Overview

Willamette Valley Vineyards is a leading producer and marketer of premium, Oregon-branded wines. The company generates revenue primarily from the sale of wine to wholesalers and direct-to-consumer channels. Willamette Valley Vineyards has experienced increased competition from large California wineries producing and marketing Oregon wines, but has emphasized growth in direct-to-consumer sales through its tasting rooms, wine club, and preferred stock program.

Results of Operations

In 2024, Willamette Valley Vineyards reported a net loss of $117,894, a significant improvement from the $1,198,593 net loss in 2023. This was driven by higher gross profit from increased sales revenue at higher margins, partially offset by higher interest expense. Net sales revenue increased 1.7% to $39.8 million, with direct-to-consumer sales growing 3.6% while distributor sales declined 0.5%.

The company’s gross profit margin improved from 57.6% in 2023 to 60.8% in 2024, as a result of higher direct sales prices and a greater proportion of direct-to-consumer sales. Selling, general and administrative expenses decreased slightly by 0.6%. Income from operations increased 147.4% to $571,858, but was offset by a 71.1% increase in interest expense.

The company’s EBITDA (earnings before interest, taxes, depreciation and amortization) increased 71.1% to $3.99 million in 2024, primarily due to the lower net loss.

Sales and Inventory

Willamette Valley Vineyards sold approximately 186,419 cases of wine in 2024, a 2.7% decrease from 2023, due to lower sales to distributors. Pinot Noir remains the company’s flagship varietal, accounting for 59% of case sales.

The company had 204,438 cases of bottled wine on hand at the end of 2024, and believes it has sufficient bulk wine inventory to bottle approximately 310,000 cases in 2025. The company’s production capacity is around 275,000 cases per year at the Estate Winery, with additional capacity available at the Tualatin Winery.

Liquidity and Capital Resources

Willamette Valley Vineyards had a working capital balance of $23.9 million and a current ratio of 2.84:1 at the end of 2024. The company used $3.2 million in cash from operations, primarily due to the net loss, increased inventory, and lower grapes payable. It invested $2.1 million in capital expenditures and received $5.4 million from financing activities, including proceeds from long-term debt.

The company has a $5 million revolving line of credit and $14 million in long-term debt, which it uses to finance winery operations, equipment, and land/vineyard development. Management believes the company has sufficient liquidity and access to capital to meet its foreseeable operating needs.

Outlook

Willamette Valley Vineyards continues to face competitive pressures from large California wineries in the Oregon market, but has made significant investments in direct-to-consumer channels, alternative wine brands, and production capacity to drive future growth. The company’s focus on quality and recognition of its wines through industry accolades should also support its competitive position. Overall, the company appears to be making progress in improving its financial performance, though challenges remain in the competitive landscape.