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SALEM, Ore., Nov. 14, 2022 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (WVVI" href="/company/WVVI" onmouseover="handlePagePreview('company','WVVI')" style="color:#4007a2 !important; text-decoration:underline !important; font-weight:bold;">NASDAQ: WVVIWVVI-pp">) (the "Company"), a leading Oregon producer of Pinot Noir, generated a loss per common share after preferred dividends of $0.29 and earnings per common share after preferred dividends of $0.02 for the three months ended September 30, 2022 and 2021, respectively, a decrease of $0.31 per share, for the three months ended September 30, 2022 over the same quarter in 2021.
Sales revenue for the three months ended September 30, 2022 and 2021 were $7,602,878 and $7,641,228, respectively, a decrease of $38,350, or 0.5%, in the current year period over the prior year period. This decrease was caused by a decrease in sales through distributors of $133,386 being partially offset by an increase in direct sales of $95,036 in the current year three-month period over the prior year period. The decrease in revenue from sales through distributors was primarily attributed to later availability of new vintage wines compared to the prior year. The increase in direct sales to consumers was primarily the result of retail sales increases from the opening of new tasting rooms in 2022.
Gross profit for the three months ended September 30, 2022 and 2021 was $3,894,183 and $4,461,638, respectively, a decrease of $567,455, or 12.7%, in the current year three-month period over the same period in the prior year.
Selling, general and administrative expense for the three months ended September 30, 2022 and 2021 was $5,120,218 and $3,768,765 respectively, an increase of $1,351,453, or 35.9%, in the current quarter over the same quarter in the prior year.
Net income (loss) for the three months ended September 30, 2022 and 2021 was $(949,821) and $456,191, respectively, a decrease of $1,406,012, or 308.2%, in the third quarter of 2022 over the same quarter in the prior year.
Jim Bernau, Founder and CEO of the winery said "Inventory delays at the start of the year have negatively impacted our sales through distributors in the first nine months of the year. We have also incurred additional expenses in the first nine months of the year in connection with the opening of four new tasting room and restaurant locations in 2022 as we significantly grew our footprint in the direct to consumer segment. We expect higher costs and reduced margins and earnings in the near term as we bring these new locations on line." For a complete discussion of the Company's financial condition and operating results for the third quarter, see our Form 10-Q for the nine months ended September 30, 2022, 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).
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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, the impact of supply chain and transportation disruptions, and the impact of the COVID-19 pandemic and the policies of United States federal, state and local governments in response to such pandemic. 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as well as in the Company's other Securities and Exchange Commission filings and reports.
The following is the Company's Statement of Income for the three months and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021:
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
SALES, NET | $ 7,602,878 | $ 7,641,228 | $ 22,546,057 | $ 22,356,517 | |||||||
COST OF SALES | 3,708,695 | 3,179,590 | 10,104,588 | 9,261,589 | |||||||
GROSS PROFIT | 3,894,183 | 4,461,638 | 12,441,469 | 13,094,928 | |||||||
OPERATING EXPENSES | |||||||||||
Sales and marketing | 3,774,495 | 2,335,623 | 9,271,835 | 6,687,412 | |||||||
General and administrative | 1,345,723 | 1,433,142 | 4,087,458 | 4,001,040 | |||||||
Total operating expenses | 5,120,218 | 3,768,765 | 13,359,293 | 10,688,452 | |||||||
INCOME (LOSS) FROM OPERATIONS | (1,226,035) | 692,873 | (917,824) | 2,406,476 | |||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest income | 1,286 | 2,797 | 4,579 | 9,275 | |||||||
Interest expense | (87,220) | (96,473) | (269,037) | (293,548) | |||||||
Other income, net | 3,734 | 29,250 | 92,403 | 159,063 | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | (1,308,235) | 628,447 | (1,089,879) | 2,281,266 | |||||||
INCOME TAX (EXPENSE) BENEFIT | 358,414 | (172,256) | 298,517 | (624,839) | |||||||
NET INCOME (LOSS) | (949,821) | 456,191 | (791,362) | 1,656,427 | |||||||
Accrued preferred stock dividends | (466,612) | (361,071) | (1,399,837) | (1,083,213) | |||||||
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS | $ (1,416,433) | $ 95,120 | $ (2,191,199) | $ 573,214 | |||||||
Earnings (loss) per common share after preferred dividends, | |||||||||||
basic and diluted | $ (0.29) | $ 0.02 | $ (0.44) | $ 0.12 | |||||||
Weighted-average number of | |||||||||||
common shares outstanding, basic and diluted | 4,964,529 | 4,964,529 | 4,964,529 | 4,964,529 | |||||||
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SOURCE Willamette Valley Vineyards