Boston Beer Reports First Quarter 2012 Results
Highlights of this release include:
- Depletions for the 13 week period ending
March 31, 2012 grew by 10% from the comparable 13 week period in the prior year endingApril 2, 2011 . - The Company achieved its 2012 planned price increases of approximately 3% during the quarter.
- First quarter gross margin was 55%; the Company maintains its full year gross margin target of between 53% and 55%.
- Advertising, promotional and selling expense increased by
$2.9 million or 8% for the quarter, primarily due to planned increased investments behind the Company's brands. - Estimated full year 2012 depletion growth of between 6% and 9% and full year 2012 earnings per diluted share of
$3.80 to $4.20 remain unchanged - Estimated 2012 Capital spending of
$40 million to $60 million remains unchanged
Mr. Roper continued, "In the first quarter our depletion growth benefited from the positive acceptance of our Samuel Adams Alpine Spring seasonal and increased distribution due to the national rollouts of our Twisted Tea and Angry Orchard brands late in the quarter. These rollouts are currently in progress, and thus far are being well supported by wholesalers, retailer and drinkers. These brands have helped us increase our investments in our sales force and our Samuel Adams brand, and have built a stronger Boston Beer brand portfolio for our wholesalers and retailers. Alchemy & Science, our craft brew incubator, is in the early stages of two exciting projects. Its House of Shandy brand was launched in certain markets early in the second quarter and its
Commenting on the Company's Freshest Beer Program, Mr. Roper continued, "We believe we are delivering better, fresher Samuel Adams beer to our drinkers while lowering wholesaler inventories, reducing costs and improving efficiency throughout the supply chain. We currently have 58 wholesalers signed up and at various stages of inventory reduction. We have over 50% of our volume on our Freshest Beer Program and believe this could reach 75% by the end of 2012. We continue to evaluate if we can reduce these inventory levels further."
1st Quarter 2012 Summary of Results
Depletions grew by 10% from the comparable 13 week period in the prior year, primarily due to increases in Samuel Adams® Seasonals, Twisted Tea®, and Angry Orchard®, offset by declines in some other Samuel Adams® styles.
Core shipment volume was approximately 536,000 barrels, an 8% increase over the same period in 2011. The Company believes wholesaler inventory levels at
Gross margin increased to 55% from 51% in the first quarter of 2011. Pricing increases, lower brewery processing costs and favorable package mix were partially offset by cost increases in barley and other ingredients.
Advertising, promotional and selling expenses were
General and administrative expenses increased
The Company's effective tax rate for the first quarter of 2011 was 37%.
Cash and cash equivalents as of the end of the first quarter totaled
During the first quarter, the Company repurchased 37,000 shares of its Class A Common Stock at a cost of approximately
Depletion estimates
- Year-to-date depletions through the 16 weeks ended
April 21, 2012 are estimated by the Company to be up approximately 10% from the comparable period in 2011. - During the first quarter of 2012 the Company changed from reporting depletions on a calendar month, quarter and year basis to reporting current year depletions against the comparable prior year weeks. The Company believes this method better reflects the depletion trends of the business and eliminates complexities around reporting on a calendar basis and comparing the number of selling days in each calendar month. The Company anticipates reporting its full year depletions on both a fiscal year and calendar year basis.
Fiscal 2012 Outlook
The Company has left unchanged its projection of 2012 earnings per diluted share of between
- Depletions growth between 6% and 9% compared to full year 2011.
- Targeted revenue per barrel increases of approximately 3% which will help offset significant barley cost pressures from the 2011 crop.
- Continued focus on efficiencies at the Company's breweries.
- Anticipated significant increases in the costs of ingredients, primarily due to barley cost pressures.
- Full-year 2012 gross margins expected to be between 53% and 55% due to anticipated price increases not fully covering cost pressures and some product mix changes.
- Increased investment in advertising, promotional and selling expenses of between
$8 million and $12 million for the full year 2012, not including any increases in freight costs for the shipment of products to the Company's wholesalers. - Startup costs of
$3 million to $5 million for new brands developed by Alchemy & Science of which$2 million to $3 million are included in our full year estimated increases in advertising, promotional and selling expenses. - Full-year effective tax rate of approximately 38%.
Full-year spending on capital investments of between
About the Company
The
Today, the Company brews over 50 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
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
THE BOSTON BEER COMPANY, INC. Financial Results |
||||||
Consolidated Statements of Comprehensive Income: |
||||||
(in thousands, except per share data) |
(unaudited) |
|||||
Thirteen weeks ended |
||||||
March 31, |
Mar. 26, |
|||||
2012 |
2011 |
|||||
Barrels sold |
539 |
502 |
||||
Revenue |
$ 122,902 |
$ 111,409 |
||||
Less excise taxes |
9,631 |
9,233 |
||||
Net revenue |
113,271 |
102,176 |
||||
Cost of goods sold |
51,462 |
49,802 |
||||
Gross profit |
61,809 |
52,374 |
||||
Operating expenses: |
||||||
Advertising, promotional and selling expenses |
38,455 |
35,512 |
||||
General and administrative expenses |
11,513 |
10,273 |
||||
Total operating expenses |
49,968 |
45,785 |
||||
Operating income |
11,841 |
6,589 |
||||
Other (expense) income, net: |
||||||
Interest income |
1 |
1 |
||||
Other (expense) income, net |
(3) |
8 |
||||
Total other (expense) income, net |
(2) |
9 |
||||
Income before income tax provision |
11,839 |
6,598 |
||||
Provision for income taxes |
4,346 |
2,639 |
||||
Net income |
$ 7,493 |
$ 3,959 |
||||
Net income per common share - basic |
$ 0.59 |
$ 0.30 |
||||
Net income per common share - diluted |
$ 0.56 |
$ 0.28 |
||||
Weighted-average number of common shares - basic |
12,759 |
13,274 |
||||
Weighted-average number of common shares - diluted |
13,449 |
14,007 |
||||
Other comprehensive income, net of tax: |
||||||
Comprehensive income |
$ 7,493 |
$ 3,959 |
||||
THE BOSTON BEER COMPANY, INC. |
||||||||||
Financial Results |
||||||||||
Consolidated Balance Sheets: |
||||||||||
(in thousands, except share data) |
(unaudited) |
|||||||||
March 31, |
Dec. 31, |
|||||||||
2012 |
2011 |
|||||||||
Assets |
||||||||||
Current Assets: |
||||||||||
Cash and cash equivalents |
$ 38,161 |
$ 49,450 |
||||||||
Accounts receivable, net of allowance for doubtful accounts of $90 and |
||||||||||
$66 as of March 31, 2012 and December 31, 2011, respectively |
24,801 |
23,233 |
||||||||
Inventories |
38,130 |
34,072 |
||||||||
Prepaid expenses and other assets |
14,568 |
14,605 |
||||||||
Deferred income taxes |
4,363 |
4,363 |
||||||||
Total current assets |
120,023 |
125,723 |
||||||||
Property, plant and equipment, net |
152,708 |
143,586 |
||||||||
Other assets |
2,263 |
1,802 |
||||||||
Goodwill |
2,540 |
1,377 |
||||||||
Total assets |
$ 277,534 |
$ 272,488 |
||||||||
Liabilities and Stockholders' Equity |
||||||||||
Current Liabilities: |
||||||||||
Accounts payable |
$ 22,497 |
$ 18,806 |
||||||||
Accrued expenses and other current liabilities |
38,844 |
48,243 |
||||||||
Total current liabilities |
61,341 |
67,049 |
||||||||
Deferred income taxes |
17,349 |
17,349 |
||||||||
Other liabilities |
3,268 |
3,345 |
||||||||
Total liabilities |
81,958 |
87,743 |
||||||||
Commitments and Contingencies |
||||||||||
Stockholders' Equity: |
||||||||||
Class A Common Stock, $.01 par value; 22,700,000 shares authorized; |
||||||||||
8,790,856 and 8,714,931 issued and outstanding as of March 31, 2012 |
||||||||||
and December 31, 2011, respectively |
88 |
87 |
||||||||
Class B Common Stock, $.01 par value; 4,200,000 shares authorized; |
||||||||||
4,107,355 issued and outstanding |
41 |
41 |
||||||||
Additional paid-in capital |
145,404 |
138,336 |
||||||||
Accumulated other comprehensive loss, net of tax |
(838) |
(838) |
||||||||
Retained earnings |
50,881 |
47,119 |
||||||||
Total stockholders' equity |
195,576 |
184,745 |
||||||||
Total liabilities and stockholders' equity |
$ 277,534 |
$ 272,488 |
||||||||
THE BOSTON BEER COMPANY, INC. |
||||||||||
Financial Results |
||||||||||
Consolidated Statements of Cash Flows: |
||||||||||
(in thousands) |
(unaudited) |
|||||||||
Thirteen weeks ended |
||||||||||
March 31, |
Mar. 26, |
|||||||||
2012 |
2011 |
|||||||||
Cash flows provided by operating activities: |
||||||||||
Net income |
$ 7,493 |
$ 3,959 |
||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||||
Depreciation and amortization |
4,731 |
4,460 |
||||||||
Impairment of long-lived assets |
- |
22 |
||||||||
Loss on disposal of property, plant and equipment |
20 |
41 |
||||||||
Bad debt expense |
24 |
17 |
||||||||
Stock-based compensation expense |
1,385 |
1,105 |
||||||||
Excess tax benefit from stock-based compensation arrangements |
(3,566) |
(1,751) |
||||||||
Changes in operating assets and liabilities, net of effects of acquisition: |
||||||||||
Accounts receivable |
(1,592) |
(1,558) |
||||||||
Inventories |
(4,058) |
(7,282) |
||||||||
Prepaid expenses and other assets |
(135) |
(719) |
||||||||
Accounts payable |
3,691 |
3,311 |
||||||||
Accrued expenses and other current liabilities |
(6,163) |
(3,705) |
||||||||
Other liabilities |
(77) |
(214) |
||||||||
Net cash provided by (used in) operating activities |
1,753 |
(2,314) |
||||||||
Cash flows used in investing activities: |
||||||||||
Purchases of property, plant and equipment |
(13,518) |
(2,248) |
||||||||
Cash paid for acquisition of brewery assets |
(1,477) |
- |
||||||||
Net cash used in investing activities |
(14,995) |
(2,248) |
||||||||
Cash flows used in financing activities: |
||||||||||
Repurchase of Class A Common Stock |
(3,731) |
(1,526) |
||||||||
Proceeds from exercise of stock options |
1,883 |
523 |
||||||||
Excess tax benefit from stock-based compensation arrangements |
3,566 |
1,751 |
||||||||
Net proceeds from sale of investment shares |
235 |
167 |
||||||||
Net cash provided by financing activities |
1,953 |
915 |
||||||||
Change in cash and cash equivalents |
(11,289) |
(3,647) |
||||||||
Cash and cash equivalents at beginning of year |
49,450 |
48,969 |
||||||||
Cash and cash equivalents at end of year |
$ 38,161 |
$ 45,322 |
||||||||
Supplemental disclosure of cash flow information: |
||||||||||
Income taxes paid |
$ 1,208 |
$ 678 |
||||||||
Reclassification of deposit and costs related to brewery acquisition to the following assets: |
||||||||||
Property, plant and equipment |
337 |
- |
||||||||
Tradename |
400 |
- |
||||||||
Goodwill |
$ 1,163 |
$ - |
||||||||
Copies of The Boston Beer Company's press releases, including quarterly financial results, |
||||||||||
are available on the Internet at www.bostonbeer.com |
SOURCE
Investor Relations Contact: Seana Phillips, +1-617-368-5074; Media Contact: Michelle Sullivan, +1-617-368-5165