WVVI.NASDAQWillamette Valley Vineyards INC

10-K: Willamette Valley Vineyards Reports 2025 Net Loss Amid Sales Decline

Sentiment:

Annual Report 24 March 2026 4:30 PM

📋All filings for Willamette Valley Vineyards INC

Willamette Valley Vineyards, Inc. reported a significant increase in net loss to $917,685 for fiscal year 2025, driven by a 6.5% decrease in net sales revenue and higher selling expenses, despite a legal settlement gain.

Capital raiseThe company filed a shelf Registration Statement on Form S-3 on June 17, 2025, for the potential future issuance of up to $20,000,000 in debt, equity, or derivative securities.A Prospectus Supplement was filed on July 3, 2025, to offer and sell up to 1,343,284 shares of Series A Redeemable Preferred Stock, with net proceeds of $2,057,265 received under these offerings as of December 31, 2025.The company relies on its preferred stock program as a source of funding for its foreseeable short and long-term operating needs.

Worse than expectedNet loss increased significantly to $917,685 in 2025 from $117,894 in 2024.Net sales revenue decreased by 6.5% in 2025, a more substantial decline than the overall U.S. wine industry's 1.6% revenue reduction.Gross profit decreased by 7.0%, and income from operations turned into a loss of $(1,436,172) from a profit of $571,878 in the prior year.EBITDA decreased by 19.7%, indicating a significant decline in operational profitability.The company was out of compliance with a debt covenant as of December 31, 2025, requiring a waiver.

Summary

Net loss increased to $917,685 in 2025 from $117,894 in 2024, representing an increase of $799,791.
Net sales revenue decreased by $2,585,320, or 6.5%, to $37,197,122 in 2025 from $39,782,442 in 2024.
Direct sales revenue decreased by 4.8%, and distributor sales revenue decreased by 8.5% in 2025 compared to 2024.
Gross profit decreased by $1,702,936, or 7.0%, to $22,492,520 in 2025, with the gross margin percentage slightly declining to 60.5% from 60.8%.
Selling, general and administrative expenses increased by 1.3% to $23,928,692 in 2025.
Income from operations turned into a loss of $(1,436,172) in 2025, a decrease of $2,008,030 from an income of $571,878 in 2024.
Interest expense, net, increased by 14.9% to $1,167,722 in 2025 due to higher average loan balances.
Other income, net, significantly increased by $1,294,999 to $1,394,628 in 2025, primarily due to a legal settlement related to historical wildfires.
EBITDA decreased by 19.7% to $3,209,021 in 2025 from $3,995,135 in 2024.
Case sales of company-produced wine decreased by 7.2% to 173,014 cases in 2025 compared to 186,419 cases in 2024.
The company was out of compliance with a debt covenant as of December 31, 2025, but received a waiver from Columbia Bank until December 31, 2026.
Wine club memberships decreased by 702 members, totaling 10,481 as of December 31, 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging report, with significant declines in sales and profitability, and a debt covenant violation. While a legal settlement provided a one-time boost to other income, it masked deeper operational issues in a contracting market.

Positives

Other income, net, significantly increased by $1,294,999 to $1,394,628 in 2025, primarily from a legal settlement related to historical wildfires.
Received a waiver from Columbia Bank for a debt covenant violation until December 31, 2026, providing temporary relief.
Continued focus on direct-to-consumer sales, which yield higher profit margins, despite a decrease in revenue from this segment.
Strong brand recognition and quality accolades, including being awarded 'Best Wine Tasting Room in the country' by USA Today for the second consecutive year and high ratings from Wine Enthusiast Magazine and James Suckling.
Management believes its focus on integrity in winemaking, small scale, storied estate vineyards, environmental stewardship, community support, and participatory wine experiences aligns with the values of prospective, developing wine enthusiasts.
Successful capital raising through the Preferred Stock program, with $2,057,265 in net proceeds received under the June 2025 Form S-3 offering as of December 31, 2025.
Maintained positive relations with employees, with no collective bargaining unit.

Negatives

Net loss increased significantly to $917,685 in 2025 from $117,894 in 2024.
Net sales revenue decreased by 6.5% in 2025 compared to 2024, with declines in both direct sales (4.8%) and distributor sales (8.5%).
Gross profit decreased by 7.0%, and the gross margin percentage slightly declined by 0.3 percentage points.
Selling, general and administrative expenses increased by 1.3%.
Income from operations turned into a loss of $(1,436,172) in 2025 from an income of $571,878 in 2024.
Interest expense increased by 14.9% due to higher average loan balances.
EBITDA decreased by 19.7% to $3,209,021 in 2025.
Case sales of company-produced wine decreased by 7.2% in 2025.
Wine club memberships decreased by 702 members in 2025.
The company was out of compliance with a debt covenant as of December 31, 2025.
The U.S. wine industry experienced a volume reduction of 2% and revenue reduction of 1.6% in 2025, with direct-to-consumer volume and tasting room visitation declining for the fourth consecutive year, indicating a challenging market environment.
The company's common stock is thinly traded, resulting in less liquidity for shareholders.

Risks

Agricultural risks, including diseases (e.g., Grapevine Red Blotch Disease), pests (e.g., phylloxera), fungi, viruses, drought, frost, and other weather conditions, can affect grape quantity and quality, decreasing product supply and negatively impacting profitability.
Operations are susceptible to changing weather patterns and climatic conditions, such as hailstorms, wildfires (leading to smoke damage), and unpredictable rainfall, which can diminish grape quality.
The company may not be able to economically insure certain risks, or coverage levels may be inadequate, exposing it to liability.
Loss of key employees, including James W. Bernau (President), John Ferry (CFO), and Mike Osborn (CEO), could harm the company's reputation and business, particularly if they join competitors.
The company's ability to operate requires adequate funding, and there is no assurance it can comply with credit facility conditions or that available funds will be sufficient for future needs, potentially affecting stockholder value.
Costs of being a publicly-held company may put the company at a competitive disadvantage compared to privately-held competitors, potentially increasing wine prices or reducing profitability.
Significant competition from other premium domestic and foreign wineries, as well as other alcoholic and non-alcoholic beverages, could adversely affect profitability, especially given larger competitors' greater financial and marketing resources.
The value of the Willamette Valley AVA may be eroded by inappropriate or fanciful marketing use by out-of-state competitors, potentially diluting prestige and reducing prices for Oregon wines.
Competition for shelf space in retail stores and marketing focus by independent distributors, many of whom carry extensive brand portfolios, could harm the company's business and reduce sales.
Loss of the 'Willamette Valley Vineyards' or 'Willamette' trademarks could adversely affect the company's distinction within the AVA and its ability to market products effectively.
Fluctuations in the quantity and quality of grape supply due to various factors (weather, diseases, contracts) could reduce wine production, sales, and harm the brand name.
Contamination of wines, through tampering or otherwise, could lead to inventory destruction, product recalls, and significant damage to the company's reputation, with insurance potentially being inadequate.
A reduction in consumer demand for premium wines due to health concerns, alternative beverages, anti-alcohol groups, or increased taxes could harm the company's business.
Changes in consumer spending related to economic conditions, tax rates, and confidence could reduce demand for premium products, limit price increases, and increase selling expenses.
Increased regulation and/or taxation (excise taxes, income taxes, tariffs) could negatively affect the company's financial condition or results of operations.
The company's common stock is thinly traded on the NASDAQ Capital Market, resulting in less liquidity for shareholders.
The company may face liabilities associated with the offer and sale of its Preferred Stock, including rescission liability or enforcement actions, due to unusual terms or potential misstatements in offering documents.
Inability to pay accumulated dividends on its Preferred Stock could adversely affect sales, as many preferred stockholders are wine enthusiasts.
The issuance of additional shares of Preferred Stock or Common Stock in the future could adversely affect holders of Common Stock through dilution or preference.
Failures or security breaches of information technology systems could disrupt operations, lead to misappropriation of sensitive data, and result in civil/criminal penalties, litigation, or reputational harm.
Provisions in the company's articles of incorporation, by-laws, and Oregon law could delay or deter tender offers or takeover attempts that may offer a premium for common stock.

Future Outlook

The company anticipates a continuing decline in the U.S. wine market through 2026, bottoming out in 2027, and then remaining relatively flat through 2030, according to Silicon Valley Bank's forecast. The company plans to address long-term grape supply needs by developing new vineyards on currently owned or leased properties, with 39 acres of pre-productive vineyards expected to yield grapes within one to three years. Management intends to fully utilize the Estate Winery's production capacity before expanding into the Tualatin Winery. The company believes that cash flow from operations, existing credit facilities, and its preferred stock program will be sufficient to meet its foreseeable short and long-term operating needs.

Management Comments

The Company's Board of Directors and management believe the winery's focus on integrity in winemaking, small scale, storied estate vineyards, environmental stewardship, support for community needs and participatory wine experiences are reflective of the values of a number of prospective, developing wine enthusiasts.
Management believes that the grapes grown on the Company's vineyards establish a foundation of quality through the Company's farming practices, upon which the quality of the Company's wines is built.
Management believes sufficient bulk wine inventory is on-hand to bottle approximately 293,464 cases of wine in 2025, and that sufficient stock is on hand to meet current demand levels until the 2025 vintage becomes available.
Management continues to invest in new production technologies intended to increase the efficiency and quality of wine production.
Management believes that these matters [legal proceedings] will not have a material adverse effect on the Company's financial position, results of operations or cash flows.
The Company's management does not believe inflation has had a material impact on the Company's revenues or loss during 2025 or 2024.

Industry Context

StockSavvy.ai notes that Willamette Valley Vineyards' performance in 2025 reflects broader challenges in the U.S. wine industry, which saw a 2% reduction in volume and 1.6% reduction in revenue, with direct-to-consumer sales and tasting room visitation declining for the fourth consecutive year. This trend is attributed to a general reduction in alcohol consumption for health reasons and a shift towards alternatives like ready-to-drink beverages, spirits, and cannabis. The company's decreased sales and profitability align with the overall market contraction forecast by Silicon Valley Bank, which predicts a continuing decline through 2027 before flattening.

Comparison to Industry Standards

The U.S. wine industry experienced a 2% reduction in volume and 1.6% reduction in revenue in 2025, while Willamette Valley Vineyards saw a 6.5% decrease in net sales revenue and a 7.2% decrease in case sales, indicating a more pronounced sales decline than the industry average.
Direct-to-consumer volume and tasting room visitation declined for the fourth consecutive year across the industry, a trend also observed by Willamette Valley Vineyards with decreased retail sales and a reduction in wine club memberships.
Oregon's overall winery count decreased from 1,143 to 1,076 in 2024, and Oregon case sales decreased by 4% from 2023 to 2024, suggesting a challenging regional market that Willamette Valley Vineyards is navigating.
The company's gross margin percentage of 60.5% in 2025, while slightly down from 60.8% in 2024, remains strong, indicating effective pricing strategies for its premium, super premium, and ultra-premium wines despite market pressures.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Executive Officer	James W. Bernau (previously President, Chief Executive)	Michael Osborn	May 19, 2025	New employment agreement and appointment to the role.
Director	Cara Pepper Day		2025 annual meeting	Decided not to stand for re-election to the board.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Equity Incentive Plan Adoption	The Willamette Valley Vineyards Inc, 2025 Omnibus Equity Incentive Plan was adopted by the Board of Directors.	September 9, 2025	Provides for the grant of Options, Share Appreciation Rights, Restricted Share Units, and Other Share-based Awards to selected employees, directors, and independent contractors, potentially aligning incentives with company performance.
Board Compensation Plan Update	The WVV Board Member Compensation Plan was updated.	February 2024	Revised director compensation structure, including yearly stipends and per-meeting fees, with flexibility for directors to decline compensation.
Section 16(a) Reporting	One Form 3 and three Form 4s were filed late by Michael Osborn.	N/A	Indicates a lapse in timely compliance with SEC reporting requirements for insider transactions, which could raise minor regulatory scrutiny.

Legal Proceedings

No material legal proceedings are pending to which the company is a party or to which any of its property is subject.
Management is not aware of any such actions being contemplated.
A legal settlement related to historical wildfires contributed significantly to other income in 2025, indicating a resolution of past disputes.

Related Party Transactions

The company provides living accommodations for its President, James W. Bernau, on company premises, with annual expenses less than $12,000 (exclusive of depreciation).
The company engages James Ellis, a Board member, for consulting services, with compensation of $9,628 in 2025 and $9,865 in 2024.
The Willamette Wineworks lease is with a related party, with payments of $130,045 in 2025 and $136,863 in 2024.

Stakeholder Impact

Shareholders (Common Stock): Experienced a significant increase in loss per common share after preferred dividends ($0.64 in 2025 vs $0.48 in 2024). The stock is thinly traded, affecting liquidity. Potential dilution from future preferred or common stock issuance.
Shareholders (Preferred Stock): Received cumulative 5.3% dividend ($0.22 per share per annum) and the company is current on obligations. However, the ability to pay depends on generating excess cash, and existing credit facilities may limit payments. Sales revenues are partly dependent on goodwill with preferred stockholders.
Employees: The company maintains positive relations. A 401(k) profit sharing plan is in place, with company contributions of $215,394 in 2025.
Customers: Decreased retail sales and wine club memberships indicate a decline in direct customer engagement. The company's focus on quality and unique experiences aims to attract and retain customers.
Creditors: The company was out of compliance with a debt covenant as of December 31, 2025, but received a waiver, indicating a potential risk to credit relationships if not resolved. Increased long-term debt and interest expense.

Next Steps

Continue to build on its base of direct-to-consumer sales.
Continue to evaluate opportunities to plant more acres and purchase properties for future vineyards.
Seek out opportunities to acquire land for future grape plantings to increase available quantities, maintain control over farming practices, more effectively manage grape costs, and mitigate uncertainty associated with long-term contracts.
Fully utilize the production capacity at the Estate Winery before expanding into the Tualatin Winery.
Address long-term grape supply needs by developing new vineyards on properties currently owned or secured by lease.
Recognize unrecognized compensation cost of $795,841 ratably over the next 9.5 years related to the 2025 Omnibus Equity Incentive Plan.
Comply with the debt covenant by the next measurement date of December 31, 2026.

Key Dates

Date	Description
1983	Company originally established as a sole proprietorship by Jim Bernau.
May 1988	Company incorporated.
1997	Company purchased Tualatin Vineyards.
December 1999	Company sold approximately 79 acres of the Tualatin Vineyards property under a sale-leaseback agreement, initiating the Peter Michael Vineyard lease.
December 2004	Company sold approximately 75 acres of the Tualatin Vineyards property under a sale-leaseback agreement, initiating the Meadowview Vineyard lease.
December 2005	Company entered into a revolving line of credit agreement with Columbia Bank.
February 2006	Company instituted a 401(k) profit sharing plan.
February 2007	Company entered into a lease agreement for 59 acres of vineyard land at Elton Vineyard.
July 2008	Company purchased 86 acres near Hopewell, Oregon, for vineyard plantings and entered into a 34-year lease for 110 adjoining acres (Ingram Vineyard).
August 2015	Company commenced a public offering of its Series A Redeemable Preferred Stock; first wines released under Pambrun and Elton labels.
November 2015	Achieved listing status for the Preferred Stock on NASDAQ under the trading symbol WVVIP.
2016	First wines released under the Maison Bleue label.
December 2016	Company purchased 40 acres in Dayton, Oregon.
January 2017	Company purchased approximately 17 acres in Dundee, Oregon (Bernau Estate) and an additional 45 adjoining acres for Pambrun Vineyard.
February 2017	Company purchased property in the Dundee Hills AVA under terms that included a 15-year note payable.
March 2017	Company entered into a 25-year lease for approximately 17 acres of agricultural land in Dundee, Oregon.
January 2018	Company purchased 36 acres in Lafayette, Oregon and assumed a lease for its Maison Bleue tasting room in Walla Walla, Washington.
September 2018	Company renewed an existing lease for its McMinnville tasting room.
2019	Company purchased 69 acres south of Salem, Oregon (Jory Claim Vineyard).
September 2019	John Ferry began serving as Chief Financial Officer.
February 2020	Company opened a microwinery, Willamette Wineworks, in Folsom, California, and began selling wine under the brand name Natoma; entered into a 5-year lease for the facility.
March 2021	Company entered into a 10-year lease for a retail wine facility in Vancouver, Washington.
December 2021	Company debuted a Pinot Noir Clonal Blending experience.
February 2022	Company opened a sparkling wine facility and tasting room called Domaine Willamette; entered into a 10-year lease for a retail wine facility in Lake Oswego, Oregon.
May 2022	Company amended the McMinnville tasting room lease; entered into a 10-year lease for a retail wine facility in Happy Valley, Oregon.
July 1, 2022	Company filed a shelf Registration Statement on Form S-3 for potential future issuance of securities.
August 1, 2022	Company began filing Prospectus Supplements to the July 2022 Form S-3.
September 2022	Company opened the Domaine Willamette Winery.
November 2022	Company increased the borrowing line of its Credit Agreement up to $5,000,000.
January 2023	Company entered into a new lease for its Maison Bleue tasting room and a 10-year lease for a retail wine facility in Bend, Oregon.
June 30, 2023	Company filed a Prospectus Supplement to the July 2022 Form S-3.
October 27, 2023	Company filed a Prospectus Supplement to the July 2022 Form S-3.
February 2024	The WVV Board Member Compensation Plan was updated.
July 2024	The Peter Michael Vineyard lease was extended until January 2030.
May 12, 2025	Michael Osborn's employment agreement was dated.
May 19, 2025	Michael Osborn's employment start date as Chief Executive Officer.
June 17, 2025	Company filed a shelf Registration Statement on Form S-3 for potential future issuance of securities.
July 3, 2025	Company filed a Prospectus Supplement to the June 2025 Form S-3.
July 2025	The Credit Agreement was renewed until July 31, 2026.
September 9, 2025	The Willamette Valley Vineyards Inc, 2025 Omnibus Equity Incentive Plan was adopted by the Board of Directors.
November 2025	Dividend declared on Series A Redeemable Preferred Stock.
November 12, 2025	Registration statement filed to register shares related to the 2025 Omnibus Equity Incentive Plan.
December 31, 2025	Fiscal year ended.
March 24, 2026	Date of the Annual Report on Form 10-K filing.
April 30, 2026	John Ferry's retention payment due date if he is with the company.
July 31, 2026	Maturity date of the renewed Credit Agreement.
December 31, 2026	Next measurement date for the debt covenant waiver from Columbia Bank.
January 1, 2027	Michael Osborn's base salary adjustment tied to CPI-W begins.
April 2027	Maturity date of AgWest loan #4.
December 2027	Maison Bleue tasting room lease ends.
2028	Maturity date of AgWest Loan #1.
January 2030	End of Peter Michael Vineyard lease extension.
December 2031	End of Elton Vineyard lease extension.
February 2032	Maturity date of the installment note payable for property purchase.
2032	Maturity date of AgWest Loan #2.
November 2033	End of Meadowview Vineyard lease extension.
January 2035	End of Peter Michael Vineyard lease extension (reasonably certain options).
2039	Maturity date of AgWest 15 year Note Loan #3.
February 2040	End of Willamette Wineworks lease extension (reasonably certain options).
August 2041	End of Vancouver, Washington retail wine facility lease extension (reasonably certain options).
January 2042	End of Lake Oswego, Oregon retail wine facility lease extension (reasonably certain options).
May 2042	End of Happy Valley, Oregon retail wine facility lease extension (reasonably certain options).
December 2053	End of Ingram Vineyard lease extension (reasonably certain options).

Recommendation

sell

The company reported a substantial increase in net loss, a significant decline in net sales revenue across all channels, and a notable drop in EBITDA for 2025. These operational and financial deteriorations, coupled with a debt covenant violation and a contracting overall wine market, suggest underlying business challenges. While a legal settlement provided a one-time boost to other income, it does not address the core business performance. The thinly traded common stock further exacerbates liquidity concerns for investors. Given the negative trends and risks, a seasoned investor would likely recommend selling to mitigate further potential losses.

Keywords

Willamette Valley Vineyards, WVVI, Wine industry, Oregon wine, Pinot Noir, Winery, SEC filing, 10-K, Financial results, Direct-to-consumer sales, Distributor sales, Vineyard operations, Sparkling wine, Corporate governance, Risk factors, Financial performance, Wine production, NASDAQ Capital Market

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