Willamette Valley Vineyards Posts a Profit for the Second Quarter 2019

By
Willamette Valley Vineyards

SALEM, Ore., Aug. 14, 2019 /PRNewswire/ -- Willamette Valley Vineyards (NASDAQ:WVVI), a leading Oregon producer of Pinot Noir, generated income applicable to common shareholders of $103,459, or $0.02 cents per share, for the second quarter of 2019, down from $546,817, or $0.11 cents per share, for the corresponding prior year period, representing a $443,358 or 81.1% decrease in income applicable to common shareholders compared to second quarter 2018. 

The Company produced revenues of $5,790,837 and $5,821,292 in second quarters of 2019 and 2018, respectively, a decrease of $30,455 or 0.5%.  This decrease was caused by an increase in direct sales of $5,957 and a decrease in sales through distributors of $36,412.  The decrease in sales through distributors was primarily the result of the Company's Oregon and Washington distributor experiencing problems in their new order/delivery systems.  This resulted in a significant reduction in Oregon and Washington sales and deliveries during the second quarter 2019. 

Gross profit was $3,498,358 and $3,772,106 for the second quarters of 2019 and 2018, respectively, a decrease of $223,748 or 6.0%.  This decrease is the result of a higher cost of product sales that the Company believes is associated with specific vintages being sold during the second quarter 2019.

Selling, general and administrative expenses were $2,901,927 and $2,543,201 for the second quarters of 2019 and 2018, respectively, an increase of $358,726 or 14.1%.   This increase was primarily the result of increases in staffing, marketing, long-term planning and development activities and an increase in professional fees. 

Income from operations was $596,431 and $1,178,905 for the second quarters of 2019 and 2018, respectively, a decrease of $582,474 or 49.4%.  This decrease was the result of a decrease in revenue and growth in selling, general and administrative expenses.

Jim Bernau, Founder and President of the winery, said, "We had a difficult quarter due to problems executing distribution in Oregon and Washington.  We are working closely with the distributor to address these issues and anticipate an improved process going forward."

Willamette Valley Vineyards, Inc. is headquartered at its Estate Vineyard near Salem, Oregon.  The Company's common stock is traded on NASDAQ (WVVI) and preferred stock on NASDAQ (WVVIP). 

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are identified by such words and phrases as "expects," "thinks," "believes," "anticipates" and words of similar import.  Such forward-looking statements are subject to risks and uncertainties and actual results could differ materially from those projected.  Such risks and uncertainties include, but are not limited to:  availability of financing for growth, availability of adequate supply of high quality grapes, successful performance of internal operations, impact of competition, changes in wine broker or distributor relations or performance, impact of possible adverse weather conditions, impact of reduction in grape quality or supply due to disease, impact of governmental regulatory decisions and other risks. 






Three months ended


Six months ended






June 30,


June 30,






2019


2018


2019


2018













SALES, NET


$   5,790,837


$   5,821,292


$   10,789,623


$   10,353,911

COST OF SALES

2,292,479


2,099,186


4,010,629


3,741,561













GROSS PROFIT

3,498,358


3,722,106


6,778,994


6,612,350













OPERATING EXPENSES









Sales and marketing

1,906,586


1,641,372


3,681,586


3,168,451


General and administrative

995,341


901,829


1,936,539


1,792,650



Total operating expenses

2,901,927


2,543,201


5,618,125


4,961,101













INCOME FROM OPERATIONS

596,431


1,178,905


1,160,869


1,651,249













OTHER INCOME (EXPENSE)









Interest income

840


2,137


10,286


9,004


Interest expense

(111,088)


(116,284)


(221,502)


(235,002)


Other income, net

8,091


45,336


121,100


138,042













INCOME BEFORE INCOME TAXES

494,274


1,110,094


1,070,753


1,563,293













INCOME TAX PROVISION 

(134,363)


(306,839)


(284,366)


(429,583)













NET INCOME


359,911


803,255


786,387


1,133,710













Accrued preferred stock dividends

(256,452)


(256,438)


(512,904)


(511,332)













INCOME APPLICABLE TO COMMON SHAREHOLDERS

$       103,459


$       546,817


$          273,483


$          622,378













Income per common share after preferred dividends

$              0.02


$              0.11


$                 0.06


$                 0.13













Weighted average number of 









common shares outstanding

4,964,529


4,964,529


4,964,529


4,964,529

 

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SOURCE Willamette Valley Vineyards