8-K
0000949870false00009498702024-04-252024-04-25

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 25, 2024

The Boston Beer Company, Inc.

(Exact name of Registrant as Specified in Its Charter)

Massachusetts

001-14092

04-3284048

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

One Design Center Place, Suite 850,

Boston, MA

02210

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 368-5000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock

 

SAM

 

NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


 

 

Item 2.02 Results of Operations and Financial Condition

On April 25, 2024, The Boston Beer Company, Inc. disclosed financial information for the first quarter of 2024 in an earnings release, a copy of which is set forth in the attached Exhibit 99.

The information in this Form 8-K and the Exhibit 99 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

 

 Exhibit 99

Earnings Release of The Boston Beer Company, Inc. dated April 25, 2024.

 

 

 

 104

Cover Page Interactive Data File (embedded within Inline XBRL document).

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

The Boston Beer Company, Inc.

 

 

(Registrant)

 

 

 

Date: April 25, 2024

 

/s/ Diego Reynoso

 

 

Diego Reynoso

 

 

Chief Financial Officer

 

 


EX-99

 

 

 

 

 

Exhibit 99

Investor Relations Contact:

 

 

Media Contact:

Jennifer Larson

 

 

Dave DeCecco

(617) 368-5152

 

 

(914) 261-6572

jennifer.larson@bostonbeer.com

 

 

dave.dececco@bostonbeer.com

 

BOSTON BEER REPORTS

FIRST QUARTER FINANCIAL RESULTS

BOSTON (April 25, 2024) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the first quarter ended March 30, 2024. Key results were:

 

First Quarter 2024 Summary:

 

Depletions were flat and shipments increased 0.9%
Net revenue of $426.1 million increased 3.9%
Gross margin of 43.7% up 570 basis points year over year
Net income of $12.6 million
Diluted income per share of $1.04

 

Capital Structure

 

Ended the first quarter with $205.4 million in cash and no debt
Repurchased $65.0 million in shares from January 2, 2024 to April 19, 2024

 

“We were pleased to see flat depletion trends in the first quarter and to deliver revenue growth,” said Chairman and Founder Jim Koch. “We remain committed to investing across our portfolio of brands to drive long-term revenue growth while also expanding our margins. Our highly cash generative business and strong balance sheet has enabled us to repurchase $65 million in shares year-to-date and will fuel our 2024 investments.”

 

“I’m thrilled to have recently joined Boston Beer as CEO,” said President and CEO Michael Spillane. “Our first quarter performance reflects a solid start to the year, and we are reiterating our 2024 volume and EPS guidance. We remain focused on executing our strategy to return to growth and expand margins by investing in our iconic brands, launching disciplined innovation and optimizing our supply chain.”

 

Details of the results were as follows:

 

First Quarter 2024 (13 weeks ended March 30, 2024) Summary of Results

Depletions for the first quarter were flat from the prior year. Shipment volume for the quarter was approximately 1.6 million barrels, a 0.9% increase from the prior year, primarily due to growth in Twisted Tea offset by declines in Truly Hard Seltzer and the Company’s other brands.

Shipments were higher than depletions as distributors built inventories to support the Company’s peak selling season and the implementation of the Company’s new automated customer ordering and inventory management system. The Company believes distributor inventory as of March 30, 2024 was at an appropriate level for each

 


 

of its brands and averaged approximately four and a half weeks on hand compared to four weeks on hand at the end of the fourth quarter of 2023 and four and a half weeks at the end of the first quarter of 2023.

 

Revenue for the quarter increased 3.9% due to volume increases, pricing, and lower returns.

 

Gross margin of 43.7% increased from the 38.0% margin realized in the first quarter of 2023, or an increase of 570 basis points year over year. Gross margin primarily benefited from price increases, the comparison against high returns and inventory obsolescence costs in the prior year related to the Truly Vodka Soda rebrand and a non-recurring payment in the prior year to a third-party contract brewery, procurement savings and lower brewery processing costs per barrel due to higher volumes partially offset by inflationary costs. The first quarter gross margin of 43.7% includes $1.0 million of shortfall fees which negatively impacted gross margin by approximately 20 basis points on an absolute basis and non-cash expense of third-party production pre-payments of $4.2 million that negatively impacted gross margins by approximately 100 basis points on an absolute basis.

 

Advertising, promotional and selling expenses for the first quarter of 2024 decreased $5.2 million or 4.1% from the first quarter of 2023, due to decreased freight to distributors of $3.6 million from lower rates and improved freight efficiencies, partially offset by higher volumes. Brand investments decreased $1.6 million, with decreases in other promotional activity partially offset by increases in media.

 

General and administrative expenses increased by $6.7 million or 15.3% from the first quarter of 2023, primarily due to higher salaries and benefits cost, which includes Chief Executive Officer transition costs that were fully expensed in the first quarter, partially offset by decreased consulting costs.

 

The Company’s effective tax rate for the first quarter of 33.0% compared to 27.8% in the prior year. In the first quarters of 2024 and 2023, the Company recorded tax expense of $0.05 and $0.04 per diluted share, respectively, resulting from the Accounting Standard "Employee Share-Based Payment Accounting" ("ASU 2016-09").

 

The Company expects that its March 30, 2024 cash balance of $205.4 million, together with its projected future operating cash flows and the unused balance on its $150.0 million line of credit, will be sufficient to fund future cash requirements.

 

During the 13-week period ended March 30, 2024 and the period from April 1, 2024 through April 19, 2024, the Company repurchased shares of its Class A Common Stock in the amounts of $50.0 million and $15.0 million, respectively, for a total of $65.0 million year to date. As of April 19, 2024, the Company had approximately $201.5 million remaining on the $1.2 billion share buyback expenditure limit set by the Board of Directors.

 

Depletions Estimate

 

Year-to-date depletions through the 16-week period ended April 20, 2024 are estimated by the Company to have decreased approximately 2% from the comparable period in 2023.

 

Full-Year 2024 Projections

 

 


 

The Company has not changed its full year guidance communicated in its February 27, 2024 Earnings Release, other than the change in its effective tax rate, which is due to an increase in estimated non-deductible compensation expense primarily related to CEO transition costs.

 

The Company’s actual 2024 results could vary significantly from the current projection and are highly sensitive to changes in volume projections, particularly related to the hard seltzer category, and supply chain performance as well as inflationary impacts.

 

Full Year 2024

Current Guidance

Prior Guidance

Depletions and Shipments Percentage Change

Down low single digit to up low single digit

Down low single digit to up low single digit

Price Increases

1% to 2%

1% to 2%

Gross Margin

43% to 45%

43% to 45%

Advertising, Promotion, and Selling Expense Year Over Year Change ($ million)

($5) to $15

($5) to $15

Effective Tax Rate

28.5%

27.5%

GAAP EPS

$7.00 to $11.00

$7.00 to $11.00

Capital Spending ($ million)

$90 to $110

$90 to $110

 

Underlying the Company's current 2024 projections are the following full-year estimates and targets:

 

The advertising, selling and promotional expense projection does not include any changes in freight costs for the shipment of products to the Company’s distributors.
During full year 2024, the Company estimates shortfall fees will negatively impact gross margin by 50 to 75 basis points and non-cash expense of third-party production pre-payments will negatively impact gross margins by 85 to 110 basis points which is a reduction from our previous estimate of 125 to 150 basis points, due to a change in timing of our production prepayment amortization
The Company’s business is seasonal, with the first quarter and fourth quarter being lower volume quarters and the fourth quarter typically the lowest absolute gross margin rate of the year
During the first quarter shipments trends were above depletions trends and the Company currently estimates that these trends will rebalance resulting in shipments trends being lower than depletions trends in the second quarter

 

Forward-Looking Statements

 

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 SEC filings, including, but not limited to, the Company’s report on Form 10-K for the year ended December 30, 2023 and subsequent reports filed by the Company with the SEC on Forms 10-Q and 8-K. Copies of these documents are available from the SEC and may be found on the Company’s website, www.bostonbeer.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

 


 

 

About the Company

 

The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 brewing Samuel Adams beer and has since grown to become one of the largest and most respected craft brewers in the United States. We consistently offer the highest-quality products to our drinkers, and we apply what we’ve learned from making great-tasting craft beer to making great-tasting and innovative “beyond beer” products. Boston Beer Company has pioneered not only craft beer but also hard cider, hard seltzer and hard tea. Our core brands include household names like Angry Orchard Hard Cider, Dogfish Head, Truly Hard Seltzer, Twisted Tea Hard Iced Tea, and Samuel Adams. We have taprooms and hospitality locations in California, Delaware, Massachusetts, New York and Ohio. For more information, please visit our website at www.bostonbeer.com, which includes links to our respective brand websites.

 

Thursday, April 25, 2024

 

 


 

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

(in thousands, except per share data)

 

 

 

(unaudited)

 

 

 

Thirteen weeks ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Revenue

 

$

452,208

 

 

$

435,156

 

Less excise taxes

 

 

26,156

 

 

 

25,156

 

Net revenue

 

 

426,052

 

 

 

410,000

 

Cost of goods sold

 

 

239,704

 

 

 

254,338

 

Gross profit

 

 

186,348

 

 

 

155,662

 

Operating expenses:

 

 

 

 

 

 

Advertising, promotional, and selling expenses

 

 

120,275

 

 

 

125,428

 

General and administrative expenses

 

 

50,384

 

 

 

43,694

 

Impairment of brewery assets

 

 

335

 

 

 

484

 

Total operating expenses

 

 

170,994

 

 

 

169,606

 

Operating income (loss)

 

 

15,354

 

 

 

(13,944

)

Other income:

 

 

 

 

 

 

Interest income

 

 

3,493

 

 

 

1,644

 

Other expense

 

 

(38

)

 

 

(102

)

Total other income

 

 

3,455

 

 

 

1,542

 

Income (loss) before income tax provision (benefit)

 

 

18,809

 

 

 

(12,402

)

Income tax provision (benefit)

 

 

6,212

 

 

 

(3,446

)

Net income (loss)

 

$

12,597

 

 

$

(8,956

)

Net income (loss) per common share – basic

 

$

1.05

 

 

$

(0.73

)

Net income (loss) per common share – diluted

 

$

1.04

 

 

$

(0.73

)

Weighted-average number of common shares – basic

 

 

12,054

 

 

 

12,309

 

Weighted-average number of common shares – diluted

 

 

12,055

 

 

 

12,309

 

Net income (loss)

 

$

12,597

 

 

$

(8,956

)

Other comprehensive (loss) income:

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(162

)

 

 

18

 

  Total other comprehensive (loss) income

 

 

(162

)

 

 

18

 

  Comprehensive income (loss)

 

$

12,435

 

 

$

(8,938

)

 

 

 


 

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share data)

 

 

 

(unaudited)

 

 

 

 

 

 

March 30,
2024

 

 

December 30,
2023

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

205,444

 

 

$

298,491

 

Accounts receivable

 

 

72,962

 

 

 

66,997

 

Inventories

 

 

146,783

 

 

 

115,773

 

Prepaid expenses and other current assets

 

 

27,489

 

 

 

20,538

 

Income tax receivable

 

 

244

 

 

 

1,711

 

Total current assets

 

 

452,922

 

 

 

503,510

 

Property, plant, and equipment, net

 

 

635,131

 

 

 

642,509

 

Operating right-of-use assets

 

 

33,644

 

 

 

35,559

 

Goodwill

 

 

112,529

 

 

 

112,529

 

Intangible assets, net

 

 

59,581

 

 

 

59,644

 

Third-party production prepayments

 

 

30,662

 

 

 

33,581

 

Note receivable

 

 

18,739

 

 

 

 

Other assets

 

 

40,980

 

 

 

42,661

 

Total assets

 

$

1,384,188

 

 

$

1,429,993

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

98,107

 

 

$

87,245

 

Accrued expenses and other current liabilities

 

 

104,960

 

 

 

126,930

 

Current operating lease liabilities

 

 

8,351

 

 

 

9,113

 

Total current liabilities

 

 

211,418

 

 

 

223,288

 

Deferred income taxes, net

 

 

85,710

 

 

 

85,721

 

Non-current operating lease liabilities

 

 

34,297

 

 

 

36,161

 

Other liabilities

 

 

6,035

 

 

 

6,894

 

Total liabilities

 

 

337,460

 

 

 

352,064

 

Stockholders' Equity:

 

 

 

 

 

 

Class A Common Stock, $0.01 par value; 22,700,000 shares authorized; 9,908,668 and 10,033,303 issued and outstanding as of March 30, 2024 and December 30, 2023 respectively

 

 

99

 

 

 

100

 

Class B Common Stock, $0.01 par value; 4,200,000 shares authorized; 2,068,000
issued and outstanding at March 30, 2024 and December 30, 2023

 

 

21

 

 

 

21

 

Additional paid-in capital

 

 

662,942

 

 

 

656,297

 

Accumulated other comprehensive loss

 

 

(219

)

 

 

(57

)

Retained earnings

 

 

383,885

 

 

 

421,568

 

Total stockholders' equity

 

 

1,046,728

 

 

 

1,077,929

 

Total liabilities and stockholders' equity

 

$

1,384,188

 

 

$

1,429,993

 

 

 

 


 

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 

 

 

(unaudited)

 

 

 

Thirteen weeks ended

 

 

 

March 30,
2024

 

 

April 1,
2023

 

Cash flows used in operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

12,597

 

 

$

(8,956

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

23,404

 

 

 

21,915

 

Impairment of brewery assets

 

 

335

 

 

 

484

 

Gain on sale of property, plant, and equipment

 

 

(23

)

 

 

(195

)

Change in right-of-use assets

 

 

1,915

 

 

 

1,921

 

Stock-based compensation expense

 

 

7,127

 

 

 

4,073

 

Deferred income taxes

 

 

(11

)

 

 

(430

)

Other non-cash expense (income)

 

 

99

 

 

 

(55

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(6,304

)

 

 

(23,372

)

Inventories

 

 

(29,342

)

 

 

(3,002

)

Prepaid expenses, income tax receivable, and other assets

 

 

(4,241

)

 

 

(16,972

)

Third-party production prepayments

 

 

2,919

 

 

 

6,362

 

Accounts payable

 

 

11,352

 

 

 

15,258

 

Accrued expenses and other liabilities

 

 

(22,356

)

 

 

(12,758

)

Operating lease liabilities

 

 

(2,355

)

 

 

(2,095

)

Net cash used in operating activities

 

 

(4,884

)

 

 

(17,822

)

Cash flows used in investing activities:

 

 

 

 

 

 

Cash paid for note receivable

 

 

(20,000

)

 

 

 

Purchases of property, plant, and equipment

 

 

(15,737

)

 

 

(17,312

)

Proceeds from disposal of property, plant, and equipment

 

 

23

 

 

 

195

 

Net cash used in investing activities

 

 

(35,714

)

 

 

(17,117

)

Cash flows used in financing activities:

 

 

 

 

 

 

Repurchases and retirement of Class A common stock

 

 

(49,967

)

 

 

(21,096

)

Proceeds from exercise of stock options and sale of investment shares

 

 

479

 

 

 

442

 

Cash paid on finance leases

 

 

(557

)

 

 

(414

)

Payment of tax withholding on stock-based payment awards and investment shares

 

 

(2,404

)

 

 

(1,993

)

Net cash used in financing activities

 

 

(52,449

)

 

 

(23,061

)

Change in cash and cash equivalents

 

 

(93,047

)

 

 

(58,000

)

Cash and cash equivalents at beginning of period

 

 

298,491

 

 

 

180,560

 

Cash and cash equivalents at end of period

 

$

205,444

 

 

$

122,560

 

 

 

 

 

 

 

 

Copies of The Boston Beer Company's press releases, including quarterly financial results,

 

are available on the Internet at www.bostonbeer.com