Willamette Valley Vineyards Posts a Profit for Q3 2020

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Nov 12, 2020, 19:41 ET

SALEM, Ore., Nov. 12, 2020 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated income applicable to common shareholders of $640,347, or $0.13 cents per share, for the third quarter of 2020, up from $595,748 or $0.12 cents per share, for the third quarter in the prior year, representing a $44,599, or 7.5%, increase in income applicable to common shareholders in the third quarter of 2020 compared to the third quarter of 2019.

Sales revenue for the three months ended September 30, 2020 and 2019 were $6,918,131 and $6,758,367, respectively, an increase of $159,764, or 2.4%, in the current year period over the prior year period. This increase was mainly caused by an increase in direct sales of $265,018 being partially offset by a decrease in sales through distributors of $105,254 in the current year three-month period over the same period in the prior year. The increase in revenue from direct sales to consumers was primarily the result of increased retail sales revenues from our brand ambassador program and increased wine sales made over the internet, which more than offset lower revenues from hospitality and kitchen sales mostly due to the restrictions on the operation of our tasting rooms resulting from the COVID-19 pandemic in 2020. The decrease in revenue from sales through distributors was primarily attributed to lower sales to restaurants and similar businesses as many of these establishments have been closed or had other restrictions placed on them due to the COVID-19 pandemic in 2020.

Gross profit for the three months ended September 30, 2020 and 2019 was $4,221,197 and $4,064,022, respectively, an increase of $157,175, or 3.9%, in the third quarter of 2020 over the same quarter in the prior year.

Selling, general and administrative expenses for the three months ended September 30, 2020 and 2019 was $2,917,363 and $2,789,695 respectively, an increase of $127,668, or 4.6%, in the current quarter over the same quarter in the prior year. This increase was primarily the result of an increase in selling expenses of $15,918, or 0.9% and an increase in general and administrative expenses of $111,750, or 12.0% in the current quarter compared to the same quarter last year.

Net income for the three months ended September 30, 2020 and 2019 was $896,799 and $852,200, respectively, an increase of $44,599, or 5.2%, in the third quarter of 2020 over the same quarter in the prior year.

Jim Bernau, Founder and CEO of the winery, said, "The winery has continued to demonstrate brand strength, in the face of COVID-19 regulatory restrictions, benefiting from strong stockholder support in retail stores and direct shipments from the winery. It is inspiring to witness our employees' resourcefulness in protecting their fellow employees and guests while driving sales and making excellent wines."

The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict, as the response to the pandemic is continuing to evolve. The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company's customers, all of which are uncertain and cannot be predicted.

For a complete discussion of the Company's financial condition and operating results for the third quarter, see our Form 10-Q for the three months ended September 30, 2020, as filed with the United States Securities and Exchange Commission on EDGAR.

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. These forward-looking statements involve risks and uncertainties that are based on current expectations, estimates and projections about the Company's business, and beliefs and assumptions made by management. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" "intends," "plans," "predicts," "potential," "should," or "will" or the negative thereof and variations of such words and similar expressions are intended to identify such forward-looking statements. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but 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 or smoke from forest fires, changes in consumer spending, the reduction in consumer demand for premium wines and the impact of the COVID-19 pandemic and the policies of United States federal, state and local governments in response to such pandemic. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic economic conditions. Many of these risks as well as other risks that may have a material adverse impact on our operations and business, are identified in Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as well as in the Company's other Securities and Exchange Commission filings and reports.

The following is the Company's Condensed Statement of Income for the three months and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019:

			Three months ended		Nine months ended
			September 30,		September 30,
			2020	2019	2020	2019

SALES, NET			$ 6,918,131	$ 6,758,367	$ 19,008,680	$ 17,547,990
COST OF SALES			2,696,934	2,694,345	7,373,909	6,704,974

GROSS PROFIT			4,221,197	4,064,022	11,634,771	10,843,016

OPERATING EXPENSES
	Sales and marketing		1,876,455	1,860,537	5,238,493	5,542,123
	General and administrative		1,040,908	929,158	3,064,332	2,865,697
		Total operating expenses	2,917,363	2,789,695	8,302,825	8,407,820

INCOME FROM OPERATIONS			1,303,834	1,274,327	3,331,946	2,435,196

OTHER INCOME (EXPENSE)
	Interest income		2,615	25,268	17,845	35,554
	Interest expense		(103,283)	(110,547)	(314,158)	(332,049)
	Other income (expense), net		37,097	(18,060)	137,899	103,040

INCOME BEFORE INCOME TAXES			1,240,263	1,170,988	3,173,532	2,241,741

INCOME TAX PROVISION			(343,464)	(318,788)	(869,230)	(603,154)

NET INCOME			896,799	852,200	2,304,302	1,638,587

Accrued preferred stock dividends			(256,452)	(256,452)	(769,356)	(769,357)

INCOME APPLICABLE TO COMMON SHAREHOLDERS			$ 640,347	$ 595,748	$ 1,534,946	$ 869,230

Earnings per common share after preferred dividends, basic and diluted			$ 0.13	$ 0.12	$ 0.31	$ 0.18

Weighted-average number of common shares outstanding			4,964,529	4,964,529	4,964,529	4,964,529