SALEM, Ore., Aug. 14 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc., (NASDAQ:WVVI), net income for the three and six months ended June 30, 2007 was $265,177 and $499,440, or $0.05 and $0.10 per diluted share, respectively, compared to net income of $259,206 and $616,500, or $0.05 and $0.13 per diluted share, respectively, in the comparable prior year periods. Revenues increased 8.5% and Net Income before taxes increased 2.3% for the three months ended June 30, 2007, as compared to the prior year period. For the six months ended June 30, 2006 revenues increased 2.6% and Net Income before taxes decreased 19.0%, as compared to the prior year period.
Continuing demand from out-of-state distributors for The Company's Pinot Noir and Pinot Gris, in excess of recent year's production levels, has drawn down the inventory of those varieties to the point that income from those products is now being significantly affected. Although the Company continues to have constraints on inventories of key varietals produced which have been allocated to distributors to be shipped on a scheduled basis over the calendar year, the Company has increased sales of other producers products which have a lower profit margin.
Despite these inventory constraints, the Company generated $0.05 and $0.06 basic earnings per share in the first and second quarter of 2007, respectively. During the first three months of 2007, the Company paid down Current Liabilities by over $1 million, resulting in current ratio of 6.8 to 1. This improved in the second quarter of 2007 to 7.3 to 1.
The Company believes the proper steps are being taken to increase the generation of high quality wine inventories over time as vineyard plantings mature. In the first quarter of 2007 The Company loaned one of its growers $250,000 to support additional plantings during the first quarter. The Company continues to improve its internal staffing and management systems in anticipation of these higher, future volumes.
In the first quarter of 2007 the Company entered a long-term lease for Elton Vineyards, a related party, located in the Eola Hills, to help address the inventory constraints. The vineyard consists of 60 acres of mature grapevines of which approximately 42 acres are Pinot Noir. Willamette Valley Vineyards has an initial 11 year lease with the option to renew for 4 successive terms of 5 years each plus a first right of refusal on the property's sale.
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 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,
2007 2006 2007 2006
__________ __________ __________ __________
Net revenues
Case revenue $ 3,717,426 $ 3,426,838 $ 7,303,987 $ 7,121,014
Facility Lease 8,793 8,793 17,586 17,586
__________ __________ __________ __________
Total net revenues 3,726,219 3,435,631 7,321,573 7,138,600 Cost of sales
Case 1,999,942 1,779,274 3,896,173 3,730,693
Bulk 986 - 986 4,631
__________ __________ __________ __________
Total cost of sales 2,000,928 1,779,274 3,897,159 3,735,324 Gross profit 1,725,291 1,656,357 3,424,414 3,403,276 Selling, general
and administrative
expenses 1,266,844 1,200,629 2,577,017 2,329,745
__________ __________ __________ __________
Net operating income 458,447 455,728 847,397 1,073,531 Other income (expense)
Interest income 11,053 18,878 28,111 23,156
Interest expense (27,523) (42,597) (55,760) (86,083)
Other income - - 12,667 16,895
__________ __________ __________ __________
Net income before
income taxes 441,977 432,009 832,415 1,027,499 Income tax 176,800 172,803 332,975 410,999
__________ __________ __________ __________
Net income 265,177 259,206 499,440 616,500 Retained earnings
beginning of
period 3,638,909 2,470,166 3,404,646 2,112,872
__________ __________ __________ __________
Retained earnings
end of period $3,904,086 $ 2,729,372 $ 3,904,086 $ 2,729,372
========== ========== ========== ==========
Basic earnings per
common share $.06 $.06 $.10 $.13 Diluted earnings per
common share $.05 $.05 $.10 $.13 Weighted average
number of basic
common shares
outstanding 4,805,877 4,711,620 4,803,326 4,692,942 Weighted average
number of diluted
common shares
outstanding 5,014,213 4,893,871 5,009,580 4,875,194
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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