8-K
Boston Beer Co Inc (SAM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 2021
The Boston Beer Company, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Massachusetts | 001-14092 | 04-3284048 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
| One Design Center Place, Suite 850,<br><br>Boston, MA | 02210 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (617) 368-5000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock | SAM | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On October 21, 2021, The Boston Beer Company, Inc. disclosed financial information for the third quarter of 2021 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 October 21, 2021. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| The Boston Beer Company, Inc. | |
|---|---|
| (Registrant) | |
| Date: October 21, 2021 | /s/ Frank H. Smalla |
| Frank H. Smalla | |
| Chief Financial Officer |
EX-99
| Exhibit 99 | |
|---|---|
| Investor Relations Contact: | Media Contact: |
| Jennifer Larson | Dave DeCecco |
| (617) 368-5152<br><br>jennifer.larson@bostonbeer.com | (914) 261-6572<br><br>dave.dececco@bostonbeer.com |
BOSTON BEER REPORTS
THIRD QUARTER FINANCIAL RESULTS
Third Quarter (13-week) and Year-to-Date (39-week) 2021 Financial Results
BOSTON, MA (10/21/21) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the third quarter and year-to-date fiscal periods ended September 25, 2021. Key results were:
Third quarter depletions increased 11% and third quarter shipments increased 11.2% compared to the prior year.
Third quarter net revenue of $561.6 million increased 14.0% compared to the prior year
Third quarter net loss of $58.4 million or $4.76 per diluted share represented a decrease of $139.2 million or $11.27 per diluted share compared to net income in the third quarter of last year.
The third quarter net loss was primarily a result of direct and indirect volume adjustment costs of $133.0 million, or $7.73 per diluted share, net of tax benefits, due to slower than anticipated hard seltzer growth.
Year-to-date depletions increased 24% and year-to-date shipments increased 29.7% compared to the prior year.
Year-to-date net revenue of $1.710 billion increased 34.0% compared to the prior year
Year-to-date net income of $66.3 million or $5.33 per share, a decrease of $92.8 million or $7.57 per diluted share compared to the prior year.
“The unexpected rapid slowdown of hard seltzer category growth this summer significantly impacted our business,” said Dave Burwick, President and CEO. “While Truly has continued to grow, gain share and solidify its long-term position, the slower category performance has reduced our full-year growth expectations for Truly to be between 20-25% year-over-year. In addition, the capacity and inventory we had built to take advantage of a higher-growth environment resulted in significant temporary costs this quarter.”
“Despite the slowdown in category growth, we expect hard seltzers, which represent 11% of total beer dollars year to date, up from 9% during the same period in 2020, will remain a very important segment of the beer market in the future. We’ve been playing to win and have reaped many benefits over the past 18 months. So far this year, Truly has generated 54% of all hard seltzer category growth. In addition, Truly has achieved the second-highest household penetration in all of beer behind only Bud Light beer and ahead of all its other hard seltzer and beer industry competitors. ”
“We have a tremendous track record of growth at Boston Beer, which is rooted in our heritage of delivering premium products that consumers love, and constantly innovating to meet ever-evolving tastes,” said Chairman and Founder Jim Koch. “Not only have we delivered a 12% compound annual growth rate in revenue for the last 20 years, we now own leading brands in a number of categories, and where we are not yet number one, our brands are gaining share. With our balanced portfolio of strong brands and a pipeline of innovative products preparing to come to market, we are well positioned to succeed in 2022 and beyond as consumers look to drink more ‘Beyond Beer’ products.”
“We believe we have the best brewers, the best high-end brands – with potential yet to be fully tapped – as well as the best salesforce and the best innovation again for 2022,” added Koch. “We are fixing our capacity and supply chain issues, our marketing is hitting its stride, and we have the best distributor network behind us. We have a company and culture that not only delivers double-digit growth over extended horizons, but also demonstrates resilience and agility when faced with challenges. We will continue to work hard to prove our ability to outgrow the beer category for many years to come.”
Details of the results were as follows:
3rd Quarter 2021 (13-weeks ended September 25, 2021) Summary of Results
The third quarter results include direct costs resulting from slower hard seltzer category growth of $102.4 million, before the related tax benefit. These costs include inventory obsolescence, destruction costs and other inventory related costs of $54.3 million, contract termination costs, primarily for excess third-party contract production, of $35.4 million and equipment impairments of $12.7 million. The total direct costs of $102.4 million have been recorded in the third quarter financial statements as a $54.3 million increase in cost of goods sold, $12.7 million in impairments of long-lived assets and $35.4 million in contract termination fees.
In addition, the third quarter results include indirect costs resulting from the slowdown of hard seltzer category growth of $30.6 million, before the related tax benefit. These costs include unfavorable absorption impacts at Company-owned breweries and downtime charges at third party breweries of $11.4 million, increased materials sourcing and warehousing costs of $11.8 million and customer return provisions for out of code or damaged products of $5.4 million and other costs of $2.0 million. These total indirect costs of $30.6 million have been recorded in the third quarter financial statements as a $6.9 million reduction in net revenue and a $23.7 million increase in cost of goods sold.
Third quarter net loss of $58.4 million or $4.76 per diluted share decreased $139.2 million or $11.27 per diluted share compared to net income in the third quarter of last year. This decrease was due to the combined direct and indirect costs related to slowing hard seltzer category growth of $133.0 million or $7.73 per diluted share, net of the related tax benefit, and higher operating expenses, partially offset by increased net revenue.
In the third quarter of 2021 and 2020, the Company recorded a tax benefit of $0.02 per diluted share and $0.41 per diluted share, respectively, resulting from the Accounting Standard "Employee Share-Based Payment Accounting" ("ASU 2016-09").
Depletions for the quarter increased 11% from the prior year, reflecting increases in the Company’s Twisted Tea, Truly Hard Seltzer, Samuel Adams and Dogfish Head brands, partially offset by decreases in its Angry Orchard brand.
Shipment volume for the quarter was approximately 2.3 million barrels, a 11.2% increase from the prior year, reflecting increases in the Company’s Twisted Tea, Samuel Adams and Angry Orchard brands, partially offset by decreases in its Truly Hard Seltzer and Dogfish Head brands.
The Company believes distributor inventory as of September 25, 2021 averaged approximately 6 weeks on hand and was at an appropriate level for each of its brands, except for Truly, which had significantly higher than planned distributor inventory levels for certain styles and packages. To address the slowing demand and continued uncertainty on future volume projections for Truly, the Company is working closely with its distributors to reduce Truly distributor inventory levels. The Company adjusted production and shipments during the third quarter and expects to continue to do so during the remainder of the year.
Gross margin of 30.7% decreased from the 48.8% margin realized in the third quarter of 2020, primarily due to $84.9 million direct and indirect volume adjustment costs, as a result of the hard seltzer slowdown described above, and higher materials costs, partially offset by price increases.
Advertising, promotional and selling expenses increased $58.8 million or 54.4% from the third quarter of 2020, primarily due to increased brand investments of $37.6 million, mainly driven by higher media, production and local marketing costs and increased freight to distributors of $21.2 million that was primarily due to higher rates and volumes.
General and administrative expenses increased by $1.7 million or 5.7% from the third quarter of 2020, primarily due to increases in external services, partially offset by lower salaries and benefits costs.
Impairment of long-lived assets increased $14.2 million from the third quarter of 2020, primarily due to write-downs of equipment of $12.7 million related to the slowdown of the hard seltzer category.
The Company’s effective tax rate for the third quarter was a tax benefit of 23.5% compared to a tax provision of 20.8% in the prior year. This change in rate was primarily due to a higher tax benefit from stock option activity recorded in accordance with ASU 2016-09 in the third quarter of 2020.
Year-to-date 2021 (39 weeks ended September 25, 2021) Summary of Results
Year-to-date results include direct costs resulting from slowing hard seltzer category growth of $102.4 million, before the related tax benefit. These direct costs were all incurred in the third quarter and are described in more detail in the Third Quarter Summary of Results section above.
In addition, year-to-date results include indirect costs resulting from slowing hard seltzer category growth of $41.5 million, before the related tax benefit. These costs include unfavorable absorption impacts at Company-owned breweries and downtime charges at third party breweries of $11.8 million, increased raw materials sourcing and warehousing costs of $22.3 million and customer return provisions for out of code or damaged products of $5.4 million and other costs of $2.0 million. The total costs of $41.5 million have been recorded in the year-to-date financial statements as a $6.9 million reduction in net revenue and a $34.6 million increase in cost of goods sold.
Year-to-date net income of $66.3 million or $5.33 per share, decreased $92.8 million or $7.57 per diluted share compared to the prior year. This decrease was due to the combined direct and indirect costs of slowing hard seltzer category growth of $143.9 million or $8.25 per diluted share, net of the related tax benefit, and higher operating expenses, partially offset by increased net revenues.
Year-to-date 2021 and 2020, the Company recorded a tax benefit of $0.75 per diluted share and $0.77 per diluted share, respectively, resulting from ASU 2016-09.
Depletions year-to-date increased 24% from the prior year, reflecting increases in the Company’s Truly Hard Seltzer, Twisted Tea, Samuel Adams and Dogfish Head brands, partially offset by decreases in its Angry Orchard brand.
Shipment volume year-to-date was approximately 7.0 million barrels, a 29.7% increase from the prior year, reflecting increases in the Company’s Truly Hard Seltzer, Twisted Tea, Samuel Adams, Angry Orchard and Dogfish Head brands.
Gross margin year-to-date of 40.8% decreased from the 46.9% margin realized in year-to-date 2020, primarily due to $95.8 million direct and indirect volume adjustment costs, as a result of the hard seltzer slowdown described above, and higher materials costs, partially offset by price increases.
Advertising, promotional and selling expenses increased $163.0 million or 53.2% from the year-to-date 2020, primarily due to increased brand investments of $99.7 million, mainly driven by higher media, production and local marketing investments and increased freight to distributors of $63.3 million that was primarily due to higher rates and volumes.
General and administrative expenses increased by $9.9 million or 11.4% from year-to-date 2020, primarily due to increases in external services and salaries and benefits costs.
Impairment of long-lived assets increased $15.4 million from year-to-date 2020, primarily due to write-downs of equipment related to the slowdown of the hard seltzer category.
The Company’s effective tax rate for year-to-date 2021 was 17.3% compared to a tax provision of 21.1% in the prior year. This lower rate in year-to-date 2021 was primarily due to the higher impact of deductions for option activity on lower net income compared to the prior year period.
The Company expects that its September 25, 2021 cash balance of $86.5 million, together with its future operating cash flows and the $150.0 million unused balance on its line of credit, will be sufficient to fund future cash requirements.
During the 39-week period ended September 25, 2021 and the period from September 26, 2021 through October 15, 2021, the Company did not repurchase any shares of its Class A Common Stock. As of October 15, 2021, the Company had approximately $90.3 million remaining on the $931.0 million share buyback expenditure limit set by the Board of Directors.
Depletion estimates
Year-to-date depletions through the 42-week period ended October 16, 2021 are estimated by the Company to have increased approximately 23% from the comparable period in 2020.
COVID-19
As the COVID-19 pandemic slowly winds down, the Company’s primary focus continues to be on operating its breweries and business safely and working hard to meet customer demand. The Company began seeing the impact of the COVID-19 pandemic on its business in early March 2020. The direct financial impact of the pandemic primarily included significantly reduced keg demand from the On-Premise channel and higher labor and safety-related costs at the Company’s breweries. In addition to these direct financial impacts, COVID-19 related safety measures resulted in a reduction of brewery productivity, with more volume shifted to third-party breweries, increasing production costs and negatively impacting gross margins. In the 39-week period ended September 26, 2020, the Company recorded COVID-19 related pre-tax reductions in net revenue and increases in other costs that total $14.2 million, of which $10.0 million was recorded in the first quarter and $4.1 million was recorded in the second quarter and $0.1 million was recorded in the third quarter. In 2021 and going forward, the Company has chosen not to report COVID-19 related direct costs separately, as they are viewed to be a normal part of operations.
Full Year 2021 Projections
The Company currently projects full year 2021 GAAP earnings per diluted share to be between $2.00 and $6.00, primarily as a result of slowing hard seltzer category growth and related inventory write-offs, contract termination fees, equipment impairments, absorption impacts, downtime charges, and increased sourcing and warehousing costs. This projection excludes the impact of ASU 2016-09 and is highly sensitive to changes in volume projections, particularly related to the hard seltzer category. The Company’s actual 2021 earnings per share could vary significantly from the current projection. Underlying the Company’s current 2021 projection are the following full-year estimates and targets:
Depletions and shipments increase of between 18% and 22%.
National price increases of between 2% and 3%.
Gross margin of between 40% and 42%. The gross margin impact related to the combined full year direct and indirect costs of the hard seltzer slowdown is estimated at $132.6 million, of which $95.8 million were incurred in the first nine months and the remainder of $36.8 million are estimated to be incurred in the fourth quarter.
Increased investments in advertising, promotional and selling expenses of between $80 million and $100 million. This does not include any changes in freight costs for the shipment of products to the Company’s distributors.
Non-GAAP effective tax rate of approximately 28%, excluding the impact of ASU 2016-09. This effective tax rate also excludes any potential future changes to current federal income tax rates and regulations.
Estimated capital spending of between $160 million and $200 million.
Preliminary 2022 Outlook
The Company is completing its 2022 planning process and will provide further guidance when the Company presents its full-year 2021 results. Based on information of which it is currently aware, the Company is using the following preliminary assumptions and targets for its 2022 fiscal year, which are highly sensitive to changes in volume projections, particularly related to the hard seltzer category:
Depletions and shipments percentage increase of between mid-single digits and low double-digits.
National price increases of between 3% and 6%.
Gross margin of between 45% and 48%.
Increased investments in advertising, promotional and selling expenses of between $10 million and $30 million. This does not include any changes in freight costs for the shipment of products to the Company’s distributors.
Non-GAAP effective tax rate of approximately 26%, excluding the impact of ASU 2016-09. This effective tax rate also excludes any potential future changes to current federal income tax rates and regulations.
Estimated capital spending of between $140 million and $190 million, which could be significantly higher, if deemed necessary to meet future growth.
Use of Non-GAAP Measures
Non-GAAP effective tax rate and earnings per diluted share, excluding the impact of ASU 2016-09, are not defined terms under U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures should not be considered in isolation or as a substitute for diluted earnings per share and effective tax rate data prepared in accordance with GAAP, and may not be comparable to calculations of similarly titled measures by other companies. Management uses these non-GAAP financial measures to make operating and strategic decisions and to evaluate the Company’s overall business performance. The Company is unable to reconcile the
projection for its Non-GAAP effective tax rate and earnings per diluted share, excluding the impact of ASU 2016-09, because the the Company is unable to predict the impact of future events outside the Company’s control, including the timing and value realized upon exercise of stock options versus the fair value of those options when granted. Therefore, because of the uncertainty and variability of the impact of ASU 2016-09, the Company is unable to provide, without unreasonable effort, a reconciliation of these non-GAAP measures on a forward-looking basis. Management believes these forward-looking non-GAAP measures provide meaningful and useful information to investors and analysts regarding our outlook and facilitate period to period comparisons of our forecasted financial performance.
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 26, 2020 and subsequent reports filed by the Company with the SEC on Forms 10-Q and 8-K. Copies of these documents are available from the SEC and may be found on the Company’s website, www.bostonbeer.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
About the Company
The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 brewing Samuel Adams beer and the Samuel Adams brand is currently recognized as one of the largest and most respected craft beer brands. Our portfolio of brands also includes Truly Hard Seltzer, Twisted Tea, Angry Orchard Hard Cider and Dogfish Head Brewery as well as other craft beer brands such as Angel City Brewery and Coney Island Brewing. For more information, please visit our investor relations website at www.bostonbeer.com, which includes links to all of our respective brand websites.
Thursday, October 21, 2021
| THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||
| September 25, <br>2021 | September 26, <br>2020 | September 25, <br>2021 | September 26, <br>2020 | |||||||||
| Barrels sold | 2,312 | 2,080 | 7,037 | 5,425 | ||||||||
| Revenue | $ | 599,971 | $ | 525,249 | $ | 1,822,994 | $ | 1,358,563 | ||||
| Less excise taxes | 38,328 | 32,457 | 113,466 | 83,068 | ||||||||
| Net revenue | 561,643 | 492,792 | 1,709,528 | 1,275,495 | ||||||||
| Cost of goods sold | 388,947 | 252,207 | 1,011,513 | 677,313 | ||||||||
| Gross profit | 172,696 | 240,585 | 698,015 | 598,182 | ||||||||
| Operating expenses: | ||||||||||||
| Advertising, promotional and selling expenses | 166,817 | 108,023 | 469,296 | 306,250 | ||||||||
| General and administrative expenses | 32,066 | 30,340 | 96,973 | 87,054 | ||||||||
| Contract termination costs and other | 35,428 | — | 35,428 | — | ||||||||
| Impairment of assets | 14,158 | 441 | 15,389 | 2,796 | ||||||||
| Total operating expenses | 248,469 | 138,804 | 617,086 | 396,100 | ||||||||
| Operating (loss) income | (75,773 | ) | 101,781 | 80,929 | 202,082 | |||||||
| Other (expense) income: | ||||||||||||
| Interest expense | (26 | ) | (20 | ) | (84 | ) | (169 | ) | ||||
| Other (expense) income, net | (657 | ) | 190 | (655 | ) | (222 | ) | |||||
| Total other (expense) income, net | (683 | ) | 170 | (739 | ) | (391 | ) | |||||
| (Loss) income before income tax (benefit) provision | (76,456 | ) | 101,951 | 80,190 | 201,691 | |||||||
| Income tax (benefit) provision | (18,035 | ) | 21,183 | 13,852 | 42,548 | |||||||
| Net (loss) income | $ | (58,421 | ) | $ | 80,768 | $ | 66,338 | $ | 159,143 | |||
| Net (loss) income per common share - basic | $ | (4.76 | ) | $ | 6.61 | $ | 5.40 | $ | 13.05 | |||
| Net (loss) income per common share - diluted | $ | (4.76 | ) | $ | 6.51 | $ | 5.33 | $ | 12.90 | |||
| Weighted-average number of common shares - basic | 12,282 | 12,221 | 12,279 | 12,191 | ||||||||
| Weighted-average number of common shares - diluted | 12,282 | 12,333 | 12,450 | 12,259 | ||||||||
| Net (loss) income | $ | (58,421 | ) | $ | 80,768 | $ | 66,338 | $ | 159,143 | |||
| Other comprehensive (loss) income: | ||||||||||||
| Foreign currency translation adjustment | (26 | ) | 61 | 9 | (10 | ) | ||||||
| Defined benefit plans liability adjustment | — | 1,117 | — | 1,117 | ||||||||
| Comprehensive (loss) income | $ | (58,447 | ) | $ | 81,946 | $ | 66,347 | $ | 160,250 | |||
| THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES | ||||||||||||
| --- | --- | --- | --- | --- | --- | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (in thousands, except share data) | ||||||||||||
| December 26,<br>2020 | ||||||||||||
| Assets | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | 86,504 | $ | 163,282 | |||||||||
| Accounts receivable | 83,121 | 78,358 | ||||||||||
| Inventories | 196,455 | 130,910 | ||||||||||
| Prepaid expenses and other current assets | 24,127 | 30,230 | ||||||||||
| Income tax receivable | 40,919 | 10,393 | ||||||||||
| Total current assets | 431,126 | 413,173 | ||||||||||
| Property, plant and equipment, net | 665,374 | 623,083 | ||||||||||
| Operating right-of-use assets | 54,485 | 58,483 | ||||||||||
| Goodwill | 112,529 | 112,529 | ||||||||||
| Intangible assets | 103,740 | 103,930 | ||||||||||
| Third-party production prepayments | 74,392 | 56,843 | ||||||||||
| Other assets | 21,880 | 10,784 | ||||||||||
| Total assets | 1,463,526 | $ | 1,378,825 | |||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current Liabilities: | ||||||||||||
| Accounts payable | 136,462 | $ | 121,647 | |||||||||
| Accrued expenses and other current liabilities | 140,712 | 129,544 | ||||||||||
| Current operating lease liabilities | 8,313 | 8,232 | ||||||||||
| Total current liabilities | 285,487 | 259,423 | ||||||||||
| Deferred income taxes, net | 83,350 | 92,665 | ||||||||||
| Non-current operating lease liabilities | 54,950 | 59,171 | ||||||||||
| Other liabilities | 10,361 | 10,599 | ||||||||||
| Total liabilities | 434,148 | 421,858 | ||||||||||
| Stockholders' Equity: | ||||||||||||
| Class A Common Stock, .01 par value; 22,700,000 shares authorized; 10,165,710 and 10,004,681 issued and outstanding as of September 25, 2021 and December 26, 2020, respectively | 102 | 100 | ||||||||||
| Class B Common Stock, .01 par value; 4,200,000 shares authorized; 2,078,000 and 2,177,983 issued and outstanding as of September 25, 2021 and December 26, 2020, respectively | 21 | 22 | ||||||||||
| Additional paid-in capital | 605,853 | 599,737 | ||||||||||
| Accumulated other comprehensive loss | (243 | ) | (252 | ) | ||||||||
| Retained earnings | 423,645 | 357,360 | ||||||||||
| Total stockholders' equity | 1,029,378 | 956,967 | ||||||||||
| Total liabilities and stockholders' equity | 1,463,526 | $ | 1,378,825 |
All values are in US Dollars.
| THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES | ||||||
|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Thirty-nine weeks ended | ||||||
| September 25, <br>2021 | September 26, <br>2020 | |||||
| Cash flows provided by operating activities: | ||||||
| Net income | $ | 66,338 | $ | 159,143 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 52,953 | 48,937 | ||||
| Impairment of assets | 15,389 | 2,796 | ||||
| Gain on disposal of property, plant and equipment | (202 | ) | (173 | ) | ||
| Change in right-of-use assets | 5,959 | 5,465 | ||||
| Other non-cash (income) expense | (92 | ) | 746 | |||
| Stock-based compensation expense | 14,002 | 10,735 | ||||
| Deferred income taxes | (9,370 | ) | 14,160 | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (5,184 | ) | (39,775 | ) | ||
| Inventories | (71,104 | ) | (23,072 | ) | ||
| Prepaid expenses, income tax receivable and other current assets | (39,239 | ) | 43 | |||
| Third-party production prepayments | (2,733 | ) | (21,397 | ) | ||
| Other assets | (5,682 | ) | (516 | ) | ||
| Accounts payable | 17,781 | 33,020 | ||||
| Accrued expenses and other current liabilities | 18,127 | 18,024 | ||||
| Change in operating lease liabilities | (6,102 | ) | (1,887 | ) | ||
| Other liabilities | 124 | 2,671 | ||||
| Net cash provided by operating activities | 50,965 | 208,920 | ||||
| Cash flows used in investing activities: | ||||||
| Purchases of property, plant and equipment | (120,887 | ) | (100,341 | ) | ||
| Proceeds from disposal of property, plant and equipment | 1,142 | 72 | ||||
| Other investing activities | 145 | 392 | ||||
| Net cash used in investing activities | (119,600 | ) | (99,877 | ) | ||
| Cash flows (used in) provided by financing activities: | ||||||
| Proceeds from exercise of stock options and sale of investment shares | 8,571 | 14,015 | ||||
| Net cash paid on note payable and finance leases | (1,181 | ) | (906 | ) | ||
| Cash borrowed on line of credit | — | 100,000 | ||||
| Cash paid on line of credit | — | (100,000 | ) | |||
| Payment of tax withholding on stock-based payment awards and investment shares | (15,533 | ) | (1,692 | ) | ||
| Net cash (used in) provided by financing activities | (8,143 | ) | 11,417 | |||
| Change in cash and cash equivalents | (76,778 | ) | 120,460 | |||
| Cash and cash equivalents at beginning of year | 163,282 | 36,670 | ||||
| Cash and cash equivalents at end of period | $ | 86,504 | $ | 157,130 | ||
| Copies of The Boston Beer Company's press releases, including quarterly financial results, | ||||||
| are available on the Internet at www.bostonbeer.com |