UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): November 7, 2006

The Boston Beer Company, Inc.

(Exact name of registrant as specified in its charter)

Massachusetts

001-14092

04-3284048

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

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

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[  ]

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-4c under the Exchange Act
(17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

      On November 7, 2006, The Boston Beer Company, Inc. disclosed unaudited financial information for the third quarter of 2006 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 November 7, 2006.

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 hereunto duly authorized.

The Boston Beer Company, Inc.

(Registrant)

Date: November 7, 2006

/s/ William F. Urich

William F. Urich

Chief Financial Officer

(Signature)^*

EXHIBIT 99

BOSTON BEER REPORTS RECORD THIRD QUARTER

VOLUME, REVENUE AND EARNINGS

      BOSTON, MA (11/7/06) -- The Boston Beer Company, Inc. (NYSE: SAM) achieved third quarter earnings per diluted share of $0.41, a 41% increase over the third quarter 2005. The Company posted third quarter net revenue of $75.9 million, an increase of 20.0% over the same period last year. The net revenue increase in the third quarter was primarily driven by an 18.9% core shipment volume increase. For the nine months ended September 30, 2006, the Company's earnings per diluted share were $1.10, an increase of $0.19 over 2005. Net revenue increased by 22.2% to $212.1 million during the first nine months of 2006 as compared to the same period 2005.

Distributor sales of the Boston Beer brands to retail (depletions) increased approximately 15.0% from the third quarter 2005. Jim Koch, Chairman and Founder of the Company, said, "2006 has been an exciting year for Samuel Adams and the Craft beer category. Samuel Adams is the leading brand in the Craft beer category, which we believe is the fastest growing beer category in the United States. The third quarter 2006 was another quarter of double-digit depletions growth for the Company. I believe that our current "Take Pride in Your Beer" advertising campaign speaks to beer drinkers about the history, authenticity and the quality of the Samuel Adams brand and the unique beers that we brew. I am delighted to find more beer drinkers developing a passion similar to mine for great beer. The continued growth of the Craft category suggests to us that consumers continue to trade up to more full-flavored, richer-tasting beers, and this trend is helped by beer retailers and wholesalers allocating more time and space to the fast growing and profitable Craft category."

Martin Roper, Boston Beer President and CEO, said, "Our depletion growth is strong at approximately 17.0% for the first nine months of this year over the same period last year. We continue to invest in the Samuel Adams brand as appropriate in order to grow the brand along with maintaining our leading position within the growing Craft beer category. Samuel Adams Boston Lager, Sam Adams Light, Samuel Adams Seasonals and Samuel Adams Brewmaster's Collection all showed depletions increases during the first nine months of 2006 over the same period 2005, and growth of the entire Samuel Adams family accelerated slightly in the third quarter 2006. Our Twisted Tea brand growth slowed in the third quarter. Our overall pricing remains healthy, as we have been able to maintain the pricing increases taken in early 2006."

Bill Urich, Boston Beer CFO, added, "Our gross margin for the third quarter 2006 decreased to 57.3% from 59.1% in the third quarter last year, due primarily to increases in packaging materials costs, production costs, utility costs and higher supply chain costs caused by the growth in demand for our beers. Additionally, we have experienced higher production and excise tax costs related to Twisted Tea which are due to changes in federal formulation requirements and regulatory changes in certain states. While we have

recently seen some slight decreases in fuel costs, most of these various cost pressures are expected to continue through the remainder of 2006."

Mr. Roper, commenting on the full year prospects, said, "Given the current volume trends, we anticipate that 2006 could be a record depletions volume year for the Company, as we project that we will end the year with approximately 15.0% to 17.0% depletions volume growth. However, there is no guarantee that the volume trends will continue in the fourth quarter or in the future. We expect that we will meet our previously communicated 2006 earnings goals, despite the significant cost pressures, the cost of our increased brand support, and the costs associated with our continued evaluation of additional investments in brewery ownership, including the viability of brewery construction in New England. In August, we entered into a purchase and sale agreement for land in Massachusetts as a potential site, and we are in the process of evaluating the costs associated with developing that site. We continue to evaluate our investment in our brands and long term security of supply options, which includ e brewery ownership and other production capacity alternatives."

3rd Quarter Results

For the 13-week period ended September 30, 2006, the Company recorded net revenue of $75.9 million, a 20.0% increase over the same period in 2005. Net revenue per barrel for core products increased by 0.4%, primarily due to price increases maintained from the first quarter, offset partially by an increase in returns of some specialty product, as well as an increase in state excise tax related to Twisted Tea®, and a slight shift in the package mix from cases to kegs.

Distributor sales of the Boston Beer brands to retail (depletions) totaled approximately 0.4 million barrels, an approximate 15.0% increase from the third quarter 2005. This increase was primarily the result of volume increases in Samuel Adams® Seasonals, Samuel Adams® Brewmaster's Collection and Samuel Adams Boston Lager®. The Company posted double-digit percentage depletion increases on Samuel Adams® Brewmaster's Collection and Seasonal brands. While the Twisted Tea® volume growth slowed in the third quarter, it still posted an increase over the third quarter of 2005.

The Company believes inventories at wholesalers at the end of the third quarter were at appropriate levels.

The Company's recorded net income of $5.9 million or $0.41 per diluted share for the third quarter 2006 increased by $1.7 million or $0.12 per diluted share from the same period last year. The Company recorded stock-based compensation expense of $0.3 million, net of tax effect, or $0.02 per diluted share, in the third quarter of 2006 as a result of the adoption of SFAS No. 123R, Share-Based Payment (SFAS No. 123R). Stock-based compensation expense recorded in the same period in 2005 was insignificant. Gross margin for core products as a percent of net sales decreased to 57.4% from 59.2% in the third quarter of 2005. The decrease in gross margin was due primarily to increases in packaging materials costs, production costs, utility costs and higher supply chain costs

caused by the growth in demand for the Company's beers. Additionally, the Company has experienced higher production and excise tax related to Twisted Tea®, offset partially by the increase in core brand net revenue. Advertising, promotional and selling expenses for the quarter were up by $3.1 million compared to the same period last year. This increase was primarily a result of increases in freight costs driven by volume, sales force salary and benefit costs, local marketing and promotional costs, and stock compensation costs over the third quarter 2005. General and administrative expenses increased by $1.0 million compared to the same period last year, due to an increase in salary and benefit costs, stock compensation expense, and costs associated with the move of the Company's corporate office in the third quarter of 2006.

Year to Date Results

Core shipment volume for the nine month period ended September 30, 2006 was 1.2 million barrels, an 18.8% increase from the same period in the prior year.

Depletions increased by approximately 17.0% during the first nine months of 2006 compared to the same period last year. The 17.0% year to date growth is attributable to increases throughout the Samuel Adams® and Twisted Tea® brand families.

The Company's recorded net income of $15.7 million, or $1.10 per diluted share for the nine months ended September 30, 2006, increased by $2.4 million, or $0.19 per diluted share, as compared to the same period last year. The Company recorded stock-based compensation expense of $0.9 million, net of tax effect, or $0.06 per diluted share, for the nine months ended September 30, 2006 as a result of the adoption of SFAS No. 123R. Stock-based compensation expense recorded in the same period in 2005 was insignificant. Net revenue per barrel for core products increased by 2.3% during the period primarily because of price increases maintained from the first quarter 2006 and a shift in the product and package mix, offset partially by an increase in returns of a specialty product. Gross margin as a percent of net sales for core products decreased to 58.2% from 60.1% in the same period last year, principally due to increases in packaging materials costs, production costs, utility costs, and higher s upply chain costs caused by the growth in demand for the Company's beers. Additionally, the Company has experienced increases in state excise tax related to Twisted Tea® and a shift in product mix, offset partially by the increase in net revenue. Advertising, promotional and selling expenses for the nine months were up by $13.0 million, or 18.1%, compared to the same period last year, primarily due to increases in freight costs driven by volume, increases in sales force salary and benefit costs and stock compensation expense, promotional and advertising expense, point of sale expense, and package redesign expense. General and administrative expenses increased by $3.3 million compared to the same period last year, due to increases in salary and benefit costs, stock compensation expense, consulting expense, insurance expense and costs associated with the move of the Company's corporate office in the third quarter of 2006.

Other matters

Shipments and orders in-hand suggest that core shipments for the fourth quarter 2006 could be up between 6.0% and 10.0% as compared to the same period in 2005, which was up approximately 14.0% over the fourth quarter 2004. Full year 2006 shipments are expected to be up between 15.0% and 17.0% over full year 2005. Actual shipments may differ, however, and no inferences should be drawn with respect to shipments in future periods. October year-to-date depletions are estimated to be up approximately 17.0% over 2005.

Based on current known information, the Company expects full year 2006 gross margin will be down approximately 2.0% below full year 2005.

The Company now expects 2006 earnings per diluted share to be between $1.16 and $1.26, which includes the impact of stock compensation expense. This earnings range does not include any significant changes in currently expected levels of brand support or any impact for significant changes to the current supply chain strategy.

The Company estimates that its adoption of SFAS No. 123R and the effect of performance-based stock options will impact earnings per diluted share by between $0.07 and $0.11 in 2006, including a $0.06 per diluted share impact through the nine months ended September 30, 2006. The range will depend on the vesting of certain performance-based stock options. Stock compensation expense recognized for the full year 2005 using the intrinsic-value method prescribed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, impacted diluted earnings per share for 2005 by $0.01.

The Company's ability to attain this earnings growth in 2006 is dependent on current trends continuing for volume, pricing and costs. The Company continues to pursue cost savings initiatives and pricing opportunities, and hopes to preserve its economics to allow for continued investment in support of its brands in order to increase both volume and earnings.

In April 2006, the Company received the anticipated notice from Miller Brewing Company terminating the Company's existing contract relationship with Miller Brewing Company, effective October 31, 2008; the termination is in accordance with the contract and the 2003 arbitration award. While the Company believes that there will be other contract capacity adequate to absorb its production requirements, there is no guarantee that the current economics can be maintained. Accordingly, as previously reported, the Company is assessing the viability of constructing a brewery in the Northeast. Mr. Roper commented, "We have identified a site in Freetown, Massachusetts on which we might be able to construct a brewery to serve our future brewing capacity needs. On August 10, 2006, we signed a purchase and sale agreement for the land; however we are able to terminate this agreement at any time, subject to possible forfeiture of some or all of our initial $300,000 deposit. We are working through an evalua tion of this site as well as the required permit process, which we anticipate will be completed by the end of the year or early 2007. We continue our discussions with engineering companies, local municipalities and state officials as we attempt to assess the viability of this site. We

have revised upward our capacity needs in New England based on healthy Craft category growth, our own growth trends, and higher freight costs, and are now exploring production capacity in excess of 1.0 million barrels of Samuel Adams brand products and Twisted Tea. After further considering our estimated capacity needs, along with more detailed site construction estimates, it now appears that construction of the facility and all equipment costs could be between $130 million and $170 million. In addition, the land acquisition costs, other site specific costs and other startup costs could be between $25 million and $40 million. The cost will ultimately depend on the final specifications, including, but not limited to, initial capacity and capabilities, expansion potential and site specific costs. We are evaluating this potential investment in brewery ownership along with other supply strategies to determine which investments are appropriate for the Company, given the growth of the Craft beer category and known and unknown risks in supply chain alternatives."

Mr. Urich added, "We are also evaluating financing options for the potential new brewery investment and are confident that we will be able to secure financing sources sufficient to meet our requirements."

The Company currently estimates total capital expenditures in 2006 to be between $7.0 and $10.0 million, exclusive of investments made in support of a possible new brewery. This estimate could change significantly based on the ultimate outcome of the Company's evaluation of its long-term production strategy.

During the three months ended September 30, 2006, the Company repurchased less than 1,000 shares of its Class A Common Stock. Through November 6, 2006, the Company has repurchased a cumulative total of approximately 7.8 million shares of its Class A Common Stock for an aggregate purchase price of $92.6 million, and had $7.4 million remaining on the $100.0 million share buyback expenditure limit set by the Board of Directors. As of November 6, 2006, the Company had 9.9 million shares of Class A Common Stock and 4.1 million shares of Class B Common Stock outstanding.

The Boston Beer Company is America's leading brewer of handcrafted, full-flavored beers. Founder and Brewer, Jim Koch, brews Samuel Adams® beers using the time-honored, traditional four-vessel brewing process, and the world's finest all-natural ingredients. With over 18 distinctive, award-winning styles of beer, Samuel Adams offers discerning beer drinkers a variety of brews. The brewery has won more awards in international beer-tasting competitions in the last five years than any other brewery in the world. Samuel Adams Brewery is an independent brewery and has half of a percent of the domestic beer market. Forbes magazine named The Boston Beer Company to its annual list of America's 200 Best Small Companies in 2006. The Company's flagship brand, Samuel Adams Boston Lager®, is brewed using the same recipe and processes that Jim Koch's great-great grandfather used in the mid 1800s. The result is a beer renowned by drinkers for its full flavor, balance, complexity, and consistent qu ality. For more information, visit www.samueladams.com or visit www.bostonbeer.com for financial information.

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 years ended December 31, 2005 and December 25, 2004. Copies of these documents may be found on the Company's website, www.bostonbeer.com or obtained by contacting the Company or the SEC.

Tuesday, November 7, 2006

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

Financial Results

(In thousands, except per share data)

Operating Results:

(unaudited)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2006

2005

2006

2005

Barrels sold

432

359

1,196

992

Revenue

$83,864

$69,743

$234,237

$191,863

Less excise taxes

7,997

6,533

22,149

18,311

    Net revenue

75,867

63,210

212,088

173,552

Cost of goods sold

32,397

25,838

88,888

69,416

    Gross profit

43,470

37,372

123,200

104,136

Operating expenses:

    Advertising, promotional and selling expenses

29,913

26,816

84,659

71,697

    General and administrative expenses

5,374

4,353

15,681

12,372

        Total operating expenses

35,287

31,169

100,340

84,069

Operating income

8,183

6,203

22,860

20,067

Other income, net:

    Interest income, net

874

425

2,173

1,205

    Other income, net

271

175

502

393

Income before provision for income taxes

9,328

6,803

25,535

21,665

Provision for income taxes

3,420

2,616

9,820

8,372

    Net income

$  5,908

$  4,187

$  15,715

$  13,293

Net income per common share - basic

$    0.43

$    0.30

$      1.13

$      0.94

Net income per common share - diluted

$    0.41

$    0.29

$      1.10

$      0.91

Weighted-average number of common

  shares - basic

13,865

14,070

13,880

14,201

Weighted-average number of common

  shares - diluted

14,351

14,437

14,330

14,580

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

are available on the Internet at www.bostonbeer.com

Consolidated Balance Sheets:

(in thousands, except share data)

(unaudited)

September 30,

December 31,

2006

2005

Assets

    Current Assets:

        Cash and cash equivalents

$

56,896 

$

41,516 

        Short-term investments

18,629 

22,425 

        Accounts receivable, net of allowance for doubtful accounts

          of $220 and $116 as of September 30, 2006 and December

          31, 2005, respectively

18,887 

9,534 

        Inventories

15,768 

13,649 

        Prepaid expenses and other assets

2,750 

1,236 

        Deferred income taxes

829 

829 

            Total current assets

113,759 

89,189 

        Property, plant and equipment, net

30,707 

26,525 

        Other assets

1,853 

1,963 

        Goodwill

1,377 

1,377 

            Total assets

$

147,696 

$

119,054 

Liabilities and Stockholders' Equity

    Current Liabilities:

        Accounts payable

$

14,117 

$

11,378 

        Accrued expenses

25,108 

17,361 

            Total current liabilities

39,225 

28,739 

    Deferred income taxes

2,390 

2,390 

    Other liabilities

3,268 

1,946 

            Total liabilities

44,883 

33,075 

    Commitments and Contingencies

    Stockholders' Equity:

        Class A Common Stock, $.01 par value; 22,700,000 shares

          authorized; 9,901,168 and 9,814,457 issued and

          outstanding as of September 30, 2006 and December 31,

          2005, respectively

99 

98 

        Class B Common Stock, $.01 par value; 4,200,000 shares

          authorized; 4,107,355 issued and outstanding

41 

41 

        Additional paid-in capital

76,860 

70,808 

        Unearned compensation

- 

(353)

        Accumulated other comprehensive loss, net of tax

(196)

(196)

        Retained earnings

26,009 

15,581 

            Total stockholders' equity

102,813 

85,979 

            Total liabilities and stockholders' equity

$

147,696 

$

119,054 

Consolidated Statements of Cash Flows:

(in thousands)

(unaudited)

Nine Months Ended

September 30,

September 24,

2006

2005

Cash flows provided by operating activities:

    Net income

    Adjustments to reconcile net income to net cash provided by

      operating activities:

$

15,715 

$

13,293 

        Depreciation and amortization

3,601 

3,198 

        Gain on disposal of property, plant and equipment

(14)

(6)

        Bad debt expense (recovery)

135 

(148)

        Stock-based compensation expense

1,409 

108 

        Deferred income taxes

- 

280 

        Excess tax benefit from stock-based compensation

          arrangements

(1,425)

853 

        Purchases of trading securities

(30,929)

(3,550)

        Proceeds from sale of trading securities

34,725 

3,300 

            Changes in operating assets and liabilities:

                Accounts receivable

(9,488)

(1,464)

                Inventories

(2,120)

109 

                Prepaid expenses and other assets

(1,417)

(433)

                Accounts payable

2,739 

1,565 

                Accrued expenses

9,172 

4,293 

                Other liabilities

1,322 

(48)

                    Net cash provided by operating activities

23,425 

21,350 

Cash flows used in investing activities:

    Purchases of property, plant and equipment

(7,704)

(10,950)

    Proceeds from disposal of property, plant and equipment

42 

14 

                    Net cash used in investing activities

(7,662)

(10,936)

Cash flows used in financing activities:

    Repurchase of Class A common stock

(5,288)

(10,854)

    Proceeds from exercise of stock options

3,332 

1,821 

    Excess tax benefit from stock-based compensation

      arrangements

1,425 

- 

    Net proceeds from sale of investment shares

148 

221 

                    Net cash used in financing activities

(383)

(8,812)

Change in cash and cash equivalents

15,380 

1,602 

Cash and cash equivalents at beginning of year

41,516 

35,794 

Cash and cash equivalents at end of period

$

56,896 

$

37,396 

Supplemental disclosure of cash flow information:

    Income taxes paid

$

5,231 

$

6,134