WILLAMETTE VALLEY VINEYARDS INC Segments Disclosure

NOTE 15 – SEGMENT REPORTING

 

The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies. Direct Sales include retail sales in the tasting rooms, wine club sales, internet sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes. Distributor Sales include all sales through a third party where prices are given at a wholesale rate. The accounting policies of the two segments are the same as those described in the summary of significant accounting policies. The Company does not have intra-entity sales or transfers.

The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. All expense categories on the statements of operations are significant and there are no other significant segment expenses that would require disclosure. Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income (loss) information for the respective segments is not available. Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated.

 

The Company’s Chief Executive Officer (CEO) uses results from operations to assess operating performance as compared to prior results, the annual operating plan and our competitors. The CEO uses this information to allocate future operating and capital expenditures.

 

The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the years ended December 31, 2024 and 2023. Sales figures are net of related excise taxes.

 

Schedule of Segment reporting

		Twelve Months Ended December 31,
		Direct Sales								Distributor Sales								Unallocated								Total
		2024				2023				2024				2023				2024				2023				2024				2023
Sales, net		$	21,254,929			$	20,518,872			$	18,527,513			$	18,617,242			$	-			$	-			$	39,782,442			$	39,136,114
Cost of sales			6,125,321				6,159,109				9,461,665				10,419,877				-				-				15,586,986				16,578,986
Gross margin			15,129,608				14,359,763				9,065,848				8,197,365				-				-				24,195,456				22,557,128
Selling expenses			14,069,163				14,327,967				2,072,378				2,145,576				978,296				1,090,560				17,119,837				17,564,103
Contribution margin		$	1,060,445			$	31,796			$	6,993,470			$	6,051,789
Percent of sales			53.4	%			52.4	%			46.6	%			47.6	%
General and administrative expenses																			6,503,761				6,200,227				6,503,761				6,200,227
Income (loss) from operations																										$	571,858			$	(1,207,202	)

 

Direct sales include $0 and $69,924 of bulk wine and grape sales in the years ended December 31, 2024 and 2023, respectively.

 

Net direct-to-consumer sales, including bulk wine, miscellaneous sales, and grape sales, represented approximately 53.4% and 52.4% of total net sales for 2024 and 2023, respectively.

 

Net sales through distributors represented approximately 46.6% and 47.6% of total net sales for 2024 and 2023, respectively.