SALEM, Ore., Nov. 14 /PRNewswire-FirstCall/ -- Willamette Valley Vineyards, Oregon's only publicly held winery, posted a profit for the Third Quarter 2008 which was less than the prior year. Earnings for the Third Quarter of 2008 were $243,629 as compared to $522,738 for 2007, or $0.05 per share as compared with $0.11 per share for 2007. Earnings for the first nine months of 2008 were $461,254 as compared to $1,022,177 for 2007, or $0.10 per share as compared with $0.21 per share for 2007.
Profits were principally affected by a reduction in sales revenue of 4.6% compared to the prior year's Third Quarter; a substantial, one-time write down of Bacchus inventory; an increase in accounting, legal, banking and other administrative expenses of $64,000 and higher capital expense of $27,000 due to higher levels of borrowing to support inventory growth of 42% compared to the prior year, same period.
Sales revenue in the first three Quarters of 2008 were weaker in large part due to the outage of three key Pinot Noir products. The winery increased production and those additional case volumes are now beginning to re-enter distribution in the Fourth Quarter.
During the quarter the winery acquired three new vineyard sites each adjacent to the winery's current operations: 15 additional acres at the Estate Vineyard south of Salem, 80 additional acres at the Elton Vineyard in Yamhill County and 6 additional acres at Tualatin Estate Vineyard near Forest Grove. Bernau has also secured an additional 102 acres adjacent to Elton Vineyards on a 34 year lease.
These vineyard land acquisitions, with a total up-front cost of $1.6 million will require an additional $5 million to develop into producing vineyards. "These additions will be planted in Pinot Noir and farmed according to environmentally sustainable standards -- increasing our total planted acreage we will own or lease to approx. 500 acres," said Bernau.
Willamette Valley Vineyards, Inc. is Oregon's leading producer of Pinot Noir and is headquartered at its Estate Vineyard near Turner, Oregon. Willamette Valley Vineyards common stock is traded on NASDAQ (Symbol: WVVI).
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are identified by such words and phrases as "expects,", "thinks," "believes," "anticipates" and words of similar import. 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. Statement of Operations (unaudited) Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 Net revenues Case revenue $4,056,522 $4,247,388 $11,344,179 $11,551,376 Facility Lease -- 2,981 -- 20,567 Total net revenues 4,056,522 4,250,369 11,344,179 11,571,943 Cost of sales Case 2,075,400 2,124,364 5,803,078 6,020,537 Bulk -- -- -- 986 Total cost of sales 2,075,400 2,124,364 5,803,078 6,021,523 Gross profit 1,981,122 2,126,005 5,541,101 5,550,420 Selling, general and administrative expenses 1,519,417 1,346,636 4,693,892 3,923,654 Net operating income 461,705 779,369 847,209 1,626,766 Other income (expense) Interest income -- 18,193 17,193 46,304 Interest expense (34,906) (26,583) (74,949) (82,343) Other income(expense) -- -- 56 12,667 Net income before income taxes 426,799 770,979 789,509 1,603,394 Income tax 183,170 248,241 328,255 581,217 Net income 243,629 522,738 461,254 1,022,177 Retained earnings beginning of period 5,308,932 3,904,086 5,091,307 3,404,647 Retained earnings end of period $5,552,561 $4,426,824 $5,552,561 $4,426,824 Basic earnings per common share $.05 $.11 $.10 $.21 Diluted earnings per common share $.05 $.10 $.09 $.20
