Willamette Valley Vineyards, a leading Oregon producer of Pinot Noir, generated net income of $510,231, or $0.10 cents per share, for the second quarter of 2015, down from $546,535, or $0.11 cents per share, for the corresponding prior year period, representing a $36,304 or 6.6% decrease in net income compared to second quarter 2014.
Income from operations was $844,884 and $759,570 for the second quarters of 2015 and 2014, respectively, an increase of $85,314 or 11.2%. As a result of insurance payments of $154,722 from a wine loss, booked to second quarter other income in 2014, that did not recur in 2015, net income was decreased for the second quarter 2015 when compared to 2014.
The Company produced revenues of $4,721,154 and $3,693,412 in second quarters of 2015 and 2014, respectively, an increase of $1,027,742, or 27.8%. The primary reasons for this increase are an increase in direct sales of $550,902, including bulk wine sales increase of $193,064, and an increase in sales through distributors of $476,840 for the second quarter 2015 when compared to 2014. Gross profit margin was 58.5% and 60.7% for the second quarters of 2015 and 2014, respectively.
Selling, general and administrative expenses were $1,914,769 and $1,481,194 for the second quarters of 2015 and 2014, respectively, an increase of $433,575 or 29.3%. This increase is primarily the result of increased selling expenses, including depreciation and staffing, associated with an increased focus on retail sales and operating the remodeled Hospitality Center, and an increased emphasis on promoting sales through distributors including product demonstrations.
Subsequent to the close of the second quarter, the Board of Directors authorized the repurchase of $250,000 of the Company’s common stock through the open market. This program takes the place of a prior inactive plan.
Jim Bernau, Founder and President of the winery, said “The second quarter has continued to be strong in sales and income from operations. We are excited to see revenue growth in all areas of the Company as our brand position continues to grow.”
Willamette Valley Vineyards, Inc. is headquartered at its Estate Vineyard near Salem, Oregon. The Company’s common stock is traded on NASDAQ.
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.