XML 37 R14.htm IDEA: XBRL DOCUMENT v3.3.0.814
9. SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
NOTE 9. SEGMENT REPORTING

The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies.  Direct Sales includes retail sales in the tasting room and remote sites, Wine Club sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes.  Distributor Sales include all sales through a third party where prices are given at a wholesale rate.

 

The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting.  The Company evaluates performance based on the gross profit of the respective business segments.  Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments.  Therefore, net income information for the respective segments is not available.  Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated.

 

The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the three and nine month periods ending September 30, 2015 and 2014.  Sales figures are net of related excise taxes.

 

                                     
    Three Months Ended September 30,  
    Direct Sales     Distributor Sales     Total  
    2015     2014     2015     2014     2015     2014  
                                     
Sales, net   $ 1,767,638     $ 1,395,164     $ 2,476,881     $ 2,651,037     $ 4,244,519     $ 4,046,201  
Cost of Sales     541,918       311,919       1,066,650       1,234,669       1,608,568       1,546,588  
Gross Margin     1,225,720       1,083,245       1,410,231       1,416,368       2,635,951       2,499,613  
Selling Expenses     797,073       628,320       369,632       306,503       1,166,705       934,823  
Contribution Margin   $ 428,647     $ 454,925     $ 1,040,599     $ 1,109,865     $ 1,469,246     $ 1,564,790  
Percent of Sales     41.6%     34.5%     58.4%     65.5%     100.0%     100.0%
                                                 
    Nine Months Ended September 30,    
    Direct Sales     Distributor Sales     Total  
      2015       2014       2015       2014       2015       2014  
                                                 
Sales, net   $ 5,150,223     $ 3,713,934     $ 7,727,951     $ 6,997,558     $ 12,878,174     $ 10,711,492  
Cost of Sales     1,556,335       940,328       3,622,201       3,308,798       5,178,536       4,249,126  
Gross Margin     3,593,888       2,773,606       4,105,750       3,688,760       7,699,638       6,462,366  
Selling Expenses     2,225,678       1,723,459       1,170,875       930,058       3,396,553       2,653,517  
Contribution Margin   $ 1,368,210     $ 1,050,147     $ 2,934,875     $ 2,758,702     $ 4,303,085     $ 3,808,849  
Percent of Sales     40.0%     34.7%     60.0%     65.3%     100.0%     100.0%

 

Direct sales include $6,690 and $0 of bulk wine sales in the three months ended September 30, 2015 and 2014, respectively. Direct sales include $645,653 and $197,760 of bulk wine sales in the nine months ended September 30, 2015 and 2014, respectively.