EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: Ken Morris
707-254-4263
THE CHALONE WINE GROUP REPORTS SECOND QUARTER 2003 RESULTS
Napa, California, August 4, 2003 --- The Chalone Wine Group, Ltd. (Nasdaq: CHLN)
announced today total case sales of 298,634 for the first six months of 2003, a
10 percent increase compared to the same period last year. Net income for the
first six months of 2003 was $504,000, compared to $938,000 for the same period
in 2002. Diluted earnings per share for the second quarter of 2003 were $.04.
"The U.S. fine wine industry has been hit with a double whammy of a down economy
and an oversupply of wine," said President and CEO Tom Selfridge. "These factors
have produced tremendous competition in the marketplace."
Selfridge said, "To meet that pressure, we responded in the last half of 2002
with competitive pricing and added sales staff to reach more markets. Last
August we also invested in a winery with 45 acres of vineyard on a prime site in
Napa Valley's Rutherford subappellation as home for Provenance Vineyards. All of
these actions should ultimately add to our bottom line but the short-term effect
is that it reduces our net income with strategic increases to Selling, General
and Administrative expenses and net interest expense, primarily due to our
Provenance acquisition. Our strategy has always been to focus not on just one or
two quarters but to take a long-term view in building market share."
Chalone Wine Group, Ltd. is a Napa-based company specializing in premium red and
white varietal wines. In California, the Company owns and operates Acacia(R)
Vineyard in the Carneros District of Napa County, and Provenance(TM) Vineyards,
Hewitt(TM) Vineyard and Jade Mountain(R) in Napa County; Chalone Vineyard(R) in
Monterey County; and Moon Mountain(R) Vineyard and Dynamite(TM) Vineyards in
Sonoma County. In conjunction with its 50 percent joint-venture partner, Paragon
Vineyard Co., the Company also owns and operates Edna Valley Vineyard(R) in San
Luis Obispo County. Additionally, the Company produces and markets wines under
the brand name Echelon Vineyards. In Washington State, the Company owns and
operates Sagelands(R) Vineyard and Canoe Ridge(R) Vineyard. In the Bordeaux
region of France, the Company owns 23.5 percent of the fourth-growth estate of
Chateau Duhart-Milon, in partnership with Domaines Barons de Rothschild
(Lafite), which owns the other 76.5 percent.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the
federal securities laws, including statements regarding Chalone Wine Group's
performance in the marketplace and operational success, future events and
management's plans and expectations. These statements involve risks and
uncertainties that could cause actual results and events to differ materially,
including variations in market taste as well as demand, changes in worldwide
supply and demand of grapes and wine. A detailed discussion of other risks and
uncertainties that could cause actual results and events to differ materially
from such forward-looking statements is included in Chalone Wine Group's
periodic filings with the Securities and Exchange Commission, including the
Company's quarterly report on Form 10-Q for the quarter ended March 31, 2003.
The Company undertakes no obligation to update forward-looking statements to
reflect events or uncertainties occurring after the date of this press release.
CHALONE Wine Group
Earnings Release for the
Quarter Ended June 30, 2003
The financial position and results below are in thousands of US dollars:
June 30
_________________________
2003 2002
____ ____
Current assets $ 89,965 $ 83,626
Total assets 192,692 180,504
Current liabilities 33,849 30,517
Shareholders' equity 96,186 93,144
Working capital 56,116 53,109
Three months ended Six months ended
June 30 June 30
________________________ _________________________
2003 2002 2003 2002
____ ____ ____ ____
Gross revenues $ 15,989 $ 12,929 $ 29,914 $ 28,889
Excise taxes (485) (356) (902) (816)
_________ _________ _________ _________
Net revenues 15,504 12,573 29,012 28,073
Cost of wines sold (10,478) (8,391) (19,391) (18,541)
_________ _________ _________ _________
Gross profit 5,026 4,182 9,621 9,532
Other operating revenue, net 26 5 21 (402)
SG&A expenses (3,628) (2,717) (6,748) (5,895)
_________ _________ _________ _________
Operating income 1,424 1,470 2,894 3,235
Interest expense, net (1,129) (782) (2,504) (1,690)
Other income 45 (33) 98 (13)
Equity in net income of Chateau Duhart-Milon 453 586 453 734
Minority interest (48) (413) (87) (619)
_________ _________ _________ _________
Income before income taxes 745 828 854 1,647
Income taxes (305) (368) (350) (709)
_________ _________ _________ _________
Net income $ 440 $ 460 $ 504 $ 938
========= ========= ========= =========
Diluted earnings per share $ 0.04 $ 0.04 $ 0.04 $ 0.08
Average number of shares outstanding - diluted 12,079 12,309 12,079 12,115