Willamette Valley Vineyards Posts a Profit for the Second Quarter 2019

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Aug 14, 2019, 16:15 ET

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