What Does Boston Beer Company Could Change To Improve Performance

First Quarter (13-week) 2022 Financial Results

BOSTON, April 21, 2022 /PRNewswire/ -- The Boston Beer Visitor, Inc. (NYSE: SAM), today reported financial results for the first quarter ended March 26, 2022. Key results were:

Kickoff quarter depletions decreased 7% and first quarter shipments decreased 25.1% compared to the quarter concluded March 27, 2021
First quarter net revenue of $430.1 one thousand thousand decreased 21.one% compared to the cyberspace acquirement realized in the first quarter of 2021
Outset quarter gross margin of twoscore.2% was 5.6 percent points below the 2021 kickoff quarter margin of 45.8%
First quarter operating expenses of $175.1 million increased 1.2% compared to the first quarter of 2021
First quarter net loss of $2.0 million or $0.16 per diluted share, decreased from cyberspace income of $65.6 million or $5.26 per diluted share in the start quarter of 2021. This change betwixt periods was primarily driven by decreased net revenue and gross margins
Full-year depletion and shipment growth continues to be estimated at between four% and x%

"Despite our depletions decline, nosotros gained dollar share in measured off-premise channels in the first quarter – the second-largest share gain amid brewers," said Chairman and Founder Jim Koch. "The out-of-stock problems that affected our first quarter performance take improved during the quarter, setting u.s.a. up for additional growth over the residue of the year. Equally we proceed to innovate, today we are announcing the launch of Truly Vodka Seltzer, a new set-to-drink difficult seltzer with 110 calories and v% ABV, which will begin rolling out afterward this summer. We believe it will help us compete finer in the loftier-finish of the hard seltzer category and continue to augment the reach of the Truly make."

"While we met our internal targets for depletions, shipments and financials, our commencement quarter performance suffers by comparing to our exceptional performance in the beginning quarter of 2021," said Dave Burwick, President and CEO. "We fully expect depletion and shipment volumes to ameliorate, both in accented terms and against less difficult prior year volume comparisons. We likewise expect margins to increase from the lower first quarter levels every bit our supply concatenation operation slowly improves during the remainder of the year. We go along to believe we take strategies in place to get dorsum to company-broad mid single-digit to double-digit depletions growth driven past broad-based growth across our unabridged portfolio of brands – particularly as consumers beverage more 'Beyond Beer' products – and via our strong innovation pipeline."

Details of the results were every bit follows:

First Quarter 2022 (13 weeks concluded March 26, 2022) Summary of Results

Depletions for the 2022 first quarter decreased seven% from the prior year, reflecting decreases in the Company'southward Truly Hard Seltzer, Angry Orchard, and Dogfish Head brands, partially offset by increases in its Twisted Tea brand. The Visitor'southward Samuel Adams make depletion book was nearly equal in both periods.

Shipment volume for the quarter was approximately ane.7 million barrels, a 25.1% decrease from the prior year, reflecting decreases in the Visitor's Truly Hard Seltzer, Twisted Tea, Angry Orchard, and Dogfish Head brands, partially offset past increases in its Samuel Adams brand.

The Company believes distributor inventory as of March 26, 2022 averaged approximately five weeks on hand and was at an appropriate level for each of its brands. The Company expects distributors will keep inventory levels beneath 2021 levels in terms of weeks on paw, equally the need for peak flavour inventory prebuilds is greatly reduced due to our increased production capacity.

The first quarter 2022 gross margin of xl.2% decreased from the 45.8% margin realized in the first quarter of 2021, primarily due to higher supply chain costs and higher materials costs, partially offset by toll increases.

Advertising, promotional and selling expenses for the beginning quarter of 2022 decreased $x.2 meg or vii.3% from the starting time quarter of 2021, primarily due to a net subtract in brand investments of $9.4 million, mainly driven by lower media costs, partially kickoff by higher investments in local marketing and decreased freight to distributors of $0.viii 1000000 primarily due to lower volumes that were partially first by higher rates.

General and administrative expenses increased by $7.8 million or 24.3% from the first quarter of 2021, primarily due to increased salaries and benefits costs and increases in services provided by third parties.

The Company recorded an expense of $4.eight million in contract termination costs in the first quarter of 2022, resulting from farther negotiations with suppliers that eliminated future shortfall fees.

The Visitor's effective tax rate for the get-go quarter was a tax benefit of fourteen.5% compared to a revenue enhancement provision of 14.4% in the prior year. In the first quarters of 2022 and 2021, the Visitor recorded tax expense of $0.03 per diluted share and a tax benefit of $0.69 per diluted share, respectively, resulting from the Accounting Standard "Employee Share-Based Payment Accounting" ("ASU 2016-09").

The Company expects that its March 26, 2022 cash balance of $15.viii million, together with its future operating greenbacks flows and the unused balance on its $135.0 meg line of credit, volition be sufficient to fund future cash requirements.

During the xiii-week catamenia ended March 26, 2022 and the menses from March 27, 2022 through April 16, 2022, the Company did not repurchase whatever shares of its Class A Common Stock. As of April 16, 2022, the Company had approximately $xc.3 1000000 remaining on the $931.0 million share buyback expenditure limit set by the Board of Directors.

Depletion and shipments estimates

Yr-to-appointment depletions through the 16-week period ended April 16, 2022 are estimated by the Company to have decreased approximately 6% from the comparable menstruation in 2021.

Yr-to-date shipments through the xvi-calendar week menses ended Apr 16, 2022 are estimated by the Company to accept decreased approximately 23% from the comparable period in 2021.

Full-year 2022 Projections

The Company currently projects full-twelvemonth 2022 Non-GAAP earnings per diluted share of between $11.00 and $16.00. This projection excludes the impact of ASU 2016-09 and is highly sensitive to changes in volume projections specially related to the hard seltzer category and supply chain functioning also as inflationary impacts that accept accelerated since we provided our last guidance. The Company's actual 2022 earnings per share could vary significantly from the current projection. The 2022 fiscal year includes 53 weeks compared to the 2021 fiscal yr which included only 52 weeks. Underlying the Company'southward current 2022 project are the following full-yr estimates and targets:

Depletions and shipments increase of between 4% and 10%. In the outset quarter of 2022 total depletions declined vii% compared to the first quarter of 2021 and increased 38% compared to the start quarter of 2020. In order for the Visitor to achieve the mid-bespeak of its full year depletions range, its depletions for the remainder of the year must increase x% compared to the last nine months of 2021 and increase 29% compared to the concluding nine months of 2020.
National cost increases of betwixt 3% and v%.
Gross margin of between 45% and 48%.
Increased investments in advertising, promotional and selling expenses of betwixt $0 and $twenty million. This does non include whatsoever changes in freight costs for the shipment of products to the Company'southward distributors.
Not-GAAP effective tax rate of approximately 26%, excluding the touch on of ASU 2016-09. This constructive tax rate likewise excludes any potential future changes to current federal income tax rates and regulations.
Estimated capital spending of between $140 1000000 and $190 million.

Apply of Non-GAAP Measures

Non-GAAP effective tax rate and earnings per diluted share, excluding the impact of ASU 2016-09, are not divers terms under U.S. by and large accepted bookkeeping principles ("GAAP"). These non-GAAP measures should not be considered in isolation or as a substitute for diluted earnings per share and effective tax charge per unit data prepared in accordance with GAAP, and may not be comparable to calculations of similarly titled measures past other companies. Management uses these non-GAAP financial measures to brand operating and strategic decisions and to evaluate the Visitor's overall business operation. The Company is unable to reconcile the projection for its Non-GAAP constructive taxation rate and earnings per diluted share, excluding the touch of ASU 2016-09, because the Company is unable to predict the impact of time to come events outside the Company's control, including the timing and value realized upon practise 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 frontwards-looking ground. Direction believes these forrard-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 operation.

Frontward-Looking Statements

Statements made in this press release that state the Company's or management'southward intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company'southward actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could crusade bodily results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including, just not limited to, the Company'south report on Form ten-K for the twelvemonth ended December 25, 2021 and subsequent reports filed by the Company with the SEC on Forms x-Q and 8-K. Copies of these documents are bachelor from the SEC and may be found on the Visitor's website, www.bostonbeer.com. You lot should not place undue reliance on forward-looking statements, which speak simply every bit of the appointment they are fabricated. The Company undertakes no obligation to publicly update or revise any forrad-looking statements.

About the Visitor

The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 brewing Samuel Adams beer and the Samuel Adams brand is currently recognized equally i of the largest and well-nigh respected craft beer brands. Our portfolio of brands likewise includes Truly Hard Seltzer, Twisted Tea, Aroused Orchard Hard Cider, Dogfish Head Brewery, and Bevy Long Drink also every bit other craft beer brands such as Angel City Brewery and Coney Isle Brewing. We also produce and sell Difficult Mt Dew under a license agreement with PepsiCo, Inc. and Sauza Agave Cocktails under a license understanding with Jim Beam Brands Co. For more data, please visit our investor relations website at www.bostonbeer.com, which includes links to all of our respective brand websites.

Thursday, April 21, 2022

THE BOSTON BEER Visitor, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)
(unaudited)
	March 26,		March 27
	2022		2021
Barrels sold		ane,705		two,275
Revenue	$	457,288	581, 709
Less excise taxes		27,175		36,629
Net acquirement		430,113		545,080
Cost of goods sold		257,161		295,450
Gross profit		172,952		249,630
Operating expenses:
Advert, promotional and selling expenses		130,615		140,859
Full general and authoritative expenses		39,698		31,946
Contract termination costs and other		4,752		—
Impairment of assets		41		227
Total operating expenses		175,106		173,032
Operating (loss) income		(2,154)		76,598
Other expense:
Interest expense		(33)		(29)
Other expense		(100)		(6)
Total other expense		(133)		(35)
(Loss) income before income taxation (benefit) provision		(2,287)		76,563
Income taxation (do good) provision		(332)		10,998
Net (loss) income	$	(1,955)	$	65,565

Net (loss) income per common share - basic	$	(0.xvi)	$	5.34
Net (loss) income per common share - diluted	$	(0.16)	$	v.26

Weighted-average number of common shares -basic		12,300		12,271
Weighted-average number of common shares - diluted		12,300		12,457

Net (loss) income	$	(i,955)	$	65,565
Other comprehensive (loss) income:
Foreign Currency translation aligning		50		20
Total other comprehensive income (loss), internet of revenue enhancement:		fifty		twenty
Comprehensive (loss) income	$	(1,905)	$	65,585

THE BOSTON BEER Company, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED Residuum SHEETS
(in thousands, except share information)
	(unaudited)
	March 26,		December 25,
	2022		2021
Avails
Electric current Assets:
Cash and cash equivalents	$	15,769	$	26,853
Restricted cash		—		39,468
Accounts receivable		101,884		55,022
Inventories		162,592		149,118
Prepaid expenses and other current avails		24,012		21,462
Income revenue enhancement receivable		52,276		53,418
Total current assets		356,533		345,341
Property, found and equipment, cyberspace		668,876		664,815
Operating correct-of-use avails		50,780		52,774
Goodwill		112,529		112,529
Intangible assets		103,614		103,677
Third-party production prepayments		lxxx,573		88,294
Other assets		17,092		19,354
Total assets	$	1,389,997	$	one,386,784
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	112,711	$	85,920
Accrued expenses and other current liabilities		124,457		161,552
Electric current operating charter liabilities		8,366		7,634
Full current liabilities		245,534		255,106
Deferred income taxes, net		87,516		87,495
Line of credit		15,000		—
Non-electric current operating lease liabilities		51,689		53,849
Other liabilities		v,334		6,925
Total liabilities		405,073		403,375

Stockholders' Equity:
Form A Mutual Stock, $.01 par value; 22,700,000 shares authorized; 10,214,612 and 10,183,801 issued and outstanding as of March 26, 2022 and December 25, 2021, respectively		102		102
Grade B Common Stock, $.01 par value; 4,200,000 shares authorized; ii,068,000 and two,068,000 issued and outstanding as of March 26, 2022 and December 25, 2021, respectively		21		21
Additional paid-in capital		615,041		611,622
Accumulated other comprehensive loss		(143)		(194)
Retained earnings		369,903		371,858
Total stockholders' equity		984,924		983,409
Total liabilities and stockholders' equity	$	ane,389,997	$	1,386,784

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF Greenbacks FLOWS
(in thousands)
(unaudited)
	March 26,		March 27
	2022		2021
Cash flows (used in) provided by operating activities:
Net (loss) income	$	(1,955)	$	65,565
Adjustments to reconcile cyberspace income to net cash provided by operating activities:
Depreciation and amortization		xix,634		16,996
Impairment of assets		41		227
Loss (gain) on disposal of holding, constitute and equipment		21		(36)
Change in right-of-use assets		i,994		1,965
Other non-greenbacks expense (income)		45		(48)
Stock-based compensation expense		2,922		four,957
Deferred income taxes		21		4,565
Changes in operating assets and liabilities:
Accounts receivable		(46,973)		(26,723)
Inventories		(11,205)		(30,581)
Prepaid expenses, income tax receivable, other electric current assets and other avails		(937)		(14,369)
Third-political party production prepayments		7,721		(21,584)
Accounts payable		26,799		36,912
Accrued expenses, other electric current liabilities and other liabilities		(37,706)		(16,095)
Modify in operating charter liabilities		(1,428)		(two,020)
Cyberspace cash (used in) provided past operating activities		(41,006)		xix,807
Cash flows used in investing activities:
Purchases of property, institute and equipment		(23,767)		(39,278)
Proceeds from disposal of property, constitute and equipment		66		320
Other investing activities		—		145
Net cash used in investing activities		(23,701)		(38,813)
Cash flows provided by financing activities:
Proceeds from practice of stock options and sale of investment shares		2,010		6,768
Net cash paid on notation payable and finance leases		(475)		(435)
Line of credit borrowings		30,000		—
Line of credit repayments		(15,000)		—
Payment of taxation withholding on stock-based payment awards and investment shares		(2,380)		(5,951)
Net greenbacks provided by financing activities		fourteen,155		382
Change in greenbacks and cash equivalents and restricted cash		(50,552)		(eighteen,624)
Cash and cash equivalents and restricted greenbacks at beginning of year		66,321		163,282
Greenbacks and cash equivalents end of period	$	15,769	$	144,658


*Copies of The Boston Beer Visitor'south press releases, including quarterly financial results,*
*are available on the Internet at www.bostonbeer.com*