Willamette Valley Vineyards Posts a Profit for 2018

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Mar 21, 2019, 18:08 ET

SALEM, Ore., March 21, 2019 /PRNewswire/ -- Willamette Valley Vineyards (NASDAQ:WVVI), a leading Oregon producer of Pinot Noir, generated income applicable to common shareholders of $1,839,665, or $0.37 cents per share, for 2018, down from $2,289,730, or $0.46 cents per share, for the prior year, representing a $450,065, or 19.7%, decrease in income applicable to common shareholders when compared to 2017. The decrease was primarily the effect of $493,081 increase in income before income taxes being more than offset by a $628,280 increase in income tax provision as well as a $314,866 increase in preferred stock dividends. The higher income tax provision was the result of the 2017 tax provision being smaller due to the cumulative effects of the "Tax Cuts and Jobs Act" enacted by the US government in 2017.

Income from operations was $4,182,715 for 2018, up from $3,636,044 for the prior year, representing an increase of $546,671, or 15.0%, when compared to 2017. The increase in income from operations was primarily the result of higher gross profit partially offset by higher selling and administrative costs.

The Company produced revenue of $23,079,739 and $20,853,527 in the years of 2018 and 2017, respectively, an increase of $2,226,212, or 10.7%, in the current year compared to the prior year. The reasons for this increase include increased sales in all categories.

Gross profit was $14,781,499 and $12,881,851 for 2018 and 2017, respectively, an increase of $1,899,648.

Operating expenses were $10,598,784 and $9,245,807 for 2018 and 2017, respectively, an increase of $1,352,977 or 14.6%. Increased operating expenses were primarily the result of efforts to increase sales and accommodate and develop new direct to consumer opportunities.

Jim Bernau, Founder and President of the winery, said "We are pleased Income from Operations was up 15% for the year. Earnings are affected by the dividend cost as we raised the money needed for the planned winery near Dundee prior to construction. As we are able to deploy these development funds, we expect the projected earnings to more than offset the higher dividend costs."

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.

			Twelve months ended
			December 31,
			2018	2017

SALES, NET			$ 23,079,739	$ 20,853,527
COST OF SALES			8,298,240	7,971,676

GROSS PROFIT			14,781,499	12,881,851

OPERATING EXPENSES:
	Sales and marketing		6,701,837	5,912,977
	General and administrative		3,896,947	3,332,830
		Total operating expenses	10,598,784	9,245,807

INCOME FROM OPERATIONS			4,182,715	3,636,044

OTHER INCOME (EXPENSE)
	Interest income		26,591	25,257
	Interest expense		(457,689)	(473,608)
	Other income, net		187,969	258,812

INCOME BEFORE INCOME TAXES			3,939,586	3,446,505

INCOME TAX PROVISION			(1,081,006)	(452,726)

NET INCOME			2,858,580	2,993,779

Preferred stock dividends			(1,018,915)	(704,049)

INCOME APPLICABLE TO COMMON SHAREHOLDERS			$ 1,839,665	$ 2,289,730

Basic income per common share after preferred dividends			$ 0.37	$ 0.46

Weighted average number of basic common shares outstanding			4,964,529	4,985,219