Truett-Hurst IPO'd in June of 2013, with a plan of selling $42M in stock @ 2.25M shares. The original founders remain owners of >50% of the company. Interestingly, the IPO came only after 6 years of operating. Founder Hurst and his partners Paul and Heath Dolan launched Truett-Hurst in 2007. The founding partners had worked together at Fetzer Winery, and Paul Dolan was Director of Winemaking and hired Phil Hurst from UC Davis to operate as one of his wine-makers. 30 years after the original meeting, they had a vision to create world class wine using farming principles. That's when the idea of forming Truett-Hurst took place.
So where do they sell to? Well the company generates around 3/4 revenue from wide wine retailers like Trader Joe's, Safeway, etc.
The estate is nestled in the Dry Creek Valley in California. Most wine companies remain private because they are rooted in heavy capex hard assets, with a large upfront investments in vineyards that can yield volatile profits. Yet for Truett-Hurst, their first year of sales before the IPO (2012) was $12.6M, with a profit of $26,462. The year prior, they drank a loss of $820,815.
A quick look at their quarterly report shows that growth has been steady and total revenue from 2013--> 2015 has grown at a ~ 15% annually. They have been operating a loss since IPO, with nearly $2,211 in operating losses witnessed in the 2015 fiscal year. Net income has also been negative leaving their stock at $1.01, from just $4 a year prior. From what I read, they do not heavily invest in R&D, and there is little chatter about a new production line that could revive the brand!
Due to lacking lagging sales, the company has decided to kill off its highly touted wine spritzer brand that was just sold to Kroger stores because of its poor sales. While on an analyst calls, the company reports that net sales increased 21% from 2014 to 2015, overhead and SGA chocked out any potential profit. Unfortunately for Truett-Hurst, a contract with Kroger's locking them in to sales only at that grocery store chain has forced the founders to place $500,000 reserve for a potential loss due to excess inventory that will be tossed. Will be interesting to see what maneuvers the company out of continued losses and whether the public markets will be amiable in the future to smaller wine brands desiring to raise public capital.
So where do they sell to? Well the company generates around 3/4 revenue from wide wine retailers like Trader Joe's, Safeway, etc.
The estate is nestled in the Dry Creek Valley in California. Most wine companies remain private because they are rooted in heavy capex hard assets, with a large upfront investments in vineyards that can yield volatile profits. Yet for Truett-Hurst, their first year of sales before the IPO (2012) was $12.6M, with a profit of $26,462. The year prior, they drank a loss of $820,815.
A quick look at their quarterly report shows that growth has been steady and total revenue from 2013--> 2015 has grown at a ~ 15% annually. They have been operating a loss since IPO, with nearly $2,211 in operating losses witnessed in the 2015 fiscal year. Net income has also been negative leaving their stock at $1.01, from just $4 a year prior. From what I read, they do not heavily invest in R&D, and there is little chatter about a new production line that could revive the brand!
Due to lacking lagging sales, the company has decided to kill off its highly touted wine spritzer brand that was just sold to Kroger stores because of its poor sales. While on an analyst calls, the company reports that net sales increased 21% from 2014 to 2015, overhead and SGA chocked out any potential profit. Unfortunately for Truett-Hurst, a contract with Kroger's locking them in to sales only at that grocery store chain has forced the founders to place $500,000 reserve for a potential loss due to excess inventory that will be tossed. Will be interesting to see what maneuvers the company out of continued losses and whether the public markets will be amiable in the future to smaller wine brands desiring to raise public capital.
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