Truett-Hurst, Inc. Reports Second Quarter and First Half Fiscal 2016 Results

Truett-Hurst

Image: Truett-Hurst Wines

HEALDSBURG, CA -Truett-Hurst, Inc. (NASDAQ: THST), which operates an innovative and fast growing super-premium and ultra-premium wine sales, marketing and production company based in the acclaimed Dry Creek and Russian River Valleys of Sonoma County, California, reported results for the second quarter of fiscal 2016 which ended on December 31, 2015.

First Half FY16 vs. FY15

For the six months ended December 31, 2015, total net sales from continuing operations increased 46.9% compared to the same period in the prior year and totaled $14.9 million.  Consolidated gross margin from continuing operations was 32.2%, an increase of 2.4 margin points over the prior year.

Wholesale

  • Net Sales of $12.0 million (+56% or $4.3 million) (prior year impacted by $0.6 million of Paperboy related items)
  • Gross Margin of 24% (an increase of 5 margin points) (prior year impacted by $0.8 million of Paperboy related items)
  • Gross Profit of $2.9 million (+$1.4 million)

Direct to Consumer (DTC)

  • Net Sales of $2.9 million (+19% or $0.5 million)
  • Gross Margin of 65% (an increase of 1.9 margin points)
  • Gross Profit of $1.9 million (+$0.4 million)

Operating Expenses: 

Operating expenses for the six months ended December 31, 2015 were $4.4 million compared to $4.0 million in the same period in the prior year. While sales and marketing expense increased by $0.5 million, the expense expressed as a percentage of net sales declined 400 basis points from 23% to 19%. General and administrative expenses were essentially flat.

Second Quarter FY16 vs. FY15

For the three months ended December 31, 2015, total net sales from continuing operations increased 72.7% compared to the same periods in the prior year and totaled $8.5 million.  Consolidated gross margin from continuing operations was 31.0%, an increase of 6.9 margin points over the prior year.

Wholesale

  • Net Sales of $6.9 million (+93% or $3.3 million) (prior year impacted by $0.6 million of Paperboy related items)
  • Gross Margin of 23% (an increase of 14 margin points) (prior year impacted by $0.8 million of Paperboy related items)
  • Gross Profit of $1.6 million (+$1.3 million)

Direct to Consumer (DTC)

  • Net Sales of $1.7 million (+20% or $0.3 million)
  • Gross Margin of 64% (an increase of 2 margin points)
  • Gross Profit of $1.1 million (+$0.2 million)

Operating Expenses: 

Operating expenses for the six months ended December 31, 2015 were $2.1 million compared to $2.0 million in the same period in the prior year.  Both sales and marketing and general and administrative expenses in the quarter were materially the same as the prior year despite increased net sales.

During the second quarter, the Company disposed of its fifty percent interest in The Wine Spies.  The current and prior period performance of The Wine Spies is characterized as discontinued operations and excluded from Truett-Hurst, Inc.'s consolidation results from continuing operations.

"I am extremely pleased with our first half results," commented Phillip L. Hurst, Truett-Hurst, Inc.'s President and CEO, "The growth we have experienced combined with focused expense management has put us back into a position with positive operating profit and net income."

Earnings Call

Truett-Hurst, Inc.'s management will host a conference call today, February 9, 2016, at 1:30 p.m. PT (4:30 p.m. ET) to discuss the Company's financial results.  To listen to the conference call, dial in approximately ten minutes before the scheduled call to 1.888.347.6082 or international at 1.412.902.4286 and request Truett-Hurst, Inc.'s Fiscal 2016 Second Quarter Results Call, or visit our webcast link: https://www.webcaster4.com/Webcast/Page/1132/12817.

A supporting presentation, in advance of the conference call, will be available at: http://www.truetthurstinc.com

To listen to a replay of the call, dial US Toll Free: 1.877.344.7529 or International Toll: 1.412.317.0088 and enter the replay access code 10079213. The call will be available one hour after the end of the conference call through February 17, 2016 at 9:00 am ET. 

About Truett-Hurst, Inc.

Truett-Hurst, Inc. (NASDAQ: THST, www.truetthurstinc.com) is a holding company and its sole asset is the controlling equity interest in H.D.D. LLC., an innovative and fast-growing super-premium, ultra-premium and luxury wine sales, marketing and production company based in the acclaimed Dry Creek and Russian River Valleys of Sonoma County, California. Truett-Hurst, Inc. is headquartered in Healdsburg, California.