Willamette Valley Vineyards Posts a Profit for 2019

Willamette Valley Vineyards, Inc., a leading Oregon producer of Pinot Noir, generated income applicable to common shareholders of $1,484,838, or $0.30 cents per share, for 2019, down from $1,839,665, or $0.37 cents per share, for the prior year, representing a $354,827, or 19.3%, decrease in income applicable to common shareholders in 2019 when compared to 2018. This decrease was primarily driven by lower net income.

Income from operations was $3,727,524 and $4,182,715 for the years ended December 31, 2019 and 2018, respectively, a decrease of $455,191, or 10.9%, for the year ended December 31, 3019 compared to the prior year period. The primary reason for this decrease was increased gross profit being more than offset by increased selling and administrative expense.

The Company had net sales of $24,749,263 and $23,079,739 for the years December 31, 2019 and 2018, respectively, an increase of $1,669,524 or 7.2%, for the year ended December 31, 2019 over the prior year period. The reasons for this increase include increased retail sales 6.4%, in-state sales 6.0% and out-of-state sales 11.2%.

Gross profit was $15,294,582 and $14,781,499 for the years ended December 31, 2019 and 2018, respectively, an increase of $513,083, or 3.5%, for the year ended December 31, 2019 over the prior year period. This increase was generally driven by an increase in sales revenues partially offset by a higher cost of sales.

Operating expenses were $11,567,058 and $10,598,784 for 2019 and 2018, respectively, an increase of $968,274 or 9.1%. Increased operating expenses were primarily the result of efforts to increase sales and accommodate and develop new direct to consumer opportunities in 2019.

Jim Bernau, Founder and President of the winery, said, “We are pleased sales revenues increased by over 7% for the year while we invested in growing our brand and retail operations. Our earnings are affected by the dividend cost associated with our outstanding shares of preferred stock which were issued in 2015 and 2017 to help fund our winery under construction near Dundee, Oregon and the micro-winery, Willamette Wineworks, in Folsom, California. As these two new wineries come on line and are integrated into our organization, we expect them to eventually generate aggregate annual earnings that will more than offset the annual dividend costs associated with our currently outstanding preferred stock.”