Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Boston Beer Reports Second Quarter Financial Results By: Boston Beer Company via GlobeNewswire July 25, 2024 at 16:15 PM EDT BOSTON, July 25, 2024 (GLOBE NEWSWIRE) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the second quarter ended June 29, 2024. Key results were: Second Quarter 2024 Summary: Depletions decreased 4% and shipments decreased 6.4%Net revenue of $579.1 million decreased 4.0%Gross margin of 46.0% up 60 basis points year over yearNet income of $52.3 million, a decrease of $5.7 million or 9.8%Diluted income per share of $4.39 Year-to-date 2024 Summary: Depletions decreased 2% and shipments decreased 3.4%Net revenue of $1.005 billion decreased 0.8%Gross margin of 45.0% up 260 basis points year over yearNet income of $64.9 million, an increase of $15.9 million or 32.3%Diluted income per share of $5.41 Capital Structure Ended the first quarter with $219.3 million in cash and no debtRepurchased $127.0 million in shares from January 2, 2024 to July 19, 2024 “Our gross margin improvement initiatives continue to take hold, with gross margin expanding over 250 basis points year-to-date, and strong cash flow generation,” said Chairman and Founder Jim Koch. “Depletions were soft in April, but improved as we moved through the quarter. While the industry environment remains dynamic, we are seeing early signs of progress on innovation and will use our strong balance sheet to invest in our brands while returning cash to shareholders.” “I’m pleased to have completed my first quarter as Boston Beer’s CEO and believe there are many areas of opportunity ahead for the company,” said President and CEO Michael Spillane. “We are revising our volume guidance to reflect softer category performance in the second quarter and timing of product launches, while maintaining our EPS guidance supported by progress on our transformation efforts. Our entire organization will be focused on optimizing all aspects of execution and launching accretive innovation to provide the foundation for a future return to growth.” Details of the results were as follows: Second Quarter 2024 (13 weeks ended June 29, 2024) Summary of Results Depletions for the second quarter decreased 4% from the prior year. Shipment volume for the quarter was approximately 2.2 million barrels, a 6.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in the Company’s Twisted Tea brand and its newly launched Sun Cruiser brand. The Company believes distributor inventory as of June 29, 2024 averaged approximately three and one half weeks on hand compared to our target wholesaler inventory levels of four to five weeks for our peak summer season. These lower than target wholesaler inventory levels were the result of not fully shipping into improving demand in the latter weeks of June. The Company is working to ensure shipments in July and August build inventories at wholesalers back to target levels. Revenue for the quarter decreased 4.0% due to lower volumes, partially offset by pricing and lower returns. Gross margin of 46.0% increased 60 basis points from the 45.4% margin realized in the prior year. Gross margin primarily benefited from price increases, procurement savings and lower returns, which more than offset higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The second quarter gross margin of 46.0% includes $3.0 million of shortfall fees, which negatively impacted gross margin by approximately 50 basis points on an absolute basis, and a non-cash expense of third-party production pre-payments of $6.2 million that negatively impacted gross margins by approximately 110 basis points on an absolute basis. Advertising, promotional and selling expenses for the second quarter of 2024 decreased $5.1 million or 3.4% from the second quarter of 2023, due to decreased freight to distributors of $2.8 million from lower rates and lower volumes. Brand and selling costs decreased $2.3 million, primarily due to lower brand media spend. General and administrative expenses increased by $3.1 million or 7.0% from the second quarter of 2023, primarily due to inflation in salaries and benefits costs. The Company’s effective tax rate for the second quarter of 28.6% compared to 27.5% in the prior year. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Year-to-date 2024 (26 weeks ended June 29, 2024) Summary of Results Net revenue year-to-date of $1.005 billion decreased 0.8% compared to year-to-date 2023. Depletions year-to-date decreased 2% from the prior year. Shipment volume year-to-date was approximately 3.8 million barrels, a 3.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in Twisted Tea brand and its newly launched Sun Cruiser brand. Gross margin year-to-date of 45.0% increased from the 42.4% margin realized in year-to-date 2023, or an increase of 260 basis points year over year. Gross margin primarily benefited from price increases, procurement savings, lower returns and inventory obsolescence costs and a non-recurring payment in the prior year to a third-party contract brewery, partially offset by higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The year-to-date gross margin of 45.0% includes $4.0 million of shortfall fees, which negatively impacted gross margin by approximately 40 basis points on an absolute basis and a non-cash expense of third-party production pre-payments of $10.4 million that negatively impacted gross margins by approximately 100 basis points on an absolute basis. Advertising, promotional and selling expenses year-to-date decreased $10.3 million or 3.7% from year-to-date 2023, primarily due to decreased freight to distributors of $6.4 million from lower rates and volumes. Brand and selling costs decreased $3.9 million, primarily due to lower brand media spend partially offset by inflation in salaries and benefits costs. General and administrative expenses year-to-date increased by $9.8 million or 11.1% from year-to-date 2023, primarily due to higher salaries and benefits costs resulting from Chief Executive Officer transition costs recorded in the first quarter and inflation costs. The Company’s effective tax rate year-to-date was 29.5% compared to 27.5% year-to-date 2023. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in year-to-date 2024 compared to year-to-date 2023. Net income year-to-date of $64.9 million or $5.41 per share, represented an increase of $15.8 million or $1.43 per diluted share compared to year-to-date 2023. This increase between periods was primarily driven by higher gross margins, partially offset by lower revenue. The Company expects that its June 29, 2024 cash balance of $219.3 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 26-week period ended June 29, 2024 and the period from July 1, 2024 through July 19, 2024, the Company repurchased shares of its Class A Common Stock in the amounts of $113.0 million and $14.0 million, respectively, for a total of $127.0 million year to date. As of July 19, 2024, the Company had approximately $140 million remaining on the $1.2 billion share buyback expenditure limit set by the Board of Directors. Depletions Estimate Year-to-date depletions through the 29-week period ended July 20, 2024 are estimated by the Company to have decreased approximately 2% from the comparable period in 2023. Full-Year 2024 Projections The Company has updated its full year guidance. The Company’s actual 2024 results could vary significantly from the current projection and are highly sensitive to changes in volume projections and supply chain performance as well as inflationary impacts. Full Year 2024Current GuidancePrior GuidanceDepletions and Shipments Percentage ChangeDown low single digit to zeroDown low single digit to up low single digitPrice Increases1% to 2%1% to 2%Gross Margin43% to 45%43% to 45%Advertising, Promotion, and Selling Expense Year Over Year Change ($ million)($5) to $15($5) to $15Effective Tax Rate28.5%28.5%GAAP EPS$7.00 to $11.00$7.00 to $11.00Capital Spending ($ 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 distributorsDuring full year 2024, the Company estimates shortfall fees will negatively impact gross margin by 50 to 75 basis points and the non-cash expense of third-party production pre-payments will negatively impact gross margins by 85 to 110 basis pointsThe 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 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 brewing Samuel Adams beer in 1984 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, July 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 Twenty-six weeks ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenue$614,216 $641,333 $1,066,423 $1,076,489 Less excise taxes 35,118 38,029 61,274 63,185 Net revenue 579,098 603,304 1,005,149 1,013,304 Cost of goods sold 312,640 329,141 552,343 583,479 Gross profit 266,458 274,163 452,806 429,825 Operating expenses: Advertising, promotional, and selling expenses 144,224 149,362 264,499 274,790 General and administrative expenses 48,024 44,899 98,408 88,593 Impairment of brewery assets 3,395 1,532 3,731 2,016 Total operating expenses 195,643 195,793 366,638 365,399 Operating income 70,815 78,370 86,168 64,426 Other income: Interest income 2,946 1,855 6,439 3,499 Other expense (440) (122) (478) (224)Total other income 2,506 1,733 5,961 3,275 Income before income tax provision 73,321 80,103 92,129 67,701 Income tax provision 20,982 22,068 27,193 18,622 Net income$52,339 $58,035 $64,936 $49,079 Net income per common share – basic$4.40 $4.73 $5.42 $3.99 Net income per common share – diluted$4.39 $4.72 $5.41 $3.98 Weighted-average number of common shares – basic 11,898 12,268 11,976 12,288 Weighted-average number of common shares – diluted 11,888 12,276 11,971 12,304 Net income$52,339 $58,035 $64,936 $49,079 Other comprehensive income: Foreign currency translation adjustment (59) 126 (221) 144 Total other comprehensive income (59) 126 (221) 144 Comprehensive income$52,280 $58,161 $64,715 $49,223 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) June 29, 2024 December 30, 2023 Assets Current Assets: Cash and cash equivalents$219,295 $298,491 Accounts receivable 125,452 66,997 Inventories 152,296 115,773 Prepaid expenses and other current assets 28,046 20,538 Income tax receivable 1,160 1,711 Total current assets 526,249 503,510 Property, plant, and equipment, net 626,860 642,509 Operating right-of-use assets 31,711 35,559 Goodwill 112,529 112,529 Intangible assets, net 59,517 59,644 Third-party production prepayments 24,278 33,581 Note receivable 18,890 — Other assets 35,412 42,661 Total assets$1,435,446 $1,429,993 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable$114,989 $87,245 Accrued expenses and other current liabilities 147,477 126,930 Current operating lease liabilities 7,481 9,113 Total current liabilities 269,947 223,288 Deferred income taxes, net 85,908 85,721 Non-current operating lease liabilities 32,981 36,161 Other liabilities 6,075 6,894 Total liabilities 394,911 352,064 Stockholders' Equity: Class A Common Stock, $0.01 par value; 22,700,000 shares authorized; 9,695,415 and 10,033,303 issued and outstanding as of June 29, 2024 and December 30, 2023 respectively 97 100 Class B Common Stock, $0.01 par value; 4,200,000 shares authorized; 2,068,000 issued and outstanding at June 29, 2024 and December 30, 2023 21 21 Additional paid-in capital 668,089 656,297 Accumulated other comprehensive loss (278) (57)Retained earnings 372,606 421,568 Total stockholders' equity 1,040,535 1,077,929 Total liabilities and stockholders' equity$1,435,446 $1,429,993 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Twenty-six weeks ended June 29, 2024 July 1, 2023 Cash flows provided by operating activities: Net income$64,936 $49,079 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 46,983 43,602 Impairment of brewery assets 3,731 2,016 Gain on sale of property, plant, and equipment (22) (195)Change in right-of-use assets 3,608 3,844 Stock-based compensation expense 11,008 8,266 Deferred income taxes 187 (1,177)Other non-cash expense (income) 296 (88)Changes in operating assets and liabilities: Accounts receivable (58,751) (60,307)Inventories (31,566) (9,376)Prepaid expenses, income tax receivable, and other assets (6,977) 1,041 Third-party production prepayments 9,303 14,512 Other assets 3,390 (5,995)Accounts payable 29,487 38,872 Accrued expenses and other liabilities 20,045 21,354 Operating lease liabilities (4,542) (4,311)Net cash provided by operating activities 91,116 101,137 Cash flows used in investing activities: Cash paid for note receivable (20,000) — Purchases of property, plant, and equipment (36,090) (34,809)Proceeds from disposal of property, plant, and equipment 23 195 Net cash used in investing activities (56,067) (34,614)Cash flows used in financing activities: Repurchases and retirement of Class A common stock (112,958) (45,887)Proceeds from exercise of stock options and sale of investment shares 2,179 9,466 Cash paid on finance leases (1,062) (797)Payment of tax withholding on stock-based payment awards and investment shares (2,404) (2,110)Net cash used in financing activities (114,245) (39,328)Change in cash and cash equivalents (79,196) 27,195 Cash and cash equivalents at beginning of period 298,491 180,560 Cash and cash equivalents at end of period$219,295 $207,755 Copies of The Boston Beer Company's press releases, including quarterly financial results, are available on the Internet at www.bostonbeer.com Investor Relations Contact: Media Contact:Jennifer Larson Dave DeCecco(617) 368-5152 (914) 261-6572jennifer.larson@bostonbeer.com dave.dececco@bostonbeer.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Boston Beer Reports Second Quarter Financial Results By: Boston Beer Company via GlobeNewswire July 25, 2024 at 16:15 PM EDT BOSTON, July 25, 2024 (GLOBE NEWSWIRE) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the second quarter ended June 29, 2024. Key results were: Second Quarter 2024 Summary: Depletions decreased 4% and shipments decreased 6.4%Net revenue of $579.1 million decreased 4.0%Gross margin of 46.0% up 60 basis points year over yearNet income of $52.3 million, a decrease of $5.7 million or 9.8%Diluted income per share of $4.39 Year-to-date 2024 Summary: Depletions decreased 2% and shipments decreased 3.4%Net revenue of $1.005 billion decreased 0.8%Gross margin of 45.0% up 260 basis points year over yearNet income of $64.9 million, an increase of $15.9 million or 32.3%Diluted income per share of $5.41 Capital Structure Ended the first quarter with $219.3 million in cash and no debtRepurchased $127.0 million in shares from January 2, 2024 to July 19, 2024 “Our gross margin improvement initiatives continue to take hold, with gross margin expanding over 250 basis points year-to-date, and strong cash flow generation,” said Chairman and Founder Jim Koch. “Depletions were soft in April, but improved as we moved through the quarter. While the industry environment remains dynamic, we are seeing early signs of progress on innovation and will use our strong balance sheet to invest in our brands while returning cash to shareholders.” “I’m pleased to have completed my first quarter as Boston Beer’s CEO and believe there are many areas of opportunity ahead for the company,” said President and CEO Michael Spillane. “We are revising our volume guidance to reflect softer category performance in the second quarter and timing of product launches, while maintaining our EPS guidance supported by progress on our transformation efforts. Our entire organization will be focused on optimizing all aspects of execution and launching accretive innovation to provide the foundation for a future return to growth.” Details of the results were as follows: Second Quarter 2024 (13 weeks ended June 29, 2024) Summary of Results Depletions for the second quarter decreased 4% from the prior year. Shipment volume for the quarter was approximately 2.2 million barrels, a 6.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in the Company’s Twisted Tea brand and its newly launched Sun Cruiser brand. The Company believes distributor inventory as of June 29, 2024 averaged approximately three and one half weeks on hand compared to our target wholesaler inventory levels of four to five weeks for our peak summer season. These lower than target wholesaler inventory levels were the result of not fully shipping into improving demand in the latter weeks of June. The Company is working to ensure shipments in July and August build inventories at wholesalers back to target levels. Revenue for the quarter decreased 4.0% due to lower volumes, partially offset by pricing and lower returns. Gross margin of 46.0% increased 60 basis points from the 45.4% margin realized in the prior year. Gross margin primarily benefited from price increases, procurement savings and lower returns, which more than offset higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The second quarter gross margin of 46.0% includes $3.0 million of shortfall fees, which negatively impacted gross margin by approximately 50 basis points on an absolute basis, and a non-cash expense of third-party production pre-payments of $6.2 million that negatively impacted gross margins by approximately 110 basis points on an absolute basis. Advertising, promotional and selling expenses for the second quarter of 2024 decreased $5.1 million or 3.4% from the second quarter of 2023, due to decreased freight to distributors of $2.8 million from lower rates and lower volumes. Brand and selling costs decreased $2.3 million, primarily due to lower brand media spend. General and administrative expenses increased by $3.1 million or 7.0% from the second quarter of 2023, primarily due to inflation in salaries and benefits costs. The Company’s effective tax rate for the second quarter of 28.6% compared to 27.5% in the prior year. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Year-to-date 2024 (26 weeks ended June 29, 2024) Summary of Results Net revenue year-to-date of $1.005 billion decreased 0.8% compared to year-to-date 2023. Depletions year-to-date decreased 2% from the prior year. Shipment volume year-to-date was approximately 3.8 million barrels, a 3.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in Twisted Tea brand and its newly launched Sun Cruiser brand. Gross margin year-to-date of 45.0% increased from the 42.4% margin realized in year-to-date 2023, or an increase of 260 basis points year over year. Gross margin primarily benefited from price increases, procurement savings, lower returns and inventory obsolescence costs and a non-recurring payment in the prior year to a third-party contract brewery, partially offset by higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The year-to-date gross margin of 45.0% includes $4.0 million of shortfall fees, which negatively impacted gross margin by approximately 40 basis points on an absolute basis and a non-cash expense of third-party production pre-payments of $10.4 million that negatively impacted gross margins by approximately 100 basis points on an absolute basis. Advertising, promotional and selling expenses year-to-date decreased $10.3 million or 3.7% from year-to-date 2023, primarily due to decreased freight to distributors of $6.4 million from lower rates and volumes. Brand and selling costs decreased $3.9 million, primarily due to lower brand media spend partially offset by inflation in salaries and benefits costs. General and administrative expenses year-to-date increased by $9.8 million or 11.1% from year-to-date 2023, primarily due to higher salaries and benefits costs resulting from Chief Executive Officer transition costs recorded in the first quarter and inflation costs. The Company’s effective tax rate year-to-date was 29.5% compared to 27.5% year-to-date 2023. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in year-to-date 2024 compared to year-to-date 2023. Net income year-to-date of $64.9 million or $5.41 per share, represented an increase of $15.8 million or $1.43 per diluted share compared to year-to-date 2023. This increase between periods was primarily driven by higher gross margins, partially offset by lower revenue. The Company expects that its June 29, 2024 cash balance of $219.3 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 26-week period ended June 29, 2024 and the period from July 1, 2024 through July 19, 2024, the Company repurchased shares of its Class A Common Stock in the amounts of $113.0 million and $14.0 million, respectively, for a total of $127.0 million year to date. As of July 19, 2024, the Company had approximately $140 million remaining on the $1.2 billion share buyback expenditure limit set by the Board of Directors. Depletions Estimate Year-to-date depletions through the 29-week period ended July 20, 2024 are estimated by the Company to have decreased approximately 2% from the comparable period in 2023. Full-Year 2024 Projections The Company has updated its full year guidance. The Company’s actual 2024 results could vary significantly from the current projection and are highly sensitive to changes in volume projections and supply chain performance as well as inflationary impacts. Full Year 2024Current GuidancePrior GuidanceDepletions and Shipments Percentage ChangeDown low single digit to zeroDown low single digit to up low single digitPrice Increases1% to 2%1% to 2%Gross Margin43% to 45%43% to 45%Advertising, Promotion, and Selling Expense Year Over Year Change ($ million)($5) to $15($5) to $15Effective Tax Rate28.5%28.5%GAAP EPS$7.00 to $11.00$7.00 to $11.00Capital Spending ($ 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 distributorsDuring full year 2024, the Company estimates shortfall fees will negatively impact gross margin by 50 to 75 basis points and the non-cash expense of third-party production pre-payments will negatively impact gross margins by 85 to 110 basis pointsThe 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 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 brewing Samuel Adams beer in 1984 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, July 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 Twenty-six weeks ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenue$614,216 $641,333 $1,066,423 $1,076,489 Less excise taxes 35,118 38,029 61,274 63,185 Net revenue 579,098 603,304 1,005,149 1,013,304 Cost of goods sold 312,640 329,141 552,343 583,479 Gross profit 266,458 274,163 452,806 429,825 Operating expenses: Advertising, promotional, and selling expenses 144,224 149,362 264,499 274,790 General and administrative expenses 48,024 44,899 98,408 88,593 Impairment of brewery assets 3,395 1,532 3,731 2,016 Total operating expenses 195,643 195,793 366,638 365,399 Operating income 70,815 78,370 86,168 64,426 Other income: Interest income 2,946 1,855 6,439 3,499 Other expense (440) (122) (478) (224)Total other income 2,506 1,733 5,961 3,275 Income before income tax provision 73,321 80,103 92,129 67,701 Income tax provision 20,982 22,068 27,193 18,622 Net income$52,339 $58,035 $64,936 $49,079 Net income per common share – basic$4.40 $4.73 $5.42 $3.99 Net income per common share – diluted$4.39 $4.72 $5.41 $3.98 Weighted-average number of common shares – basic 11,898 12,268 11,976 12,288 Weighted-average number of common shares – diluted 11,888 12,276 11,971 12,304 Net income$52,339 $58,035 $64,936 $49,079 Other comprehensive income: Foreign currency translation adjustment (59) 126 (221) 144 Total other comprehensive income (59) 126 (221) 144 Comprehensive income$52,280 $58,161 $64,715 $49,223 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) June 29, 2024 December 30, 2023 Assets Current Assets: Cash and cash equivalents$219,295 $298,491 Accounts receivable 125,452 66,997 Inventories 152,296 115,773 Prepaid expenses and other current assets 28,046 20,538 Income tax receivable 1,160 1,711 Total current assets 526,249 503,510 Property, plant, and equipment, net 626,860 642,509 Operating right-of-use assets 31,711 35,559 Goodwill 112,529 112,529 Intangible assets, net 59,517 59,644 Third-party production prepayments 24,278 33,581 Note receivable 18,890 — Other assets 35,412 42,661 Total assets$1,435,446 $1,429,993 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable$114,989 $87,245 Accrued expenses and other current liabilities 147,477 126,930 Current operating lease liabilities 7,481 9,113 Total current liabilities 269,947 223,288 Deferred income taxes, net 85,908 85,721 Non-current operating lease liabilities 32,981 36,161 Other liabilities 6,075 6,894 Total liabilities 394,911 352,064 Stockholders' Equity: Class A Common Stock, $0.01 par value; 22,700,000 shares authorized; 9,695,415 and 10,033,303 issued and outstanding as of June 29, 2024 and December 30, 2023 respectively 97 100 Class B Common Stock, $0.01 par value; 4,200,000 shares authorized; 2,068,000 issued and outstanding at June 29, 2024 and December 30, 2023 21 21 Additional paid-in capital 668,089 656,297 Accumulated other comprehensive loss (278) (57)Retained earnings 372,606 421,568 Total stockholders' equity 1,040,535 1,077,929 Total liabilities and stockholders' equity$1,435,446 $1,429,993 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Twenty-six weeks ended June 29, 2024 July 1, 2023 Cash flows provided by operating activities: Net income$64,936 $49,079 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 46,983 43,602 Impairment of brewery assets 3,731 2,016 Gain on sale of property, plant, and equipment (22) (195)Change in right-of-use assets 3,608 3,844 Stock-based compensation expense 11,008 8,266 Deferred income taxes 187 (1,177)Other non-cash expense (income) 296 (88)Changes in operating assets and liabilities: Accounts receivable (58,751) (60,307)Inventories (31,566) (9,376)Prepaid expenses, income tax receivable, and other assets (6,977) 1,041 Third-party production prepayments 9,303 14,512 Other assets 3,390 (5,995)Accounts payable 29,487 38,872 Accrued expenses and other liabilities 20,045 21,354 Operating lease liabilities (4,542) (4,311)Net cash provided by operating activities 91,116 101,137 Cash flows used in investing activities: Cash paid for note receivable (20,000) — Purchases of property, plant, and equipment (36,090) (34,809)Proceeds from disposal of property, plant, and equipment 23 195 Net cash used in investing activities (56,067) (34,614)Cash flows used in financing activities: Repurchases and retirement of Class A common stock (112,958) (45,887)Proceeds from exercise of stock options and sale of investment shares 2,179 9,466 Cash paid on finance leases (1,062) (797)Payment of tax withholding on stock-based payment awards and investment shares (2,404) (2,110)Net cash used in financing activities (114,245) (39,328)Change in cash and cash equivalents (79,196) 27,195 Cash and cash equivalents at beginning of period 298,491 180,560 Cash and cash equivalents at end of period$219,295 $207,755 Copies of The Boston Beer Company's press releases, including quarterly financial results, are available on the Internet at www.bostonbeer.com Investor Relations Contact: Media Contact:Jennifer Larson Dave DeCecco(617) 368-5152 (914) 261-6572jennifer.larson@bostonbeer.com dave.dececco@bostonbeer.com
BOSTON, July 25, 2024 (GLOBE NEWSWIRE) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the second quarter ended June 29, 2024. Key results were: Second Quarter 2024 Summary: Depletions decreased 4% and shipments decreased 6.4%Net revenue of $579.1 million decreased 4.0%Gross margin of 46.0% up 60 basis points year over yearNet income of $52.3 million, a decrease of $5.7 million or 9.8%Diluted income per share of $4.39 Year-to-date 2024 Summary: Depletions decreased 2% and shipments decreased 3.4%Net revenue of $1.005 billion decreased 0.8%Gross margin of 45.0% up 260 basis points year over yearNet income of $64.9 million, an increase of $15.9 million or 32.3%Diluted income per share of $5.41 Capital Structure Ended the first quarter with $219.3 million in cash and no debtRepurchased $127.0 million in shares from January 2, 2024 to July 19, 2024 “Our gross margin improvement initiatives continue to take hold, with gross margin expanding over 250 basis points year-to-date, and strong cash flow generation,” said Chairman and Founder Jim Koch. “Depletions were soft in April, but improved as we moved through the quarter. While the industry environment remains dynamic, we are seeing early signs of progress on innovation and will use our strong balance sheet to invest in our brands while returning cash to shareholders.” “I’m pleased to have completed my first quarter as Boston Beer’s CEO and believe there are many areas of opportunity ahead for the company,” said President and CEO Michael Spillane. “We are revising our volume guidance to reflect softer category performance in the second quarter and timing of product launches, while maintaining our EPS guidance supported by progress on our transformation efforts. Our entire organization will be focused on optimizing all aspects of execution and launching accretive innovation to provide the foundation for a future return to growth.” Details of the results were as follows: Second Quarter 2024 (13 weeks ended June 29, 2024) Summary of Results Depletions for the second quarter decreased 4% from the prior year. Shipment volume for the quarter was approximately 2.2 million barrels, a 6.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in the Company’s Twisted Tea brand and its newly launched Sun Cruiser brand. The Company believes distributor inventory as of June 29, 2024 averaged approximately three and one half weeks on hand compared to our target wholesaler inventory levels of four to five weeks for our peak summer season. These lower than target wholesaler inventory levels were the result of not fully shipping into improving demand in the latter weeks of June. The Company is working to ensure shipments in July and August build inventories at wholesalers back to target levels. Revenue for the quarter decreased 4.0% due to lower volumes, partially offset by pricing and lower returns. Gross margin of 46.0% increased 60 basis points from the 45.4% margin realized in the prior year. Gross margin primarily benefited from price increases, procurement savings and lower returns, which more than offset higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The second quarter gross margin of 46.0% includes $3.0 million of shortfall fees, which negatively impacted gross margin by approximately 50 basis points on an absolute basis, and a non-cash expense of third-party production pre-payments of $6.2 million that negatively impacted gross margins by approximately 110 basis points on an absolute basis. Advertising, promotional and selling expenses for the second quarter of 2024 decreased $5.1 million or 3.4% from the second quarter of 2023, due to decreased freight to distributors of $2.8 million from lower rates and lower volumes. Brand and selling costs decreased $2.3 million, primarily due to lower brand media spend. General and administrative expenses increased by $3.1 million or 7.0% from the second quarter of 2023, primarily due to inflation in salaries and benefits costs. The Company’s effective tax rate for the second quarter of 28.6% compared to 27.5% in the prior year. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Year-to-date 2024 (26 weeks ended June 29, 2024) Summary of Results Net revenue year-to-date of $1.005 billion decreased 0.8% compared to year-to-date 2023. Depletions year-to-date decreased 2% from the prior year. Shipment volume year-to-date was approximately 3.8 million barrels, a 3.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were only partially offset by growth in Twisted Tea brand and its newly launched Sun Cruiser brand. Gross margin year-to-date of 45.0% increased from the 42.4% margin realized in year-to-date 2023, or an increase of 260 basis points year over year. Gross margin primarily benefited from price increases, procurement savings, lower returns and inventory obsolescence costs and a non-recurring payment in the prior year to a third-party contract brewery, partially offset by higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. The year-to-date gross margin of 45.0% includes $4.0 million of shortfall fees, which negatively impacted gross margin by approximately 40 basis points on an absolute basis and a non-cash expense of third-party production pre-payments of $10.4 million that negatively impacted gross margins by approximately 100 basis points on an absolute basis. Advertising, promotional and selling expenses year-to-date decreased $10.3 million or 3.7% from year-to-date 2023, primarily due to decreased freight to distributors of $6.4 million from lower rates and volumes. Brand and selling costs decreased $3.9 million, primarily due to lower brand media spend partially offset by inflation in salaries and benefits costs. General and administrative expenses year-to-date increased by $9.8 million or 11.1% from year-to-date 2023, primarily due to higher salaries and benefits costs resulting from Chief Executive Officer transition costs recorded in the first quarter and inflation costs. The Company’s effective tax rate year-to-date was 29.5% compared to 27.5% year-to-date 2023. The increased effective tax rate is due to an increase in non-deductible stock compensation expense in year-to-date 2024 compared to year-to-date 2023. Net income year-to-date of $64.9 million or $5.41 per share, represented an increase of $15.8 million or $1.43 per diluted share compared to year-to-date 2023. This increase between periods was primarily driven by higher gross margins, partially offset by lower revenue. The Company expects that its June 29, 2024 cash balance of $219.3 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 26-week period ended June 29, 2024 and the period from July 1, 2024 through July 19, 2024, the Company repurchased shares of its Class A Common Stock in the amounts of $113.0 million and $14.0 million, respectively, for a total of $127.0 million year to date. As of July 19, 2024, the Company had approximately $140 million remaining on the $1.2 billion share buyback expenditure limit set by the Board of Directors. Depletions Estimate Year-to-date depletions through the 29-week period ended July 20, 2024 are estimated by the Company to have decreased approximately 2% from the comparable period in 2023. Full-Year 2024 Projections The Company has updated its full year guidance. The Company’s actual 2024 results could vary significantly from the current projection and are highly sensitive to changes in volume projections and supply chain performance as well as inflationary impacts. Full Year 2024Current GuidancePrior GuidanceDepletions and Shipments Percentage ChangeDown low single digit to zeroDown low single digit to up low single digitPrice Increases1% to 2%1% to 2%Gross Margin43% to 45%43% to 45%Advertising, Promotion, and Selling Expense Year Over Year Change ($ million)($5) to $15($5) to $15Effective Tax Rate28.5%28.5%GAAP EPS$7.00 to $11.00$7.00 to $11.00Capital Spending ($ 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 distributorsDuring full year 2024, the Company estimates shortfall fees will negatively impact gross margin by 50 to 75 basis points and the non-cash expense of third-party production pre-payments will negatively impact gross margins by 85 to 110 basis pointsThe 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 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 brewing Samuel Adams beer in 1984 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, July 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 Twenty-six weeks ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Revenue$614,216 $641,333 $1,066,423 $1,076,489 Less excise taxes 35,118 38,029 61,274 63,185 Net revenue 579,098 603,304 1,005,149 1,013,304 Cost of goods sold 312,640 329,141 552,343 583,479 Gross profit 266,458 274,163 452,806 429,825 Operating expenses: Advertising, promotional, and selling expenses 144,224 149,362 264,499 274,790 General and administrative expenses 48,024 44,899 98,408 88,593 Impairment of brewery assets 3,395 1,532 3,731 2,016 Total operating expenses 195,643 195,793 366,638 365,399 Operating income 70,815 78,370 86,168 64,426 Other income: Interest income 2,946 1,855 6,439 3,499 Other expense (440) (122) (478) (224)Total other income 2,506 1,733 5,961 3,275 Income before income tax provision 73,321 80,103 92,129 67,701 Income tax provision 20,982 22,068 27,193 18,622 Net income$52,339 $58,035 $64,936 $49,079 Net income per common share – basic$4.40 $4.73 $5.42 $3.99 Net income per common share – diluted$4.39 $4.72 $5.41 $3.98 Weighted-average number of common shares – basic 11,898 12,268 11,976 12,288 Weighted-average number of common shares – diluted 11,888 12,276 11,971 12,304 Net income$52,339 $58,035 $64,936 $49,079 Other comprehensive income: Foreign currency translation adjustment (59) 126 (221) 144 Total other comprehensive income (59) 126 (221) 144 Comprehensive income$52,280 $58,161 $64,715 $49,223 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) June 29, 2024 December 30, 2023 Assets Current Assets: Cash and cash equivalents$219,295 $298,491 Accounts receivable 125,452 66,997 Inventories 152,296 115,773 Prepaid expenses and other current assets 28,046 20,538 Income tax receivable 1,160 1,711 Total current assets 526,249 503,510 Property, plant, and equipment, net 626,860 642,509 Operating right-of-use assets 31,711 35,559 Goodwill 112,529 112,529 Intangible assets, net 59,517 59,644 Third-party production prepayments 24,278 33,581 Note receivable 18,890 — Other assets 35,412 42,661 Total assets$1,435,446 $1,429,993 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable$114,989 $87,245 Accrued expenses and other current liabilities 147,477 126,930 Current operating lease liabilities 7,481 9,113 Total current liabilities 269,947 223,288 Deferred income taxes, net 85,908 85,721 Non-current operating lease liabilities 32,981 36,161 Other liabilities 6,075 6,894 Total liabilities 394,911 352,064 Stockholders' Equity: Class A Common Stock, $0.01 par value; 22,700,000 shares authorized; 9,695,415 and 10,033,303 issued and outstanding as of June 29, 2024 and December 30, 2023 respectively 97 100 Class B Common Stock, $0.01 par value; 4,200,000 shares authorized; 2,068,000 issued and outstanding at June 29, 2024 and December 30, 2023 21 21 Additional paid-in capital 668,089 656,297 Accumulated other comprehensive loss (278) (57)Retained earnings 372,606 421,568 Total stockholders' equity 1,040,535 1,077,929 Total liabilities and stockholders' equity$1,435,446 $1,429,993 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Twenty-six weeks ended June 29, 2024 July 1, 2023 Cash flows provided by operating activities: Net income$64,936 $49,079 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 46,983 43,602 Impairment of brewery assets 3,731 2,016 Gain on sale of property, plant, and equipment (22) (195)Change in right-of-use assets 3,608 3,844 Stock-based compensation expense 11,008 8,266 Deferred income taxes 187 (1,177)Other non-cash expense (income) 296 (88)Changes in operating assets and liabilities: Accounts receivable (58,751) (60,307)Inventories (31,566) (9,376)Prepaid expenses, income tax receivable, and other assets (6,977) 1,041 Third-party production prepayments 9,303 14,512 Other assets 3,390 (5,995)Accounts payable 29,487 38,872 Accrued expenses and other liabilities 20,045 21,354 Operating lease liabilities (4,542) (4,311)Net cash provided by operating activities 91,116 101,137 Cash flows used in investing activities: Cash paid for note receivable (20,000) — Purchases of property, plant, and equipment (36,090) (34,809)Proceeds from disposal of property, plant, and equipment 23 195 Net cash used in investing activities (56,067) (34,614)Cash flows used in financing activities: Repurchases and retirement of Class A common stock (112,958) (45,887)Proceeds from exercise of stock options and sale of investment shares 2,179 9,466 Cash paid on finance leases (1,062) (797)Payment of tax withholding on stock-based payment awards and investment shares (2,404) (2,110)Net cash used in financing activities (114,245) (39,328)Change in cash and cash equivalents (79,196) 27,195 Cash and cash equivalents at beginning of period 298,491 180,560 Cash and cash equivalents at end of period$219,295 $207,755 Copies of The Boston Beer Company's press releases, including quarterly financial results, are available on the Internet at www.bostonbeer.com Investor Relations Contact: Media Contact:Jennifer Larson Dave DeCecco(617) 368-5152 (914) 261-6572jennifer.larson@bostonbeer.com dave.dececco@bostonbeer.com