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) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
The Boston Beer Company, Inc. (Registrant) |
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Date: May 4, 2011 | /s/ William F. Urich | |||
William F. Urich | ||||
Chief Financial Officer |
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Investor Relations Contact: | Media Contact: | |
Seana Phillips | Katie Powell | |
(617) 368-5074 | (617) 368-5035 |
| First quarter depletions grew by 7% and core shipments increased by 10%. | ||
| First quarter gross margin was 51%; the Company maintains its full year gross margin target of between 54% and 56%. | ||
| Advertising, promotional and selling expense increased by $6.4 million or 22% for the quarter, primarily due to planned increased investments behind the Companys brands. | ||
| The Freshest Beer Program reduced inventory at participating wholesalers by an estimated 56,000 cases as of the end of quarter, reducing reported net sales growth by approximately 1% and reported earnings per diluted share by approximately $0.02. | ||
| Net income for the first quarter was $4.0 million, or $0.28 per diluted share, a decrease of $2.3 million, or $0.16 per diluted share, from the first quarter of 2010 primarily due to the increased advertising, promotional and selling expenses. | ||
| The Companys full year 2011 earnings per diluted share projection of between $3.45 and $3.95 remains unchanged. |
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| Year-to-date depletions through April 2011 are estimated by the Company to be up approximately 5% from the same period in 2010. | ||
| Shipments and orders in-hand suggest that core shipments year-to-date through May 2011 will be up approximately 8% compared to the same period in 2010. | ||
| The Company believes that inventory levels at those wholesalers who are not participating in the Freshest Beer Program at the end of the first quarter were similar to the levels in previous years. |
| Depletions growth of 9% and shipment growth of 7% to 8%, reflecting an estimated aggregate inventory reduction at Freshest Beer Program participating wholesalers of between 300 thousand and 500 thousand case equivalents. | ||
| Revenue per barrel increases of approximately 1%. | ||
| Full-year 2011 gross margins of between 54% and 56%, which could be negatively impacted by further increases in energy cost. |
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| Increased investment in brand support by between $12.0 million and $18.0 million for the full year 2011, not including any increases in freight costs for the shipment of beer products to the Companys wholesalers. | ||
| Full year 2011 effective tax rate of approximately 39%. | ||
| Full year capital expenditures of between $15.0 million and $25.0 million, most of which relate to continued investments in the Companys breweries and additional keg purchases. |
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(unaudited) | ||||||||
Three Months Ended | ||||||||
March 26, | March 27, | |||||||
2011 | 2010 | |||||||
Barrels sold |
502 | 457 | ||||||
Revenue |
$ | 111,409 | $ | 102,470 | ||||
Less excise taxes |
9,233 | 8,440 | ||||||
Net revenue |
102,176 | 94,030 | ||||||
Cost of goods sold |
49,802 | 46,136 | ||||||
Gross profit |
52,374 | 47,894 | ||||||
Operating expenses: |
||||||||
Advertising, promotional and selling expenses |
35,512 | 29,137 | ||||||
General and administrative expenses |
10,273 | 8,453 | ||||||
Total operating expenses |
45,785 | 37,590 | ||||||
Operating income |
6,589 | 10,304 | ||||||
Other income (expense), net: |
||||||||
Interest income |
1 | 2 | ||||||
Other income (expense), net |
8 | (1 | ) | |||||
Total other income (expense), net |
9 | 1 | ||||||
Income before provision for income taxes |
6,598 | 10,305 | ||||||
Provision for income taxes |
2,639 | 4,045 | ||||||
Net income |
$ | 3,959 | $ | 6,260 | ||||
Net income per common share basic |
$ | 0.30 | $ | 0.45 | ||||
Net income per common share diluted |
$ | 0.28 | $ | 0.44 | ||||
Weighted-average number of common shares basic |
13,274 | 13,959 | ||||||
Weighted-average number of common shares diluted |
14,007 | 14,373 | ||||||
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(unaudited) | |||||||||
March 26, | December 25, | ||||||||
2011 | 2010 | ||||||||
Assets |
|||||||||
Current Assets: |
|||||||||
Cash and cash equivalents |
$ | 45,322 | $ | 48,969 | |||||
Accounts receivable, net of allowance for doubtful accounts of $138
and $121 as of March 26, 2011 and December 25, 2010, respectively |
21,627 | 20,017 | |||||||
Inventories |
33,896 | 26,614 | |||||||
Prepaid expenses and other assets |
14,329 | 12,756 | |||||||
Deferred income taxes |
3,648 | 3,648 | |||||||
Total current assets |
118,822 | 112,004 | |||||||
Property, plant and equipment, net |
140,646 | 142,889 | |||||||
Other assets |
1,925 | 2,260 | |||||||
Goodwill |
1,377 | 1,377 | |||||||
Total assets |
$ | 262,770 | $ | 258,530 | |||||
Liabilities and Stockholders Equity |
|||||||||
Current Liabilities: |
|||||||||
Accounts payable |
$ | 22,734 | $ | 19,423 | |||||
Accrued expenses and other current liabilities |
47,313 | 52,776 | |||||||
Total current liabilities |
70,047 | 72,199 | |||||||
Deferred income taxes |
17,087 | 17,087 | |||||||
Other liabilities |
3,442 | 3,656 | |||||||
Total liabilities |
90,576 | 92,942 | |||||||
Commitments and Contingencies |
|||||||||
Stockholders Equity: |
|||||||||
Class A Common Stock, $.01 par value; 22,700,000 shares authorized;
9,319,519 and 9,288,015 shares issued and outstanding as of
March 26, 2011 and December 25, 2010, respectively |
93 | 93 | |||||||
Class B Common Stock, $.01 par value; 4,200,000 shares authorized;
4,107,355 shares issued and outstanding |
41 | 41 | |||||||
Additional paid-in capital |
126,189 | 122,016 | |||||||
Accumulated other comprehensive loss, net of tax |
(438 | ) | (438 | ) | |||||
Retained earnings |
46,309 | 43,876 | |||||||
Total stockholders equity |
172,194 | 165,588 | |||||||
Total liabilities and stockholders equity |
$ | 262,770 | $ | 258,530 | |||||
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(unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 26, | March 27, | |||||||||
2011 | 2010 | |||||||||
Cash flows provided by (used in) operating activities: |
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Net income |
$ | 3,959 | $ | 6,260 | ||||||
Adjustments to reconcile net income to net cash (used in) provided by
operating activities: |
||||||||||
Depreciation and amortization |
4,460 | 4,205 | ||||||||
Impairment of long-lived assets |
22 | (2 | ) | |||||||
Loss on disposal of property, plant and equipment |
41 | 1 | ||||||||
Bad debt expense |
17 | 57 | ||||||||
Stock-based compensation |
1,105 | (121 | ) | |||||||
Excess tax benefit from stock-based compensation
arrangements |
(1,751 | ) | (1,031 | ) | ||||||
Changes in operating assets and liabilities: |
||||||||||
Accounts receivable |
(1,558 | ) | (6,672 | ) | ||||||
Inventories |
(7,282 | ) | (3,186 | ) | ||||||
Prepaid expenses and other assets |
(719 | ) | 70 | |||||||
Accounts payable |
3,311 | (6,038 | ) | |||||||
Accrued expenses and other current liabilities |
(3,705 | ) | 2,181 | |||||||
Other liabilities |
(214 | ) | 1,267 | |||||||
Net cash used in operating activities |
(2,314 | ) | (3,009 | ) | ||||||
Cash flows used in investing activities: |
||||||||||
Purchases of property, plant and equipment |
(2,248 | ) | (2,076 | ) | ||||||
Net cash used in investing activities |
(2,248 | ) | (2,076 | ) | ||||||
Cash flows provided by (used in) financing activities: |
||||||||||
Repurchase of Class A Common Stock |
(1,526 | ) | (13,530 | ) | ||||||
Proceeds from exercise of stock options |
523 | 638 | ||||||||
Excess tax benefit from stock-based compensation
arrangements |
1,751 | 1,031 | ||||||||
Net proceeds from sale of investment shares |
167 | 129 | ||||||||
Net cash provided (used in) by financing activities |
915 | (11,732 | ) | |||||||
Change in cash and cash equivalents |
(3,647 | ) | (16,817 | ) | ||||||
Cash and cash equivalents at beginning of period |
48,969 | 55,481 | ||||||||
Cash and cash equivalents at end of period |
$ | 45,322 | $ | 38,664 | ||||||
Supplemental disclosure of cash flow information: |
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Income taxes paid |
$ | 678 | $ | 205 | ||||||