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THE DUCKHORN PORTFOLIO, INC.

(NAPA)
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The Duckhorn Portfolio Announces Second Quarter 2022 Financial Results

03/10/2022 | 04:17pm EST

Net Sales Increase 18.0%
Net Income of $17.9 million; Adjusted Net Income of $19.5 million
Adjusted EBITDA of $34.3 million
Raises Fiscal Year 2022 Guidance

The Duckhorn Portfolio, Inc. (NYSE: NAPA) (the “Company”) today reported its financial results for the three months ended January 31, 2022.

Second Quarter 2022 Highlights

  • Net sales were $98.7 million, an increase of $15.1 million, or 18.0%, versus the prior year period.
  • Gross profit was $49.5 million, an increase of $7.7 million, or 18.5%, versus the prior year period. Adjusted gross profit was $49.7 million, an increase of $7.1 million, or 16.5%, versus the prior year period.
  • Net income was $17.9 million, or $0.16 per diluted share, versus $22.0 million, or $0.22 per diluted share, in the prior year period; adjusted net income was $19.5 million, or $0.17 per diluted share, versus $16.8 million, or $0.17 per diluted share, in the prior year period. Adjusted net income increased $3.7 million, or 23.6%, when compared against the prior year period, and adjusted earnings per share would have been $0.14 per diluted share in the prior year period if similarly burdened by public company costs and using the Fiscal 2022 diluted share count.
  • Adjusted EBITDA was $34.3 million, an increase of $2.1 million, or 6.6%, versus the prior year period. The most recent period’s calculation includes public company costs that did not exist in the prior year period when the Company was private. Adjusted EBITDA increased $3.5 million, or 11.5%, versus the prior year period when comparing adjusted EBITDA in the second quarter against the prior year period similarly burdened by public company costs.
  • Cash was $4.8 million as of January 31, 2022, with a leverage ratio of 2.0x net debt (net of deferred financing costs) to trailing twelve months adjusted EBITDA.

“We are pleased with our impressive second quarter results as we delivered double-digit organic sales and volume growth and continued to outperform the high-growth luxury wine industry,” commented Alex Ryan, President, Chief Executive Officer and Chairman. “Leading the growth for the quarter were our flagship winery brands, Duckhorn Vineyards and Decoy, as they appeal to a broad group of consumers given their exceptional quality and accessible price points as luxury wines. The brands continued to see distribution growth across a variety of demographics and their power to expand into new price points gives us confidence that they will produce industry-leading results over the long-term.”

Ryan continued, “Given our strong performance in the first half of the year and our proven ability to gain market share at an accelerated pace, we are raising our fiscal year 2022 guidance. We believe that our brand power, differentiated strategic plan and highly flexible supply chain well positions us to sustain momentum in 2022 and deliver profitable growth for years to come.”

Second Quarter 2022 Results

 

Three months ended January 31,

 

2022

 

2021

Net sales growth

18.0

%

 

8.7

%

Volume contribution

24.8

%

 

11.4

%

Price / mix contribution

(6.8

)%

 

(2.8

)%

 

Three months ended January 31,

 

2022

 

2021

Wholesale – distributors

67.2

%

 

60.2

%

Wholesale – California direct to retail

19.8

%

 

19.6

%

DTC

13.0

%

 

20.2

%

Net sales

100.0

%

 

100.0

%

Note: Sum of individual amounts may not recalculate due to rounding.

Net sales were $98.7 million, an increase of $15.1 million, or 18.0%, versus $83.7 million in the prior year period. The increase in net sales is primarily attributable to 24.8% volume growth, which compares to 11.4% in the prior year period. However, this was partially offset by negative 6.8% price / mix contribution, as our leading Duckhorn Vineyards and Decoy winery brands outpaced the growth of our Other Winery Brands. There was also a timing shift in shipments for select DTC volume from the second quarter to the first quarter. On a like-for-like basis, pricing changes were immaterial to our results.

Gross profit was $49.5 million, an increase of $7.7 million, or 18.5%, versus the prior year period. Gross profit margin was 50.1%, up 20 basis points versus the prior year period due to brand mix which more than offset channel unfavorability. Adjusted gross profit was $49.7 million, an increase of $7.1 million, or 16.5%, versus the prior year period.

Total selling, general and administrative expenses were $23.8 million, an increase of $6.3 million, or 36.3%, versus $17.5 million in the prior year period. The increase was primarily attributed to $1.0 million in expenses related to capital markets transactions, an additional $1.4 million in general and administrative costs specific to being a public company, and higher workforce-related expenses, including $0.9 million in incremental equity-based compensation. Selling expenses also increased approximately $2.2 million, primarily to support sales activities and the continued resurgence of business travel versus the prior year period.

Net income was $17.9 million, or $0.16 per diluted share, versus $22.0 million, or $0.22 per diluted share, in the prior year period. Adjusted net income was $19.5 million, or $0.17 per diluted share, versus $16.8 million, or $0.17 per diluted share, in the prior year period. The increases in adjusted net income were due to higher net sales and favorable brand mix, lower interest expense and lower income tax expense, partially offset by channel mix and increases in direct selling expenses, which were generally in line with net sales growth during the period. For comparison, adjusted net income for the three months ended January 31, 2021 would have been $15.8 million, or $0.14 per diluted share, if that earlier period reflected similar public company costs and diluted share count consistent with the second quarter of Fiscal 2022.

Adjusted EBITDA was $34.3 million, an increase of $2.1 million, or 6.6%, versus $32.2 million in the prior year period. The increase was largely driven by higher net sales and favorable brand mix, partially offset by the increases in selling, general and administrative expenses due to increased sales activities, greater workforce-related expenses, public company costs, and capital markets transaction expenses. Adjusted EBITDA increased $3.5 million, or 11.5%, versus the prior year when comparing adjusted EBITDA in the second quarter against the prior year period similarly burdened by public company costs.

Fiscal Year 2022 Guidance
The Company is raising its previously provided fiscal 2022 guidance. For the year, we expect to deliver adjusted EPS between $0.55 and $0.58 per diluted share versus fiscal 2021 adjusted EPS of $0.58 per diluted share. Note that the provided annual range is negatively impacted by an increase in weighted average share count of approximately nine million shares or 8% on a year-over-year basis, a function of timing related to the Company’s third quarter fiscal 2021 IPO. Fiscal 2022 also includes a full year of public company costs, whereas fiscal 2021 results only include a partial year of public company costs.

Accordingly, the Company views it as useful to consider these factors in evaluating our operating performance year-over-year. On a like-for-like basis, the guidance range provided for fiscal 2022 adjusted EPS of $0.55 to $0.58 per diluted share is comparable to what would be an adjusted EPS of $0.52 per diluted share in fiscal 2021 if that year had been burdened by a full year of public company costs and assuming a diluted share count consistent with our guidance for fiscal 2022.

The Company’s upwardly revised guidance ranges are presented below for fiscal year 2022:

(amounts in millions, except per share data and percentages)

Fiscal year ended July 31, 2022

Net sales

$

364.0

 

-

$

369.0

 

Adjusted EBITDA

$

121.0

 

-

$

125.0

 

Adjusted EPS

$

0.55

 

-

$

0.58

 

Diluted share count

 

114.5

 

-

 

116.5

 

Effective tax rate

 

24

%

-

 

26

%

Conference Call and Webcast
The Company will host a conference call to discuss these results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) Investors interested in participating in the live call can dial 844-200-6205 from the U.S. and 929-526-1599 internationally, and enter confirmation code 928334. A telephone replay will be available approximately two hours after the call concludes through Thursday, March 24, 2022, by dialing 866-813-9403 from the U.S., or 929-458-6194 from international locations, and entering confirmation code 890811. There will also be a simultaneous, live webcast available on the Company’s investor relations website at https://ir.duckhorn.com. The webcast will be archived for 30 days.

About The Duckhorn Portfolio, Inc.
The Duckhorn Portfolio is North America’s premier luxury wine company, with ten wineries, eight state-of-the-art winemaking facilities, seven tasting rooms and more than 900 coveted acres of vineyards spanning 23 Estate properties. Established in 1976, when vintners Dan and Margaret Duckhorn founded Napa Valley’s Duckhorn Vineyards, today, our portfolio features some of North America’s most revered wineries, including Decoy, Paraduxx, Goldeneye, Migration, Canvasback, Calera, Kosta Browne, Greenwing and Postmark. Sourcing grapes from our own Estate vineyards and fine growers in Napa Valley, Sonoma County, Anderson Valley, California’s North and Central coasts, and Washington State, we offer a curated and comprehensive portfolio of acclaimed luxury wines with price points ranging from $20 to $200 across more than 15 varietals and 25 appellations. Our wines are available throughout the United States, on five continents, and in more than 50 countries around the world. To learn more, visit us at: https://www.duckhornportfolio.com. Investors can access information on our investor relations website at: https://ir.duckhorn.com.

Use of Non-GAAP Financial Information
In addition to the Company’s results which are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company believes the following non-GAAP measures presented in this press release and discussed on the related teleconference call are useful in evaluating its operating performance: adjusted gross profit, adjusted EBITDA, adjusted net income and adjusted EPS. Certain of these non-GAAP measures exclude depreciation and amortization, non-cash equity-based compensation expense, purchase accounting adjustments, casualty losses or gains, impairment losses, changes in the fair value of derivatives, net of taxes, and certain other items which are not related to the Company’s core operating performance. The Company believes that these non-GAAP financial measures are provided to enhance the reader’s understanding of our past financial performance and our prospects for the future. The Company’s management team uses these non-GAAP financial measures to evaluate business performance in comparison to budgets, forecasts and prior period financial results. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies. A reconciliation is provided herein for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Readers are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

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, the Company’s ability to manage the growth of its business; the Company’s reliance on its brand name, reputation and product quality; the effectiveness of the Company’s marketing and advertising programs; general competitive conditions, including actions the Company’s competitors may take to grow their businesses; overall decline in the health of the economy and the impact of inflation on consumer discretionary spending; the occurrence of severe weather events (including fires, floods and earthquakes), catastrophic health events, natural or man-made disasters, social and political conditions or civil unrest; risks associated with disruptions in the Company’s supply chain for grapes and raw and processed materials, including corks, glass bottles, barrels, winemaking additives and agents, water and other supplies; risks associated with the disruption of the delivery of the Company’s wine to customers; 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 and government agencies the Company relies on for the distribution of its wines outside of California; the Company’s ability to successfully execute its growth strategy; decreases in the Company’s wine score ratings by wine rating organizations; quarterly and seasonal fluctuations in the Company’s operating results; 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, including its brand and reputation; the Company’s ability to comply with laws and regulations affecting its business, including those relating to the manufacture, sale and distribution of wine; the risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to both domestic and to international markets; claims, demands and lawsuits to which the Company is, and may in the future, 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 substantial indebtedness and its ability to maintain compliance with restrictive covenants in the documents governing such indebtedness; the Company’s sponsor’s significant influence over the Company, and the Company’s status as a “controlled company” under the rules of the New York Stock Exchange; the potential liquidity and trading of the Company’s securities; the future trading prices of the Company’s common stock and the impact of securities analysts’ reports on these prices; and the risks identified in the Company’s other filings with the SEC. The Company cautions investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read the Company’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and the Company undertakes no obligation to update or revise any of these statements. The Company’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

 

THE DUCKHORN PORTFOLIO, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except shares and per share data)

 

 

January 31, 2022

 

July 31, 2021

ASSETS

(unaudited)

 

 

Current assets

 

 

 

Cash

$

4,770

 

 

$

4,244

 

Accounts receivable trade (net of allowance of $400 and $800, respectively)

 

43,008

 

 

 

33,253

 

Inventories

 

297,531

 

 

 

267,737

 

Prepaid expenses and other current assets

 

9,524

 

 

9,167

Total current assets

 

354,833

 

 

 

314,401

 

Long-term assets

 

 

 

Property and equipment, net

 

255,845

 

 

 

240,939

 

Intangible assets, net

 

196,705

 

 

 

200,547

 

Goodwill

 

425,209

 

 

 

425,209

 

Other long-term assets

 

2,719

 

 

 

2,021

 

Total long-term assets

 

880,478

 

 

 

868,716

 

Total assets

$

1,235,311

 

 

$

1,183,117

 

 

 

 

 

LIABILITIES AND EQUITY

Current liabilities

 

 

 

Accounts payable

$

9,858

 

 

$

3,556

 

Accrued expenses

 

27,076

 

 

 

21,557

 

Accrued compensation

 

12,716

 

 

 

16,845

 

Deferred revenue

 

143

 

 

 

3,102

 

Current maturities of long-term debt

 

11,244

 

 

 

11,324

 

Other current liabilities

 

377

 

 

 

397

 

Total current liabilities

 

61,414

 

 

 

56,781

 

Long-term liabilities

 

 

 

Revolving line of credit, net

 

133,011

 

 

 

121,348

 

Long-term debt, net of current maturities and debt issuance costs

 

109,149

 

 

 

114,625

 

Deferred income taxes

 

86,667

 

 

 

86,667

 

Other long-term liabilities

 

986

 

 

 

1,458

 

Total long-term liabilities

 

329,813

 

 

 

324,098

 

Total liabilities

 

391,227

 

 

 

380,879

 

Equity

 

 

 

Common stock, $0.01 par value; 500,000,000 shares authorized, 115,065,210 issued and outstanding at January 31, 2022 and 115,046,793 issued and outstanding at July 31, 2021

 

1,151

 

 

 

1,150

 

Additional paid-in capital

 

729,508

 

 

 

726,903

 

Retained earnings

 

112,839

 

 

 

73,634

 

Total The Duckhorn Portfolio, Inc. equity

 

843,498

 

 

 

801,687

 

Non-controlling interests

 

586

 

 

 

551

 

Total equity

 

844,084

 

 

 

802,238

 

Total liabilities and equity

$

1,235,311

 

 

$

1,183,117

 

 

THE DUCKHORN PORTFOLIO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except shares and per share data)

 

 

Three months ended January 31,

 

Six months ended January 31,

 

2022

 

2021

 

2022

 

2021

Net sales (net of excise taxes of $1,507, $1,150 $2,983 and $2,415, respectively)

$

98,736

 

 

$

83,657

 

 

$

202,917

 

 

$

175,295

 

Cost of sales

 

49,259

 

 

 

41,900

 

 

 

101,030

 

 

 

89,263

 

Gross profit

 

49,477

 

 

 

41,757

 

 

 

101,887

 

 

 

86,032

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

23,814

 

 

 

17,471

 

 

 

46,972

 

 

 

34,276

 

Casualty loss (gain), net

 

31

 

 

 

(7,770

)

 

 

80

 

 

 

(6,215

)

Income from operations

 

25,632

 

 

 

32,056

 

 

 

54,835

 

 

 

57,971

 

 

 

 

 

 

 

 

 

Interest expense

 

1,636

 

 

 

3,612

 

 

 

3,242

 

 

 

7,192

 

Other income, net

 

(338

)

 

 

(1,491

)

 

 

(1,431

)

 

 

(2,814

)

Total other expenses

 

1,298

 

 

 

2,121

 

 

 

1,811

 

 

 

4,378

 

Income before income taxes

 

24,334

 

 

 

29,935

 

 

 

53,024

 

 

 

53,593

 

Income tax expense

 

6,407

 

 

 

7,935

 

 

 

13,784

 

 

 

14,071

 

Net income

 

17,927

 

 

 

22,000

 

 

 

39,240

 

 

 

39,522

 

Less: Net loss (income) attributable to non-controlling interest

 

5

 

 

 

3

 

 

 

(35

)

 

 

4

 

Net income attributable to The Duckhorn Portfolio, Inc.

$

17,932

 

 

$

22,003

 

 

$

39,205

 

 

$

39,526

 

 

 

 

 

 

 

 

 

Net income per share of common stock:

 

 

 

 

 

 

 

Basic

$

0.16

 

 

$

0.22

 

 

$

0.34

 

 

$

0.39

 

Diluted

$

0.16

 

 

$

0.22

 

 

$

0.34

 

 

$

0.39

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

Basic

 

115,049,395

 

 

 

101,713,460

 

 

 

115,048,094

 

 

 

101,713,460

 

Diluted

 

115,389,502

 

 

 

101,713,460

 

 

 

115,391,011

 

 

 

101,713,460

 

 

THE DUCKHORN PORTFOLIO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)

 

 

Six months ended January 31,

 

2022

 

2021

Cash flows from operating activities

 

 

 

Net income

$

39,240

 

 

$

39,522

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

Depreciation and amortization

 

11,109

 

 

 

10,881

 

(Gain) loss on disposal of assets

 

(13

)

 

 

66

 

Change in fair value of derivatives

 

(957

)

 

 

(2,827

)

Amortization of debt issuance costs

 

804

 

 

 

823

 

Loss on debt extinguishment

 

 

 

 

272

 

Equity-based compensation

 

2,875

 

 

 

576

 

Change in operating assets and liabilities:

 

 

 

Accounts receivable trade, net

 

(9,755

)

 

 

(3,272

)

Inventories

 

(29,794

)

 

 

(26,363

)

Prepaid expenses and other current assets

 

(361

)

 

 

(7,765

)

Other long-term assets

 

(217

)

 

 

(166

)

Accounts payable

 

6,377

 

 

 

2,250

 

Accrued expenses

 

6,621

 

 

 

9,138

 

Accrued compensation

 

(4,129

)

 

 

(45

)

Deferred revenue

 

(2,960

)

 

 

3,086

 

Other current and long-term liabilities

 

(12

)

 

 

(35

)

Net cash provided by operating activities

 

18,828

 

 

 

26,141

 

 

 

 

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(23,408

)

 

 

(9,793

)

Proceeds from sales of property and equipment

 

72

 

 

 

45

 

Net cash used in investing activities

 

(23,336

)

 

 

(9,748

)

 

 

 

 

Cash flows from financing activities

 

 

 

Payments of deferred offering costs

 

(270

)

 

 

 

Payments under line of credit

 

(52,000

)

 

 

(43,500

)

Borrowings under line of credit

 

63,000

 

 

 

37,500

 

Extinguishment of long-term debt

 

 

 

 

(38,131

)

Issuance of long-term debt

 

 

 

 

38,131

 

Payments of long-term debt

 

(5,696

)

 

 

(7,238

)

Repayment of capital leases

 

 

 

 

(8

)

Debt issuance costs

 

 

 

 

(125

)

Net cash provided by (used in) financing activities

 

5,034

 

 

 

(13,371

)

Net increase in cash

 

526

 

 

 

3,022

 

Cash - Beginning of year

 

4,244

 

 

 

6,252

 

Cash - End of year

$

4,770

 

 

$

9,274

 

 

THE DUCKHORN PORTFOLIO, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted gross profit, adjusted net income, adjusted EBITDA and adjusted EPS, collectively referred to as “Non-GAAP Financial Measures,” are commonly used in the Company’s industry and should not be construed as an alternative to net income or earnings per share as indicators of operating performance (as determined in accordance with GAAP). These Non-GAAP Financial Measures may not be comparable to similarly titled measures reported by other companies. The Company has included these Non-GAAP Financial Measures because it believes the measures provide management and investors with additional information to evaluate business performance in comparison to budgets, forecasts and prior year financial results.

Non-GAAP Financial Measures are adjusted to exclude certain items that affect comparability. The adjustments are itemized in the tables below. You are encouraged to evaluate these adjustments and the reason the Company considers them appropriate for supplemental analysis. In evaluating adjustments, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments set forth below. The presentation of Non-GAAP Financial Measures should not be construed as an inference that future results will be unaffected by unusual or recurring items.

Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that the Company calculates as net income before interest, taxes, depreciation and amortization, non-cash equity-based compensation expense, purchase accounting adjustments, casualty losses or gains, impairment losses, changes in the fair value of derivatives and certain other items which are not related to our core operating performance. Adjusted EBITDA is a key performance measure the Company uses in evaluating its operational results. The Company believes adjusted EBITDA is a helpful measure to provide investors an understanding of how management regularly monitors the Company’s core operating performance, as well as how management makes operational and strategic decisions in allocating resources. The Company believes adjusted EBITDA also provides management and investors consistency and comparability with the Company’s past financial performance and facilitates period to period comparisons of operations, as it eliminates the effects of certain variations unrelated to its overall performance.

Adjusted EBITDA has certain limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations include:

  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
  • adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
  • adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt;
  • adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to the Company; and
  • other companies, including companies in the Company’s industry, may calculate adjusted EBITDA differently, which reduce their usefulness as comparative measures.

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including net income and the Company’s other GAAP results. In evaluating adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by the types of items excluded from the calculation of adjusted EBITDA.

Adjusted Gross Profit
Adjusted gross profit is a non-GAAP financial measure that the Company calculates as gross profit excluding the impact of purchase accounting adjustments (including depreciation and amortization related to purchase accounting) and bulk wine losses. We believe adjusted gross profit is a useful measure to us and our investors to assist in evaluating our operating performance because it provides consistency and direct comparability with our past financial performance between fiscal periods, as the metric eliminates the effects of non-cash or other expenses unrelated to our core operating performance that would result in fluctuations in a given metric for reasons unrelated to overall continuing operating performance. Adjusted gross profit should not be considered a substitute for gross profit or any other measure of financial performance reported in accordance with GAAP.

Adjusted Net Income
Adjusted net income is a non-GAAP financial measure that the Company calculates as net income excluding the impact of non-cash equity-based compensation expense, purchase accounting adjustments, casualty losses or gains, impairment losses, changes in the fair value of derivatives and certain other items unrelated to core operating performance, as well as the estimated income tax impacts of all such adjustments included in this non-GAAP performance measure. We believe adjusted net income assists us and our investors in evaluating our performance period-over-period. In calculating adjusted net income, we also calculate the following non-GAAP financial measures which adjust each GAAP-based financial measure for the relevant portion of each adjustment to reach adjusted net income:

  • Adjusted net sales – calculated as net sales excluding the impact of purchase accounting and bulk wine losses;
  • Adjusted SG&A – calculated as selling, general, and administrative expenses excluding the impacts of purchase accounting, transaction expenses, equity-based compensation, and COVID-19 costs;
  • Adjusted income tax – calculated as the tax effect of all adjustments to reach adjusted net income based on the applicable blended statutory tax rate for the period.

Adjusted net income should not be considered a substitute for net income or any other measure of financial performance reported in accordance with GAAP.

Adjusted EPS
Adjusted EPS is a non-GAAP financial measure that the Company calculates as adjusted net income divided by diluted share count for the applicable period. We believe adjusted EPS is useful to us and our investors because it improves comparability of results of operations from period to period. Adjusted EPS should not be considered a substitute for net income per share or any other measure of financial performance reported in accordance with GAAP.

THE DUCKHORN PORTFOLIO, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, amounts in millions, except shares and per share data)

 

 

 

 

 

 

 

 

Three months ended January 31, 2022

 

Net

sales

 

Gross

profit

 

SG&A

 

Adjusted EBITDA

 

Income

tax

 

Net

income

 

Diluted

EPS

GAAP results

$98.7

 

$49.5

 

$23.8

 

$17.9

 

$6.4

 

$17.9

 

$0.16

Interest expense

 

 

 

 

 

 

1.6

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

6.4

 

 

 

 

 

 

Depreciation and amortization expense

 

 

0.1

 

(1.9)

 

6.3

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

$32.3

 

 

 

 

 

 

Purchase accounting adjustments

 

 

0.1

 

 

 

0.1

 

 

0.1

 

Transaction expenses

 

 

 

 

(1.0)

 

1.0

 

0.3

 

0.8

 

0.01

Change in fair value of derivatives

 

 

 

 

 

 

(0.5)

 

(0.1)

 

(0.4)

 

Equity-based compensation

 

 

 

 

(1.2)

 

1.4

 

0.3

 

1.1

 

0.01

Non-GAAP results

$98.7

 

$49.7

 

$19.7

 

$34.3

 

$6.9

 

$19.5

 

$0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended January 31, 2021

 

Net

sales

 

Gross

profit

 

SG&A

 

Adjusted EBITDA

 

Income

tax

 

Net

income

 

Diluted

EPS

GAAP results

$83.7

 

$41.8

 

$17.5

 

$22.0

 

$7.9

 

$22.0

 

$0.22

Interest expense

 

 

 

 

 

 

3.6

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

7.9

 

 

 

 

 

 

Depreciation and amortization expense

 

 

0.1

 

(1.9)

 

5.8

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

$39.3

 

 

 

 

 

 

Purchase accounting adjustments

 

 

0.8

 

 

 

0.8

 

0.2

 

0.6

 

0.01

Change in fair value of derivatives

 

 

 

 

 

 

(1.3)

 

(0.3)

 

(0.9)

 

(0.01)

Equity-based compensation

 

 

 

 

(0.3)

 

0.3

 

 

0.3

 

Casualty loss (gain), net

 

 

 

 

 

 

(7.8)

 

(2.0)

 

(5.8)

 

(0.06)

Financial statement uplift costs

 

 

 

 

(0.2)

 

0.2

 

0.1

 

0.2

 

Wildfire costs

 

 

 

 

 

 

0.1

 

 

 

COVID-19 costs

 

 

 

 

(0.7)

 

0.7

 

0.2

 

0.5

 

Non-GAAP results

$83.7

 

$42.7

 

$14.4

 

$32.2

 

$6.0

 

$16.8

 

$0.17

 

Note: Sum of individual amounts may not recalculate due to rounding.

 


ę Business Wire 2022
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Financials (USD)
Sales 2023 398 M - -
Net income 2023 69,6 M - -
Net Debt 2023 204 M - -
P/E ratio 2023 26,9x
Yield 2023 -
Capitalization 1 874 M 1 874 M -
EV / Sales 2023 5,23x
EV / Sales 2024 4,73x
Nbr of Employees 446
Free-Float 37,2%
Chart THE DUCKHORN PORTFOLIO, INC.
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Technical analysis trends THE DUCKHORN PORTFOLIO, INC.
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 9
Last Close Price 16,31 $
Average target price 19,22 $
Spread / Average Target 17,9%
EPS Revisions
Managers and Directors
Alex Ryan President & Chief Executive Officer
Lori Beaudoin Chief Financial Officer & Executive Vice President
Zach Rasmuson Chief Operating Officer & Executive Vice President
James Lewis O'Hara Independent Director
Deirdre A. Mahlan Independent Director
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