Willamette Valley Vineyards Posts a Loss for the First Quarter 2010

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May 21, 2010, 03:34 ET

SALEM, Ore., May 21 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards (Nasdaq: WVVI), a leading producer of Pinot Noir, generated a net loss of ($188,344), or ($0.04) cents per share for the first three months of 2010. Comparable results for the comparable prior year period include a net profit of $165,156 and $0.03 cents per share.

First quarter 2010 sales revenue decreased 2.1% and gross profit decreased 21.3% compared to the first quarter of 2009. The decreased sales revenue is principally driven by the loss of product placements and reduced order activity from some of our key chain store customers. Gross profit depletion is primarily due to increased production costs on produced brands across product lines. Additionally, a shift in the mix of our Oregon wholesale sales from produced brands to purchased brands resulted in reduced gross profit as a percentage of sales.

Increased sales, general and administrative expenses of 11.5% over the prior year first quarter also played a factor in the Company's operating loss. This increase is mainly due to incremental labor costs for administrative shared services and timing of certain professional service fees.

Jim Bernau, Founder and President of the winery said, "This Quarter was caught in the cross hairs of high pre-recession wine-grape, packaging and transportation costs imbedded in our cost of goods and recession promotional pricing. The historically low yield in 2008 made Oregon's best vintage ever but compounded escalating costs by increasing the farming costs per case produced."

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

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.

WILLAMETTE VALLEY VINEYARDS, INC.
Statement of Operations
(unaudited)
	Three months ended
	March 31,
	2010	2009

Net revenues
Case revenue	$3,553,576	$3,629,247

Total net revenues	3,553,576	3,629,247

Cost of sales
Case	2,084,849	1,763,144

Total cost of sales	2,084,849	1,763,144

Gross profit	1,468,727	1,866,103

Selling, general and administrative expenses	1,741,483	1,561,734

Net operating income (loss)	(272,756)	304,369

Other income (expense)
Interest income	2,819	-
Interest expense	(53,304)	(32,663)
Other income(expense)	11,078	10,992

Net income (loss) before income taxes	(312,163)	282,698

Income tax expense/(benefit)	(123,819)	117,542

Net income (loss)	(188,344)	165,156

Retained earnings beginning of period	6,531,371	5,799,901

Retained earnings end of period	$6,343,027	$5,965,057
Basic earnings (loss) per common share	$ (.04)	$ .03

Diluted earnings (loss) per common share	$ (.04)	$ .03

Weighted average number of basic common shares
outstanding	4,888,977	4,852,244

Weighted average number of diluted common shares
outstanding	4,904,452	4,864,444