Willamette Valley Vineyards Inc. (WVVI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Willamette Valley Vineyards Inc. has a market cap of $17.1 million; its shares were traded at around $3.5 with a P/E ratio of 25.1 and P/S ratio of 1. Willamette Valley Vineyards Inc. had an annual average earning growth of 18.5% over the past 10 years.
As the Company is working down its aged inventory of purchased wines, these are being sold at lower than standard margins and in some cases at or below cost to avoid the wine spoiling from excessive age. In 2009, management implemented a new inventory management and purchasing system to identify and prevent the accumulation of purchased wine inventory. From October 2009 to the end of the 1st Quarter 2010, aged wine inventory has been reduced from $698,332 to $543,034. Approximately 30% of purchased wine inventory has been categorized by management as aged and of special sales focus. In the first quarter 2010 an inventory obsolescence reserve of $54,303 was established for purchased brands wine inventory that is slow-moving and aged.
The Company has an asset-based loan agreement with Umpqua Bank that allows it to borrow up to $2,000,000. The maturity date on this loan agreement is June 2010. At March 31, 2010, the Company had a credit line balance of $803,255 and $1,196,745 of available credit. The interest rate charged in the quarter was 3.25%. The interest rate on this note is a variable interest rate and is subject to change from time to time based on changes in an independent index which is the Prime Rate as published in the Wall Street Journal (the “Index”). The index rate at March 31, 2010 is 3.25%. The loan agreement contains, among other things, certain restrictive financial covenants with respect to total equity, debt-to-equity and debt coverage that must be maintained by the Company on a quarterly basis. As of March 31, 2010, the Company was in compliance with all of the financial covenants. The Company is in the process of renewing its revolving line of credit which is due to expire in June 2010.
As a result of the factors listed above, net loss for the three months ended March 31, 2010 was $188,344 compared to net income of $165,156 in the comparable prior year period. This is a decrease of 214.0% versus 2009 for the three months ended March 31, 2010. Diluted loss per share was ($0.04) for the first quarter 2010, compared to $0.03 earnings per diluted share in the comparable prior year period.
At March 31, 2010, we had a working capital balance of $11.2 million and a current working capital ratio of 5.57:1. At December 31, 2009, we had a working capital balance of $11.4 million and a current working capital ratio of 4.98:1. We had a cash balance of $0 at March 31, 2010, compared to a cash balance of $0 at December 31, 2009.
Total inventory for Bacchus Distribution was $1,554,059 of purchased wines and $335,768 of non-wine merchandise at March 31, 2010. This compares to produced wine inventory of $5,530,944 and $4,376,473 of non-wine merchandise and work-in-process for the same period. At March 31, 2009 total inventory for Bacchus Distribution was $2,098,072 of purchased wines and $226,645 of non-wine merchandise at period end March 31, 2009. This compares to produced wine inventory of $4,210,312 and $4,287,874 of non-wine merchandise and work-in-process for the same period.
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Willamette Valley Vineyards Inc. has a market cap of $17.1 million; its shares were traded at around $3.5 with a P/E ratio of 25.1 and P/S ratio of 1. Willamette Valley Vineyards Inc. had an annual average earning growth of 18.5% over the past 10 years.
Highlight of Business Operations:
As a result, the Company generated ($0.04) basic earnings per share during the three months ended March 31, 2010, a decrease of $0.07 basic earnings per share versus the comparable prior year period.As the Company is working down its aged inventory of purchased wines, these are being sold at lower than standard margins and in some cases at or below cost to avoid the wine spoiling from excessive age. In 2009, management implemented a new inventory management and purchasing system to identify and prevent the accumulation of purchased wine inventory. From October 2009 to the end of the 1st Quarter 2010, aged wine inventory has been reduced from $698,332 to $543,034. Approximately 30% of purchased wine inventory has been categorized by management as aged and of special sales focus. In the first quarter 2010 an inventory obsolescence reserve of $54,303 was established for purchased brands wine inventory that is slow-moving and aged.
The Company has an asset-based loan agreement with Umpqua Bank that allows it to borrow up to $2,000,000. The maturity date on this loan agreement is June 2010. At March 31, 2010, the Company had a credit line balance of $803,255 and $1,196,745 of available credit. The interest rate charged in the quarter was 3.25%. The interest rate on this note is a variable interest rate and is subject to change from time to time based on changes in an independent index which is the Prime Rate as published in the Wall Street Journal (the “Index”). The index rate at March 31, 2010 is 3.25%. The loan agreement contains, among other things, certain restrictive financial covenants with respect to total equity, debt-to-equity and debt coverage that must be maintained by the Company on a quarterly basis. As of March 31, 2010, the Company was in compliance with all of the financial covenants. The Company is in the process of renewing its revolving line of credit which is due to expire in June 2010.
As a result of the factors listed above, net loss for the three months ended March 31, 2010 was $188,344 compared to net income of $165,156 in the comparable prior year period. This is a decrease of 214.0% versus 2009 for the three months ended March 31, 2010. Diluted loss per share was ($0.04) for the first quarter 2010, compared to $0.03 earnings per diluted share in the comparable prior year period.
At March 31, 2010, we had a working capital balance of $11.2 million and a current working capital ratio of 5.57:1. At December 31, 2009, we had a working capital balance of $11.4 million and a current working capital ratio of 4.98:1. We had a cash balance of $0 at March 31, 2010, compared to a cash balance of $0 at December 31, 2009.
Total inventory for Bacchus Distribution was $1,554,059 of purchased wines and $335,768 of non-wine merchandise at March 31, 2010. This compares to produced wine inventory of $5,530,944 and $4,376,473 of non-wine merchandise and work-in-process for the same period. At March 31, 2009 total inventory for Bacchus Distribution was $2,098,072 of purchased wines and $226,645 of non-wine merchandise at period end March 31, 2009. This compares to produced wine inventory of $4,210,312 and $4,287,874 of non-wine merchandise and work-in-process for the same period.
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