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Scheid's Second-Quarter Revenue Falls

Posted on: Monday, 15 August 2005, 18:00 CDT

Aug. 13--Salinas-based Scheid Vineyards' second-quarter revenues dropped 48 percent from the same period a year ago, the company said Friday.

Revenues were $757,000, down from $1.4 million in 2004. The company attributed the difference to late sales of its bulk wine.

The publicly traded winemaker sold much of its bulk wine last month and earlier this month, which both fall in the third quarter.

"(The bulk wine) was bought sooner last year," said Mike Thomsen, the company's chief financial officer.

Bulk wine is a nonbottled product sold to customers who blend it with other bulk wines to create particular flavors. The timing of the sale of bulk wine depends on the customer's bottling schedule.

Scheid made more bulk wine this year than in past years and sold it at a higher price than last year, factors that should be reflected in the third-quarter results, Thomsen said.

The revenue for the first half of this year also decreased -- by $944,000, or 30 percent, from $2.5 million in 2004 to $1.8 million. That drop includes a $833,000 property sale -- without that, the company's net loss for the six-month period would have been $1.4 million.

Its sales revenues should pick up in the third and fourth quarters, Thomsen said, partially because they encompass harvest season.

Harvest might be particularly fruitful for Scheid because the company plans to begin crushing up to 10,000 tons of its own grapes beginning in September, cutting down on some operating costs.

The 42,000-square-foot-plant will also process grapes and store bulk wine for other growers and wineries, another revenue source.

President and CEO Scott Scheid said in a statement that the development of this year's wine grape crop is proceeding as expected, with harvesting expected to begin late this month.

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Copyright (c) 2005, The Monterey County Herald, Calif.

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SVIN,

Source: The Monterey County Herald (Monterey, Calif.)

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