PR Newswire | Nov 12, 2021 06:39PM EST

11/12 17:38 CST

Willamette Valley Vineyards Posts results for Q3 2021 SALEM, Ore., Nov. 12, 2021

SALEM, Ore., Nov. 12, 2021 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated Income applicable to common shareholders for the three months ended September 30, 2021 and 2020 of $95,120 and $640,347, respectively, a decrease of $545,227, or 85.1%, in the third quarter of 2021 over the same quarter in the prior year.

Sales revenue for the three months ended September 30, 2021 and 2020 were $7,641,228 and $6,918,131, respectively, an increase of $723,097, or 10.5%, in the current year period over the prior year period. This increase was caused by an increase in direct sales of $699,172 and an increase in direct sales through distributors of $23,925 in the current year three-month period over the prior year period. The increase in direct sales to consumers was primarily the result of increased revenue from tasting room sales, phone sales, and wine club sales.

Gross profit as a percentage of net sales for the three months ended September 30, 2021 and 2020 was 58.4% and 61.0%, respectively, a decrease of 2.6 percentage points in the current year period over the prior year period mostly as a result of higher cost vintages produced in 2020 that were sold in 2021.

Selling, general and administrative expense for the three months ended September 30, 2021 and 2020 was $3,768,765 and $2,917,363 respectively, an increase of $851,402, or 29.2%, in the current quarter over the same quarter in the prior year. This increase was primarily a result of our tasting rooms being open for more days in 2021 compared to 2020 resulting in higher labor and related costs associated with operating the tasting rooms.

Net income for the three months ended September 30, 2021 and 2020 was $456,191 and $896,799, respectively, a decrease of $440,608, or 49.1%, in the third quarter of 2021 over the same quarter in the prior year.

Jim Bernau, Founder and CEO of the Company said, "An unusual combination of circumstances negatively impacted the Company's financial results this past quarter, including the 2020 vintages sold in 2021 having a relatively higher cost of goods sold, as well as the incurrence of scale-up expenses including compensation costs in advance of the openings of our new winery near Dundee and three new tasting room restaurants in Lake Oswego, the Vancouver Waterfront and Happy Valley. I believe these circumstances will continue to impact the Company at least in the near term. Other factors which could negatively impact the Company's financial results going forward include our inability to supply key, high demand products as retailers' orders have been outstripping available supply prior to the release of our next vintage, as well as distributor trucking shortages and substantial increases in supply costs, such as bottles, which could increase our operating costs until such time as the national supply chain issues are resolved. Construction of the additional 50,000 cases of fermentation capacity at our Turner location was completed on schedule and is currently being used at its maximum capacity for our second largest harvest."

For a complete discussion of the Company's financial condition and operating results for the third quarter, see our Form 10-Q for the three months ended September 30, 2021, 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).

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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, the impact of supply chain and transportation disruptions, and the impact of the COVID-19 pandemic and the policies of United States federal, state and local governments in response to such pandemic. 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2020, as well as in the Company's other Securities and Exchange Commission filings and reports.

The following is the Company's Statement of Income for the three months and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020:

Three months ended Nine months ended

September 30, September 30,

2021 2020 2021 2020

SALES, NET $ 7,641,228 $ 6,918,131 $ 22,356,517 $ 19,008,680

COST OF SALES 3,179,590 2,696,934 9,261,589 7,373,909

GROSS PROFIT 4,461,638 4,221,197 13,094,928 11,634,771

OPERATING EXPENSES

Sales and marketing 2,335,623 1,876,455 6,687,412 5,238,493

General and administrative 1,433,142 1,040,908 4,001,040 3,064,332

Total operating expenses 3,768,765 2,917,363 10,688,452 8,302,825

INCOME FROM OPERATIONS 692,873 1,303,834 2,406,476 3,331,946

OTHER INCOME (EXPENSE)

Interest income 2,797 2,615 9,275 17,845

Interest expense (96,473) (103,283) (293,548) (314,158)

Other income, net 29,250 37,097 159,063 137,899

INCOME BEFORE INCOME TAXES 628,447 1,240,263 2,281,266 3,173,532

INCOME TAX PROVISION (172,256) (343,464) (624,839) (869,230)

NET INCOME 456,191 896,799 1,656,427 2,304,302

Accrued preferred stock dividends (361,071) (256,452) (1,083,213) (769,356)

INCOME APPLICABLE TO COMMON SHAREHOLDERS $ 95,120 $ 640,347 $ 573,214 $ 1,534,946

Earnings per common share after preferred dividends,

basic and diluted $ 0.02 $ 0.13 $ 0.12 $ 0.31

Weighted-average number of

common shares outstanding 4,964,529 4,964,529 4,964,529 4,964,529

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SOURCE Willamette Valley Vineyards