SALEM, Ore., Nov. 10 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), set a record with its Third Quarter Earnings Release, achieving its highest earnings since its inception -- besting the company's Second Quarter of 2005 reported three months ago which was, at that time, the winery's highest earning Quarter.
Willamette Valley reported a net profit of $318,246, or $0.07 per basic share on revenue of $3,618,056 in the three months ended September 30, 2005 as compared to a net profit of $116,692, or $0.03 per basic share on revenues of $2,312,607 for the same period in 2004. For the nine months ended September 30, 2005, the Company reported a net profit of $682,525, or $0.15 per basic share on revenues of $9,505,632 compared to a net profit of $317,178, or $0.07 per basic share on revenues of $6,259,471 for the same period in 2004.
"Wine quality has been at its highest since I began growing wine grapes in 1983," commented Founder and President Jim Bernau, "being featured on national television with Rachael Ray and with Chefs Caprial and John Pence and in national publications like the Wine Spectator, Wine Enthusiast and Sunset magazine hasn't hurt either." Sales Revenue increased 56% and Net Income before taxes increased 173% for the three months ended September 30, 2005 as compared to the prior year period, and increased 52% and 115%, respectively, for the nine months ended September 30, 2005 as compared to the prior year period.
The Company used $1,942,963 of cash generated from net earnings and the reduction in wine inventories resulting from record sales to pay down the bank credit line and other financing in the first nine months of 2005. As a result, interest costs have dropped significantly compared to comparable prior year periods.
In August 2005, the Company entered into a new term loan agreement to pay-off the distributor obligation. During September 2005, the Company used excess cash generated through sales to pay $500,000 in principal on this loan, leaving an outstanding balance of $1,000,000.
Sales to out-of-state distributors continued to be the primary reason for the increases in sales revenue and profitability during the three and nine months ended September 30, 2005. Sales to out-of-state distributors increased 130% and 85% for the three and nine months ended September 30, 2005 as compared to the respective prior year periods. This demand has reduced inventories of certain varieties, and the Company has placed those varieties on allocation with its distributors in order to address inventory constraints. The winery's flagship, Vintage Pinot Noir, has experienced the highest increase in orders, but has no present limitations on its availability.
"Willamette Valley Vineyards is continuing to aspire to be the brand of choice for Pinot Noir under $20 a bottle retail or under $50 on a restaurant wine list," said Bernau. "Pinot Noir is the grape we love to grow, the Willamette Valley is one of the best places in the world to grow it and this is a niche we can burrow into and achieve. It is not inexpensive to grow and make high quality Pinot Noir, but it should not be priced out of reach for many who want to enjoy Oregon Pinot Noir." "Higher quality means higher costs as we apply more hand labor in caring for the wine grapes at lower crop levels as they develop on the vine," said Bernau. "We have been able to raise prices, in part, to cover these additional costs." Revenues from the winery's Oregon Wholesale Department, called Bacchus Fine Wines, increased 37% in the three months and 42% in the nine months ended September 30, 2005, compared to the respective prior year periods. Sales of Company produced products through Bacchus Fine Wines increased 31% and sales of products produced by other wineries increased 53% in the three months ended September 30, 2005 compared to the prior year period. For the nine months ended September 30, 2005, such sales increased 21% and 85%, respectively, compared to the prior year period.
Increased sales of Company produced products have reduced excess inventories and the Company is reviewing sales projections in order to plan appropriate future inventory production levels. In the past year, the Company has planted 25 acres of vines at its Forest Grove site and contracted on a long term basis for 90 acres of wine grapes. Management expects the Company's lack of inventory of certain varieties may negatively impact the Company's operating performance for the Fourth Quarter of 2005.
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 Nine months ended
September 30, September 30,
2005 2004 2005 2004 Net revenues
Case revenue $ 3,609,228 $ 2,302,461 $ 9,394,542 $ 6,233,268
Custom crush-
facility lease-
bulk revenue 8,828 10,146 111,090 26,203 Total net revenues 3,618,056 2,312,607 9,505,632 6,259,471 Cost of sales
Case 1,944,787 1,166,551 5,106,703 3,112,378
Bulk -- -- 55,926 -- Total cost of
sales 1,944,787 1,166,551 5,162,629 3,112,378 Gross profit 1,673,269 1,146,056 4,343,003 3,147,093 Selling, general
and administrative
expenses 1,085,852 871,511 3,047,836 2,403,668 Net operating
income 587,417 274,545 1,295,167 743,425 Other income
(expense)
Interest income 349 1,216 775 3,764
Interest expense (57,355) (81,285) (175,735) (233,107)
Other income
(expense) -- 10 17,336 14,548 Net income before
income taxes 530,411 194,486 1,137,543 528,630 Income tax 212,165 77,794 455,018 211,452 Net income 318,246 116,692 682,525 317,178 Retained earnings
beginning of
period 1,320,212 692,737 955,933 492,251 Retained earnings
end of period $1,638,458 $809,429 $1,638,458 $809,429 Basic earnings per
common share $.07 $.03 $.15 $.07 Diluted earnings
per common share $.07 $.03 $.15 $.07 Weighted average
number of
basic common shares
outstanding 4,514,635 4,486,180 4,498,019 4,484,752 Weighted average
number of diluted
common shares
outstanding 4,621,115 4,560,959 4,604,499 4,563,863
DATASOURCE: Willamette Valley Vineyards, Inc.
CONTACT: Jim Bernau of Willamette Valley Vineyards, Inc., 800-344-9463 Web site: http://www.wvv.com/
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