Willamette Valley Vineyards Posts a Profit for the Third Quarter 2012

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Nov 13, 2012, 04:56 ET

SALEM, Ore., Nov. 13, 2012 /PRNewswire/ -- Willamette Valley Vineyards (NASDAQ:WVVI), a leading Oregon producer of Pinot Noir, generated net profits of $268,228, or $0.06 cents per share, for the third quarter of 2012, a decrease of 28.2% from the comparable prior year period. Results for the corresponding prior year period were net profits of $373,407, or $0.08 cents per share.

Third quarter 2012 sales revenue decreased 7.8% and gross profit decreased 4.9% compared to the third quarter of 2011. The reduction in revenue was primarily a result of a one-time event - an additional month's Oregon wholesale revenue in August 2011 when the Company completed its last month of self-distribution while at the same time stocking the new distributor in advance of their September 2011 start-up of sales. Gross profit margin for the third quarter 2012 was 56.8%, an improvement of 1.7 percentage points from the corresponding prior year period.

Selling, general and administrative expenses increased by 13.8% over the prior year third quarter due to increases in the Company's sales effort to compensate for changing from self-distribution in Oregon, to selling through a wine wholesaler.

Jim Bernau, Founder and President of the winery said, "This quarter shows a strengthening of our brand in the marketplace through sustained improvements in our margins. Shedding our self-distribution division of the company, and the heavy administrative and regulatory burden it imposed, has allowed us to focus our resources on creating elegant, classic Oregon Pinot Noir."

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.

		Three months ended		Nine months ended
		September 30,		September 30,
		2012	2011	2012	2011
		(unaudited)	(unaudited)	(unaudited)	(unaudited)

SALES		$ 3,155,762	$ 3,423,496	$ 8,729,512	$ 9,021,117
COST OF SALES		1,363,569	1,538,051	3,624,643	3,987,119

GROSS PROFIT		1,792,193	1,885,445	5,104,869	5,033,998

SELLING, GENERAL & ADMIN EXPENSES		1,211,136	1,064,428	3,585,648	3,367,716

INCOME FROM OPERATIONS		581,057	821,017	1,519,221	1,666,282

OTHER INCOME (EXPENSE)
	Interest income	3,382	4,502	7,618	9,348
	Interest expense	(86,180)	(51,480)	(167,969)	(150,026)
	Other income, net	12,749	42,510	85,803	46,400

INCOME BEFORE INCOME TAXES		511,008	816,549	1,444,673	1,572,004

INCOME TAX PROVISION		(238,105)	(318,078)	(621,309)	(641,104)

INCOME FROM CONTINUING OPERATIONS		$ 272,903	$ 498,471	$ 823,364	$ 930,900

DISCONTINUED OPERATIONS
	Loss from operations	(8,060)	(215,627)	(261,390)	(615,107)
	Income tax benefit	3,385	90,563	109,784	258,345

LOSS FROM DISCONTINUED OPERATIONS		(4,675)	(125,064)	(151,606)	(356,762)

NET INCOME		$ 268,228	$ 373,407	$ 671,758	$ 574,138

BASIC NET INCOME FROM CONTINUING
	OPERATIONS PER COMMON SHARE	$ 0.06	$ 0.10	$ 0.17	$ 0.19
BASIC NET LOSS FROM DISCONTINUED
	OPERATIONS PER COMMON SHARE	$ (0.00)	$ (0.03)	$ (0.03)	$ (0.07)

BASIC NET INCOME PER COMMON SHARE		$ 0.06	$ 0.08	$ 0.14	$ 0.12

DILUTED NET INCOME FROM CONTINUING
	OPERATIONS PER COMMON SHARE	$ 0.06	$ 0.10	$ 0.17	$ 0.19
DILUTED NET LOSS FROM DISCONTINUED
	OPERATIONS PER COMMON SHARE	$ (0.00)	$ (0.03)	$ (0.03)	$ (0.07)

DILUTED NET INCOME PER COMMON SHARE		$ 0.06	$ 0.08	$ 0.14	$ 0.12

Weighted average number of basic common shares outstanding
		4,821,084	4,892,977	4,860,692	4,892,977
Weighted average number of diluted common shares outstanding
		4,828,038	4,896,865	4,866,466	4,897,423