Willamette Valley Vineyards Posts results for Q1 2021

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Willamette Valley Vineyards (NASDAQ: WVVI) reported a loss of $0.05 per common share for Q1 2021, compared to a profit of $0.11 in Q1 2020, marking an 84.4% drop in net income to $122,685. Sales revenue fell by 11.6% to $5,765,338 due to decreased distributor shipments, despite a rise in direct sales. Gross profit also declined by 10.7% to $3,493,567. Additionally, selling, general, and administrative expenses increased by 17.2% to $3,317,558. The company is expanding production capacity and developing new winery restaurants in Oregon, aiming to meet increasing demand.

Positive

• Expansion of winemaking capacity by 50,000 cases scheduled for summer 2021.
• New winery restaurants planned in Lake Oswego, Bend, Happy Valley, and Vancouver, with the first opening late 2021.
• Increased orders from distributors noted through April 2021.

Negative

• Net income decreased 84.4% from Q1 2020.
• Sales revenue decreased 11.6% year-over-year due to lower distributor shipments.
• Gross profit dropped 10.7% compared to the previous year.
• Selling, general, and administrative expenses rose 17.2%.

SALEM, Ore., May 13, 2021 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ: WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated a loss per common share after preferred dividends of $0.05 and profit per common share of $0.11 for the period ended March 31, 2021 and 2020, respectively, a decrease of $0.16, for the period ended March 31, 2021 over the prior year period.

Sales revenue for the three months ended March 31, 2021 and 2020 were $5,765,338 and $6,521,895, respectively, a decrease of $756,557, or 11.6%, in the current year period over the prior year period. This decrease was caused by a decrease in shipments to distributors of $1,110,429 being partially offset by an increase in direct sales of $353,872 in the current year three-month period over the same period in the prior year. The decrease in revenue from the distributors was primarily attributed to the timing of orders, shipments from the winery and inventory management from distributors as first quarter depletions from distributors to their accounts rose 9% from the same period of the prior year and orders from distributors through April are ahead of the previous year.  

Gross profit for the three months ended March 31, 2021 and 2020 was $3,493,567 and $3,912,042, respectively, a decrease of $418,475, or 10.7%, in the first quarter of 2021 over the same quarter in the prior year. This decrease was primarily the result of a decrease in case sales to distributors in the first three months of the current year compared to the same period in 2020.

Selling, general and administrative expenses for the three months ended March 31, 2021 and 2020 was $3,317,558 and $2,829,504, respectively, an increase of $488,054, or 17.2%, in the current quarter over the same quarter in the prior year.

Net income for the three months ended March 31, 2021 and 2020 was $122,685 and $787,082, respectively, a decrease of $664,397, or 84.4%, in the first quarter of 2021 over the same quarter in the prior year. 

Jim Bernau, Founder and CEO of the winery said ""Through to today, the Company's sales performance has never been higher - remarkable given many of our restaurant accounts are just starting to order this year.  As a result, we are installing an additional 50,000 cases of winemaking capacity this summer and have contracted for more wine-grapes in hopes of meeting increasing distributor demand.  Additionally, we are in the early stages of developing new Willamette Valley Vineyards winery restaurants in Lake Oswego, Bend, Happy Valley and on the Vancouver Washington Waterfront so far, with the first expected to open late this year.  The new sparkling winery south of Dundee is on schedule to open in late Spring of next year with the Highway 99 widening construction at the entrance currently underway."

For a complete discussion of the Company's financial condition and operating results for the first quarter, see our Form 10-Q for the three months ended March 31, 2021, 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," "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, 2020, as well as in the Company's other Securities and Exchange Commission filings and reports. 

The following is the Company's Statement of Income for the three months ended March 31, 2021 compared to the three months ended March 31, 2020:

					Three months ended
					March 31,
					2021		2020
SALES, NET					$       5,765,338		$       6,521,895
COST OF SALES					2,271,771		2,609,853
GROSS PROFIT					3,493,567		3,912,042
OPERATING EXPENSES
	Sales and marketing				2,116,665		1,748,040
	General and administrative				1,200,893		1,081,464
		Total operating expenses			3,317,558		2,829,504
INCOME FROM OPERATIONS					176,009		1,082,538
OTHER INCOME (EXPENSE)
	Interest income				3,397		9,517
	Interest expense				(99,576)		(105,742)
	Other income (expense), net				89,134		95,002
INCOME BEFORE INCOME TAXES					168,964		1,081,315
INCOME TAX PROVISION					(46,279)		(294,233)
NET INCOME					122,685		787,082
Accrued preferred stock dividends					(359,636)		(256,452)
INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS					$        (236,951)		$           530,630
Earnings (Loss) per common share after preferred dividends,
	basic and diluted				$               (0.05)		$                  0.11
Weighted-average number of
	common shares outstanding				4,964,529		4,964,529

 

 

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SOURCE Willamette Valley Vineyards