EXHIBIT 99.6
THE CHALONE WINE GROUP REPORTS THIRD QUARTER 2004 RESULTS
Napa, California, November 5, 2004 --- The Chalone Wine Group, Ltd. (Nasdaq:
CHLN) announced today it had net revenues of $46.5 million and a net loss of
$214,000 during the first nine months of 2004, compared to a net revenue of
$45.3 million and a net income of $883,000 in the same period of 2003.
"While the competition in the marketplace remains fierce, we're pleased to post
an increase of almost $1.2 million in net revenues," said President and CEO Tom
Selfridge. "The wines from our newest wineries--Provenance Vineyards, Orogeny
Vineyards and Hewitt Vineyard--have earned critical acclaim and continue to sell
well. Plus, this is the first year for Provenance Vineyards' tasting room, which
has quickly become a popular stop in Napa Valley and is also adding to our
bottom line. At the same time, our more established wineries are doing well in
the market."
Selfridge said, "As we discussed in our second quarter results, on May 17th we
received a proposal from Domaines Barons de Rothschild (Lafite) SCA (DBR) to
purchase the company. We formed an independent special committee of the board of
the directors to evaluate the proposal, and the committee retained outside
attorneys and financial advisors to assist its evaluation of the DBR proposal.
If we subtract the $939,000 costs associated with the proposed acquisition, we
would have reported a profit of $725,000 for this period."
Commenting on the proposal, Selfridge said, "As announced on November 1st, the
Company has signed an agreement for DBR to acquire all of the outstanding
publicly held shares of Chalone common stock. While the review of the proposal
took some time and we still need shareholder approval, we remain focused on
business as usual as we enter what is typically the busiest time in selling
wine. Throughout this long process our employees continue to perform
magnificently and I thank them."
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 area 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, Dynamite(R) Vineyards and
Orogeny(TM) Vineyards in Sonoma County; and Echelon Vineyards in San Miguel. 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. 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.
For more information about Chalone Wine Group, visit WWW.CHALONEWINEGROUP.COM
The information provided above in this release includes a non-GAAP financial
measure. The profit of $725,000 noted above is a non-GAAP, pro forma measure
obtained by adding back to the Company's GAAP net loss of $214,000 expenses
totaling $939,000 associated with the cited proposal and various efforts of the
Company in connection with the proposal. The Company believes this information
may help investors to better understand our operating results without the
expenses associated with the proposal. This non-GAAP profit measure is provided
as additional information only and is not intended as an alternative for
financial information presented in accordance with GAAP.
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 and delays in consummating, or the failure
to consummate, the proposed acquisition with DBR. 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,
2004. 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 September 30, 2004
The financial position and results below are in thousands of US dollars:
September 30,
-------------------------
2004 2003
---- ----
Current assets $105,868 $92,108
Total assets 201,145 197,655
Current liabilities 43,097
47,700
Shareholders' equity 111,048 96,832
Working capital 49,011
58,168
Three months ended Nine months ended
September 30, September 30,
--------------------------------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Gross revenues $16,481 $16,878 $ 47,951 $46,792
Excise taxes (463) (492) (1,360) (1,394)
-------- -------- --------- --------
Net revenues 16,018 16,386 46,591 45,398
Cost of wines sold (10,741) (10,912) (31,553) (30,303)
-------- -------- --------- --------
Gross profit 5,277 5,474 15,038 15,095
Other operating revenue, net (111) 3 (111) 24
Cost associated with proposed acquisition (627) - (939) -
Depreciation and Amortization (200) (236) (621) (683)
SG&A expenses (3,481) (3,190) (10,193) (9,491)
-------- -------- --------- --------
Operating income 858 2,051 3,174 4,945
Interest expense, net (1,278) (1,371) (4,113) (3,875)
Other income 88 63 290 161
Equity in net income of Chateau Duhart-Milon (64) (35) 530 418
Minority interest (65) (65) (244) (152)
-------- -------- --------- --------
Income before income taxes (461) 643 (363) 1,497
Income taxes 189 (264) 149 (614)
-------- -------- --------- --------
Net income (loss) $ (272) $ 379 $ (214) $ 883
======== ======== ========= ========
Diluted earnings per share $ (0.02) $ 0.03 $ (0.02) $ 0.07
Average number of shares outstanding - diluted 12,345 12,078 12,345 12,079
CONTACT: Ken Morris 707-254-4263, cell phone: 707-235-2303,
Kmorris@ChaloneWineGroup.com