Boston Beer Reports Third Quarter 2009 Results
Key highlights of the third quarter were:
-- Depletions growth of 6% for the quarter and 2% year to date, adjusted
for comparable selling days.
-- The Packaging Services Agreement with Diageo North America, Inc. ended
on May 2, 2009 . The Pennsylvania Brewery is now dedicated solely to
brewing the Company's beers and is showing efficiency, capacity and cost
improvements.
-- Gross margins improved to 54% for the quarter and 51% year to date, but
remain significantly lower than the gross margins realized prior to
2006, due to the significant brewery operating, packaging and ingredient
cost increases experienced since then, which have not been fully offset
with pricing.
-- Estimate of earnings per diluted share for 2009 has been increased from
previous guidance of $1.40 to $1.70 to between $1.75 and $2.05 .
Mr. Roper continued, "Our
3rd Quarter Results
Core shipment volume for the three months ended
The Company's net income of
Year to Date Results
Core shipment volume for the nine month period ended
The Company's net income of
Other matters
Year-to-date depletions reported to the Company through
Shipments and orders in-hand suggest that core shipments year-to-date through
Based on information of which the Company is currently aware and its projection that 2009 depletions will increase approximately 2 to 3% compared to 2008, the Company projects 2009 earnings per diluted share of between
The Company currently expects 2009 capital expenditures to be between
Looking forward to 2010, based on information of which the Company is currently aware, the Company hopes to increase revenue per barrel by 2% through minor front line and deal level adjustments and forecasts stability on costs of packaging and ingredients and a continued improvement in operating costs at the
The Company is currently evaluating 2010 capital expenditures and, based on current information, its initial estimates are between
The Company expects that its cash balances as of
During the nine months ended
The
Today, the Company brews more than 21 styles of beer. The Company uses the traditional four vessel brewing process and often takes extra steps like dry-hopping and a secondary fermentation known as krausening. It passionately pursues the development of new styles and the perfection of its classic beers by constantly searching for the world's finest ingredients. While resurrecting traditional brewing methods, the Company has earned a reputation as a pioneer in another revolution, the "extreme beer" movement, where it seeks to challenge drinkers' perceptions of what beer can be. The
Statements made in this press release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's
The Boston Beer Company, Inc.
Financial Results
Operating Results
(in thousands, except
per share data) (unaudited) (unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
2009 2008 2009 2008
---- ---- ---- ----
Barrels sold 545 671 1,689 1,723
Revenue, net of
product recall
returns of $979 and
$13,307 for the three
and nine months
ended September 27,
2008, respectively $118,851 $110,467 $335,967 $323,446
Less Excise Tax 10,129 9,339 28,102 28,823
------ ----- ------ ------
Net revenue 108,722 101,128 307,865 294,623
Cost of goods sold 50,417 55,983 149,564 149,735
Costs (recovery)
associated with
product recall - 1,254 (24) 9,546
---- ----- ---- -----
Gross profit 58,305 43,891 158,325 135,342
Operating expenses:
Advertising,
promotional and
selling expenses 32,737 34,004 89,792 101,249
General and
administrative
expenses 8,388 9,368 27,149 26,017
----- ----- ------ ------
Total operating
expenses 41,125 43,372 116,941 127,266
------ ------ ------- -------
Operating income 17,180 519 41,384 8,076
Other income, net:
Interest income 46 134 85 1,316
Other (expense)
income, net (4) (14) - 200
--- --- --- ---
Total other
income, net 42 120 85 1,516
-- --- --- -----
Income before income
taxes 17,222 639 41,469 9,592
Income tax provision 6,848 934 17,811 5,101
----- --- ------ -----
Net income (loss) $10,374 $(295) $23,658 $4,491
======= ===== ======= ======
Net income (loss) per
common share - basic $0.74 $(0.02) $1.68 $0.32
===== ====== ===== =====
Net income (loss) per
common share -
diluted $0.72 $(0.02) $1.65 $0.31
===== ====== ===== =====
Weighted-average
number of common
shares - basic 14,008 13,934 14,054 13,890
====== ====== ====== ======
Weighted-average
number of common
shares - diluted 14,334 13,934 14,322 14,333
====== ====== ====== ======
Consolidated Balance Sheets:
(in thousands, except share data) (unaudited)
September 26, December 27,
2009 2008
---- ----
Assets
Current Assets:
Cash and cash equivalents $44,802 $9,074
Accounts receivable, net
of allowance for doubtful
accounts of $300 and $255 as
of September 26, 2009 and December
27, 2008, respectively 24,331 18,057
Inventories 24,132 22,708
Prepaid expenses and
other assets 6,736 16,281
Deferred income taxes 1,988 2,734
----- -----
Total current assets 101,989 68,854
Property, plant and equipment, net 146,665 147,920
Other assets 1,530 1,606
Goodwill 1,377 1,377
----- -----
Total assets $251,561 $219,757
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $18,709 $20,203
Accrued expenses 55,273 46,854
------ ------
Total current liabilities 73,982 67,057
Deferred income taxes 9,617 9,617
Other liabilities 2,656 3,055
----- -----
Total liabilities 86,255 79,729
Commitments and Contingencies
Stockholders' Equity:
Class A Common Stock, $.01
par value; 22,700,000
shares authorized; 10,144,258
and 10,068,486 issued and outstanding
as of September 26, 2009 and
December 27, 2008, respectively 101 101
Class B Common Stock, $.01
par value; 4,200,000 shares authorized;
4,107,355 issued and outstanding 41 41
Additional paid-in capital 108,350 102,653
Accumulated other comprehensive
loss, net of tax (431) (431)
Retained earnings 57,245 37,664
------ ------
Total stockholders' equity 165,306 140,028
------- -------
Total liabilities and
stockholders' equity $251,561 $219,757
======== ========
Consolidated Statements of Cash Flows:
(in thousands) (unaudited)
Nine Months Ended
-----------------
September 26, September 27,
2009 2008
---- ----
Cash flows provided by
operating activities:
Net income $23,658 $4,491
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 12,679 8,289
Impairment of long-lived assets 589 -
(Gain) loss on disposal of property,
plant and equipment (1) 25
Bad debt expense (recovery) 49 (7)
Stock-based compensation expense 2,408 3,354
Excess tax benefit from stock-based
compensation arrangements (1,174) (4,578)
Deferred income taxes 746 -
Proceeds from sale of trading
securities - 16,200
Changes in operating assets and
liabilities:
Accounts receivable (6,323) (3,331)
Inventories (1,424) (5,714)
Prepaid expenses and other assets 9,641 (754)
Accounts payable (1,494) 6,890
Accrued expenses 9,593 2,649
Other liabilities (399) (343)
---- ----
Net cash provided by operating
activities 48,548 27,171
------ ------
Cash flows used in investing activities:
Purchases of property, plant and equipment (11,900) (45,339)
Proceeds from disposal of property, plant
and equipment - 11
Purchase of brewery assets - (44,960)
- -------
Net cash used in investing
activities (11,900) (90,288)
------- -------
Cash flows used in financing activities:
Repurchase of Class A common stock (4,077) (15,324)
Proceeds from exercise of stock options 1,642 4,842
Excess tax benefit from stock-based
compensation arrangements 1,174 4,578
Net proceeds from sale of investment
shares 341 301
--- ---
Net cash used in financing
activities (920) (5,603)
---- ------
Change in cash and cash equivalents 35,728 (68,720)
Cash and cash equivalents at beginning of
period 9,074 79,289
----- ------
Cash and cash equivalents at end of period $44,802 $10,569
======= =======
Supplemental disclosure of cash flow information:
Income taxes paid $7,336 $8,329
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SOURCE
Erika Schermerhorn, +1-617-368-5091