Willamette Valley Vineyards Posts Results for Q1 2024

Rhea-AI Summary

Willamette Valley Vineyards (NASDAQ: WVVI) reported results for Q1 2024. The company posted a net loss of $521,805, a 29.9% improvement from the $744,823 loss in Q1 2023. Loss per common share decreased from $0.25 to $0.22. Revenues increased by 5.9% to $8.8 million, driven by higher direct sales and distributor shipments. Gross profit rose by 17.7% to $5.27 million. However, selling, general, and administrative expenses increased by 7.7%, mainly due to higher legal costs and an additional tasting room. Despite these expenses, the company managed to reduce net losses through higher product prices.

Positive

• Revenue increased by 5.9%, reaching $8,803,080 for Q1 2024.
• Gross profit rose by 17.7%, amounting to $5,272,722.
• Net loss decreased by 29.9%, reducing to $521,805.
• Loss per common share decreased from $0.25 to $0.22.
• Direct sales revenue increased by $214,507.
• Revenue from distributor shipments rose by $279,633.
• Higher gross margins achieved through improved production management and cost-cutting.

Negative

• Selling, general, and administrative expenses increased by 7.7%, totaling $5,875,299.
• General and administrative expenses rose significantly by 25.7%, attributed to higher legal costs.
• Selling expenses increased by 1.1%, partly due to an additional tasting room.

Insights

Financial Analyst

The financial report from Willamette Valley Vineyards shows a mixed yet improving outlook. The company reported a loss per common share of $0.22 for Q1 2024, a slight improvement from the loss of $0.25 in Q1 2023. Although the company is still operating at a loss, the reduction in losses by $223,018 or 29.9% indicates a positive trend. Revenue grew by 5.9% to $8,803,080, driven by an increase in both direct sales and distributor shipments. Gross profit saw a more substantial increase of 17.7%, suggesting better cost management and higher-margin products.

However, the increase in selling, general and administrative expenses by 7.7% due to higher legal costs and additional tasting room locations adds a layer of concern. While the net loss is decreasing, the company's ability to manage its expenses will be important going forward. Investors should watch how these cost increases are addressed in subsequent quarters to ensure that the revenue and profit growth are not neutralized by rising expenses.

Market Research Analyst

The wine market has been facing various headwinds, making it notable that Willamette Valley Vineyards managed to both increase its revenue and improve its gross margins. The 17.7% increase in gross profit is particularly promising, indicating that the company is succeeding in selling higher-priced, higher-margin wines. CEO Jim Bernau’s strategy of focusing on wine enthusiasts and offering multiple facilities with wine and culinary experiences seems to be paying off. These experiential offerings are increasingly popular in the market and could help differentiate the company from competitors.

Additionally, the growth in direct sales and distributor shipments reflects a healthy demand for the company's products. This suggests that despite broader market challenges, there is still a robust consumer base for quality wines. Investors should keep an eye on how the company continues to capitalize on these consumer trends and whether it can sustain this growth momentum.

SALEM, Ore., May 13, 2024 /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 $0.22 and  $0.25 for the three months ended March 31, 2024 and 2023 respectively, a decrease of $0.03, for the three month period ended March 31, 2024 over the same three month period in the prior year. 

Sales revenue for the three months ended March 31, 2024 and 2023 was $8,803,080 and $8,308,940, respectively, an increase of $494,140, or 5.9%, in the current year period over the prior year period. This increase was caused by an increase in revenues from direct sales of $214,507 and an increase in revenues from shipments to distributors of $279,633 in the current year's three-month period over the same period in the prior year.  

Gross profit for the three months ended March 31, 2024 and 2023 was $5,272,722 and $4,478,463, respectively, an increase of $794,259, or 17.7%, in the first quarter of 2024 over the same quarter in the prior year. This increase was primarily the result of a combination of an increase in direct sales combined with higher margins from our sales through distributors in the first three months of the current year compared to the same period in 2023.

Selling, general and administrative expenses for the three months ended March 31, 2024 and 2023 was $5,875,299 and $5,453,413, respectively, an increase of $421,886, or 7.7%, 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 $44,202, or 1.1% and an increase in general and administrative expenses of $377,684, or 25.7% in the current quarter compared to the same quarter last year. Selling expenses increased in 2024 compared to 2023 primarily as a result of having an additional tasting room location in 2024. General and administrative expenses increased in the first quarter of 2024 compared to the same quarter of 2023 primarily as a result of higher legal costs.

Net loss for the three months ended March 31, 2024 and 2023 was $521,805 and $744,823, respectively, a decrease of $223,018, or 29.9%, in the first quarter of 2024 over the same quarter in the prior year. The decrease in net loss for the first quarter of 2024, compared to the comparable period in 2023, was primarily the result of higher prices of products sold in 2024.

Jim Bernau, Founder and CEO of the Company said, "In spite of the headwinds in the wine market, I believe our increasing gross margins and profits are a result of improved production management, selective cost cutting combined with the sales growth of higher quality, higher priced wines from our estate vineyards.  Our wine enthusiast focused strategy through stock ownership offering multiple facilities with wine and culinary experiences is bearing fruit."

For a complete discussion of the Company's financial condition and operating results for the first quarter 2023, see our Form 10-Q for the three months ended March 31, 2024, 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).

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the "Securities Act", and Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the "Exchange Act". 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 revenues or costs for any of our tasting rooms and restaurants exceeding our expectations. 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 our Annual Report on Form 10-K. 

The following is the Company's Statement of Operations for the three months ended March, 31, 2024 compared to the three months ended March 31, 2023:

				Three months ended
				March 31,
				2024		2023
SALES, NET				$     8,803,080		$     8,308,940
COST OF SALES				3,530,358		3,830,477
GROSS PROFIT				5,272,722		4,478,463
OPERATING EXPENSES:
	Sales and marketing			4,027,782		3,983,580
	General and administrative			1,847,517		1,469,833
		Total operating expenses		5,875,299		5,453,413
LOSS FROM OPERATIONS				(602,577)		(974,950)
OTHER INCOME (EXPENSE)
	Interest expense			(229,687)		(124,422)
	Other income, net			98,052		73,586
LOSS BEFORE INCOME TAXES				(734,212)		(1,025,786)
INCOME TAX BENEFIT				212,407		280,963
NET LOSS				(521,805)		(744,823)
Accrued preferred stock dividends				(563,177)		(511,719)
LOSS APPLICABLE TO COMMON SHAREHOLDERS				$   (1,084,982)		$   (1,256,542)
Loss per common share after preferred dividends,
	basic and diluted			$            (0.22)		$            (0.25)
Weighted-average number of
	common shares outstanding, basic and diluted			4,964,529		4,964,529

 

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SOURCE Willamette Valley Vineyards

FAQ

What were Willamette Valley Vineyards' Q1 2024 earnings and losses?

Willamette Valley Vineyards reported a net loss of $521,805 for Q1 2024, with a loss per common share of $0.22.

How did Willamette Valley Vineyards' revenues change in Q1 2024?

Revenues increased by 5.9% to $8,803,080 in Q1 2024, compared to Q1 2023.

What factors contributed to Willamette Valley Vineyards' revenue growth in Q1 2024?

Revenue growth was driven by an increase in direct sales of $214,507 and distributor shipments of $279,633.

What was Willamette Valley Vineyards' gross profit for Q1 2024?

The gross profit for Q1 2024 was $5,272,722, a 17.7% increase from Q1 2023.

Why did Willamette Valley Vineyards' general and administrative expenses increase in Q1 2024?

General and administrative expenses rose by 25.7% due to higher legal costs.

What caused the increase in Willamette Valley Vineyards' selling expenses in Q1 2024?

Selling expenses increased by 1.1% primarily due to an additional tasting room location.

How did Willamette Valley Vineyards reduce its net loss in Q1 2024?

The net loss was reduced by 29.9% due to higher prices of products sold and improved production management.

What is the stock symbol for Willamette Valley Vineyards?

The stock symbol for Willamette Valley Vineyards is NASDAQ: WVVI.