SALEM, Ore., April 2 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) produced the Company's highest earning year since inception. Willamette Valley reported a net profit of $1,291,774, or $0.27 per basic share, on revenue of $14.9 million for the year ended December 31, 2006, as compared to a net profit of $1,156,939, or $0.26 per basic share, on revenues of $13.7 million for the year ended December 31, 2005. The gross margins received from the sales of the winery's produced wines rose to 58% in 2006 compared to 56% for 2005.
Out-of-state distributor sales revenue increased 15% for the year ended December 31, 2006 as compared to the prior period and generated the lion's share of the increase in net profit. Retail sales increased 7% and generated positive contribution to net income growth. The Oregon Wholesale Department called Bacchus Fine Wines produced an increase of 18% in the sales of purchased wine from other wineries but a reduction in sales in winery produced products. As a result, this Department's contribution to net earnings as compared to the prior year was lower. The Board of Directors and Management are taking steps to improve Oregon wholesale operations by purchasing a state- of-the-art sales tracking system, strengthening Oregon marketing support and adding a new Oregon Brand Manager to be focused exclusively on winery produced wines all to be in place by mid-year 2007.
The Company sold a total of 100,280 cases of its own wine in 2006. The winery continued to receive distributor orders in excess of its supply of Pinot Noir and Pinot Gris and has allocated these wines to distributors to fairly apportion available supplies. Management has taken steps to address inventory shortages relative to orders by increasing production through additional plantings, contracting for winegrapes on a long term basis and leasing a top Eola Hills Appellation vineyard, Elton Vineyards, owned by Betty M. O'Brien, a Director of the Company. These actions bring to a total of 538 acres of vineyard owned, leased or contracted by the Company, with 282 of those acres recently planted and not yet productive. The total acres of Pinot Noir are 235, of which 105 are young, non-productive vines; Pinot Gris 122 and 105; Riesling 95 and 70 respectively. Management expects the shortage of these varieties to limit the potential for growth until such time as current plantings mature.
Management is expecting to purchase capital assets at a significantly higher level in 2007 than in past years. Purchases will be made to address future production requirements based on the expected increases in wine grape quantities. Management is planning for increasing production capacity with the expectation that additional construction and equipment expenses will be made through 2009. The Company is required to install additional water storage capacity on the Turner property and fire sprinklers in its 20,000 square foot wine warehouse, which will also require significant capital investment in 2007.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are identified by such words and phrases as "expects," "thinks," "believes," "anticipates" and words of similar import. 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 Oregon's leading producer of Pinot Noir and is headquartered at its Estate Vineyard near Turner, Oregon. Willamette Valley Vineyards common stock is traded on NASDAQ (Symbol: WVVI).
WILLAMETTE VALLEY VINEYARDS, INC. Statement of Operations
For the Years Ended December 31, 2006 2005 Net revenues $14,916,072 $13,667,869
Cost of goods sold 7,963,437 7,282,112
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Gross margin 6,952,635 6,385,757 Selling, general and
administrative expenses 4,678,228 4,385,354
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Income from operations 2,274,407 2,000,403
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Other income (expenses):
Interest income 59,736 1,197
Interest expense (169,643) (233,736)
Other income 16,895 17,336
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(93,012) (215,203)
------------ ------------ Income before income taxes 2,181,395 1,785,200 Income tax provision 889,621 628,261
------------ ------------ Net income $1,291,774 $1,156,939
____________ ____________ Basic net income
per common share $ 0.27 $ 0.26
____________ ____________
Diluted net income
per common share $ 0.26 $ 0.25
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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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