SALEM, Ore., March 11, 2020 /PRNewswire/ -- Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) (the "Company"), a leading Oregon producer of Pinot Noir, generated income applicable to common shareholders of $1,484,838, or $0.30 cents per share, for 2019, down from $1,839,665, or $0.37 cents per share, for the prior year, representing a $354,827, or 19.3%, decrease in income applicable to common shareholders in 2019 when compared to 2018. This decrease was primarily driven by lower net income.
Income from operations was $3,727,524 and $4,182,715 for the years ended December 31, 2019 and 2018, respectively, a decrease of $455,191, or 10.9%, for the year ended December 31, 3019 compared to the prior year period. The primary reason for this decrease was increased gross profit being more than offset by increased selling and administrative expense.
The Company had net sales of $24,749,263 and $23,079,739 for the years December 31, 2019 and 2018, respectively, an increase of $1,669,524 or 7.2%, for the year ended December 31, 2019 over the prior year period. The reasons for this increase include increased retail sales 6.4%, in-state sales 6.0% and out-of-state sales 11.2%.
Gross profit was $15,294,582 and $14,781,499 for the years ended December 31, 2019 and 2018, respectively, an increase of $513,083, or 3.5%, for the year ended December 31, 2019 over the prior year period. This increase was generally driven by an increase in sales revenues partially offset by a higher cost of sales.
Operating expenses were $11,567,058 and $10,598,784 for 2019 and 2018, respectively, an increase of $968,274 or 9.1%. Increased operating expenses were primarily the result of efforts to increase sales and accommodate and develop new direct to consumer opportunities in 2019.
Jim Bernau, Founder and President of the winery, said, "We are pleased sales revenues increased by over 7% for the year while we invested in growing our brand and retail operations. Our earnings are affected by the dividend cost associated with our outstanding shares of preferred stock which were issued in 2015 and 2017 to help fund our winery under construction near Dundee, Oregon and the micro-winery, Willamette Wineworks, in Folsom, California. As these two new wineries come on line and are integrated into our organization, we expect them to eventually generate aggregate annual earnings that will more than offset the annual dividend costs associated with our currently outstanding preferred stock."
For a complete discussion of the Company's financial condition and operating results, see our Form 10-K for the year ended December 31, 2019, 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, 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, the ability of our planned winery in Dundee Oregon and planned micro-winery in Folsom California to generate revenues in excess of costs, the impact of governmental regulatory decisions and other risks set forth under Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the United States Securities and Exchange Commission.
The following is the Company's Statement of Income for the year ended December 31, 2019 compared to the year ended December 31, 2018:
Twelve months ended
COST OF SALES
Sales and marketing
General and administrative
Total operating expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE)
Other income, net
INCOME BEFORE INCOME TAXES
INCOME TAX PROVISION
Preferred stock dividends
INCOME APPLICABLE TO COMMON SHAREHOLDERS
Basic income per common share after preferred dividends
Weighted average number of basic common shares outstanding
SOURCE Willamette Valley Vineyards