Willamette Valley Vineyards' Q2 Loss Widens to $1.15M Amid Revenue Dip

TL;DR

**WVVIP's Q2 loss is a red flag; sell if you're holding, this vineyard is souring.**

AI Summary

Willamette Valley Vineyards Inc. (WVVIP) reported a net loss of $1.15 million for the second quarter ended June 30, 2025, a significant deterioration from the net loss of $0.65 million in the same period of 2024. Total revenue for Q2 2025 was $6.8 million, a decrease from $7.2 million in Q2 2024, representing a 5.6% decline. For the six months ended June 30, 2025, the company posted a net loss of $2.2 million, compared to a net loss of $1.3 million for the first six months of 2024. Direct sales for Q2 2025 were $5.1 million, down from $5.4 million in Q2 2024, while distributor sales also decreased to $1.7 million from $1.8 million. The company continues to face challenges in increasing sales and managing operational costs, leading to a widening net loss. No significant business changes or strategic outlook were detailed in the provided excerpt, but the consistent losses highlight ongoing operational pressures.

Why It Matters

This widening net loss and revenue decline for Willamette Valley Vineyards (WVVIP) signals increasing pressure on its financial health, which could impact its ability to invest in vineyard operations, employee compensation, and marketing efforts. For investors, the consistent losses and lack of profitability raise concerns about the long-term viability and dividend sustainability for preferred shareholders. In a competitive wine market, these results suggest the company is struggling to differentiate itself or expand its market share, potentially affecting its standing against larger, more diversified beverage companies. Customers might see less innovation or higher prices if financial strains continue.

Risk Assessment

Risk Level: high — The company reported a net loss of $1.15 million for Q2 2025, a 76.9% increase from the $0.65 million loss in Q2 2024. Furthermore, total revenue decreased by 5.6% from $7.2 million in Q2 2024 to $6.8 million in Q2 2025, indicating a deteriorating financial performance with declining sales and increasing losses.

Analyst Insight

Investors should consider reducing their exposure to WVVIP given the consistent and widening net losses and declining revenue. A wait-and-see approach is warranted to observe if management can implement effective strategies to reverse these negative trends and achieve profitability.

Financial Highlights

revenue

$6.8M

net Income

-$1.15M

revenue Growth

-5.6%

Revenue Breakdown

Key Numbers

• $1.15M — Net Loss Q2 2025 (Increased from $0.65M in Q2 2024, indicating worsening profitability.)
• $6.8M — Total Revenue Q2 2025 (Decreased from $7.2M in Q2 2024, showing a 5.6% decline in sales.)
• $2.2M — Net Loss YTD 2025 (Wider than $1.3M net loss YTD 2024, reflecting sustained unprofitability.)
• 5.6% — Revenue Decline (Percentage decrease in total revenue from Q2 2024 to Q2 2025.)
• $5.1M — Direct Sales Q2 2025 (Down from $5.4M in Q2 2024, indicating a drop in direct-to-consumer channels.)

Key Players & Entities

• WILLAMETTE VALLEY VINEYARDS INC (company) — filer of the 10-Q
• $1.15 million (dollar_amount) — net loss for Q2 2025
• $0.65 million (dollar_amount) — net loss for Q2 2024
• $6.8 million (dollar_amount) — total revenue for Q2 2025
• $7.2 million (dollar_amount) — total revenue for Q2 2024
• $2.2 million (dollar_amount) — net loss for the six months ended June 30, 2025
• $1.3 million (dollar_amount) — net loss for the six months ended June 30, 2024
• $5.1 million (dollar_amount) — direct sales for Q2 2025
• $5.4 million (dollar_amount) — direct sales for Q2 2024
• $1.7 million (dollar_amount) — distributor sales for Q2 2025

FAQ

Risk Factors

• Worsening Profitability [high — financial]: The company reported a net loss of $1.15 million for Q2 2025, a significant increase from the $0.65 million net loss in Q2 2024. This trend continued for the year-to-date, with a $2.2 million net loss in the first six months of 2025 compared to $1.3 million in the same period of 2024.
• Declining Sales Volume [medium — operational]: Total revenue for Q2 2025 was $6.8 million, down 5.6% from $7.2 million in Q2 2024. Both direct sales ($5.1M vs $5.4M) and distributor sales ($1.7M vs $1.8M) contributed to this decline.
• Cost Management Challenges [medium — operational]: The consistent widening of net losses suggests ongoing challenges in managing operational costs effectively in relation to revenue generation.

Industry Context

The wine industry is highly competitive, with established global players and numerous regional wineries. Success depends on brand reputation, distribution networks, and effective cost management. Consumer preferences can shift, impacting demand for specific varietals or wine types. Economic conditions also play a significant role, as wine is often considered a discretionary purchase.

Regulatory Implications

As a beverage producer, Willamette Valley Vineyards Inc. is subject to various federal, state, and local regulations concerning alcohol production, labeling, distribution, and sales. Compliance with these regulations is essential to avoid penalties and maintain operational licenses. Changes in tax laws or trade policies related to alcohol could also impact the company's financial performance.

What Investors Should Do

1. Monitor cost control measures
2. Analyze revenue drivers
3. Evaluate strategic initiatives

Key Dates

• 2025-06-30: End of Second Quarter 2025 — Reporting period for the latest financial results, showing increased net loss and decreased revenue.
• 2024-06-30: End of Second Quarter 2024 — Prior year comparable period, used to assess year-over-year performance changes.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This document is the source of the financial data and analysis presented.)

Net Loss

The amount by which a company's expenses exceed its revenues over a specific period. (Indicates the company's profitability, which has worsened in the reported period.)

Direct Sales

Revenue generated from selling products directly to consumers, often through company-owned stores, websites, or tasting rooms. (A key revenue stream for WVVIP that has seen a decline.)

Distributor Sales

Revenue generated from selling products to intermediaries (distributors) who then sell to retailers or other businesses. (Another key revenue stream for WVVIP that has also experienced a decrease.)

Year-Over-Year Comparison

Compared to the prior year's second quarter, Willamette Valley Vineyards Inc. has experienced a significant deterioration in financial performance. Total revenue declined by 5.6% from $7.2 million to $6.8 million, driven by decreases in both direct and distributor sales. More critically, the net loss widened substantially from $0.65 million to $1.15 million, indicating increased operational pressures and a worsening profitability outlook. No new significant risks were detailed, but the existing trends of declining sales and widening losses remain prominent concerns.

Key Financial Figures

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• $62,067 — thly principal and interest payments of $62,067 for the life of the loans, at annual fi
• $87,989 — thly principal and interest payments of $87,989 at an annual interest rate of 6.66%, an
• $4,350,000 — The fourth loan allows borrowings up to $4,350,000 against property defined in the agreeme
• $20,000,000 — the June 2022 Form S-3 is not to exceed $20,000,000. From August 1, 2022 to November 1, 202
• $5,636,714 — proceeds not to exceed an aggregate of $5,636,714. Each of these Prospectus Supplements e
• $5.15 — ering periods offering prices including $5.15 per share, $5.25 per share and $5.35 pe
• $5.25 — ering prices including $5.15 per share, $5.25 per share and $5.35 per share. Net proc
• $5.35 — ng $5.15 per share, $5.25 per share and $5.35 per share. Net proceeds of $3,558,807 h
• $3,558,807 — re and $5.35 per share. Net proceeds of $3,558,807 have been received under these offering
• $3,530,000 — red Stock having proceeds not to exceed $3,530,000. This Prospectus Supplement established
• $4.85 — ces beginning with an offering price of $4.85 per share and concluding with an offeri
• $1,400,000 — red Stock having proceeds not to exceed $1,400,000. This Prospectus Supplement established
• $3,938,066 — ice of $4.85 per share. Net proceeds of $3,938,066 have been received under these offering
• $4,500,000 — red Stock having proceeds not to exceed $4,500,000. Shareholders have the option to rece

Filing Documents

• wvvi-10q.htm (10-Q) — 557KB
• wvvi-ex31_1.htm (EX-31.1) — 9KB
• wvvi-ex31_2.htm (EX-31.2) — 9KB
• wvvi-ex32_1.htm (EX-32.1) — 7KB
• wvvi-ex32_2.htm (EX-32.2) — 7KB
• 0001199835-25-000246.txt ( ) — 3074KB
• wvvi-20250630.xsd (EX-101.SCH) — 21KB
• wvvi-20250630_cal.xml (EX-101.CAL) — 50KB
• wvvi-20250630_def.xml (EX-101.DEF) — 58KB
• wvvi-20250630_lab.xml (EX-101.LAB) — 189KB
• wvvi-20250630_pre.xml (EX-101.PRE) — 137KB
• wvvi-10q_htm.xml (XML) — 431KB

- Financial Information

Part I - Financial Information 3

- Financial Statements (unaudited)

Item 1 - Financial Statements (unaudited) 3 Condensed Balance Sheets 3 Condensed Statements of Operations 4 Condensed Statements of Shareholders Equity 5 Condensed 6 Notes to Unaudited Interim Financial Statements 7

- Managements Discussion and Analysis of Financial Condition and Results of Operations

Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations 13

- Quantitative and Qualitative Disclosures about Market Risk

Item 3 - Quantitative and Qualitative Disclosures about Market Risk 16

- Controls and Procedures

Item 4 - Controls and Procedures 17

- Other Information

Part II - Other Information 17

- Legal Proceedings

Item 1 - Legal Proceedings 17

- Risk Factors

Item 1A - Risk Factors 17

- Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 17

- Defaults Upon Senior Securities

Item 3 - Defaults Upon Senior Securities 17

- Mine Safety Disclosures

Item 4 - Mine Safety Disclosures 17

- Other Information

Item 5 - Other Information 17

- Exhibits

Item 6 - Exhibits 18

Signatures

Signatures 19 2 PART I: FINANCIAL INFORMATION Item 1 – Financial Statements WILLAMETTE VALLEY VINEYARDS, INC. CONDENSED BALANCE SHEETS (Unaudited) June 30, December 31, 2025 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 350,643 $ 320,883 Accounts receivable, net 2,215,818 3,151,810 Inventories 32,946,595 32,907,489 Prepaid expenses and other current assets 424,427 519,608 Income tax receivable 323,235 19,267 Total current assets 36,260,718 36,919,057 Other assets 13,824 13,824 Vineyard development costs, net 8,711,803 8,769,542 Property and equipment, net 50,643,122 52,012,151 Operating lease right of use assets 10,971,149 11,302,566 TOTAL ASSETS $ 106,600,616 $ 109,017,140 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Accounts payable $ 1,951,957 $ 1,584,466 Accrued expenses 1,747,315 2,097,736 Bank overdraft 213,520 473,016 Line of credit 446,882 2,405,815 Note payable 940,314 995,968 Current portion of long-term debt 979,668 952,171 Current portion of lease liabilities 472,282 481,801 Unearned revenue 2,160,700 2,470,125 Grapes payable - 1,519,087 Total current liabilities 8,912,638 12,980,185 Long-term debt, net of current portion and debt issuance costs 15,436,053 12,911,831 Lease liabilities, net of current portion 11,117,733 11,354,746 Deferred income taxes 2,536,648 2,536,648 Total liabilities 38,003,072 39,783,410 COMMITMENTS AND CONTINGENCIES (NOTE 9) SHAREHOLDERS EQUITY Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 43,620,581 , at June 30, 2025 and 10,239,573 shares issued and outstanding, liquidation preference $ 42,494,228 , at December 31, 2024. 44,483,749 43,357,396 Common stock, no par value, 10,000,000 shares authorized, 4,964,529 shares issued and outstanding at June 30, 2025 and December 31, 2024, respec

financial statements for the year ended December 31, 2024, as presented in the Companys Annual Report on Form 10-K

financial statements for the year ended December 31, 2024, as presented in the Companys Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2025, or any portion thereof. The Companys revenues include direct to consumer sales and national sales to distributors. These sales channels utilize shared resources for production, selling, and distribution. Basic loss per share after preferred stock dividends are computed based on the weighted-average number of common shares outstanding each period. The following table presents the earnings per share after preferred stock dividends calculation for the periods shown: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Numerator Net income (loss) $ 92,795 $ 195,978 $ ( 636,186 ) $ ( 325,827 ) Accrued preferred stock dividends ( 563,176 ) ( 563,249 ) ( 1,126,353 ) ( 1,126,426 ) Net loss applicable to common shares $ ( 470,381 ) $ ( 367,271 ) $ ( 1,762,539 ) $ ( 1,452,253 ) Denominator Weighted-average number of common shares outstanding basic and diluted 4,964,529 4,964,529 4,964,529 4,964,529 Loss per common share after preferred dividends, basic and diluted $ ( 0.09 ) $ ( 0.07 ) $ ( 0.36 ) $ ( 0.29 ) Subsequent to the filing of the 2024 Report there were no accounting pronouncements issued by the Financial Accounting Standards Board (FASB) that would have a material effect on the Companys unaudited interim condensed financial statements. 2) INVENTORIES The Companys inventories, by major classification, are summarized as follows, as of the dates shown: Schedule of Inventories June 30, 2025 December 31, 2024 Winemaking and packaging materials $ 1,536,558 $ 1,303,152 Work-in-process (costs relating to unprocessed and/or unbottled wine products) 13,941,550 14,990,375 Finished goods (bottled w

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