SALEM, Ore., Nov. 14 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc. , net income for the three and nine months ended September 30, 2006 was $228,063 and $844,563, or $0.05 and $0.17 per diluted share, respectively, compared to net income of $318,246 and $682,525, or $0.07 and $0.15 per diluted share, respectively, in the comparable prior year periods. Revenues decreased 9% and Net Income before taxes decreased 28% for the three months ended September 30, 2006, as compared to the prior year period. For the nine months ended September 30, 2006 revenues increased 10% and Net Income before taxes increased 24%, as compared to the prior year period.
Demand for Willamette Valley Vineyards products continues to exceed available inventories. These inventory constraints reduced sales revenue and net income during the three months ended September 30, 2006, even though demand remained high. The lack of available inventory is a result of high demand experienced in the recent past and of previous sales made to distributors, which has drawn down available supplies.
"The distributor orders for our Pinot Noir and Pinot Gris have exceeded our remaining inventory," explained winery Founder and CEO Jim Bernau. "We are increasing production but it takes time and care to go from new vines to cellar aged wine."
The winery is Oregon's leading producer of Pinot Noir where the growth in consumer purchases has been the highest among all wine varietals.
The Company has and continues to receive orders from its distributors it cannot completely fill, rather all available inventory has been fairly allocated to each distributor based upon their historical sales. Management continues to develop both short and long term wine grape and wine supplies to address this demand. This year's harvest aided our effort by producing higher quality and volumes, approximately 20% more than expected in tonnage.
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,
2006 2005 2006 2005
Net revenues
Case revenue $3,293,144 $ 3,609,228 $10,414,158 $ 9,394,542
Custom crush-
facility lease-
bulk revenue 14,899 8,828 32,485 111,090
Total net revenues 3,308,043 3,618,056 10,446,643 9,505,632
Cost of sales
Case 1,745,683 1,944,787 5,476,376 5,106,703
Bulk - - 4,631 55,926
Total cost of
sales 1,745,683 1,944,787 5,481,007 5,162,629
Gross profit 1,562,360 1,673,269 4,965,636 4,343,003
Selling, general
and administrative
expenses 1,160,318 1,085,852 3,490,063 3,047,836
Net operating
income 402,042 587,417 1,475,573 1,295,167
Other income (expense)
Interest income 19,729 349 42,885 775
Interest expense (41,667) (57,355) (127,750) (175,735)
Other income
(expense) - - 16,895 17,336
Net income before
income taxes 380,104 530,411 1,407,603 1,137,543
Income tax 152,041 212,165 563,040 455,018
Net income 228,063 318,246 844,563 682,525
Retained earnings
beginning of
period 2,729,372 1,320,212 2,112,872 955,933
Retained earnings
end of period $2,957,435 $1,638,458 $2,957,435 $1,638,458
Basic earnings per
common share $.05 $.07 $.18 $.15
Diluted earnings per
common share $.05 $.07 $.17 $.15
Weighted average
number of
basic common
shares
outstanding 4,781,055 4,514,635 4,722,636 4,498,019
Weighted average
number of
diluted common
shares
outstanding 4,978,955 4,621,115 4,920,536 4,604,499
