Willamette Valley Vineyards enjoying increased margins
By Mateusz Perkowski
A publicly-traded Oregon winery and vineyard company has seen its stock price surge after reporting favorable financial results for the first half of the year.
Willamette Valley Vineyards, based in Turner, Ore., has seen its price per share rise from about $4.50 earlier in August to more than $5 after reporting that its net income more than doubled and its revenue increased 16 percent, to $6.65 million, compared to mid-2012.
The company attributes its hefty profits to more robust sales of its wine while administrative and marketing expenses rose only moderately during the first half of 2013, according to a filing with the U.S. Securities and Exchange Commission.
Willamette Valley Vineyards' margins have also improved after discontinuing last year its Bacchus Fine Wines distribution division, which as reduced the company's overall operating expenses, according to an SEC filing. It now distributes its wines through Young's Market Co.
Eliminating the distribution arm also marked the end of the company's re-sale of wine from other producers, which used to contribute to about 20 percent of its sales but generated a much lower margin than sales of its own brands, the filing said.
Another big change for the company is the expansion and remodeling of its hospitality center in Turner, Ore., which it hopes will boost direct-to-consumer sales of its wine, according to an SEC filing.
The company's board had approved $4.5 million for the construction project, with $2 million coming from Northwest Farm Credit Services and the rest from its cash reserves, the filing said.
Willamette Valley Vineyards was established 30 years ago by president Jim Bernau and first sold its shares to the public in 1988. The firm owns and leases nearly 600 acres of vineyards, which at full production would contribute about 75 percent of the grapes to fill its 300,000 gallon winemaking capacity.