Rick Nechio, Interim Chief Executive Officer of
“As with many fast-growing companies building a brand and creating a new market, there have been learnings along the way. Consequently, to better leverage our success to date, we are reorganizing
The main components of the Company’s reorganization in the third and fourth quarter include:
- Outsourcing the company’s sales function to a third-party organization with extensive experience in the wine and spirits industry, which is expected to improve sales efficiency and productivity. In the process, the company converted a majority of the company’s sales expense from a fixed to a variable cost.
- Entering a contract with a marketing agency that has extensive consumer packaged goods experience, including celebrity and influencer-endorsed brands, to completely overhaul the company’s marketing strategy and plan, primarily intended to better leverage the company’s tremendous assets, including celebrity ownership, to grow the Company’s Direct-to-Consumer business.
- The company’s leadership team has already deferred certain investments in additional inventory, curtailed its sales and marketing efforts and staffing, and taken other measures to reduce expenses and business operations. Collectively, these cost reduction efforts have reduced the company’s budgeted cash requirements by approximately
$5.0 million for the second half of 2022, preserving capital for its highest-priority expenses and investments and providing an additional runway for the growth strategy to gain traction in the market.
- Hired
James Spellmire , a veteran public company financial professional, accomplished entrepreneur and expert in cash preservation strategies, as Chief Financial Officer.
An important element of the reorganization plan is establishing a cash runway that will provide sufficient time for the plan to gain traction. As part of that plan, the company believes it currently has sufficient wine in inventory to meet demand for the balance of year and early 2023 as well as mitigate supply chain risks the industry is facing, which would otherwise have been a drain on cash.
“In short, we feel we are well-positioned for the move into Q4, which is historically the season for the lion’s share of wine sales over the course of the year. We are already in place with several national grocery retailers, with more coming online between now and the end of the year, just in time for the holidays,” says Nechio.
Third Quarter Financial Results and Commentary
For the three months ended
In parallel, the company continues to execute its growth strategy, opening new distributor and retail relationships, expanding to new geographic markets, and introducing new product extensions. The company believes that these efforts will further accelerate top-line growth in ways that will improve liquidity measures as the company converts inventory and receivables to cash.
Readers are referred to, and encouraged to read in its entirety, the company's Quarterly Report on Form 10-Q for the three months ended
Press contact – FreshVineWine@jonesworks.com
IR contact – Joeh@gregoryfca.com
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Forward-Looking Statements
This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. These forward-looking statements address various matters including statements regarding the timing or nature of future operating or financial performance or other events. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, our ability to achieve positive cash flow from our operations on our anticipated timeframes or at all; the inclusion of the Company’s wines in Fall resets of four national, big box grocery retailers and the impact of such inclusion of the Company’s operating results; the Company's ability to hire additional personnel and to manage the growth of its business; the Company's reliance on its brand name, reputation and product quality; the Company's ability to adequately address increased demands that may be placed on its management, operational and production capabilities; the effectiveness of the Company's advertising and promotional activities and investments; the Company's reliance on celebrities to endorse its wines and market its brand; general competitive conditions; fluctuations in consumer demand for wine; overall decline in the health of the economy and consumer discretionary spending; the occurrence of adverse weather events, natural disasters, public health emergencies, or other unforeseen circumstances that may cause delays to or interruptions in the Company's operations; risks associated with disruptions in the Company's supply chain for grapes and raw and processed materials; the impact of COVID-19 and its variants on the Company's customers, suppliers, business operations and financial results; disrupted or delayed service by the distributors the Company relies on for the distribution of its wines; the Company's ability to successfully execute its growth strategy; the Company's success in retaining or recruiting, or changes required in, its officers, key employees or directors; the Company's ability to protect its trademarks and other intellectual property rights; the Company's ability to comply with laws and regulations affecting its business, including those relating to the manufacture, sale and distribution of wine; claims, demands and lawsuits to which the Company are or may be subject and the risk that its insurance or indemnities coverage may not be sufficient; the Company's ability to operate, update or implement its IT systems; the Company's ability to successfully pursue strategic acquisitions and integrate acquired businesses; the Company's potential ability to obtain additional financing when and if needed; the Company's founders' significant influence over the Company; and the risks identified in the Company's other filings with the
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