Willamette Valley Vineyards, Salem, Ore., generated income applicable to common shareholders of $103,459, or $0.02 cents a share, for the second quarter of 2019, which was down from $546,817, or $0.11 cents a share, for the corresponding prior-year period, representing a $443,358 or 81.1 percent decrease in income applicable to common shareholders compared with second quarter 2018, according to the company.

The company produced revenues of $5.7 million and $5.8 million in the second quarters of 2019 and 2018, respectively, a decrease of $30,455 or 0.5 percent. This decrease was caused by an increase in direct sales of $5,957 and a decrease in sales through distributors of $36,412. The decrease in sales through distributors primarily was the result of the company’s Oregon and Washington state distributor experiencing problems in their new order/delivery systems. This resulted in a significant reduction in Oregon and Washington sales and deliveries during the second quarter 2019, it reports.

Gross profit was $3.4 million and $3.7 million for the second quarters of 2019 and 2018, respectively, a decrease of $223,748 or 6 percent, the company says. The decrease is the result of a higher cost of product sales that the company believes is associated with specific vintages being sold during the second quarter 2019.

Selling, general and administrative expenses were $2.9 million and $2.5 million for the second quarters of 2019 and 2018, respectively, an increase of $358,726 or 14.1 percent. This increase primarily was the result of increases in staffing, marketing, long-term planning and development activities and an increase in professional fees.

Income from operations was $596,431 and $1.1 million for the second quarters of 2019 and 2018, respectively, a decrease of $582,474 or 49.4 percent. The decrease was the result of a decrease in revenue and growth in selling, general and administrative expenses, the company says.

Jim Bernau, founder and president of the winery, said: “We had a difficult quarter due to problems executing distribution in Oregon and Washington state. We are working closely with the distributor to address these issues and anticipate an improved process going forward.” BI