SALEM, Ore., Aug. 13, 2024 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ: WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated a loss per common share after preferred dividends of $0.07 and $0.08 for the three months ended June 30, 2024 and 2023 respectively, a decrease of $0.01, for the three month period ended June 30, 2024 over the same three month period in the prior year.
Sales revenue for the three months ended June 30, 2024 and 2023 were $10,332,358 and $10,726,243, respectively, a decrease of $393,885, or 3.7%, in the current year period over the prior year period. This decrease was caused by a decrease in sales through distributors of $597,059 partly offset by an increase in direct sales of $203,174 in the current year three-month period over the prior year period. The decrease in revenue from sales through distributors was primarily related to lower case sales in this market. The increase in direct sales to consumers was primarily the result of opening a new tasting room in late 2023.
Gross profit as a percentage of net sales for the three months ended June 30, 2024 and 2023 was 62.6% and 58.3%, respectively, an increase of 4.3 percentage points in the current year period over the prior year period, mostly as a result of higher prices charged for products compared to the same quarter of 2023.
Selling, general and administrative expenses for the three months ended June 30, 2024 and 2023 was $5,934,784 and $5,941,739 respectively, a decrease of $6,955, or 0.1%, in the current quarter over the same quarter in the prior year. This decrease was primarily the result of a decrease in selling and marketing expenses of $11,872, or 0.3% being partially offset by an increase in general and administrative expenses of $4,917, or 0.3% in the current quarter compared to the same quarter last year.
Net income for the three months ended June 30, 2024 and 2023 was $195,978 and $108,453, respectively, an increase of $87,525, or 80.7%, in the second quarter of 2024 over the same quarter in the prior year. The increase in net income for the second quarter of 2024, compared to the comparable period in 2023, was primarily the result of higher prices for products sold in 2024.
Jim Bernau, Founder and CEO said, "The Company is facing a rapidly changing market that we believe is influenced by interest costs, inflation and consumer trends. We have seen wholesalers and retailers reducing their wine inventories and reallocating their shelf space for alternative alcoholic beverages. We are also seeing retailers emphasize contract house wine brands in an effort to capture greater retail margins. We are hoping to address these challenges by increasing our direct contact with wine consumers, offering wine, culinary and hospitality experiences through our ten locations and increasing our interaction with our diverse wine enthusiast ownership. We believe our efforts will produce positive financial results in both our wholesale and retail parts of our business."
For a complete discussion of the Company's financial condition and operating results for the second quarter, see our Form 10-Q for the three months ended June 30, 2024, 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).
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, referred to as the "Securities Act", and Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the "Exchange Act". 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, and the revenues or costs for any of our tasting rooms and restaurants exceeding our expectations. 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 our Annual Report on Form 10-K.
The following is the Company's Statement of Operations for the three months and six months ended June, 30, 2024 compared to the three and six months ended June 30, 2023:
Three months ended | Six months ended | ||||||||||
June 30, | June 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
SALES, NET | $ 10,332,358 | $ 10,726,243 | $ 19,135,438 | $ 19,035,183 | |||||||
COST OF SALES | 3,860,668 | 4,475,665 | 7,391,026 | 8,306,142 | |||||||
GROSS PROFIT | 6,471,690 | 6,250,578 | 11,744,412 | 10,729,041 | |||||||
OPERATING EXPENSES | |||||||||||
Sales and marketing | 4,338,171 | 4,350,043 | 8,365,953 | 8,333,623 | |||||||
General and administrative | 1,596,613 | 1,591,696 | 3,444,130 | 3,061,529 | |||||||
Total operating expenses | 5,934,784 | 5,941,739 | 11,810,083 | 11,395,152 | |||||||
INCOME (LOSS) FROM OPERATIONS | 536,906 | 308,839 | (65,671) | (666,111) | |||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest expense, net | (263,694) | (164,610) | (493,381) | (289,032) | |||||||
Other income, net | 2,541 | 5,135 | 100,593 | 78,721 | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 275,753 | 149,364 | (458,459) | (876,422) | |||||||
INCOME TAX (EXPENSE) BENEFIT | (79,775) | (40,911) | 132,632 | 240,052 | |||||||
NET INCOME (LOSS) | 195,978 | 108,453 | (325,827) | (636,370) | |||||||
Accrued preferred stock dividends | (563,249) | (511,720) | (1,126,426) | (1,023,439) | |||||||
LOSS APPLICABLE TO COMMON SHAREHOLDERS | $ (367,271) | $ (403,267) | $ (1,452,253) | $ (1,659,809) | |||||||
Loss per common share after preferred dividends, | |||||||||||
basic and diluted | $ (0.07) | $ (0.08) | $ (0.29) | $ (0.33) | |||||||
Weighted-average number of | |||||||||||
common shares outstanding, basic and diluted | 4,964,529 | 4,964,529 | 4,964,529 | 4,964,529 | |||||||
SOURCE Willamette Valley Vineyards
