $3.8 million, respectively. 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 $0.5 million, $0.9 million and $1.2 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. The remaining unvested awards vested on August 1, 2022. Accordingly, as of July 31, 2022, the total unrecognized compensation expense related to the 2016 Plan was $— million over a weighted-average period of 0.0 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. Restricted stock units and stock options are 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 years ended July 31, 2022 and 2021: Fiscal years ended July 31, 2022 2021 Expected term (in years) (a) 6.25 6.25 Expected dividend yield (b) — % — % Risk-free interest rate (c) 2.54 % 1.06% - 1.09% Expected volatility (d) 47.0 % 25.0 % ________________________________________________ (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 The following table represents the stock option activity: Number of options outstanding Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value Balance as of July 31, 2021 1,552,648 $ 17.11 9.60 $ 7,552 Options granted 50,034 18.53 — — Options exercised (7,485) 15.00 — — Forfeited (38,499) 17.00 — — Expired (1,088) 24.00 — — Balance as of July 31, 2022 1,555,610 $ 17.15 8.70 $ 3,847 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. Total recognized equity compensation expense related to the 2021 Plan stock options was $2.0 million and $0.5 million for the fiscal years ended July 31, 2022 and 2021, respectively. The total unrecognized compensation expense related to the 2021 Plan stock options was $5.0 million as of July 31, 2022, which is expected to be recognized over a weighted-average period of 2.7 years. The weighted-average grant-date fair value of options granted for the fiscal year ended July 31, 2022 was $0.5 million. Approximately 0.4 million options were vested and exercisable as of July 31, 2022. Restricted stock units The following table represents the RSU grant activity under the 2021 Plan: Number of shares Weighted-average grant-date fair value per share Unvested as of July 31, 2021 555,950 $ 16.95 Granted 39,011 19.51 Vested (167,518) 16.64 Forfeited (12,834) 17.00 Unvested as of July 31, 2022 414,609 $ 17.32 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 $3.0 million and $0.9 million, respectively, for the fiscal years ended July 31, 2022 and 2021. The total unrecognized compensation expense related to the 2021 Plan RSUs was $6.1 million as of July 31, 2022, which is expected to be recognized over a weighted-average period of 2.5 years. Employee stock purchase plan In connection with the IPO, the Company adopted the 2021 Employee Stock Purchase Plan, 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 first offering period for the Employee Stock Purchase Plan began on January 3, 2022 and ended on June 30, 2022. Unless otherwise determined by the Board of Directors, in their sole discretion, the purchase of common stock under the ESPP will be 85% of the lower of the fair market value per share on the first trading day of the applicable offering period or the fair market value per share on the exercise date of the applicable purchase period. The fair value of ESPP shares is estimated at the date of grant using the Black-Scholes option pricing model. The following assumptions were applied in the model to estimate the grant-date fair value of the ESPP for the initial offering period that began on January 3, 2022. Expected term (in years) (a) 0.5 Expected dividend yield (b) — Risk-free interest rate (c) 0.22 % Expected volatility (d) 47 % Stock price $ 23.33 The equity-based compensation expense related to the ESPP is generally recognized evenly over the service period unless otherwise stipulated by the award agreement. The service period is the period over which the employee performs the related services, which is normally the same as the six month ESPP offering period. The Company recognized equity compensation expense related to the ESPP in selling, general and administrative expense and capitalized a portion into inventory, as applicable. As of July 31, 2022, total recognized compensation expense related to the ESPP was $0.1 million. |
Related party transactions
Related party transactions | 12 Months Ended |
Jul. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions |
Casualty loss (gain)
Casualty loss (gain) | 12 Months Ended |
Jul. 31, 2022 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Casualty loss (gain) | Casualty loss (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 $1.3 million are reported on the casualty gain, net line in the Consolidated Statements of Operations for the year ended July 31, 2021. 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. Fire and smoke exposure related expenses are reported on the casualty loss line in the Consolidated Statement of Operations and was $0.1 million in the fiscal year ended July 31, 2022. Flood In Fiscal 2020, the Company entered into an agreement with its insurer to resolve an open Fiscal 2019 flood insurance claim. The Company received $8.1 million and $4.3 million in the fiscal years ended July 31, 2021 and 2020, respectively, fully resolving the flood insurance claim. The Company incurred incremental charges in the fiscal years ended July 31, 2021 and 2020, offset by insurance proceeds received, which were reported on the casualty loss (gain), net line item in the Consolidated Statements of Operations. |
Earnings per share
Earnings per share | 12 Months Ended |
Jul. 31, 2022 | |
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) 2022 2021 2020 Numerator - Net income attributable to The Duckhorn Portfolio, Inc. $ 60,190 $ 55,976 $ 32,377 Denominator: Weighted average number of shares of common stock outstanding - basic 115,096,152 106,681,496 101,713,460 Dilutive stock options and restricted stock (a) 267,426 253,357 — Weighted average number of shares of common stock outstanding - assuming dilution 115,363,578 106,934,853 101,713,460 Earnings per share attributable to The Duckhorn Portfolio, Inc. Basic $ 0.52 $ 0.52 $ 0.32 Diluted $ 0.52 $ 0.52 $ 0.32 ________________________________________________ (a) Calculated using the treasury stock method. There were 4,283 outstanding common stock options deemed anti-dilutive for the fiscal year ended July 31, 2022. No common stock options were deemed anti-dilutive for the fiscal years ended July 31, 2021 and 2020. There were 6,140 and 2,465 outstanding restricted stock units deemed anti-dilutive for the fiscal years ended July 31, 2022 and 2021, respectively. No outstanding restricted stock units were deemed anti-dilutive for the fiscal year ended July 31, 2020. |
Subsequent events
Subsequent events | 12 Months Ended |
Jul. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events Effective August 30, 2022, the Company entered into an eighth amendment to the First Lien Loan and Security Agreement with Bank of the West, dated as of October 14, 2016, to extend the maturity date of all facilities to November 1, 2023 and to transition from a LIBOR-based interest rate to a term SOFR-based interest rate plus applicable margins defined by the terms of the Credit Facility. The transaction did not result in any additional cash proceeds. The Company does not anticipate the rate change to be material to its consolidated financial statements. Effective September 1, 2022, the Company amended its interest rate swap agreement. The floating rate component of the agreement was previously designated as one-month LIBOR. The amended agreement replaced the LIBOR-based interest rate with SOFR. |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 12 Months Ended |
Jul. 31, 2022 | |
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 credit losses, 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 recognition | Revenue recognition 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 that performance obligation is fulfilled and 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 costs that are billed to customers as a fulfillment activity rather than as separate performance obligations. Shipping and handling costs are 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. 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 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 estimated and recognized as a reduction of the transaction price based on the expected amounts at the time of revenue recognition for the related sale. 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 $66.3 million, $63.8 million and $44.5 million for the fiscal years ended July 31, 2022, 2021 and 2020, 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 does 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. The Company expenses 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, 2022 and 2021. |
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 $6.6 million, $6.0 million and $4.5 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. Advertising costs are recognized in selling, general and administrative expenses. |
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 trade, net | Accounts receivable trade, net 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 credit losses for estimated losses resulting from the inability of its customers to make required payments. The Company determines this allowance based on historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. Accounts receivable are written off when determined to be uncollectible. Recoveries of accounts receivable previously written off are recorded to income when received. |
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. 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. On an ongoing basis, the Company evaluates the cost estimate and assumptions. As required, the Company records valuation adjustments to the carrying value of its inventories based on periodic reviews of slow-moving, obsolete and excess inventory to determine the need for reserves by comparing inventory carrying values with their net realizable values upon ultimate sale or disposal. 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 estimates of net realizable value are based on analysis and assumptions including, but not limited to, historical experience, as well as Management's judgement with respect to future demand and market conditions. 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. 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 |
Goodwill and intangible assets | Goodwill and 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 identifiable 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 if 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 30th of each fiscal year as the date to perform annual impairment testing. Indefinite-lived intangible assets include trade names and lane rights. The Company's 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 are amortized on a straight-line basis over their estimated useful lives and that amortization is recognized in selling, general and administrative expenses. |
Long-lived assets impairment | Long-lived asset impairmentLong-lived assets deemed to have definite lives, which principally consist of property and equipment, customer relationships, and operating lease right-of-use 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. |
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, 2022 and 2021. 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 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; and |
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. 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. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are |
Leases | Leases Effective August 1, 2021, the Company adopted ASU No. 2016-02, Leases (Topic 842) . See "Recently adopted accounting pronouncements" for further discussion. Service arrangements are evaluated to determine whether they contain a lease at inception. Leases are classified as either finance leases or operating leases based on criteria in Topic 842. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's secured incremental borrowing rate. The Company's incremental borrowing rate for a lease is the rate of interest it would pay to borrow on a collateralized basis over a similar term to the lease in a similar economic environment. The Company applied incremental borrowing rates on a lease-by-lease basis. Right-of-use assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term operating leases that have a term of one year or less. The Company recognizes expenses for short-term operating leases on a straight-line basis over the lease term. Certain of the Company's operating leases have variable rental payments based on changes in a consumer price index or a production index that trigger rental increases. Additionally, certain of the Company's operating leases include variable payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Certain grower purchase agreements under which we contract for grapes to meet our production needs contain variable payments based on tonnage yield, grape quality and grape prices. Variable lease payments are excluded from the calculations of the right-of-use assets and are recognized in the financial statements in the period in which the obligation is incurred and payment variability removed. Any variable payments related to grapes purchased for inventory production would generally be recognized during harvest as yield size and quality can be determined, and the Company accepts the grapes at a production facility. The cost of grapes we purchase to produce wine is recognized in inventory until the wine is sold , and amounted to $68.1 million in Fiscal 2022 and $26.5 million in Fiscal 2021 . The Company monitors for triggering events or conditions that require a reassessment of its leases. When the reassessment requires a re-measurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset. Additionally, the Company reviews relevant impairment indicators of its right-of-use assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets |
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 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 |
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 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, 2022 and 2021, 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 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 at both July 31, 2022 and 2021. At July 31, 2022 and 2021, 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 $2.4 million and $2.2 million at July 31, 2022 and 2021, respectively. 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 . 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 46%, 48% and 43% of net sales for the years ended July 31, 2022, 2021 and 2020, respectively. There were no significant concentrations of revenue or credit risk related to DTC sales. Of the largest five customers, two 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, 2022 2021 2020 Customer A 16 % 15 % 13 % Customer B 14 % 16 % 15 % Customer C 9 % 10 % 8 % |
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 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 values shares purchased under the ESPP using a Black-Scholes option valuation model. See Note 15 (Equity-based compensation) for further discussion. |
Recently adopted accounting pronouncements and Recently issued accounting pronouncements not yet adopted | Accounting pronouncements As an “emerging growth company” as established by the JOBS Act, the Company was permitted to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Prior to fiscal year ended July 31, 2022, the Company had elected to use the adoption dates available to private companies. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently adopted accounting pronouncements: 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 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 ("ROU") assets and corresponding lease liabilities and (iii) expands mandatory qualitative and quantitative disclosures regarding leasing activities. The Company adopted the standard effective August 1, 2021, the first day of fiscal year 2022, using the modified retrospective transition method. The guidance provides a number of optional practical expedients in adoption. The Company elected the package of practical expedients available for expired or existing contracts, which allowed it to carryforward historical assessments of (1) whether contracts are, or contain, leases, (2) lease classification and (3) initial direct costs. The Company did not elect the use-of-hindsight practical expedient. In addition, the Company elected an accounting policy to include both lease and non-lease components as a single component for all asset classes where it is the lessee. The most significant impact of adoption was the recognition as of August 1, 2021 of operating lease ROU assets of $27.2 million and corresponding operating lease liabilities of $26.9 million on the Consolidated Statement of Financial Position, along with certain incremental disclosures. The difference between the operating lease ROU assets and operating lease liabilities represents the existing deferred rent and tenant improvement allowance liabilities balance, resulting from historical straight-lining of operating leases, which were effectively reclassified upon adoption to reduce the measurement of leased assets. In addition, the difference represents favorable lease assets effectively reclassified upon adoption from intangible assets to increase the measurement of leased assets. Adoption of the new standard did not have a material impact on the Company's results of operations or liquidity. See Note 6 (Leases) for further discussion. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , and several amendments, collectively, ASC 326, to replace the incurred loss impairment method with a method that requires the reflection of expected credit losses on financial instruments. The Company adopted this standard as of July 31, 2022. As a result of adopting this ASU, the Company changed its method of estimating its allowance for doubtful accounts for accounts receivable to be based upon the Company's historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. The change in estimating the allowance did not have a material effect on the consolidated financial statements or disclosures. Recently issued accounting pronouncements not yet adopted: 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 U.S. 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. Effective August 30, 2022, the Company executed Amendment No. 8 to the First Lien Loan Agreement. The amendment transitioned the outstanding debt from a LIBOR-based interest rate to a term SOFR-based interest rate. The Amendment contemporaneously extended the maturity date of all facilities to November 1, 2023. The Company determined that the extension of the maturity date is a change to terms unrelated to replacement of a reference rate as contemplated by the guidance in ASU 2020-04. Accordingly, the Company is not eligible to elect the optional expedients under ASU 2020-04 for the contract modifications related to Amendment No. 8. The Company will continue to monitor the effects of rate reform, if any, on any new or amended contracts through December 31, 2022. The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements. 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) |
Basis of presentation and sig_3
Basis of presentation and significant accounting policies (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Of the largest five customers, two 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, 2022 2021 2020 Customer A 16 % 15 % 13 % Customer B 14 % 16 % 15 % Customer C 9 % 10 % 8 % Accounts receivable trade July 31, 2022 2021 Customer A 22 % 23 % Customer B 14 % 11 % Customer C 8 % 14 % |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
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, 2022 2021 2020 Wholesale - Distributors 66.3 % 65.3 % 60.0 % Wholesale - California direct to trade (a) 17.9 16.9 18.9 DTC (b) 15.8 17.8 21.1 Net sales 100.0 % 100.0 % 100.0 % ________________________________________________ (a) Includes bulk and grape sales of $2.6 million, $0.6 million and $1.1 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. (b) Includes shipping and handling revenue of $2.3 million, $2.6 million and $2.4 million for the fiscal years ended July 31, 2022, 2021 and 2020, respectively. The following table presents the percentages of consolidated net sales disaggregated by brand: Fiscal years ended July 31, 2022 2021 2020 Duckhorn Vineyards & Decoy 78.5 % 76.3 % 73.0 % Other winery brands 21.5 23.7 27.0 Net sales 100.0 % 100.0 % 100.0 % Net sales disaggregated by geographic area comprised of the following: Fiscal years ended July 31, (in thousands) 2022 2021 2020 United States $ 348,910 $ 318,389 $ 258,439 Canada 7,769 5,355 3,723 Other international 15,831 12,869 8,486 Net sales $ 372,510 $ 336,613 $ 270,648 |
Schedule of Changes in Contract Liabilities | Changes in the contract liability balance during the periods presented comprised of the following: Fiscal years ended July 31, (in thousands) 2022 2021 2020 Outstanding at beginning of period $ 3,102 $ 4,148 $ 3,863 Increase (decrease) attributable to: Upfront payments 30,018 33,257 34,836 Revenue recognized (32,179) (34,069) (34,328) Refund (669) (234) (223) Outstanding at end of period $ 272 $ 3,102 $ 4,148 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories were comprised of the following: July 31, (in thousands) 2022 2021 Finished goods $ 108,989 $ 121,423 Work in progress 162,337 134,847 Raw materials 14,104 11,467 Total $ 285,430 $ 267,737 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment, net was comprised of the following: July 31, (in thousands) Depreciable lives 2022 2021 Land N/A $ 136,328 $ 120,063 Buildings and improvements 4-42 70,813 68,616 Vineyards and improvements 5-20 44,759 29,164 Machinery and equipment 3-20 52,619 49,607 Barrels 1-2 30,067 26,349 Total depreciable property and equipment 334,586 293,799 Less: accumulated depreciation and amortization (70,591) (58,542) Total depreciable property and equipment, net 263,995 235,257 Construction in progress N/A 5,664 5,682 Property and equipment, net $ 269,659 $ 240,939 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Leases [Abstract] | |
Schedule of Amounts in Consolidated Statement of Financial Position for Leases | The amounts reported in the Consolidated Statement of Financial Position for the Company's leases are reported in the following captions: (in thousands) Consolidated Statement of Financial Position July 31, 2022 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 23,375 Liabilities: Current: Operating lease liabilities Operating lease liabilities 3,498 Non-Current: Operating lease liabilities Operating lease liabilities, non-current 19,732 Total lease liabilities $ 23,230 |
Lease Cost | The components of lease cost reported in the Consolidated Financial Statements are reported in the following captions: (in thousands) July 31, 2022 Operating lease costs: Lease cost $ 4,239 Variable lease cost (a) 1,137 Short-term lease cost 96 Less: Sublease income (20) Total lease costs $ 5,452 ________________________________________________ (a) Variable lease cost includes payments for property taxes, insurance, maintenance, and grower purchase agreements. Variable lease cost is recorded in the period in which variability is removed. See Note 14 (Commitments and contingencies) for estimated variable cost of grower purchase agreements to be recognized in Fiscal 2023 related to the 2022 harvest, subject to grape yield sizes and the Company accepting grapes under its quality control provisions. Weighted average remaining lease terms and discount rates consisted of the following: July 31, 2022 Operating leases: Weighted average remaining lease term (in years) 7.75 Weighted average discount rate 3.53 % Supplemental and other information related to leases comprised of the following: (in thousands) July 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,534 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 232 |
Summary of Future Minimum Payments | A summary of our remaining lease payments of operating lease liabilities (leases with terms in excess of one year) for the next five fiscal years and thereafter as of July 31, 2022 were as follows: (in thousands) Operating lease liabilities 2023 $ 4,191 2024 4,226 2025 4,152 2026 2,751 2027 2,718 Thereafter 8,706 Total lease payments 26,744 Less: interest (3,514) Total lease liabilities 23,230 |
Summary of Future Minimum Payments Prior To Adoption of ASC 842 | The future minimum payments under operating leases in effect as of July 31, 2021 have a non-cancelable term in excess of one year as determined prior to the adoption of ASC 842, are as follows: (in thousands) July 31, 2021 2022 $ 4,079 2023 3,987 2024 3,727 2025 3,448 2026 2,046 Thereafter 6,888 Total lease payments $ 24,175 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets were comprised of the following: July 31, 2022 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (41,834) $ 50,886 Total definite-lived intangible assets 92,720 (41,834) 50,886 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 $ 233,620 $ (41,834) $ 191,786 July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (34,274) $ 58,446 Leasehold interests (a) 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 ________________________________________________ (a) In accordance with guidance in ASC 842, upon adoption of the standard, the Company reclassified leasehold interests into the operating lease asset for the respective leases. Therefore, as of July 31, 2022, the leasehold interests intangible balance is zero. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets were comprised of the following: July 31, 2022 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (41,834) $ 50,886 Total definite-lived intangible assets 92,720 (41,834) 50,886 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 $ 233,620 $ (41,834) $ 191,786 July 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Net Definite-lived intangible assets Customer relationships $ 92,720 $ (34,274) $ 58,446 Leasehold interests (a) 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 ________________________________________________ (a) In accordance with guidance in ASC 842, upon adoption of the standard, the Company reclassified leasehold interests into the operating lease asset for the respective leases. Therefore, as of July 31, 2022, the leasehold interests intangible balance is zero. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense is as follows: (in thousands) Fiscal years ended July 31, 2023 $ 7,560 2024 7,560 2025 7,560 2026 7,560 2027 7,560 Thereafter (collectively) 13,086 Total $ 50,886 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses were comprised of the following: July 31, (in thousands) 2022 2021 Trade spend (a) $ 15,319 $ 10,734 Accrued professional fees 3,191 456 Deferred compensation liability (b) 2,142 2,096 Barrel purchase 988 936 Bulk wine 143 1,526 Other 7,692 5,809 Total $ 29,475 $ 21,557 ________________________________________________ (a) Trade spend refers to estimated amounts the Company owes to distributors for depletion-based incentives 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 $1.8 million and $1.7 million at July 31, 2022 and 2021, respectively. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt, net was comprised of the following: July 31, (in thousands) 2022 2021 Revolving line of credit $ 110,000 $ 124,000 Debt issuance costs (1,326) (2,652) Revolving line of credit, net 108,674 121,348 Term loan, first lien 110,117 117,637 Capital expenditure loan 5,049 8,875 Total long-term debt 115,166 126,512 Current maturities of long-term debt (9,810) (11,324) Debt issuance costs (282) (563) Long-term debt, net of current maturities and debt issuance costs $ 105,074 $ 114,625 |
Schedule of Maturities of Long-term Debt | As of July 31, 2022, 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) 2023 $ 9,810 2024 215,356 2025 — 2026 — 2027 — Thereafter (collectively) — Total $ 225,166 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | As of July 31, 2022, 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) 2022 2021 Derivative instruments not designated as hedging instruments Interest rate swap contracts $ 100,000 $ 100,000 Foreign currency forward contracts 2,793 2,369 Total derivative instruments not designated as hedging instruments $ 102,793 $ 102,369 |
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) 2022 2021 Derivative instruments not designated as hedging instruments Classification Interest rate swap contracts Derivative instrument Long-term asset $ 1,443 $ — Derivative instrument Other long-term liabilities — 480 Total interest rate swap contract liability $ 1,443 $ 480 Foreign currency forward contracts Derivative instrument Other current assets — 5 Derivative instrument Other current liabilities 223 — Total foreign currency contract asset $ 223 $ 5 |
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 2022 2021 2020 Interest rate swap contracts Other (income) expense, net $ (1,923) $ (5,961) $ 2,596 Foreign currency forward contracts Other (income) expense, net 228 113 (256) Total (gains) losses $ (1,695) $ (5,848) $ 2,340 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
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, 2022, 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 Interest rate swap contracts $ — $ 1,443 $ — $ 1,443 Deferred compensation plan asset — 1,753 — 1,753 Liabilities Foreign currency forward contracts $ — $ 223 $ — $ 223 Deferred compensation liability — 2,142 — 2,142 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 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
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) 2022 2021 2020 Provision for income taxes Current Federal $ 13,844 $ 14,431 $ 11,591 State 4,864 4,549 3,842 18,708 18,980 15,433 Deferred Federal 2,080 2,809 (2,905) State 1,736 (781) (2,096) Deferred income taxes 3,816 2,028 (5,001) Income tax expense $ 22,524 $ 21,008 $ 10,432 |
Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets (liabilities) were comprised of the following: July 31, (in thousands) 2022 2021 Deferred tax assets Operating lease liabilities $ 5,935 $ — Accrued liabilities 1,118 2,001 State taxes 1,136 998 Equity-based compensation 550 284 Interest rate swap — 122 Other 523 221 Total deferred tax assets 9,262 3,626 Deferred tax liabilities Inventory (1,116) (7,291) Property and equipment (41,658) (34,114) Intangible assets (46,018) (47,759) Operating lease asset (5,972) — Interest rate swap (368) — Prepaid expenses (2,156) (1,129) Casualty gain (Note 17) (2,457) — Total deferred tax liabilities (99,745) (90,293) Net deferred tax liabilities $ (90,483) $ (86,667) |
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, 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes 6.4 3.9 3.3 Equity-based compensation 0.1 2.6 — Other (0.3) (0.2) 0.1 Total 27.2 % 27.3 % 24.4 % |
Schedule of Unrecognized Tax Benefits | The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for Fiscal 2022 is as follows: (in millions) July 31, 2022 Beginning balance $ — Gross increase related to prior year tax positions 0.4 Ending balance $ 0.4 |
Equity-based compensation (Tabl
Equity-based compensation (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Nonvested Restricted Stock Shares Activity | As discussed above, the unvested Class M Units were exchanged for restricted shares of the Company in Fiscal 2021. The following table represents restricted shares activity: Performance-based shares Weighted-average grant-date fair value Unvested as of July 31, 2021 399,234 $ 14.23 Granted — — Vested (133,076) 14.23 Forfeited — — Unvested as of July 31, 2022 266,158 $ 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 years ended July 31, 2022 and 2021: Fiscal years ended July 31, 2022 2021 Expected term (in years) (a) 6.25 6.25 Expected dividend yield (b) — % — % Risk-free interest rate (c) 2.54 % 1.06% - 1.09% Expected volatility (d) 47.0 % 25.0 % ________________________________________________ (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 | The following table represents the stock option activity: Number of options outstanding Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value Balance as of July 31, 2021 1,552,648 $ 17.11 9.60 $ 7,552 Options granted 50,034 18.53 — — Options exercised (7,485) 15.00 — — Forfeited (38,499) 17.00 — — Expired (1,088) 24.00 — — Balance as of July 31, 2022 1,555,610 $ 17.15 8.70 $ 3,847 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | The following table represents the RSU grant activity under the 2021 Plan: Number of shares Weighted-average grant-date fair value per share Unvested as of July 31, 2021 555,950 $ 16.95 Granted 39,011 19.51 Vested (167,518) 16.64 Forfeited (12,834) 17.00 Unvested as of July 31, 2022 414,609 $ 17.32 |
Schedule of Employee Stock Purchase Plan (ESPP) Valuation Assumptions | The fair value of ESPP shares is estimated at the date of grant using the Black-Scholes option pricing model. The following assumptions were applied in the model to estimate the grant-date fair value of the ESPP for the initial offering period that began on January 3, 2022. Expected term (in years) (a) 0.5 Expected dividend yield (b) — Risk-free interest rate (c) 0.22 % Expected volatility (d) 47 % Stock price $ 23.33 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Jul. 31, 2022 | |
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) 2022 2021 2020 Numerator - Net income attributable to The Duckhorn Portfolio, Inc. $ 60,190 $ 55,976 $ 32,377 Denominator: Weighted average number of shares of common stock outstanding - basic 115,096,152 106,681,496 101,713,460 Dilutive stock options and restricted stock (a) 267,426 253,357 — Weighted average number of shares of common stock outstanding - assuming dilution 115,363,578 106,934,853 101,713,460 Earnings per share attributable to The Duckhorn Portfolio, Inc. Basic $ 0.52 $ 0.52 $ 0.32 Diluted $ 0.52 $ 0.52 $ 0.32 ________________________________________________ (a) Calculated using the treasury stock method. |
Description of business (Detail
Description of business (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 17, 2021 | Nov. 30, 2021 | Mar. 31, 2021 | Jul. 31, 2022 | Oct. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Deferred offering costs | $ 0.3 | $ 0.3 | $ 6.7 | $ 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 | |||||||
First Secondary Offering | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Sale of stock, number of shares issued in transaction | 626,467 | 12,000,000 | ||||||
Sale of stock, price per share (in dollars per share) | $ 20.50 | |||||||
Sale of stock, transaction costs | $ 0.6 | $ 0.4 | ||||||
Second Secondary Offering | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Sale of stock, number of shares issued in transaction | 5,000,000 | |||||||
Sale of stock, price per share (in dollars per share) | $ 19.25 | $ 19.25 | ||||||
Sale of stock, transaction costs | $ 0.2 |
Basis of presentation and sig_4
Basis of presentation and significant accounting policies - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Mar. 09, 2021 | Jul. 31, 2022 USD ($) segment $ / shares shares | Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | Aug. 01, 2021 USD ($) | |
Accounting Policies [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Contract with customer, liability, consideration given to customers | $ 66,300 | $ 63,800 | $ 44,500 | ||
Advertising expense | 6,600 | 6,000 | 4,500 | ||
Charges related to credit loss on accounts receivable | 0 | 500 | 200 | ||
Recoveries and reductions in allowance for credit loss | 400 | 0 | 0 | ||
Accounts receivable, allowance for doubtful accounts | 400 | 800 | |||
Deferred offering costs | $ 300 | 6,700 | $ 0 | ||
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 | $ 1,251,513 | 1,183,117 | |||
Operating lease right-of-use assets | 23,375 | 0 | $ 27,200 | ||
Operating lease liabilities | 23,230 | $ 26,900 | |||
Inventories | |||||
Accounting Policies [Line Items] | |||||
Long-term purchase commitment, amount purchased, cost | $ 68,100 | $ 26,500 | |||
Bootlegger's | Outside Investors | |||||
Accounting Policies [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 23.80% | 23.80% | |||
Revenue Benchmark | Five Largest Customers | Customer Concentration Risk | |||||
Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 46% | 48% | 43% | ||
Minimum | |||||
Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life | 5 years | ||||
Maximum | |||||
Accounting Policies [Line Items] | |||||
Property, plant and equipment, useful life | 20 years | ||||
Variable Interest Entity, Primary Beneficiary | |||||
Accounting Policies [Line Items] | |||||
Variable interest entity, ownership percentage | 76.20% | 76.20% | |||
Assets | $ 2,400 | $ 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, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Customer A | Revenue Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 16% | 15% | 13% |
Customer A | Accounts Receivable Trade Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 22% | 23% | |
Customer B | Revenue Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 14% | 16% | 15% |
Customer B | Accounts Receivable Trade Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 14% | 11% | |
Customer C | Revenue Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 9% | 10% | 8% |
Customer C | Accounts Receivable Trade Benchmark | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 8% | 14% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 USD ($) | Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 1 | 1 | 1 |
Revenue | $ 372,510 | $ 336,613 | $ 270,648 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 348,910 | 318,389 | 258,439 |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 7,769 | 5,355 | 3,723 |
Other international | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 15,831 | 12,869 | 8,486 |
Bulk and Grape Sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,600 | 600 | 1,100 |
Shipping and Handling | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 2,300 | $ 2,600 | $ 2,400 |
Duckhorn Vineyards & Decoy | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.785 | 0.763 | 0.730 |
Other winery brands | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.215 | 0.237 | 0.270 |
Wholesale - Distributors | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.663 | 0.653 | 0.600 |
Wholesale - California direct to trade | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.179 | 0.169 | 0.189 |
DTC | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer, percent | 0.158 | 0.178 | 0.211 |
Revenue - Schedule of Change in
Revenue - Schedule of Change in Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Change in Contract with Customer, Liability [Abstract] | |||
Outstanding at beginning of period | $ 3,102 | $ 4,148 | $ 3,863 |
Upfront payments | 30,018 | 33,257 | 34,836 |
Revenue recognized | (32,179) | (34,069) | (34,328) |
Refund | (669) | (234) | (223) |
Outstanding at end of period | $ 272 | $ 3,102 | $ 4,148 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 12 Months Ended |
Jul. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized included in opening contract liability balance | $ 3.1 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 108,989 | $ 121,423 |
Work in progress | 162,337 | 134,847 |
Raw materials | 14,104 | 11,467 |
Total | $ 285,430 | $ 267,737 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Inventory [Line Items] | ||
Excess and obsolete inventory reserve | $ 5.1 | $ 1.2 |
Inventory, capitalized costs incurred | 14.2 | 12.5 |
Capitalized leases costs used in production of inventory | 4.2 | $ 4.2 |
Seltzer Products | ||
Inventory [Line Items] | ||
Excess inventory reserved | $ 4.3 |
Property and equipment - Schedu
Property and equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (70,591) | $ (58,542) |
Property and equipment, net | $ 269,659 | 240,939 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 20 years | |
Depreciable Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 334,586 | 293,799 |
Property and equipment, net | 263,995 | 235,257 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | 136,328 | 120,063 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciable property and equipment | $ 70,813 | 68,616 |
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 | $ 44,759 | 29,164 |
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 | $ 52,619 | 49,607 |
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 | $ 30,067 | 26,349 |
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 | $ 5,664 | $ 5,682 |
Property and equipment - Narrat
Property and equipment - Narrative (Details) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 USD ($) a vineyard | Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 1.7 | $ 1.2 | $ 1.2 |
Number of vineyards purchased | vineyard | 4 | ||
Area of vineyards purchased (in acres) | a | 340 | ||
Acquisition price | $ 32.7 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | ||
Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | Jul. 31, 2022 a | |
Lessee, Lease, Description [Line Items] | |||
Area of property (acre) | a | 150 | ||
Rental expense | $ | $ 4 | $ 4.1 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract (in years) | 2 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract (in years) | 30 years |
Leases - Amounts in Consolidate
Leases - Amounts in Consolidated Statements of Financial Position for Leases (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Aug. 01, 2021 | Jul. 31, 2021 |
Assets: | |||
Operating lease right-of-use assets | $ 23,375 | $ 27,200 | $ 0 |
Current: | |||
Current operating lease liabilities | 3,498 | ||
Non-Current: | |||
Operating lease liabilities | 19,732 | ||
Total lease liabilities | $ 23,230 | $ 26,900 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2022 USD ($) | |
Lease, Cost [Abstract] | |
Lease cost | $ 4,239 |
Variable lease cost | 1,137 |
Short-term lease cost | 96 |
Less: Sublease income | (20) |
Total lease costs | $ 5,452 |
Weighted average remaining lease term (in years) | 7 years 9 months |
Weighted average discount rate | 3.53% |
Leases - Maturity of Operating
Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Aug. 01, 2021 |
Leases [Abstract] | ||
2023 | $ 4,191 | |
2024 | 4,226 | |
2025 | 4,152 | |
2026 | 2,751 | |
2027 | 2,718 | |
Thereafter | 8,706 | |
Total lease payments | 26,744 | |
Less: interest | (3,514) | |
Total lease liabilities | $ 23,230 | $ 26,900 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Jul. 31, 2022 USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 3,534 |
Right-of-use assets obtained in exchange for new lease liabilities: | |
Operating leases | $ 232 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments Prior To Adoption of ASC 842 (Details) $ in Thousands | Jul. 31, 2021 USD ($) |
Leases [Abstract] | |
2022 | $ 4,079 |
2023 | 3,987 |
2024 | 3,727 |
2025 | 3,448 |
2026 | 2,046 |
Thereafter | 6,888 |
Total lease payments | $ 24,175 |
Goodwill and other intangible_3
Goodwill and other intangible assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 425,209 | $ 425,209 | |
Impairment loss | 0 | 0 | $ 11,830 |
Goodwill impairment loss | 0 | 0 | |
Amortization of intangible assets | 7,600 | 7,700 | 7,700 |
Trade names | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment loss | $ 0 | $ 0 | $ 11,800 |
Goodwill and other intangible_4
Goodwill and other intangible assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 92,720 | $ 94,292 |
Accumulated amortization | (41,834) | (34,645) |
Net | 50,886 | 59,647 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 140,900 | 140,900 |
Net | 140,900 | 140,900 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount | 233,620 | 235,192 |
Accumulated amortization | (41,834) | (34,645) |
Net | 191,786 | 200,547 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 139,600 | 139,600 |
Net | 139,600 | 139,600 |
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 | (41,834) | (34,274) |
Net | 50,886 | 58,446 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | (41,834) | (34,274) |
Leasehold interests | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,572 | |
Accumulated amortization | (371) | |
Net | $ 0 | 1,201 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (371) |
Goodwill and other intangible_5
Goodwill and other intangible assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 7,560 | |
2024 | 7,560 | |
2025 | 7,560 | |
2026 | 7,560 | |
2027 | 7,560 | |
Thereafter (collectively) | 13,086 | |
Net | $ 50,886 | $ 59,647 |
Accrued expenses - Schedule of
Accrued expenses - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Payables and Accruals [Abstract] | ||
Trade spend | $ 15,319 | $ 10,734 |
Accrued professional fees | 3,191 | 456 |
Deferred compensation liability | 2,142 | 2,096 |
Barrel purchase | 988 | 936 |
Bulk wine | 143 | 1,526 |
Other | 7,692 | 5,809 |
Accrued expenses | $ 29,475 | $ 21,557 |
Accrued expenses - Narrative (D
Accrued expenses - Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Jul. 31, 2021 |
Payables and Accruals [Abstract] | ||
Cash surrender value of life insurance | $ 1.8 | $ 1.7 |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt issuance costs | $ (282) | $ (563) |
Current maturities of long-term debt | (9,810) | (11,324) |
Long-term debt | 105,074 | 114,625 |
Long-Term Debt, Excluding Lines Of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 115,166 | 126,512 |
First Lien Loan Agreement | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 110,117 | 117,637 |
First Lien Loan Agreement | Capital expenditure loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 5,049 | 8,875 |
Revolving Credit Facility | First Lien Loan Agreement | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 110,000 | 124,000 |
Debt issuance costs | (1,326) | (2,652) |
Long-term debt | $ 108,674 | $ 121,348 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | ||||||
Jul. 31, 2022 USD ($) tranche | Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | Nov. 30, 2018 USD ($) | Aug. 31, 2018 USD ($) | Dec. 31, 2016 USD ($) | Oct. 14, 2016 USD ($) | |
Debt Instrument [Line Items] | |||||||
Loss on debt extinguishment | $ 0 | $ 272,000 | $ 0 | ||||
Amortization of debt issuance costs | $ 1,608,000 | 1,623,000 | $ 2,121,000 | ||||
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 | 4.30% | ||||||
Long term line of credit | $ 25,000,000 | ||||||
Secured debt | $ 25,000,000 | ||||||
First Lien Loan Agreement | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Weighted average interest rate | 4.20% | ||||||
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 | 2.10% | ||||||
Remaining borrowing capacity | $ 315,000,000 | ||||||
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 | London Interbank Offered Rate (LIBOR) | Capital expenditure loan | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percent) | 1.90% | ||||||
First Lien Loan Agreement | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percent) | 1.25% | ||||||
First Lien Loan Agreement, Tranche One | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Secured debt | $ 135,000,000 | ||||||
First Lien Loan Agreement, Tranche One | London Interbank Offered Rate (LIBOR) | Term Loan | Tranche One | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (percent) | 1.90% | ||||||
First Lien Loan Agreement, Tranche Two | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Secured debt | $ 16,400,000 | $ 25,000,000 | |||||
First Lien Loan Agreement, Tranche Two | London Interbank Offered Rate (LIBOR) | 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, 2022 | Jul. 31, 2021 |
Debt Instrument [Line Items] | ||
Total | $ 105,074 | $ 114,625 |
Secured Debt and Lines of Credit | ||
Debt Instrument [Line Items] | ||
2023 | 9,810 | |
2024 | 215,356 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter (collectively) | 0 | |
Total | $ 225,166 |
Derivative instruments - Intere
Derivative instruments - Interest Rate Swaps (Details) - Interest Rate Swap Expiring March 2023 $ in Thousands | Jul. 31, 2022 USD ($) |
Derivative [Line Items] | |
Notional amount | $ 100,000 |
Interest rate | 0.487% |
Derivative instruments - Total
Derivative instruments - Total Notional Amount (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Derivative [Line Items] | ||
Notional amount | $ 102,793 | $ 102,369 |
Interest rate swap contracts | ||
Derivative [Line Items] | ||
Notional amount | 100,000 | 100,000 |
Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 2,793 | $ 2,369 |
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, 2022 | Jul. 31, 2021 |
Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 1,443 | |
Derivative liability | $ 480 | |
Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 5 | |
Derivative liability | 223 | |
Long-term asset | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 1,443 | 0 |
Other long-term liabilities | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | 0 | 480 |
Other current assets | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 5 |
Other current liabilities | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | $ 223 | $ 0 |
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, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Derivative [Line Items] | |||
Total (gains) losses | $ (1,695) | $ (5,848) | $ 2,340 |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Total (gains) losses | (1,695) | (5,848) | 2,340 |
Interest rate swap contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Total (gains) losses | (1,923) | (5,961) | 2,596 |
Foreign currency forward contracts | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Total (gains) losses | $ 228 | $ 113 | $ (256) |
Fair value measurements - Asset
Fair value measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Assets | ||
Deferred compensation plan asset | $ 1,753 | $ 1,719 |
Liabilities | ||
Deferred compensation liability | 2,142 | 2,096 |
Interest rate swap contracts | ||
Assets | ||
Derivative asset | 1,443 | |
Liabilities | ||
Derivative liability | 480 | |
Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 5 | |
Liabilities | ||
Derivative liability | 223 | |
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 | ||
Assets | ||
Derivative asset | 0 | |
Liabilities | ||
Derivative liability | 0 | |
Quoted prices in active markets (Level 1) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 0 | |
Liabilities | ||
Derivative liability | 0 | |
Significant other observable inputs (Level 2) | ||
Assets | ||
Deferred compensation plan asset | 1,753 | 1,719 |
Liabilities | ||
Deferred compensation liability | 2,142 | 2,096 |
Significant other observable inputs (Level 2) | Interest rate swap contracts | ||
Assets | ||
Derivative asset | 1,443 | |
Liabilities | ||
Derivative liability | 480 | |
Significant other observable inputs (Level 2) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | 5 | |
Liabilities | ||
Derivative liability | 223 | |
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 | ||
Assets | ||
Derivative asset | 0 | |
Liabilities | ||
Derivative liability | 0 | |
Significant unobservable inputs (Level 3) | Foreign currency forward contracts | ||
Assets | ||
Derivative asset | $ 0 | |
Liabilities | ||
Derivative liability | $ 0 |
Income taxes - Provision (Benef
Income taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Current | |||
Federal | $ 13,844 | $ 14,431 | $ 11,591 |
State | 4,864 | 4,549 | 3,842 |
Current income tax expense | 18,708 | 18,980 | 15,433 |
Deferred | |||
Federal | 2,080 | 2,809 | (2,905) |
State | 1,736 | (781) | (2,096) |
Deferred income taxes | 3,816 | 2,028 | (5,001) |
Income tax expense | $ 22,524 | $ 21,008 | $ 10,432 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jul. 31, 2021 |
Deferred tax assets | ||
Operating lease liabilities | $ 5,935 | $ 0 |
Accrued liabilities | 1,118 | 2,001 |
State taxes | 1,136 | 998 |
Equity-based compensation | 550 | 284 |
Interest rate swap | 0 | 122 |
Other | 523 | 221 |
Gross deferred tax asset | 9,262 | 3,626 |
Deferred tax liabilities | ||
Inventory | (1,116) | (7,291) |
Property and equipment | (41,658) | (34,114) |
Intangible assets | (46,018) | (47,759) |
Operating lease asset | (5,972) | 0 |
Interest rate swap | (368) | 0 |
Prepaid expenses | (2,156) | (1,129) |
Casualty gain (Note 17) | (2,457) | 0 |
Gross deferred tax liability | (99,745) | (90,293) |
Net deferred tax liabilities | $ (90,483) | $ (86,667) |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Interest and penalties | $ 0 | $ 0 | $ 0 |
Uncertain tax liability | 0.4 | $ 0 | |
Unrecognized tax liability that would impact effective tax rate | $ 0.4 |
Income taxes - Effective Income
Income taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State income taxes | 6.40% | 3.90% | 3.30% |
Equity-based compensation | 0.10% | 2.60% | 0% |
Other | (0.30%) | (0.20%) | 0.10% |
Total | 27.20% | 27.30% | 24.40% |
Income taxes - Schedule of Unre
Income taxes - Schedule of Unrecognized Tax Benefits (Details) $ in Millions | 12 Months Ended |
Jul. 31, 2022 USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning balance | $ 0 |
Gross increase related to prior year tax positions | 0.4 |
Ending balance | $ 0.4 |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, maximum annual contributions per employee by employer, amount | $ 31 | $ 29 | $ 29 |
Defined contribution plan, employer matching contribution, percent of match | 3% | ||
Defined contribution plan, vesting period | 2 years | ||
Defined contribution plan, employer discretionary contribution, percent | 7% | ||
Defined contribution plan, employer discretionary contribution, vesting period | 5 years | ||
Defined contribution plan, employer matching and discretionary contribution, percent | 10% | ||
Defined contribution plan, cost | $ 4,600 | 3,800 | 3,700 |
Deferred compensation plan, vesting period | 3 years | ||
Deferred compensation arrangement with individual, contributions by employer | $ 400 | 1,100 | $ 900 |
Deferred compensation liability | 2,100 | 2,100 | |
Cash surrender value of life insurance | $ 1,800 | $ 1,700 |
Commitment and contingencies (D
Commitment and contingencies (Details) T in Thousands | 12 Months Ended | |||||
Oct. 31, 2022 USD ($) T | Jul. 31, 2022 USD ($) barrel | Oct. 31, 2021 T | Jul. 31, 2021 USD ($) | Oct. 31, 2020 T | Jul. 31, 2020 USD ($) | |
Commitments and Contingencies [Line Items] | ||||||
Long-term purchase contract, amount purchased, mass | T | 34 | 12 | ||||
Purchase commitment, quantity | barrel | 8,553 | |||||
Purchase commitment, remaining amount committed | $ 8,800,000 | |||||
COVID-19, incremental costs | 0 | $ 700,000 | $ 1,400,000 | |||
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 | 7,300,000 | |||||
Inventories | ||||||
Commitments and Contingencies [Line Items] | ||||||
Long-term purchase commitment, amount purchased, cost | $ 68,100,000 | $ 26,500,000 | ||||
Inventories | Forecast | ||||||
Commitments and Contingencies [Line Items] | ||||||
Long-term purchase commitment, amount purchased, cost | $ 68,700,000 | |||||
Minimum | ||||||
Commitments and Contingencies [Line Items] | ||||||
Long-term purchase contract, period | 1 year | |||||
Maximum | ||||||
Commitments and Contingencies [Line Items] | ||||||
Long-term purchase contract, period | 8 years |
Equity-based compensation - Nar
Equity-based compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Mar. 17, 2016 | Mar. 16, 2016 | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2016 | Mar. 17, 2021 | |
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 | $ 8.5 | ||||||
Share-based payment arrangement, expense | $ 0.5 | 0.9 | $ 1.2 | ||||
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% | ||||||
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 | 1.9 | 3.8 | |||||
Unrecognized compensation expense | $ 0 | ||||||
Unrecognized compensation expense, period for recognition | 0 years | ||||||
2021 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 | $ 5 | ||||||
Weighted average grant date fair value of options granted | $ 0.5 | ||||||
Options vested and exercisable (shares) | 400,000 | ||||||
2021 Plan | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25% | ||||||
2021 Plan | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25% | ||||||
2021 Plan | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25% | ||||||
2021 Plan | Share-based Payment Arrangement, Tranche Four | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25% | ||||||
2021 Plan | Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based payment arrangement, expense | $ 2 | 0.5 | |||||
Unrecognized compensation expense, period for recognition | 2 years 8 months 12 days | ||||||
2021 Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based payment arrangement, expense | $ 3 | $ 0.9 | |||||
Unrecognized compensation expense, period for recognition | 2 years 6 months | ||||||
Unrecognized compensation expense | $ 6.1 | ||||||
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 | ||||||
Unrecognized compensation expense | $ 0.1 | ||||||
Offering period (in months) | 6 months | ||||||
Purchase price of common stock, percent | 85% | ||||||
Award requisite service period (in months) | 6 months |
Equity-based compensation - Act
Equity-based compensation - Activity for Awards (Details) | 12 Months Ended |
Jul. 31, 2022 $ / shares shares | |
Restricted Stock | 2016 Equity Incentive Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 399,234 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (133,076) |
Forfeited (in shares) | shares | 0 |
Unvested as of ending of period (in shares) | shares | 266,158 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 14.23 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 14.23 |
Forfeited (in dollars per share) | $ / shares | 0 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 14.23 |
Restricted Stock Units (RSUs) | 2021 Plan | |
Number of Shares | |
Unvested as of beginning of period (in shares) | shares | 555,950 |
Granted (in shares) | shares | 39,011 |
Vested (in shares) | shares | (167,518) |
Forfeited (in shares) | shares | (12,834) |
Unvested as of ending of period (in shares) | shares | 414,609 |
Weighted-average grant-date fair value | |
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 16.95 |
Granted (in dollars per share) | $ / shares | 19.51 |
Vested (in dollars per share) | $ / shares | 16.64 |
Forfeited (in dollars per share) | $ / shares | 17 |
Unvested as of ending of period (in dollars per share) | $ / shares | $ 17.32 |
Equity-based compensation - Val
Equity-based compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
2021 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 3 months | 6 years 3 months |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 2.54% | |
Expected volatility | 47% | 25% |
2021 Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.06% | |
2021 Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.09% | |
Employee Stock | Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | |
Expected dividend yield | 0% | |
Risk-free interest rate | 0.22% | |
Expected volatility | 47% | |
Stock price (in dollars per share) | $ 23.33 |
Equity-based compensation - Sto
Equity-based compensation - Stock Option Activity (Details) - 2021 Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Number of options outstanding | ||
Balance as of July 31, 2020 (shares) | 1,552,648 | |
Options granted (shares) | 50,034 | |
Options exercised (Shares) | (7,485) | |
Forfeited (shares) | (38,499) | |
Expired (in shares) | (1,088) | |
Balance as July 31, 2021 (shares) | 1,555,610 | 1,552,648 |
Weighted-average exercise price | ||
Balance as of July 31, 2020 (in dollars per share) | $ 17.11 | |
Options granted (in dollars per share) | 18.53 | |
Options exercised (in dollars per share) | 15 | |
Forfeited (in dollars per share) | 17 | |
Expired (in dollars per share) | 24 | |
Balance as of April 30, 2021 (in dollars per share) | $ 17.15 | $ 17.11 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Life (in years) | 8 years 8 months 12 days | 9 years 7 months 6 days |
Aggregate Intrinsic Value | $ 3,847 | $ 7,552 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Feb. 28, 2021 | Jul. 31, 2021 | |
Related Party Transactions [Abstract] | ||
Cash dividend | $ 100,000 | $ 100,000 |
Casualty loss (gain) (Details)
Casualty loss (gain) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||
Casualty loss | $ 123 | $ (6,559) | $ (4,047) |
Fire | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Casualty loss | $ 100 | 1,300 | |
Flood | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Insurance proceeds | $ 8,100 | $ 4,300 |
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, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Numerator - Net income attributable to The Duckhorn Portfolio, Inc. | $ 60,190 | $ 55,976 | $ 32,377 |
Denominator: | |||
Weighted average number of shares of common stock outstanding - basic (shares) | 115,096,152 | 106,681,496 | 101,713,460 |
Dilutive stock options and restricted stock (shares) | 267,426 | 253,357 | 0 |
Weighted average number of shares of common stock outstanding - assuming dilution (shares) | 115,363,578 | 106,934,853 | 101,713,460 |
Earnings per share attributable to The Duckhorn Portfolio, Inc. | |||
Basic (in dollars per share) | $ 0.52 | $ 0.52 | $ 0.32 |
Diluted (in dollars per share) | $ 0.52 | $ 0.52 | $ 0.32 |
Earnings per share - Narrative
Earnings per share - Narrative (Details) - shares | 12 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | |
Option | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 4,283 | 0 | 0 |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 6,140 | 2,465 | 0 |