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Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $4.8 million, representing a 43% increase year-over-year and a 41% increase compared to Q1 2025 [7][43] - Gross margins for Q2 2025 were 67%, up from 65% in Q2 2024, while first half gross margins were 68.4% compared to 68.2% in the previous year [7][43][44] - Q2 EBITDA was negative DKK 19.6 million, an improvement from negative DKK 27.4 million in Q2 2024 [8][45] - Free cash flow in Q2 was negative DKK 21.2 million, an improvement of DKK 23.4 million compared to Q2 2024 [8] Business Line Data and Key Metrics Changes - The company is on track to deliver between 60,000 to 80,000 units annually when design wins reach peak production [6] - The existing capture business has shown notable improvements, with a strong pipeline of design wins contributing to growth [11][30] Market Data and Key Metrics Changes - The demand for advanced network interface cards (NICs) is expected to grow significantly, with projections indicating a market growth to nearly $11 billion in the next five years [22][23] - The mass market for advanced NICs is anticipated to approach $6 billion by 2029, driven by the transition from basic NICs to advanced programmable solutions [23] Company Strategy and Development Direction - The company aims to strengthen its position in the evolving mass market for network interface cards, focusing on partnerships and design wins to drive growth [6][10] - The partnership with Intel Altera is crucial for delivering advanced NICs to the mass market, leveraging their proven hardware and software designs [26][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q3 2025, indicating that revenue will surpass both Q2 2025 and Q3 2024 [9] - The company expects to achieve its guidance for 2025, with a target of over 5,700 units shipped [49] - Cost reduction measures implemented in Q2 are expected to lower operating expenses in the coming quarters [49][50] Other Important Information - The company successfully completed a private placement capital raise of NOK 210 million to finance growth opportunities [9] - Management highlighted the importance of artificial intelligence in shaping future market demands for their products [14][22] Q&A Session Summary Question: Have you received first orders from myrtle.ai for Volo? - The product has been launched, and while orders have not yet been received, the company is prepared to fulfill them once they come in [54] Question: Can you quantify the expected revenue contribution from dMatrix in 2026? - Each data center could yield between 2,500 to 25,000 units, but exact predictions are challenging as the product is not yet ready [56][58] Question: What is the revenue potential of the first 5G core deployment? - The initial deployment will require a three-digit number of units, expected to be delivered in Q4 and Q1 [59] Question: What are the key risks in scaling the dMatrix partnership? - The company is confident in meeting delivery timelines and does not anticipate bottlenecks at this stage [60][61] Question: How much of the expected volume in 2026 will come from traditional SmartNIC business versus dMatrix? - The guidance for 2026 anticipates around 5,000 to 6,000 units from existing business, with 80% of the remainder expected from dMatrix [64] Question: When do you expect to receive the first commercial production order from dMatrix? - Discussions regarding forecasts for 2026 will take place before the final product delivery in November [65]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $4.8 million, representing a 43% increase year-over-year and a 41% increase compared to Q1 2025 [7][40] - Gross margins for Q2 2025 were 67%, up from 65% in Q2 2024, while first half gross margins were 68.4% compared to 68.2% in 2024 [7][41] - Q2 EBITDA was negative DKK 19.6 million, an improvement from negative DKK 27.4 million in Q2 2024 [8][42] - Free cash flow in Q2 was negative DKK 21.2 million, an improvement of DKK 23.4 million compared to Q2 2024 [8][9] - Cash and cash equivalents at the end of Q2 2025 amounted to €133.4 million, compared to €103.2 million at the end of Q2 2024 [43] Business Line Data and Key Metrics Changes - The company reported significant progress in its capture business and design win goals, aiming to deliver 60,000 to 80,000 units annually at peak production [6][9] - The partnership with Intel Altera is driving growth in high-volume designs, particularly in AI and cloud services [10][12] Market Data and Key Metrics Changes - The demand for advanced network interface cards (NICs) is expected to grow significantly, with projections indicating a market size of nearly $11 billion in the next five years [20][21] - The mass market for advanced NICs is anticipated to approach $6 billion by 2029, driven by the need for AI, cloud, and mobile services [21][22] Company Strategy and Development Direction - The company is focused on transforming its business to become a leader in the mass market for network interface cards, leveraging partnerships and design wins to drive growth [6][10] - The strategy includes reducing net working capital through better inventory management and payment terms, anticipating a shift towards large volume orders [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q3 2025, expecting revenue to surpass both Q2 2025 and Q3 2024 [9] - The company is confident in its financial outlook, driven by increasing unit sales and high gross margins due to strong software components in its products [47] Other Important Information - The company successfully completed a private placement capital raise of NOK 210 million to finance growth opportunities [9] - Recent design wins include partnerships with dMatrix and Broadcom Symantec, focusing on AI infrastructure and cybersecurity solutions [12][35] Q&A Session Summary Question: Have you received first orders from myrtle.ai for Volo? - The product has been launched, and while orders have not yet been received, the company is prepared to fulfill them once they come in [51] Question: Can you quantify the expected revenue contribution from dMatrix in 2026? - Each data center could yield between 2,500 to 25,000 units, but exact predictions are challenging as the product is not yet ready [53][55] Question: What is the revenue potential of the first 5G core deployment? - The initial deployment will require a three-digit number of units, expected to be delivered primarily in Q4 and Q1 [56] Question: What are the key risks in scaling the dMatrix partnership? - The company is confident in its ability to deliver on time and does not foresee any significant bottlenecks at this stage [57][58] Question: How much of the expected volume in 2026 will come from traditional SmartNIC business versus dMatrix? - The guidance for 2026 includes around 5,000 to 6,000 units from existing business, with the remainder expected from dMatrix [61] Question: When do you expect to receive the first commercial production order from dMatrix? - Discussions regarding forecasts for 2026 will take place before the final product delivery in November this year [62]

2025 Half-Year Report Lars Boilesen, CEO Heine Thorsgaard, CFO August 26, 2025 © NAPATECH 2025 Q&A Session Following the presentation DK: +45 89 87 50 45 UK: +44 20 3936 2999 US: +1 646 233 4753 All other locations: +44 20 3936 2999 Access Code: 120993 To ask a question, press *1 on your telephone keypad. To withdraw your question, press *2 Texted questions can be submitted using the button on the website 2 Safe Harbor Statement This presentation has been prepared by Napatech A/S solely for information purp ...

Group 1 - Four Corners Property Trust (FCPT) has acquired a NAPA Auto Parts property for $2.0 million, emphasizing its portfolio expansion to maximize shareholder wealth [1] - The newly acquired property is located in a high-traffic area in New York, is corporate-operated, and secured under triple-net leases with an average remaining term of five years [1] - The acquisition was executed at a capitalization rate of 7.2% on rent net of transaction costs [1] Group 2 - FCPT has been actively acquiring properties, including Raising Cane's, Dollar General's, and Jiffy Lube's properties for $6.6 million in Texas and Florida, secured under long-term triple-net leases with an average remaining term of eight years [2] - In November, FCPT acquired a Miller's Ale House property in Georgia for $3.8 million, which is corporate-operated under a long-term net lease with approximately 11 years remaining [3] Group 3 - From the beginning of 2024 through October 30, FCPT has acquired 42 properties worth $132 million at a capitalization rate of 7.2% on rents, broadening its footprint and ensuring portfolio diversification [5] - These strategic acquisitions allow FCPT to gain exposure to growing industries and establish long-term lease agreements with strong tenants [5] Group 4 - Over the past six months, FCPT's shares have increased by 16.0%, outperforming the industry's growth of 15.3% [6]

Core Insights - Genuine Parts Co. (GPC) experienced a significant decline in its stock price, becoming the biggest decliner in the S&P 500 after its third-quarter profit missed analyst estimates [1][3] - The company faced macroeconomic challenges in several international markets, particularly in Europe and Australia, which negatively impacted its sales and is expected to continue through 2024 [2][3] - GPC has revised its full-year profit projections, now expecting earnings per share (EPS) between $6.60 to $6.80, down from a previous range of $8.55 to $8.75 [2] Financial Performance - GPC reported third-quarter revenue of $5.97 billion, narrowly beating consensus estimates, but its net income of $226.6 million fell short of the expected $338.4 million [1] - The company has lowered its total sales growth forecast to a maximum of 2% from a previous estimate of 3%, and now anticipates industrial sales to decline by 1% to 2% compared to earlier expectations of flat to 2% growth [2] Market Conditions - CEO Will Stengel indicated that the company is facing "market headwinds" in Europe and Australia, which have adversely affected sales and are likely to persist [3] - GPC shares dropped 20% to $114.30, marking their lowest point since March 2021, reflecting investor concerns over the company's outlook [3]

Financial Performance - Net sales for Fiscal 2024 were $405,481,000, a slight increase of 0.6% compared to $402,996,000 in Fiscal 2023[266] - Gross profit for Fiscal 2024 was $214,926,000, down from $215,689,000 in Fiscal 2023[266] - Net income attributable to The Duckhorn Portfolio, Inc. decreased to $56,013,000 in Fiscal 2024 from $69,298,000 in Fiscal 2023[266] - Adjusted EBITDA increased to $155,084,000 in Fiscal 2024, compared to $144,509,000 in Fiscal 2023[266] - Selling, general and administrative expenses increased to $120.1 million in Fiscal 2024, representing 29.6% of net sales, compared to 27.2% in Fiscal 2023[302] - Total selling, general and administrative expenses increased by $10.4 million, or 9.5%, for Fiscal 2024 compared to Fiscal 2023, reaching $120.1 million[306] - Interest expense increased by $6.4 million, or 54.4%, for Fiscal 2024, totaling $18.1 million, primarily due to higher average outstanding debt balances[307] - Income tax expense decreased by $4.4 million, or 17.4%, for Fiscal 2024, amounting to $20.8 million, mainly due to a decrease in income before taxes[308] - Basic earnings per share decreased to $0.45 in fiscal 2024 from $0.60 in fiscal 2023, a drop of 25%[384] - Net income for fiscal year 2024 was $56,021,000, a decrease from $69,286,000 in fiscal year 2023[388] Sales and Market Presence - The wholesale channel accounted for 69.8% of net sales in Fiscal 2024, up from 67.9% in Fiscal 2023[272] - Net sales growth contribution for Fiscal 2024 was primarily driven by a volume contribution of 3.1%, despite a negative price/mix contribution of (2.5)%[277] - The company expects Duckhorn Vineyards, Decoy, and Sonoma-Cutrer to drive the majority of net sales growth in future periods[274] - The five largest customers represented approximately 45% of net sales in Fiscal 2024, with Customer A contributing 14%, Customer B 12%, and Customer C 10%[440] - Duckhorn Vineyards & Decoy brands contributed 76.1% of total net sales in Fiscal 2024, down from 79.2% in Fiscal 2023[447] Acquisitions and Investments - The acquisition of Sonoma-Cutrer on April 30, 2024, is expected to enhance market presence and contribute to net sales growth[263] - The company completed the acquisition of Sonoma-Cutrer for approximately $267.1 million, consisting of 31,531,532 shares of common stock and $50 million in cash[291] - The acquisition of Geyserville Winery was completed for $54.6 million, funded by $15 million from the Credit Facility and available cash, enhancing processing and storage capabilities[293] - The company incurred $49,614,000 for the acquisition of a business in fiscal year 2024[388] - The acquisition of Sonoma-Cutrer is expected to enhance the Company's portfolio of luxury Chardonnay wines[449] Cash Flow and Liquidity - Net cash provided by operating activities was $4.2 million for Fiscal 2024, a significant decrease of $65.9 million compared to $70.1 million in Fiscal 2023[325] - As of July 31, 2024, the company had $10.9 million in cash and $324.0 million in undrawn capacity on its revolving line of credit[316] - The company expects cash flows generated from operations and its Credit Facility to be adequate for future business growth plans and contractual obligations[318] - Net cash provided by financing activities in Fiscal 2024 was $77.6 million, significantly up from $5.7 million in Fiscal 2023, primarily due to borrowings under the line of credit of $135.0 million[328] Assets and Liabilities - Total current assets increased to $537.5 million in fiscal 2024 from $387.5 million in fiscal 2023, representing a 38.6% growth[382] - Total liabilities increased to $544.6 million in fiscal 2024 from $405.3 million in fiscal 2023, representing a 34.3% increase[382] - The company's total assets reached $1.8 billion in fiscal 2024, up from $1.3 billion in fiscal 2023, indicating a growth of 34.8%[382] - The company's goodwill balance was $483.9 million as of July 31, 2024, with an annual impairment test conducted as of June 30[377] Operational Insights - Approximately 10% of the grapes are sourced from the company's Estate properties, with 90% sourced from third-party growers, allowing for flexibility in production[283] - The company maintains a diversified sourcing model, with the ability to adjust grape sourcing based on market conditions, optimizing gross profit[283] - The cost of grapes purchased for wine production was $85.7 million in Fiscal 2024, compared to $71.0 million in Fiscal 2023[432] - The company does not engage in commodity hedging for grape purchases, which are subject to market conditions and can impact future results[363] Tax and Compliance - The effective tax rate for Fiscal 2024 was 27.1%, up from 26.7% in Fiscal 2023, primarily due to nondeductible transaction costs[309] - The Company’s effective tax rate may be affected by the realization of deferred tax assets, which are evaluated based on future taxable income forecasts[428] - The company is in compliance with all covenants under its Credit Agreement as of July 31, 2024[333] Other Financial Metrics - Total other expenses, net, increased by $6.5 million, or 56.6%, for Fiscal 2024, totaling $18.0 million[307] - Depreciation and amortization expenses rose to $37,168,000 in fiscal year 2024, up from $27,768,000 in fiscal year 2023[388] - Equity-based compensation increased to $7,319,000 in fiscal year 2024 from $6,290,000 in fiscal year 2023[388] - The Company recognized consideration given to customers totaling $52.7 million, $57.5 million, and $66.3 million for Fiscal 2024, 2023, and 2022, respectively, as a reduction to net sales[407] Brand and Market Strategy - The company operates a portfolio of winery brands, including Duckhorn Vineyards and Sonoma-Cutrer, focusing on luxury and ultra-luxury wine production[389] - The launch of Decoy Featherweight Sauvignon Blanc in January 2024 targets the lower-in-calorie/lower-in-alcohol wine category[261] - The company plans to continue investing in direct-to-consumer (DTC) capabilities to enhance consumer engagement and brand loyalty[262]

Core Viewpoint - Johnson Fistel, LLP is investigating potential breaches of fiduciary duties by Duckhorn Portfolio Inc's board related to its proposed sale to Butterfly Equity, raising concerns about whether the board adequately pursued alternatives and secured the best price for shareholders [1][3]. Group 1: Acquisition Details - Duckhorn has accepted an acquisition proposal from Butterfly Equity, offering shareholders $11.10 per share in an all-cash transaction, after which Duckhorn will become a privately held entity [2]. Group 2: Investigation Focus - The investigation by Johnson Fistel centers on whether Duckhorn's board fulfilled its responsibilities to shareholders, particularly regarding the pursuit of alternative options and the pricing of the acquisition [3]. - Analyst projections for Duckhorn's earnings and revenue growth are highlighted, noting that the company's shares have historically traded at higher prices than the proposed acquisition offer [3].

Performance Overview and Challenges - The Duckhorn Portfolio Inc reported fourth-quarter net sales of $107.4 million, exceeding analyst estimates of $106.55 million, representing a 7.3% increase year-over-year driven by a 23.7% growth in volume due to the acquisition of Sonoma-Cutrer [1][3] - Gross profit decreased by 7.2% to $51.3 million, resulting in a gross profit margin of 47.8%, down from 55.2% the previous year, influenced by timing shifts of higher-margin products and normalized trade spending [1][3] Financial Achievements and Industry Implications - Adjusted EBITDA for the fourth quarter was $39.9 million, marking a 16.7% increase from the prior year, with an adjusted EBITDA margin improvement of approximately 300 basis points to 37.2% [2] - This growth underscores the company's ability to maintain profitability and operational efficiency in the luxury wine industry amidst market fluctuations [2] Key Financial Metrics - For fiscal year 2024, net sales were reported at $405.5 million, slightly above the annual estimate of $402.05 million, while net income was $56.0 million, or $0.45 per diluted share, falling short of the estimated $0.50 per share [3] - Adjusted net income for the year was $74.8 million, or $0.60 per diluted share [3] - Key metrics for Q4 2024 compared to Q4 2023 include: - Net Sales: $107.4M vs $100.1M - Gross Profit: $51.3M vs $55.3M - Adjusted EBITDA: $39.9M vs $34.2M - Net Income: $11.3M vs $17.8M [3] Analysis and Commentary - The company demonstrated resilience in a challenging market, leveraging strategic acquisitions like Sonoma-Cutrer for volume growth, while the impact of timing shifts and product mix changes on gross margins indicates a need for careful management of product releases and pricing strategies [4] - The successful integration of Sonoma-Cutrer and execution of strategic initiatives positions the company for growth and profitability into fiscal 2025 and beyond [4]

[Financial Results Overview](index=1&type=section&id=Financial%20Results%20Overview) This section provides an overview of the company's financial performance for both the fourth quarter and the full fiscal year 2024, including key metrics and management's perspective [Fourth Quarter 2024 Performance](index=1&type=section&id=Fourth%20Quarter%202024%20Highlights) The company reported a 7.3% increase in Q4 net sales to $107.4 million, primarily driven by the Sonoma-Cutrer acquisition, with adjusted EBITDA growing 16.7% to $39.9 million Fourth Quarter 2024 Key Financial Metrics | Metric | Q4 2024 | Change vs. Q4 2023 | | :--- | :--- | :--- | | Net Sales | $107.4 million | +7.3% | | Net Income | $11.3 million | -36.5% | | Adjusted Net Income | $20.4 million | +22.2% | | Adjusted EBITDA | $39.9 million | +16.7% | | Diluted EPS | $0.08 | -46.7% | | Adjusted Diluted EPS | $0.14 | -6.7% | - The net sales decline of **13.9%** (excluding Sonoma-Cutrer) was primarily due to the shift in the Kosta Browne Appellation Series release from Q4 in fiscal 2023 to Q3 in fiscal 2024[2](index=2&type=chunk) [Fiscal Year 2024 Performance](index=1&type=section&id=Fiscal%20Year%202024%20Highlights) For fiscal year 2024, net sales grew modestly by 0.7% to $405.5 million, while adjusted EBITDA increased by 7.3% to $155.1 million, improving the margin to 38.2% Fiscal Year 2024 Key Financial Metrics | Metric | FY 2024 | Change vs. FY 2023 | | :--- | :--- | :--- | | Net Sales | $405.5 million | +0.7% | | Net Income | $56.0 million | -19.2% | | Adjusted Net Income | $74.8 million | -3.2% | | Adjusted EBITDA | $155.1 million | +7.3% | | Diluted EPS | $0.45 | -25.0% | | Adjusted Diluted EPS | $0.60 | -10.4% | - Excluding the impact of the Sonoma-Cutrer acquisition, net sales for the fiscal year declined by **$18.4 million** or **4.6%** compared to the prior year[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed satisfaction with Q4 performance and strategic progress in fiscal 2024, highlighting the Sonoma-Cutrer acquisition as a key driver for future growth - The company meaningfully advanced its strategic agenda in fiscal 2024, highlighted by the strategic acquisition of Sonoma-Cutrer[4](index=4&type=chunk) - Management believes the successful integration of Sonoma-Cutrer and execution of strategic initiatives position the business for solid growth and profitability into fiscal 2025 and beyond[4](index=4&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) This section provides an in-depth look at the company's financial performance, including sales drivers, margin analysis, and channel mix for the fiscal year [Fourth Quarter 2024 Financial Details](index=2&type=section&id=Fourth%20Quarter%202024%20Financial%20Information) Q4 net sales growth was driven by a 23.7% volume increase from Sonoma-Cutrer, partially offset by a 16.4% negative price/mix impact, while SG&A as a percentage of sales declined by 190 basis points - The increase in Q4 net sales was driven by a **23.7% volume growth** from the Sonoma-Cutrer acquisition, while price/mix had a **negative contribution of 16.4%**[6](index=6&type=chunk) - Adjusted gross profit margin declined **390 basis points**, partly due to the timing shift of the higher-margin Kosta Browne release to Q3[7](index=7&type=chunk) - Selling, general and administrative (SG&A) expenses as a percentage of net sales declined by **190 basis points**, reflecting active operating expense management[7](index=7&type=chunk) [Sales Channel Mix](index=2&type=section&id=Sales%20Channel%20Mix) For fiscal year 2024, the Wholesale - Distributors channel increased its share of net sales to 69.8%, while other channels experienced a reduction in their respective shares Net Sales by Channel (% of Total) | Channel | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Wholesale – Distributors | 69.8% | 67.9% | | Wholesale – California direct to trade | 16.3% | 17.1% | | DTC | 13.9% | 15.0% | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets, statements of operations, and cash flows for the reported periods, detailing asset, liability, equity, revenue, expense, and cash movement [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of July 31, 2024, total assets grew to $1.82 billion from $1.35 billion, largely due to the Sonoma-Cutrer acquisition, with total liabilities increasing to $544.6 million and equity rising to $1.27 billion Key Balance Sheet Items (in thousands) | Account | July 31, 2024 | July 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$1,817,028** | **$1,347,682** | | Total current assets | $537,540 | $387,530 | | Goodwill | $483,879 | $425,209 | | **Total Liabilities** | **$544,573** | **$405,274** | | Long-term debt, net | $200,734 | $210,619 | | **Total Stockholders' Equity** | **$1,272,455** | **$942,408** | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For fiscal year 2024, net sales were $405.5 million, but higher costs led to a decrease in income from operations to $94.8 million and net income to $56.0 million Fiscal Year Statement of Operations (in thousands, except per share data) | Account | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net sales | $405,481 | $402,996 | | Gross profit | $214,926 | $215,689 | | Income from operations | $94,843 | $105,978 | | Net income | $56,021 | $69,286 | | Diluted EPS | $0.45 | $0.60 | [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In fiscal 2024, net cash from operating activities significantly decreased to $4.2 million, primarily due to increased inventories, while financing activities provided $77.6 million, resulting in a net cash increase of $4.5 million Fiscal Year Cash Flow Summary (in thousands) | Activity | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,160 | $70,092 | | Net cash used in investing activities | ($77,274) | ($72,572) | | Net cash provided by financing activities | $77,633 | $5,666 | | **Net increase in cash** | **$4,519** | **$3,186** | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations from GAAP to non-GAAP figures for both the fourth quarter and the full fiscal year [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS to provide a clearer view of core operating performance by excluding specific non-recurring or non-cash items - The company uses non-GAAP measures to enhance the reader's understanding of past financial performance and future prospects by excluding items not related to core operating performance[12](index=12&type=chunk)[23](index=23&type=chunk) - Adjusted EBITDA is calculated as net income before interest, taxes, depreciation, amortization, and other specific adjustments to help management monitor core operating performance and make strategic decisions[25](index=25&type=chunk) - Adjusted Net Income and Adjusted EPS exclude items like non-cash equity compensation, purchase accounting adjustments, and transaction expenses to improve comparability of results between periods[30](index=30&type=chunk)[32](index=32&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Detailed tables reconcile GAAP figures to their non-GAAP counterparts for both the fourth quarter and the full fiscal year, itemizing adjustments for various non-operating factors [Fourth Quarter Reconciliation](index=11&type=section&id=Fourth%20Quarter%20Reconciliation) For Q4 2024, GAAP Net Income of $11.3 million was adjusted to a non-GAAP Adjusted Net Income of $20.4 million, with key adjustments including purchase accounting, derivative fair value changes, and equity-based compensation Q4 2024 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $51,312 | $3,690 | $55,001 | | SG&A | $30,614 | ($6,752) | $23,862 | | Net Income | $11,296 | $9,122 | $20,418 | | EBITDA | $29,081 | $10,829 | $39,910 (Adj. EBITDA) | [Fiscal Year Reconciliation](index=12&type=section&id=Fiscal%20Year%20Reconciliation) For fiscal year 2024, GAAP Net Income of $56.0 million was reconciled to a non-GAAP Adjusted Net Income of $74.8 million, with significant adjustments for transaction expenses, equity-based compensation, and purchase accounting FY 2024 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $214,926 | $2,478 | $217,404 | | SG&A | $120,083 | ($30,735) | $89,348 | | Net Income | $56,013 | $18,783 | $74,796 | | EBITDA | $132,087 | $22,997 | $155,084 (Adj. EBITDA) | [Other Information](index=3&type=section&id=Other%20Information) This section provides background on The Duckhorn Portfolio, Inc. as a leading luxury wine company and includes important disclaimers regarding forward-looking statements and associated risks [About The Duckhorn Portfolio, Inc.](index=3&type=section&id=About%20The%20Duckhorn%20Portfolio%2C%20Inc.) The Duckhorn Portfolio is North America's premier luxury wine company, managing eleven wineries and over 2,200 acres of vineyards, distributing wines globally across a wide price range - The company is positioned as North America's premier luxury wine company with **eleven wineries** and over **2,200 acres of vineyards**[11](index=11&type=chunk) - The portfolio includes revered wineries like Duckhorn Vineyards, Decoy, Sonoma-Cutrer, and Kosta Browne[11](index=11&type=chunk) - Wines are sold throughout the United States, on five continents, and in more than **50 countries**[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section warns that forward-looking statements are subject to risks such as economic downturns, inflation, competition, supply chain disruptions, and acquisition integration challenges, which could cause actual results to differ materially - The press release contains forward-looking statements regarding future financial performance and growth initiatives, which are not guarantees of future results[13](index=13&type=chunk)[14](index=14&type=chunk) - Applicable risks include economic conditions, consumer demand, supply chain disruptions, successful execution of growth strategy, and risks associated with the acquisition of Sonoma-Cutrer[14](index=14&type=chunk)