Willamette Valley Vineyards Posts results for Q2 2023

SALEM, Ore., Aug. 14, 2023 /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 $0.08 and  $0.04 for the three months ended June 30, 2023 and 2022 respectively, an increase of $0.04, for the three month period ended June 30, 2023 over the same three month period in the prior year. 

Sales revenue for the three months ended June 30, 2023 and 2022 were $10,726,243 and $8,700,861, respectively, an increase of $2,025,382, or 23.3%, in the current year period over the prior year period. This increase was caused by an increase in sales through distributors of $337,579 and an increase in direct sales of $1,687,803 in the current year three-month period over the prior year period. The increase in revenue from sales through distributors was primarily attributed to more availability of new vintage wines compared to the prior year. The increase in direct sales to consumers was primarily the result of retail sales in new tasting rooms in 2023.

Gross profit for the three months ended June 30, 2023 and 2022 was $6,250,578 and $4,827,257, respectively, an increase of $1,423,321, or 29.5%, in the current year three-month period over the same prior year period.

Selling, general and administrative expenses for the three months ended June 30, 2023 and 2022 was $5,941,739 and $4,382,814 respectively, an increase of $1,558,925, or 35.6%, in the current quarter over the same quarter in the prior year. This increase was primarily the result of an increase in selling and marketing expenses of $1,330,430, or 44.1% and an increase in general and administrative expenses of $228,495, or 16.8% in the current quarter compared to the same quarter last year.

Net income for the three months ended June 30, 2023 and 2022 was $108,453 and $257,401, respectively, a decrease of $148,948, or 57.9%, in the second quarter of 2023 over the same quarter in the prior year.

Jim Bernau, Founder and CEO of the winery said "The Company' sales growth of over 23% in this quarter is a strong signal our expansion strategy is working.  I believe that the production management improvements made last year will lead to improved margins and product availability, and that we just need to sell through the 2021 vintage to get to better margins.

I am anticipating the financial impact of the higher SG&A costs will lessen as the new locations become better known by consumers and believe that the recent Wine Enthusiast Magazine's recommendation for our new sparkling winery, Domaine Willamette as a top "Must Visit" will help."

For a complete discussion of the Company's financial condition and operating results for the second quarter, see our Form 10-Q for the three months ended June 30, 2023, 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 four new 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 Income for the three months and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022:

					Three months ended				Six months ended
					June 30,				June 30,
					2023		2022		2023		2022
SALES, NET					$    10,726,243		$      8,700,861		$    19,035,183		$    14,943,179
COST OF SALES					4,475,665		3,873,604		8,306,142		6,395,893
GROSS PROFIT					6,250,578		4,827,257		10,729,041		8,547,286
OPERATING EXPENSES
	Sales and marketing				4,350,043		3,019,613		8,333,623		5,497,340
	General and administrative				1,591,696		1,363,201		3,061,529		2,741,735
		Total operating expenses			5,941,739		4,382,814		11,395,152		8,239,075
INCOME (LOSS) FROM OPERATIONS					308,839		444,443		(666,111)		308,211
OTHER INCOME (EXPENSE)
	Interest income				5		904		5		3,293
	Interest expense				(164,615)		(90,371)		(289,037)		(181,817)
	Other income (expense), net				5,135		(355)		78,721		88,669
INCOME (LOSS) BEFORE INCOME TAXES					149,364		354,621		(876,422)		218,356
INCOME TAX (EXPENSE) BENEFIT					(40,911)		(97,220)		240,052		(59,897)
NET INCOME (LOSS)					108,453		257,401		(636,370)		158,459
Accrued preferred stock dividends					(511,720)		(466,613)		(1,023,439)		(933,225)
LOSS APPLICABLE TO COMMON SHAREHOLDERS					$       (403,267)		$       (209,212)		$    (1,659,809)		$       (774,766)
Loss per common share after preferred dividends,
	basic and diluted				$              (0.08)		$              (0.04)		$              (0.33)		$              (0.16)
Weighted-average number of
	common shares outstanding, basic and diluted				4,964,529		4,964,529		4,964,529		4,964,529

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SOURCE Willamette Valley Vineyards