SALEM, Ore., Aug. 12 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), announced its results for the second quarter ended June 30, 2005. Oregon's only public common stock held winery reported achieving its highest performing quarterly results in its history.
"The favorable business climate and the remarkable interest in Pinot Noir generated by the movie 'Sideways' are the big reasons why we are having so much success," exclaimed founder and CEO, Jim Bernau. "The timing of the movie was perfect. We had just finished training all of our distributors on the unique qualities of Oregon Pinot Noir. When the 'Sideways' movie goers showed up in the wine shops, our sales organization was primed to fill those orders.
"Our distributors experienced a 70% increase in retailer and restaurant orders for our Pinot Noir for the first six months of 2005," a surprised Bernau reported.
Sales Revenue increased 67% and Net Income before taxes increased 268% for the three months ended June 30, 2005 as compared to the prior year period, and increased 49% and 82%, respectively, for the six months ended June 30, 2005 as compared to the prior year period.
The winery reported a net profit of $275,520, or $0.06 per basic share, on revenue of $3,512,499 in the second quarter of 2005 as compared to a net profit of $74,965, or $0.02 per share on revenues of $2,103,814 for the same period in 2004. For the six months ended June 30, 2005, the winery reported a net profit of $364,279, or $0.08 per basic share, on revenues of $5,887,577 compared to a net profit of $200,486, or $0.04 per basic share, on revenues of $3,947,440 for the same period in 2004.
These increased sales and earnings enabled the Company to pay down its line of credit with Umpqua Bank by $1,130,580, resulting in reduced interest costs for the three and six months ended June 30, 2005, which are expected to continue in future periods. "One of our big goals was paying off the credit line, which we just accomplished," Bernau stated.
The primary reason for the increases in sales revenue and profitability during the three and six months ended June 30, 2005 was sales to out-of-state distributors, which increased 102% and 63% for the three and six months ended June 30, 2005 as compared to the respective prior year periods. Depletions of the Company's wines from these distributors to their retail customers increased 62% and 52% during the three and six months ended June 30, 2005 as compared to the respective prior year periods - the highest percentage increase in terms of case volume ever experienced.
The Company continues to benefit from the national exposure provided by the airing of Rachael Ray's $40 a Day on the Food Network and PBS's Caprial and John's Kitchen, where the Company has been featured. "It was great having Rachael Ray and her film crew at the winery," commented Bernau. "We had no idea what devoted viewers she has." The Company's wines continued to receive strong reviews. The '04 Pinot Gris received five gold medals in 2005 from the Long Beach Grand Cru Wine Awards, San Francisco International Wine Awards, L.A. County World of Wine Awards, the Taster's Guild International Wine Awards, and the Indy International Wine Competition. Nationally recognized wine critic Dan Berger called the WVV '04 Pinot Gris "exceptional" in his publication "Vintages Experiences". This wine received 89 points and was featured as one of the "Best Wines for Summer Sippin" in the August issue of Wine Enthusiast.
The Willamette Valley Vineyards '04 Whole Cluster Pinot Noir was described in the July 5, 2005 issue of The Oregonian, by writer Katherine Cole, as "lip- smacking strawberry, cranberry, raspberry preserves." The winery's Griffin Creek brand continues to receive accolades as well with the 2002 Viognier winning a Best of Show at the Pacific Rim International Wine Competition, and Best of Class at L.A. County Fair World of Wines. The 2002 Lakeside Syrah received 91 points from Wine and Spirits magazine.
The winery has recently negotiated an agreement with Umpqua Bank for $1.5 million in financing at 6% which will allow a pay-off of the distributor inventory financing note at 8%. "We expect to pay off this refinancing within the next 18 months since our positive cash flows are so strong," commented founder and CEO Jim Bernau. "In the interim, there will be a considerable cost savings and reduced bookkeeping requirements." Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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.
Willamette Valley Vineyards, Inc. is headquartered in Turner, Oregon. The company is one of Oregon's leading wineries and the state's only publicly held winery. Willamette Valley Vineyards is the owner of Tualatin Estate Vineyards and Griffin Creek wines. Willamette Valley Vineyards common stock is traded on NASDAQ (Symbol: WVVI).
WILLAMETTE VALLEY VINEYARDS, INC. Statement of Operations
(unaudited) Three months ended June 30, Six months ended June 30,
2005 2004 2005 2004
__________ __________ __________ __________
Net revenues
Case revenue $3,500,676 $2,096,773 $5,785,314 $3,931,383
Custom crush-
facility lease-
bulk revenue 11,823 7,041 102,263 16,057
__________ __________ __________ __________
Total net revenues 3,512,499 2,103,814 5,887,577 3,947,440 Cost of sales
Case 1,931,401 1,061,808 3,161,917 1,945,827
Bulk -- -- 55,926 --
__________ __________ __________ __________
Total cost of sales 1,931,401 1,061,808 3,217,843 1,945,827 Gross profit 1,581,098 1,042,006 2,669,734 2,001,613 Selling, general and
administrative
expenses 1,069,561 842,970 1,961,984 1,532,733
__________ __________ __________ __________
Net operating
income 511,537 199,036 707,750 468,880 Other income (expense)
Interest income 260 1,346 426 2,548
Interest expense (52,597) (75,440) (118,380) (151,822)
Other income
(expense) -- -- 17,336 14,538
__________ __________ __________ __________
Net income before
income taxes 459,200 124,942 607,132 334,144 Income tax 183,680 49,977 242,853 133,658
__________ __________ __________ __________
Net income 275,520 74,965 364,279 200,486 Retained earnings
beginning of
period 1,044,692 617,772 955,933 492,251
__________ __________ __________ __________
Retained earnings
end of period $1,320,212 $692,737 $1,320,212 $692,737
========== ========== ========== ==========
Basic earnings per
common share $.06 $.02 $.08 $.04 Diluted earnings per
common share $.06 $.02 $.08 $.04 Weighted average
number of basic
common shares
outstanding 4,492,602 4,485,780 4,489,573 4,484,030 Weighted average
number of
diluted common
shares
outstanding 4,598,281 4,567,637 4,595,252 4,565,887
DATASOURCE: Willamette Valley Vineyards, Inc.
CONTACT: Jim Bernau of Willamette Valley Vineyards, Inc., +1-800-344-9463 Web site: http://www.wvv.com/
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