Form 8-K Truett-Hurst, Inc. For: May 13

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

May 13, 2015

 

TRUETT-HURST, INC.

______________

(Exact name of registrant as specified in its charter)

Delaware	001-35973	46-1561499
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

125 Foss Creek Circle, Healdsburg, CA 95448

(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (707) 431.4436

(Former name or former address, if changed since last report): Not applicable

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On May 13, 2015, Truett-Hurst Inc. (NASDAQ: THST), announced its financial results for its third quarter and nine-month period of fiscal 2015 ended March 31, 2015.  A copy of Truett-Hurst Inc.’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this report, including the press release and presentation furnished as Exhibits 99.1 and 99.2 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. In addition, the exhibits furnished herewith contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in such exhibits.

 

Item 9.01.

Financial Statements and Exhibits

 

(c)

Exhibits

 

The exhibits listed below are furnished pursuant to Item 2.02 hereof and shall not be deemed “filed” under the Securities Exchange Act of 1934.

 

99.1

Press release issued by Truett-Hurst, Inc. on May 13, 2015.

 

99.2

Truett-Hurst, Inc. Third Quarter Fiscal 2015 Teleconference Presentation, dated May 13, 2015.

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Truett-Hurst Inc.

 

 

By:

/s/ Paul Forgue

Paul Forgue

Chief Financial Officer and Chief Operations Officer

Date: May 13, 2015

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.	Description of Exhibit
99.1	Press release issued by Truett-Hurst, Inc. on May 13, 2015.
99.2	Truett-Hurst, Inc. Third Quarter Fiscal 2015 Teleconference Presentation, dated May 13, 2015.

 

 

 

 

 

 

Exhibit 99.1

 

news release 

 

May 13, 2015

 

NASDAQ: THST

  

Truett-Hurst, Inc. Reports Third Quarter Fiscal 2015 Results

 

Healdsburg, California (May 13, 2015) – Truett-Hurst, Inc. (NASDAQ: THST) today reported results for the third quarter and nine-month period of fiscal 2015 (“FY15”), which ended March 31, 2015. Truett-Hurst, Inc. 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.

 

FY15Q3 Vs. FY14Q3

 

·

Net sales up 19% to $6.2 million from $5.2 million (+$1.0 million):

 

o

Wholesale up 1% to $3.5 million.

 

o

Direct to Consumer (“DTC”) up 18% to $1.2 million.

 

o

Internet up 120% to $1.5 million.

 

Despite the Company’s inability to ship the Paperboy product due to continued unavailability of bottles, wholesale net sales during the quarter were up slightly compared to the prior year. After eliminating Paperboy sales from both periods, net sales for all other wholesale products grew 12% from an adjusted total of $3.13 million in FY14Q3. Applying the same adjustment to overall net sales, total net sales grew 28% in the quarter from adjusted net sales of $4.8 million to $6.1 million. We are unsure when, or if, we will be able to resume Paper Boy production.

 

Overall gross margins increased to 39% from 34% and gross profit increased $0.7 million to $2.4 million

 

o

Wholesale gross margins increased 5.1 margin points to 30.6%

 

o

DTC gross margins increased 2.7 margin points to 63.9%

 

o

Internet gross margins increased 3.2 margin points to 41.2%

 

Operating Expenses:

 

Operating expenses for the third quarter of FY15 were $2.8 million compared to $2.4 million in the prior-year quarter period. Sales and marketing (“S&M”) expense increased $0.5 million primarily due to higher variable expenses associated with our internet net sales (i.e., shipping, credit card transaction fees and sales commissions). We also had higher personnel costs and brand related programming, promotions and incentives. General and administrative (“G&A”) expense was higher by $0.3 million due to increased compensation expense (including non-cash stock compensation expense) and increased professional fees. The third quarter of FY14 included a provision for loss on deposit of $0.4 million from our former paper bottle supplier’s filing of administration in the UK.

 

 

Truett-Hurst, Inc. • 125 Foss Creek Circle • Healdsburg, CA 95448 • tel: 707.431.4436 • fax: 707.395.0289 • email: [email protected]

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

Nine Months FY15 Vs. Nine Months FY14

 

·

Net sales up 16% to $19.2 million from $16.5 million (+$2.7 million):

 

o

Wholesale down 6% to $11.2 million.

 

o

DTC up 20% to $3.6 million.

 

o

Internet up 166% to $4.4 million.

 

The prior year comparisons for wholesale net sales are impacted by two different Paper Boy related items (i) the loss contingency accrual booked in Q2FY15 of $0.6 million, and (ii) our inability to ship Paperboy product due to continued unavailability of bottles. After eliminating the impact of both items in each period, net sales for all other wholesale products grew 11% from adjusted net sales of $10.5 million to $11.7 million. With the same adjustments made to total net sales, total net sales grew 30% from adjusted net sales of $15.1 million to $19.7 million.

 

Overall gross margins increased 2 margin points from 34% and 36% for nine-month periods of FY14 and FY15, respectively.

 

o

Wholesale gross margins decreased 4.4 margin points to 22.7%

 

o

DTC gross margins increased 3.0 margin points to 63.5%

 

o

Internet gross margins increased 9.0 margin points to 46.2%

 

Wholesale gross margins for the nine-month period in FY15 were impacted by $0.8 million from the Paperboy related loss contingency accrual and inventory impairment recorded in the second quarter. The wholesale gross margin, adjusted for these two items, was 28%, an increase of 1 margin point over the same period in FY14.

 

The overall gross margin, adjusted for these two items, was 39%, an increase of 5 margin points over the same period in FY14.

 

Operating Expenses:

 

Operating expenses for the nine-month period of FY15 were $7.9 million compared to $6.3 million in the prior nine-month period, an increase of $1.6 million. S&M expense was higher by $1.3 million primarily due to the increase of variable expenses associated with our internet net sales (i.e., shipping, credit card transaction fees and sales commissions). We also had incremental investment in sales personnel, travel and entertainment, and brand related programming, promotions and incentives. G&A expense increased $0.7 million due primarily to higher compensation expense (including non-cash stock compensation expense), IT related infrastructure costs, and professional fees. The nine-month period of FY14 included a provision for loss on deposit of $0.4 million from our former paper bottle supplier’s filing of administration in the UK.

 

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

Phillip L. Hurst, Truett-Hurst, Inc.’s President and CEO stated, “Setting aside the historic Paper Boy items, we are pleased that we are growing our top line and seeing healthy margin expansion.”

 

Earnings Call

 

Truett-Hurst, Inc.’s management will host a conference call today, May 13, 2015, at 1:30 p.m. PST (4:30 p.m. EST) 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 Third Quarter Fiscal 2015 Results Call or visit our webcast link: http://www.videonewswire.com/event.asp?id=102157.

 

A supporting Third Quarter 2015 Earnings Presentation, in advance of the conference call, will be available at:

 

http://www.truetthurstinc.com/index.php?s=151&cat=3

 

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 10064415. The call will be available one hour after the end of the conference call through May 21, 2015 at 9:00 am ET.

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

TRUETT-HURST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data)

(unaudited)

 

		Three-Month Periods Ended								Nine-Month Periods Ended
		March 31,								March 31,
		2015				2014				2015				2014
Sales		$	6,278			$	5,280			$	19,624			$	16,957
Less excise tax			(126	)			(120	)			(426	)			(415	)
Net sales			6,152				5,160				19,198				16,542
Cost of sales			3,723				3,408				12,335				10,880
Gross profit			2,429				1,752				6,863				5,662
Operating expenses:
Sales and marketing			1,885				1,377				5,308				3,930
General and administrative			855				613				2,610				1,937
Provision for loss of deposit			-				400				-				400
Bulk wine sales, net gain			-				-				-				(1	)
Loss on disposal of assets			10				-				12				-
Total operating expenses			2,750				2,390				7,930				6,266
Loss from operations			(321	)			(638	)			(1,067	)			(604	)
Other (expense) income:
Interest expense, net			(74	)			(42	)			(207	)			(123	)
Other			(68	)			(56	)			(154	)			(26	)
Total other expense			(142	)			(98	)			(361	)			(149	)
Loss before income taxes			(463	)			(736	)			(1,428	)			(753	)
Income tax expense (benefit)			2				(111	)			4				(100	)
Net loss before non-controlling interests			(465	)			(625	)			(1,432	)			(653	)
Net (loss) income attributable to non-controlling interest: The Wine Spies, LLC			(27	)			(13	)			58				(74	)
Net loss attributable to Truett-Hurst, Inc. and H.D.D. LLC			(438	)			(612	)			(1,490	)			(579	)
Less: Net loss attributable to non-controlling interest: H.D.D. LLC			(178	)			(428	)			(656	)			(402	)
Net loss attributable to Truett-Hurst, Inc.		$	(260	)		$	(184	)		$	(834	)		$	(177	)
Net loss per share
Basic and diluted		$	(0.07	)		$	(0.06	)		$	(0.22	)		$	(0.07	)
Weighted average shares used in computing net loss per share:
Basic and diluted			3,842,798				2,936,894				3,787,014				2,704,752

 

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

TRUETT-HURST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

		March 31, 2015				June 30, 2014
ASSETS		Unaudited
Current assets:
Cash and cash equivalents		$	2,072			$	5,567
Accounts receivable			2,349				3,300
Inventories			22,269				17,179
Bulk wine deposit			1,122				1,424
Other current assets			106				161
Total current assets			27,918				27,631
Property and equipment, net			5,811				5,553
Goodwill			134				134
Intangible assets, net			732				629
Other assets, net			476				381
Total assets		$	35,071			$	34,328
LIABILITIES and EQUITY
Current liabilities:
Credit facilities		$	8,865			$	8,685
Accounts payable and accrued expenses			4,236				3,194
Accrual for sales returns			556				-
Due to related parties			201				56
Related party note			12				67
Current maturities of long-term debt			379				333
Total current liabilities			14,249				12,335
Deferred rent liability			32				48
Long-term debt, net of current maturities			3,345				3,527
Total liabilities			17,626				15,910
Commitments and contingencies
Stockholders' equity
Preferred stock, par value of $0.001 per share, 5,000,000 shares authorized and zero issued and outstanding at March 31, 2015 and June 30, 2014			-				-
Class A common stock, par value of $0.001 per share, 15,000,000 authorized and 4,010,120 issued and outstanding at March 31, 2015 and 3,750,472 issued and outstanding at June 30, 2014			4				4
Class B common stock, par value of $0.001 per share, 1,000 authorized and 8 issued and outstanding at March 31, 2015 and 9 issued and outstanding at  June 30, 2014			-				-
Additional paid-in capital			14,516				14,057
Accumulated deficit			(4,829	)			(3,995	)
Total Truett-Hurst, Inc. stockholders' equity			9,691				10,066
Non-controlling interests			7,754				8,352
Total equity			17,445				18,418
Total liabilities and equity		$	35,071			$	34,328

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

TRUETT-HURST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

		Nine-Month Periods Ended
		March 31,
		2015				2014
Cash flows from operating activities:
Net loss before non-controlling interests		$	(1,432	)		$	(653	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			496				394
Stock-based compensation			458				253
Loss (gain) on fair value of interest rate swap			98				(3	)
Loss on disposal of asset			12				-
Deferred rent			(16	)			(2	)
Deferred taxes			2				(100	)
Changes in operating assets and liabilities, net
Accounts receivable			951				293
Inventories			(5,090	)			(3,962	)
Bulk wine deposit			302				(1,125	)
Other current assets			(43	)			44
Accounts payable and accrued expenses			1,042				(880	)
Accrual for sales returns			556				-
Net cash used in operating activities			(2,664	)			(5,741	)
Cash flows from investing activities:
Acquisition of property and equipment			(615	)			(472	)
Acquisition of intangible and other assets			(240	)			(180	)
Proceeds from sale of assets			3				1
Net cash used in investing activities			(852	)			(651	)
Cash flows from financing activities:
Net proceeds (payments on) from line of credit			180				(305	)
Net proceeds from related parties			90				208
Proceeds (payments to) on long-term debt			(249	)			239
Net cash provided by financing activities			21				142
Net decrease in cash			(3,495	)			(6,250	)
Cash at beginning of period			5,567				11,367
Cash at end of period		$	2,072			$	5,117
Supplemental disclosure of cash flow information:
Cash paid for interest		$	188			$	125
Cash paid for income taxes		$	2			$	2
Supplemental disclosure of non-cash transactions
Seller-financed acquisition of trademark		$	170			$	-
Deferred tax asset arising from LLC unit exchange		$	3,606			$	2,791
Due to related parties pursuant to tax receivable agreement		$	3,245			$	2,512
Equity benefit on LLC unit exchange		$	31			$	279

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

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.

 

Forward-Looking Statements

 

This press release and our earnings conference call for the third quarter of fiscal 2015 ended March 31, 2015 contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, that are made as of the date of this press release based upon our current expectations. All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenue, projected costs, prospects, plans, opportunities, and objectives constitute “forward-looking statements.” The words “may,” “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “potential” or “continue” and similar types of expressions identify such statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements include expectations regarding revenue, income, expenses, for the fiscal year ending June 30, 2015 and any future periods. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause such differences include, but are not limited to, a reduction in the supply of grapes and bulk wine available to us; significant competition; any change in our relationships with retailers which could harm our business; we may not achieve or maintain profitability in the future; the loss of key employees; a reduction in our access to, or an increase in the cost of, the third-party services we use to produce our wine; credit facility restrictions on our current and future operations; failure to protect, or infringement of, trademarks and proprietary rights; these factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. For additional information, see our Annual Report on Form 10-K filed on September 29, 2014, or our other reports currently on file with the Securities and Exchange Commission, which contain a more detailed discussion of risks and uncertainties that may affect future results. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

 

 

 

 

 

 

 

Truett-Hurst, Inc. Announces Third Quarter Fiscal 2015 Financial Results

 

 

 

For more information, contact:	For more information, contact:
Truett-Hurst, Inc.	Truett-Hurst, Inc.’s Investor Relations
Paul Forgue,	Wil Lindgren, Investor Relations &
Chief Financial Officer & Chief Operations Officer	Director of Reporting and Finance
Phone: 707.431.4423	Phone: 707.431.4436
Fax: 707.395.0289	Fax: 707.395.0290
Email: [email protected]	Email: [email protected]

 

 

 

 

 

 

Exhibit 99.2

  

Truett - Hurst, Inc. FY15Q3 Earnings Call May 13, 2015 NASDAQ: THST 1

2 Safe Harbor Statement This presentation (including the presentation and any subsequent questions and answers) contains statements that are forward - looking within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 . Such forward - looking statements are only predictions and are not guarantees of future performance . Any such forward - looking statements are and will be, as the case may be, subject to many risks, uncertainties, certain assumptions and factors relating to the operations and business environments of Truett - Hurst, Inc . and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward - looking statements . These risk factors, include, but are not limited to, a reduction in the supply of grapes and bulk wine available to us ; significant competition ; any change in our relationships with retailers could harm our business ; we may not achieve or maintain profitability in the future ; the loss of key employees ; a reduction in our access to, or an increase in the cost of, the third - party services we use to produce our wine could harm our business ; credit facility restrictions on our current and future operations ; failure to protect, or infringement of, trademarks and proprietary rights ; these factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report or detailed in our periodic filings (including Forms 8 - K, 10 - K and 10 - Q) or other documents filed with the Securities and Exchange Commission . For more detailed information on us, please refer to our filings with the Securities and Exchange Commission, which are readily available at http : //www . sec . gov, or through the our Investor Relations website at http : //www . truetthurstinc . com . For additional information, see our annual report for the year ended June 30 , 2014 on Form 10 - K filed on September 29 , 2014 , or our other reports currently on file with the Securities and Exchange Commission, which contain a more detailed discussion of risks and uncertainties that may affect future results . We do not undertake to update any forward - looking statements unless otherwise required by law .

Agenda • Financial Update – FY15 Q3 vs. FY14 Q3 – YTD FY15 vs FY14 – Paper Boy Impact on Net Revenue Growth – P&L Recap – Segment Recap – Select Balance Sheet Data – Ownership Structure • Business Update – Industry Overview – Truett Hurst Customer Update – Market Risks & Opportunities • Q&A 3

FINANCIAL UPDATE 4

FY15Q3 vs. FY14Q3 ― Revenue growth of 19 % with net sales of $6.2 million (an increase of $1.0 million versus prior - period quarter) ― 1% increase in Wholesale ― 18% increase in DTC ― 120% increase in Internet ― Overall gross margin percent increased to 39% from 34% (gross profit dollars of $2.4 million in FY15Q3) ― Wholesale: 5.1 margin point increase ― DTC: 2.7 margin point increase ― Internet: 3.2 margin point increase ― Operating expenses of $2.8 million ― $0.5 million incremental investment in sales and marketing ― $0.3 million increase in general and administrative 5

YTD FY15 vs. YTD FY14 ― Revenue growth of 16 % with net sales of $19.2 million (an increase of $2.7 million versus prior - period quarter) ― 6% decline in Wholesale (FY15 impacted by loss contingency accrual of $0.6 million posted in FY15Q2) ― 20% increase in DTC ― 166% increase in Internet ― Overall gross margin increase to 36%. Gross profit dollars grew 21.2% to $6.9 million (an increase of $1.2 million versus prior year) ― Wholesale: 4.4 margin point decline (5 margin point impact from loss contingency accrual and inventory impairment) ― DTC: 3.0 margin point increase ― Internet: 9.0 margin point increase ― Operating expenses of $7.9 million ― $1.3 million incremental investment in sales and marketing ― $0.7 million increase in general and administrative ― Net sales impacted by $0.6 million loss contingency accrual and cost of sales impacted by $0.2 million inventory impairment posted during FY15Q2 (both related to Paper Boy) 6

7 Net Revenue Growth (adjusted for Paper Boy impacts) Nine Months ended March 31 Three Months ended March 31 Reported wholesale and consolidated growth rates have been negatively impacted by several items related to our Paper Boy bran d. In Q215, we recorded a sales contingency accrual which reduced sales by $0.6 million. Due to unavailability of paper bottles, w e h ave not been able to produce and therefore sell significant amounts of our Paper Boy brand during FY15. The charts below highlight o ur segment and consolidated net sales after removing the impact of these Paper Boy related items from each period. 10,497 11,687 3,012 3,618 1,640 4,366 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2014 2015 In Thousands Wholesale DTC Internet 3,128 3,511 993 1,176 656 1,444 - 1,000 2,000 3,000 4,000 5,000 6,000 2014 2015 In Thousands Wholesale DTC Internet 11% 12% 20% 166% 18% 120% Consolidated Growth w/out Paper Boy items 30% Consolidated Growth w/out Paper Boy items 28%

P&L Recap 8 FY 14 FY 15 9mo 15 v 14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 B / (W) %  L4Q Net sales before impact of loss contingency 5,386$ 5,996$ 5,160$ 5,515$ 6,482$ 7,146$ 6,152$ 3,238$ 19.6% 25,295$ Loss Contingency (1) - - - - - (582) - (582) (582) Net Sales - Reported 5,386 5,996 5,160 5,515 6,482 6,564 6,152 2,656 16.1% 24,713 Gross profit before PB Related Items (1) 1,789 2,121 1,752 1,767 2,435 2,790 2,429 1,992 35.2% 9,421 PB Related Items (1) (791) (791) (791) Gross profit - Reported 1,789 2,121 1,752 1,767 2,435 1,999 2,429 1,201 21.2% 8,630 Gross Margin % - Reported 33% 35% 34% 32% 38% 30% 39% 34% Gross Margin % - Adjusted 33% 35% 34% 32% 38% 39% 39% 37% Sales and marketing ex stock comp 1,048 1,321 1,337 1,434 1,482 1,758 1,845 (1,379) 37.2% 6,519 Sales and Marketing stock comp 106 78 40 117 83 100 40 1 340 1,154 1,399 1,377 1,551 1,565 1,858 1,885 (1,378) 6,859 General and administrative ex stock comp 728 579 602 696 888 707 780 (466) 24.4% 3,071 General and administrative stock comp 8 9 11 67 55 105 75 (207) 302 736 588 613 763 943 812 855 (673) 3,373 Other - (1) 400 88 2 - 10 387 100 Total Operating Expenses 1,890 1,986 2,390 2,402 2,510 2,670 2,750 (1,664) 26.6% 10,332 Income (loss) from Operations (101)$ 135$ (638)$ (635)$ (75)$ (671)$ (321)$ (463)$ -76.7% (1,702)$ Add: Stock Comp 114 87 51 184 138 205 115 206 642 Add: Other - (1) 400 88 2 - 10 (387) 100 Add: Q215 Paper Boy Charges - - - - - 791 - 791 791 Income (loss) from Operations - Adjusted 13$ 221$ (187)$ (363)$ 65$ 325$ (196)$ 147$ 312.8% (169)$ (1) Loss contingency accrual & inventory impairment: Sales return provision - included in net sales 582 Inventory Impairment (Paper Boy)- included in cost of goods 209 Total Gross Margin Impact 791

9 Segment Recap Gross profit contribution growth with all segments exceeding sales growth due to margin expansion Wholesale comparisons impacted by availability of Paper Boy in FY15 – adjusted growth ~ 12% Continued strong growth in tasting room and wine club sales driving DTC Expect pace of additional internet sales increases to moderate as we evaluate new partners and focus on organic growth. Q3 2014 2015 B / (W) %  Net Sales Wholesale 3,511 3,532 21 0.6% Direct to Consumer 993 1,176 183 18.4% Internet 656 1,444 788 120.1% 5,160 6,152 992 19.2% Gross Profit Wholesale 895 1,082 187 20.9% Direct to Consumer 608 752 144 23.7% Internet 249 595 346 139.0% 1,752 2,429 677 38.6% Gross Margin Wholesale 25.5% 30.6% 5.1% Direct to Consumer 61.2% 63.9% 2.7% Internet 38.0% 41.2% 3.2% 34.0% 39.5% 5.5% Margin improvement vs. prior year for each segment. We anticipate that in upcoming periods wholesale margins may be reduced as a result of the lower margins (relative to our wines) of the CA Winecraft brand.

10 Select Balance Sheet Data Q-O-Q 2015 2015  in Q2 Q3 WC Total Assets 34,557 35,071 Total Liabilities 16,762 17,626 Total Equity 17,795 17,445 34,557 35,071 Cash and cash equivalents 2,913 2,072 Property & equipment, net 5,931 5,811 Major Working Capital Accounts A/R 2,294 2,349 (55) Inventories 21,952 22,269 (317) Bulk Wine Deposit - 1,122 (1,122) AP & Accrueds 3,474 4,236 762 (732) Interest Bearing Debt Credit facilities 8,457 8,865 Other Interest Bearing Debt 3,849 3,736 12,306 12,601

11 Ownership Structure Activity during Q3FY15: • 92,134 LLC units were converted into Class A Shares • 70,000 equity incentives vested HDD LLC Ownership Class A Shares (Fully Diluted) Members THI Total Outstanding Unconverted LLC Units Equity Incentives Total As of Initial Public Offering 4,102,644 2,700,000 6,802,644 2,700,000 4,102,644 252,000 7,054,644 60.3% 39.7% 100.0% 38.3% 58.2% 3.6% 100.0% Changes through 3/31/15: LLC Conversions (1,111,318) 1,111,318 0 1,111,318 (1,111,318) 0 0 Vesting of Equity Incentives Outstanding @ IPO Date 0 0 0 112,000 0 (112,000) 0 Post IPO Equity Incentives Equity Incentives Granted - RSA / RSU 0 0 0 0 0 131,629 131,629 Equity Incentives Granted - Options 0 0 0 0 0 150,000 150,000 Equity Incentives Vested 0 0 0 86,802 0 (86,802) 0 0 0 0 86,802 0 194,827 281,629 As of 3/31/15 2,991,326 3,811,318 6,802,644 4,010,120 2,991,326 334,827 7,336,273 43.9% 56.1% 100.0% 54.7% 40.8% 4.6% 100.0%

BUSINESS UPDATE 12

Overall Channel Growth 13

Execution • Customer Updates – The Kroger Company • Initial CA Winecraft production completed in March and load - in orders began shipping in April for late May launch on racks in approximately 900 stores • Sonoma Ranches brand in stores Q4 FY15 • Several new items under consideration – launch timing not yet known – Safeway/Albertsons • Combined new company – 2,100 stores • Expanding into Albertsons now – starting in So. Cal • Extending Curious Beast franchise with Cabernet Sauvignon – Target Corporation • 8 new items in launch now • Republic Of Wine – initial strong success – Total Wines & More • Total Wines & More is looking to double business from $2 billion to $4 billion in three years • TH has 21 skus • Expansion plans in the works – Colby Red • New package completed • Listings in Harris Teeter, HEB, Winn - Dixie. • Major promotion in Walgreens “Heart Month” • Three Tier Wholesale development outside large retailers and Colby Red has been slower than expected and well below distributor commitments. Currently assessing sales and distribution options to improve execution. 14

Market Risks & Opportunities • Market Risks – The Wine Spies • Customer retention and growth – Three Tier Distribution • Fierce competition with large branded companies • Economies of scale • Sales support • Market Opportunities – Large retail partners are growing – Retailers control shelf space – Private label/Control brands taking share – Consumers seeking innovation/new brands 15

Q & A 16

17 APPENDIX I. Contact Information II. Conference Call Playback Information III. Third Quarter and Nine - Month Fiscal 2015 Pro forma Diluted EPS & Market Cap

Appendix I - Contact Information 18 Phillip L. Hurst Chief Executive Officer, President Email: [email protected] T: 707.431.4408 M: 707.318.7480 Paul A. Forgue Chief Financial Officer & Chief Operations Officer Email: [email protected] T: 707.431.4423 M: 707.494.3452 www.truetthurstinc.com [email protected]

Appendix II – Call Playback Information Webcast/PowerPoint/Replay available at: http://www.truetthurstinc.com/index.php?s=151&cat=3 Replay available until May 21, 2015. 19

Appendix III Adjusted Pro Forma EPS & Market Cap March 31, 2015 Net loss attributable to Truett-Hurst, Inc. and H.D.D. LLC (438)$ Adjusted Pro Forma Basic and Diluted Loss Per Share Weighted average Class A common stock 3,842,798 LLC units assuming 100% LLC membership conversion 2,991,326 Total weighted average basic pro forma shares outstanding 6,834,124 Adjusted Pro Forma Basic Loss Per Share Calculation (0.06)$ Adjusted Market Capital based on March 31, 2015 Class A common stock closing price of $2.60 (1) 18,203,760$ 1) Calculated using 4,010,120 Class A common shares outstanding and 2,991,326 LLC units convertible to Class A common stock as of March 31, 2015. TRUETT-HURST, INC. AND SUBSIDIARIES Adjusted Pro Forma Basic Loss Per Share & Market Cap For the Three-month Period Ended March 31, 2015 (assumes 100% conversion of LLC units to THST Class A stock ) 20

Appendix III Adjusted Pro Forma EPS & Market Cap March 31, 2015 Net loss attributable to Truett-Hurst, Inc. and H.D.D. LLC (1,490)$ Adjusted Pro Forma Basic and Diluted Loss Per Share Weighted average Class A common stock 3,787,014 LLC units assuming 100% LLC membership conversion 2,991,326 Total weighted average basic pro forma shares outstanding 6,778,340 Adjusted Pro Forma Basic Loss Per Share Calculation (0.22)$ Adjusted Market Capital based on March 31, 2015 Class A common stock closing price of $2.60 (1) 18,203,760$ 1) Calculated using 4,010,120 Class A common shares outstanding and 2,991,326 LLC units convertible to Class A common stock as of March 31, 2015 TRUETT-HURST, INC. AND SUBSIDIARIES Adjusted Pro Forma Basic Loss Per Share & Market Cap For the Nine-month Period Ended March 31, 2015 (assumes 100% conversion of LLC units to THST Class A stock ) 21

 

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