SALEM, Ore., May 15 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Inc. , net income for the three months ended March 31, 2007 was $234,263, or $0.05 per diluted share, compared to net income of $357,294, or $0.07 per diluted share in the comparable prior year period. Revenues decreased 3% and Net Income before taxes decreased 34% for the three months ended March 31, 2007, 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 inventory of those varieties to the point Company income is now being significantly affected.
While the Company again generated positive net income during the three months ended March 31, 2007 generally the Company's weakest quarter due to the seasonality of its sales, profits were lower as compared to the same period of the prior year. Management attributes the lower net profit level for this period to be a direct result of the limited inventories of key varietals which have been allocated to its distributors to be shipped on a scheduled basis over the calendar year.
Management believes the proper steps are being taken to increase the generation of high quality wine inventories over time as vineyard plantings mature. The Company loaned one of its growers $250,000 to support additional plantings in this Quarter and entered a long-term lease for Elton Vineyards, located in the Eola Hills, consisting of 60 acres of mature grapevines, of which approximately 42 acres are Pinot Noir. Internal staffing and management systems are continuing to be improved in anticipation of these higher, future volumes.
Despite these inventory constraints, the Company had the second highest first quarter earnings since the Company's inception. During the first three months of 2007, Current Liabilities were paid down by over $1 million, resulting in the Company's current ratio of 6.8 to 1.
The winery is partnering with the high quality, northwest fresh seafood restaurant group, McCormick & Schmick's, or M&S, for a "Summer of Salmon" campaign in all of the M&S restaurants nationwide where the Company's Willamette Valley Vineyards Pinot Noir and Pinot Gris will be paired with wild, seasonal salmon entrées.
The Company continued to receive high marks for its Pinot Noir from national reviewers, including a 90 point rating for its '05 Estate Pinot from Anthony Dias Blue, as well as from Wine & Spirits Magazine. The newly released '06 Pinot Gris is following in the tradition as being recognized as one of America's best by earning 90 points from the Wine Enthusiast, 94 points from Epicurean-Traveler and being named a winner of the Pacific Coast Oyster Wine Competition again 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. 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 March 31,
2007 2006
__________ __________
Net Revenues
Case Revenue $ 3,586,561 $ 3,694,176
Facility Lease 8,793 8,793
__________ __________
Total Revenue 3,595,354 3,702,969
Cost of Sales
Case 1,896,231 1,951,419
Bulk - 4,631
__________ __________
Total Cost of Sales 1,896,231 1,956,050
Gross Margin 1,699,123 1,746,919
Selling, general and
administrative expense 1,310,173 1,129,116
__________ __________
Net operating income 388,950 617,803
Other income (expense)
Interest income 17,058 4,279
Interest expense (28,237) (43,487)
Other income 12,667 16,895
__________ __________
Net income before income taxes 390,438 595,490
Income tax (156,175) (238,196)
__________ __________
Net income 234,263 357,294
Retained earnings beginning of
period 3,404,646 2,112,872
__________ __________
Retained earnings end of period $ 3,638,909 $ 2,470,166
========== ==========
Basic income per common share $ .05 $ .08
Diluted income per common share $ .05 $ .07
Weighted average number of
basic common shares
outstanding 4,800,775 4,674,058
Weighted average number of
diluted common shares
outstanding 5,004,810 4,819,920
