US SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-QSB
_______________________________________________________
Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the Quarter Ended June 30, 1999
Commission File Number 0-21522
WILLAMETTE VALLEY VINEYARDS, INC.
(Exact name of registrant as specified in charter)
Oregon 93-0981021
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
_______________________________________________________
8800 Enchanted Way, S.E., Turner, Oregon 97392
(503) 588-9463
(Address, including Zip code, and telephone number,
including area code, of registrant's principal
executive offices)
______________________________________________________
Indicate by check mark whether the registrant (1) has filed,
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
[X] YES [ ] NO
Number of shares of common stock outstanding as of
June 30, 1999
4,237,481 shares, no par value
Transitional Small Business Disclosure Format
[ ] YES [X] NO
WILLAMETTE VALLEY VINEYARDS, INC.
INDEX TO FORM 10-Q
Part I - Financial Information
Item 1--Balance Sheet
Statement of Operations
Cash Flow
Notes to Consolidated Financial Statements
Item 2--Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II - Other Information
Item 6--Exhibits and Reports of Form 8-K
Signature
PART I. FINANCIAL INFORMATION
WILLAMETTE VALLEY VINEYARDS, INC.
ITEM 1
Balance Sheet
June 30, December 31,
1999 1998
ASSETS (unaudited)
___________ __________
Current Assets:
Cash and cash equivalents $ 135,926 $ 149,401
Accounts receivable trade, net 237,604 371,537
Income taxes receivable 24,436 24,436
Inventories 5,080,021 4,601,808
Prepaid expenses and
other current 78,432 86,986
Deferred income taxes 234,203 234,203
_________ _________
Total current assets 5,790,622 5,468,371
Vineyard development cost, net 1,938,098 1,892,538
Property and equipment, net 6,656,029 6,790,985
Investments 4,974 4,974
Notes receivable 48,647 46,937
Debt issuance costs, net 120,213 119,244
Other assets 67,813 67,813
__________ __________
Total assets $ 14,626,396 $14,390,862
============ ===========
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Line of credit $ 2,252,667 $ 1,652,667
Current portion of
long-term debt 191,176 191,176
Accounts payable 637,789 315,185
Accrued commissions
and payroll 182,168 213,210
Grapes payable 214,674 581,294
_________ _________
Total current liabilities 3,478,474 2,953,532
Long-term debt 4,039,713 4,101,772
Deferred income taxes 300,083 300,083
_________ _________
Total liabilities 7,818,270 7,355,387
Shareholders' equity
Common stock, no par
value - 10,000,000
shares authorized,
4,237,481 shares issued
outstanding 6,789,055 6,781,256
Retained earnings 19,071 254,219
________ ________
Total shareholders' equity 6,808,126 7,035,475
Total liabilities and
shareholders' equity $ 14,626,396 $ 14,390,862
============= ===========
The accompanying notes are an integral part of this
financial statement.
WILLAMETTE VALLEY VINEYARDS, INC.
Statement of Operations
(Unaudited)
Three months Six months
ended June 30, ended June 30,
1999 1998 1999 1998
_____ _____ _____ _____
Net Revenues
Case Revenue
$1,230,405 $1,338,836 $2,346,641 $2,445,721
Bulk Revenue - 88,393 - 323,645
_________ _________ __________ _________
Total Revenue
1,230,405 1,427,229 2,346,641 2,769,366
Cost of Sales
Case 528,741 599,336 1,030,446 1,099,293
Bulk - 95,135 - 306,314
_________ _________ __________ _________
Total Cost
of Sales 528,741 694,471 1,030,446 1,405,607
Gross Margin
701,664 732,758 1,316,195 1,363,759
Selling, general and
administrative expense
678,432 639,533 1,324,441 1,207,074
_________ _________ __________ _________
Net operating income (loss)
23,232 93,225 (8,246) 156,685
_________ _________ __________ _________
Other income (expense)
Interest income
2,480 12,696 4,506 16,265
Interest expense
(122,507) (123,899) (232,430) (249,756)
Other income 833 - 1,022 3,647
_________ _________ __________ _________
Net loss before income taxes
(95,962) (17,978) (235,148) (73,159)
Income tax benefit
- - - -
_________ _________ __________ _________
Net loss (95,962) (17,978) (235,148) (73,159)
_________ _________ __________ _________
Retained earnings beginning of
period 115,033 271,018 254,219 326,199
Retained earnings end of period
19,071 253,040 19,071 253,040
Basic loss per common share
(.02) - (.06) (.02)
Diluted loss per common share
(.02) - (.06) (.02)
Weighted average number of
basic common shares
outstanding
4,237,481 4,232,681 4,237,481 4,232,681
WILLAMETTE VALLEY VINEYARDS, INC.
Statement of Cash Flows
(unaudited)
Six Months Ended June 30,
1999 1998
Cash flows from operating activities:
Net loss $(235,148) $(73,159)
Reconciliation of net loss to net
cash used for operating activities:
Depreciation and amortization 361,948 278,219
Equity change 7,800 2,188
Changes in assets and liabilities:
Accounts receivable trade, net 133,933 261,862
Other receivable - 6,583
Inventories (478,214) 300,910
Prepaid expenses and other current
8,554 (70,399)
Grapes payable (366,620) (501,238)
Accounts payable 322,604 (21,434)
Accrued commissions and payables (31,042) (52,047)
_________ ________
Net cash provided (used)
by operating activities (276,185) 131,485
_________ ________
Cash Flow from investing activities
Construction expenditures
and purchases of equipment (192,381) (138,396)
Vineyard development expenditures(80,171) (187,561)
Cash received for investments - 71,456
Notes receivable (1,710) (5,413)
_________ ________
Net cash used by investing activities
(274,262) (259,914)
_________ ________
Cash Flows from financing activities:
Line of credit borrowings (repayment)
600,000 320,370
Debt issuance cost (969) (682)
Increase in long term debt (62,059) 295,792
_________ ________
Net cash provided by financing activities
536,972 615,480
_________ ________
Net increase in cash and cash equivalents
(13,475) 487,051
Cash and cash equivalents:
Beginning of period 149,401 13,541
_________ ________
End of period 135,926 500,592
========= ========
The accompanying notes are an integral part of this
financial statement.
WILLAMETTE VALLEY VINEYARDS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The interim financial statements have been prepared by
the Company, without audit and subject to year-end
adjustment, in accordance with generally accepted
accounting principles, except that certain information
and footnote disclosures made in the latest annual report
have been condensed or omitted for the interim statements.
Certain costs are estimated for the full year and are
allocated to interim periods based on estimates of operating
time expired, benefit received, or activity associated with
the interim period. The financial statements reflect all
adjustments, which are, in the opinion of management,
necessary for fair presentation.
Forward Looking Statement:
This Management's Discussion and Analysis of Financial
Condition and Results of Operation and other sections of this
Form 10QSB contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements involve risks and
uncertainties that are based on current expectations,
estimates and projections about the Company's business, and
beliefs and assumptions made by management. Words such as
"expects", "anticipates", "intends", "plans",
"believes", "seeks", "estimates" and variations of such
words and similar expressions are intended to identify such
forward-looking statements. Therefore, actual outcomes and
results may differ materially from what is expressed or
forecasted in such forward-looking statements due to numerous
factors, including, but 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, impact of governmental
regulatory decisions, successful assimilation of Tualatin
Vineyards Inc.'s business with that of the Company and other
risks detailed below as well as those discussed elsewhere in
this Form 10QSB and from time to time in the Company's
Securities and Exchange Commission filings and reports. In
addition, such statements could be effected by general
industry and market conditions and growth rates, and general
domestic economic conditions.
2. INVENTORIES BY MAJOR CLASSIFICATION ARE SUMMARIZED AS
FOLLOWS:
June 30, December 31,
1999 1998
Winemaking and packaging
materials $ 390,741 $ 211,550
Work-in-progress (costs relating
to unprocessed and/or bulk
wine products 2,160,629 1,923,852
Finished goods (bottled wines 2,528,651 2,466,406
and related products)
________ ________
$ 5,080,021 $4,601,808
3) PROPERTY AND EQUIPMENT CONSIST OF THE FOLLOWING:
June 30, December 31,
1999 1998
Land and improvements $ 1,047,522 $ 1,041,326
Winery building and hospitality
center 4,530,576 4,539,821
Equipment 3,911,042 3,715,612
________ ________
9,489,140 9,296,759
Less accumulated depreciation(2,833,111) (2,505,774)
__________ _________
$ 6,656,029 $ 6,790,985
========== ==========
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operation
RESULTS OF OPERATIONS
Long-term growth in earnings is based upon repositioning
the Company's brands by making higher quality wines to sell
at higher prices and margins. The focus on making better
wines is working.
The 1996 Signature Cuvee Pinot Noir was rated the
leading Oregon Pinot Noir of the '96 vintage by noted
wine critic and Master of Wine, Clive Coates. The
flagship Merlot of our Southern Oregon brand, Griffin
Creek, earned a score of "91" from the Wine Spectator -
the highest score ever received for an Oregon Merlot.
Our Pinot Blanc from Tualatin Estate Vineyards received
a rating of "Excellent" from Restaurant Wine
Magazine, their highest accolade given to an Oregon
Pinot Blanc.
The reduction in revenues is directly related to the
loss of discontinued product sales and the price
increases of our Vintage Series line. Management
anticipates this trend to continue until the higher
quality products are brought successfully into
distribution.
Some products were discontinued, such as Edelweiss because
it was a low priced, blended, sweet white wine of
California and Oregon grapes. The "Lot 27" and "28"
Chardonnay and Pinot Noir were discontinued because
they were low priced to the consumer and of a quality
reflective of the price. Management felt these wines
interfered with our repositioning effort and the wine
trade and consumers' perception of the Willamette
Valley Vineyards brand.
The Vintage and Founders' Reserve lines were upgraded
in wine quality and package presentation. Front line
prices to distributors were increased in September
1998. For example, Vintage Pinot Noir increased from
$80 to $88 per case, Whole Cluster Pinot Noir from $74
to $94 per case, and Pinot Gris from $74 to $88 per
case. These increases have resulted in suggested
prices to the consumer rising from $11 to $13 per
bottle. These price increases, combined with the
discontinuance of many significant prices discounts,
has resulted in a significant reduction in sales from
wholesale to retail.
The reduction in sales is uneven across the country.
Some distributors, who have businesses that focus on
selling high quality wines and have room in their
portfolio to focus on higher quality Oregon wines, are
not experiencing the sales reductions with Pinot Noir.
Where Willamette Valley Vineyards was positioned as a
lower priced "value" brand in distributors' book of
business, time and effort is needed to convert their
sales force and broaden distribution in their
respective markets. Management is now offering sales
incentives to distributors to increase distribution of
the product line and some temporary reductions in
prices (while remaining above prior years' prices) to
increase depletions.
The winery has built a substantial amount of high
quality wines which are currently being released into the
market. Successful distribution of these new wines
will result in higher total revenues and margins. For
example:
Inventory Inventory Revenue Revenue
Product cases cases @ FOB @ FOB
6-30-98 6-30-99 6-30-98 6-30-99
Willamette Valley Vineyards
Founders' Reserve Pinot Noir
2,405 3,148 400,433 554,048
Vineyard Designate Pinot Noir
0 1,600 0 384,000
Signature Cuvee Pinot Noir
236 661 67,496 224,740
Griffin Creek
Merlot 730 783 141,620 197,316
Syrah 0 350 0 79,100
Total 609,549 1,439,204
Winery Operations
The Company's revenues from winery operations before the
deduction of excise taxes are summarized as follows:
Three Months ended Six Months ended
June 30, June 30,
1999 1998 1999 1998
Tasting Room Sales
and Rental Income
$226,785 $223,549 $377,282 $378,329
On-site and
off-site festivals
85,920 107,596 200,335 225,500
In-state sales 497,269 575,834 913,164 1,001,897
Out-of-state sales
451,238 499,648 908,857 936,838
Bulk wine/
Misc. sales 12,754 88,393 29,719 323,645
_______ _______ _______ _______
Total Revenue
$1,273,966 $1,495,020 $2,429,357 $2,866,209
Less Excise Taxes 43,561 67,791 82,716 96,843
__________ _________ _________ _________
Net Revenue $1,230,405 $1,427,229 $2,346,641 $2,769,366
========== ========= ========= =========
Tasting Room sales and rental income for the three
months ended June 30, 1999 increased 1% over the same
period in 1998. For the first six months of 1999, the
sales decreased less than one percent over the same
period in 1998. Retail sales in the tasting room have
remained static for the first half of 1999. The
Company believes the current weather pattern of cool
and cloudy days witnessed in Oregon this spring was a
factor in contributing to stagnant sales. In order to
help improve the Company's image as one of Oregon's
high quality and high price wineries, it eliminated one of
its lower price products, Edelweiss. This adversely
affected the dollar revenue in the tasting room in the
first half of 1999. Edelweiss sales dropped from 845
cases in 1998 to 194 cases in 1999 in the first six
months of each respective period.
On-site and off-site festival sales for the three
months ended June 30, 1999 decreased 20% over the
second quarter of 1998. For the first half of 1999,
sales in this category decreased 11% over the same
period in 1999. During the second quarter of 1999, the
Company's revenue from its largest festival, Memorial
Day Weekend, dropped from $22,000 in 1998 to $20,000 in
1999. During the first half of 1999 and specifically
the second quarter of 1999, the Company saw a decline
in wine mail orders from mailings that are directly
related to its on-site events. The Company has hired a
new retail manager whose main task will be to improve
sales in this category.
Sales in the state of Oregon, through the Company's
independent sales force, decreased 14% in the three
months ending June 30, 1999 over the same period in
1998. For the first half of 1999, the sales decreased
9% over the same period in 1998. The Company's
strategy, to replace its lower price "Lot 27"
Chardonnay with a higher quality and higher price
Vintage Chardonnay, affected sales in Oregon. The number
of cases sold in 1999 of "Lot 27" Chardonnay declined
by 495 cases in the first half of 1999 as compared to
the same period in 1998. The Company raised the price
on its Pinot Gris wine, which saw a reduction of 362
cases in the first half of 1999 over 1998. These two
items accounted for a reduction in revenue of nearly
$75,000 between the first half of 1999 and the first
half of 1998.
Out-of-state sales in the three months ending June 30,
1999 decreased 10% over the same period in 1998. For
the first half of 1999, sales decreased 3% over
the same period in 1998. Sales in the Tualatin Estate
product line have been adversely effected by the price
increase and upgraded packaging from Tualatin Vineyards
to Tualatin Estate, which took effect in the second half of
1998. An example is Tualatin Estate Riesling where the
price increased to $59 a case in the first half of 1999
from $40.25 in the first half of 1998. This price
increase reduced the sales in the first half of 1999 by
562 cases, or approximately $20,000 in lost revenue, from
sales to the Company's largest distributor in Oregon.
The Company has seen an overall reduction of approximately
30% in case depletions but the price increases have made
up for a large part of the volume reductions between the
first half of 1999 against 1998.
Bulk wine sales were made in the first half of 1998 to
further reduce excess inventories from the large harvest of
1997. Whereas in 1998 harvest crop yields were lower, the
Company's bulk inventory levels meet its current sales
projection so, at this time, the Company has sold only bulk
wine for which it had previous contract commitments.
Excise taxes
The Company reports its excise taxes as a deduction of sales
revenue to equal net revenue (as shown on the Statement of
Operations). The amount for the first half of 1999 was
$82,716. For the same period in 1998, the excise taxes
collected was $96,843.
Gross Margin
Winery Operations
As a percentage of revenue, gross margin for the winery
operations increased to 57% for the quarter ending June 30,
1999 as compared to 51% in the second quarter of 1998. For
the first half of 1999, the gross margin increased to 56%
as compared to 49% for the first half of 1998. After
adjusting for the lower margin bulk wine sales, the gross
margin would have been 57% for the quarter ending June 30,
1999 as compared to 55% for the same period in 1998. For the
first half of 1999, the adjusted gross margin would have
been 56% as compared to 55% in the first half of 1998. In
the past few years, the Company has experienced higher
production costs, specifically in the price of grapes
it purchases from other vineyards. In order to keep margins
at a sustained level, the Company has expanded its marketing
efforts to sell higher priced wines with greater profit
margins. The price increases that went into effect in the
last half of 1998 have contributed to the increase in the
gross margins in 1999 over 1998. The Company expects that
these margins will continue to grow as it releases its
Signature Series and Vineyard Designate Pinot Noir, which
will retail for over $35 per bottle.
Selling, General and Administrative Expense
Selling, general and administrative expenses increased 6% to
$678,432 in the second quarter of 1999 from $639,533 in the
second quarter of 1998. For the first half of 1999,
selling, general and administrative expenses increased 10%
to $1,324,441 from $1,207,074 in the first half of 1998.
The increase was principally attributed to higher costs due
to the transition from replacing commission sales agents
with full time professional sales managers. The Company
pays its in-state sales representatives by commission
which is included as a selling expense. At the beginning of
1999, the Company hired a new West Coast Sales Manager and
an East Coast Sales Manager, replacing several different
sales agents who were paid by commissions on collected
revenue. In the first half of 1999, as the agents were
phased out, the Company had the expense of commissions paid
to the agents and the expenses paid to the new managers. The
direct travel expense for the new managers was up $42,000 in
the first half of 1999 from 1998 as the new managers
traveled to the majority of the Company's distributors
throughout the United States.
As a percentage of revenue from winery operations, selling,
general and administrative expenses increased to 55% in the
second quarter of 1999 from 45% in the second quarter of
1998. For the first half of 1999, as a percentage of
revenue from winery operations, selling, general and
administrative expenses increased to 56% from 44% in the
second quarter of 1998. The increase in percentage was due
to the decrease in total revenue plus the increase in
selling cost for the first six months of 1999 over the same
period in 1998. The Company is spending according to its
budget and expects that expenses as a percentage of revenues
to decrease in the second half of 1999.
Interest Income, Other Income and Expense
Interest income/other income decreased to $3,313 for the
second quarter of 1999 from $12,696 for the second quarter
of 1998 because the Company no longer receives interest
income from invested funds set aside for the completion of
the storage facility. For the first half of 1999, interest
income/other income decreased to $5,528 from $19,912 for the
first half of 1998.
Interest expense decreased to $122,507 in the second quarter
of 1999 from $123,899 in 1998. For the first half of 1999,
interest expense decreased to $232,430 from $249,756 for
the second half of 1998. Interest costs were lower because
the Company paid additional interest fees in 1998 to
renegotiate its long term loans to lower its rates over the
term of the loans. Also, in the first half of 1999, the
Company capitalized $14,699 of interest cost to vineyard
development for money borrowed to plant grapes at Tualatin
Estate. It is the Company's goal to reduce its debt over
time to ease the heavy burden of interest cost and provide
better financial flexibility.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Company had a working capital balance
of $2.3 million and a current ratio of 1.7:1. At December
31, 1998, the Company had a working capital balance of $2.5
million and a current ratio of 1.9:1. It is very important
that sales improve in the balance of the year, not only to
show a profit, but more particularly to reduce inventories
to generate cash to pay down account payable and debt and
meet on-going financial obligations.
The Company had a cash balance of $135,926 at June 30, 1999.
Of the total cash available, the Company has set aside funds
in reserve for various future commitments. At June 30,
1999, the Company held $103,000 in reserve to complete the
planting and vineyard development cost of the newly planted
60 acres at Tualatin Vineyards. This amount remained from a
$1.3 million loan taken out in April of 1997 to purchase
Tualatin Vineyards and to plant additional acreage at
Tualatin.
On March 31, 1999, the Company obtained an increase in its
line of credit from Farm Credit Services. At June 30, 1999,
the line of credit balance was $2,252,667. The Company
raised the line of credit to $2,500,000 from $2,000,000 to
meet the Company cash needs in 1999 until renewal in March
2000.
As of June 30, 1999, the Company had a total long-term debt
balance of $4,146,075 owed to Farm Credit Services. This
debt was used to finance the Hospitality Center, invest in
winery equipment to increase the Company's winemaking
capacity, complete the storage facility, and purchase
Tualatin Vineyards. At December 31, 1998, the Company was in
violation of one of its debt coverage covenants. Farm
Credit Services has temporarily released the Company from
complying with this one covenant. Farm Credit Services has
notified the Company that unless the Company is able to
comply with the debt coverage covenant and reduce borrowing
under the line of credit to $1,900,000 at December 31, 1999,
Farm Credit Services can make no assurances for continued
financing under the line of credit beyond the May 1, 2000
operating loan maturity date.
At June 30, 1999, the Company owed $214,674 payable to a
grape grower for the 1997 and 1998 harvest, which will be
paid on a quarterly basis for wine sold during that quarter.
At June 30, 1999, the Company has contracted or is in the
final stage to contract the purchase of approximately $1
million of grapes for its 1999 harvest.
PART II OTHER INFORMATION
Other
a. Status of Computer Software for the year 2000.
The Company began to develop its strategy in the first part
of 1998 to make itself "business ready" for the year 2000.
Its first step was to make all levels of the Company aware of
the basic problems the Company can expect as the year
2000 approaches. Each month the Company holds an all staff
meeting. The Company began to set aside time in each meeting
to discuss the problem in detail. The Company has made
educational awareness a priority in 1999. The Company's
small staff makes it easy to communicate with its employees
and develop strategy plans.
In November of 1998, the Company's outside computer
consultants identified each of the different computer based
systems which support the Company's business and production
needs. Once the equipment was identified, tests were
performed to determine which equipment passed or failed the
Y2K compliance testing. A list of the equipment was made and
the Company started to replace the critical equipment
immediately. From its plan, the Company expects to replace
the majority of the effected equipment by the year 2000. At
this date, there are only two pieces of equipment for which
the test results have not been received. These are the
telephone system and the tank control system. The Company
expects that both of these systems will be corrected, if
necessary, by the year 2000.
Based on tests performed by the consultants and on contacts
with equipment manufacturers, the Company is beginning its
assessment evaluation to determine the severity of the
problem and what needs to be fixed. All critical items on
the equipment list have been addressed, including the
financial reporting, networking communications, and Point-of-
Sale system in the tasting room. As of March 31, 1999, the
Company has spent $15,000 on software and hardware upgrades
and expects to spend an additional $30,000 in 1999 to insure
that its basic needs are taken care of by December 31, 1999.
Due to the nature of the winemaking business, the Company
feels most of the critical needs are now fulfilled. The
Company is currently testing all temperature control systems
for its stainless steel tanks and is prepared to take any
necessary action to make them compliant for the year 2000.
However, in January, typically, there is very little activity
on the production side of the winery. At that time, the wine
is aging in stainless steel tanks and oak barrels. The
Company does not expect to bottle any wine during the first
few months after the year 2000. The Winery's average
temperature ranges from 40 to 50 degrees in these months so
the wine shall not be in danger of spoiling.
The Company has prepared a short survey to mail to its
primary vendors and all distributors to inquire as to their
abilities for compliance in the year 2000. The surveys were
sent out in the first part of May 1999 and the Company has
received most of the surveys back from its vendors. From the
returned surveys, the Company will determine any critical
needs to be met by the end of the year. The majority of the
Company's customers in the state of Oregon are on a cash-
collected-at-delivery basis so there is no need to see if
their payable software is compliant for the year 2000. The
out-of-state customers pose the most significant problem
since the Company must be aware that all of their
distributors have the means to conduct normal business after
2000. All of the surveys returned have signified that all
respondents are Y2K compliant or will be by December 31, 1999.
Item 6 Exhibits and Reports on Form 8-K.
No exhibits or reports.
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of
1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
WILLAMETTE VALLEY VINEYARDS, INC.
Date: By /s/ James W Bernau
James W Bernau
President
Date: By /s/ John Moore
John Moore
Controller
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of
1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Date: __________________________________
By James W Bernau
President
Date: __________________________________
By John Moore
Controller
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 135,926
<SECURITIES> 0
<RECEIVABLES> 348,604
<ALLOWANCES> (111,000)
<INVENTORY> 5,080,021
<CURRENT-ASSETS> 5,790,622
<PP&E> 9,489,140
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<CURRENT-LIABILITIES> 3,478,474
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0
0
<COMMON> 6,789,055
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<SALES> 1,230,405
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<CGS> 528,741
<TOTAL-COSTS> 678,432
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 122,507
<INCOME-PRETAX> (95,962)
<INCOME-TAX> 0
<INCOME-CONTINUING> (95,962)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (95,962)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
