Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
For the quarterly period ended March 29, 2008
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 1-14092
THE BOSTON BEER COMPANY, INC.
(Exact name of registrant as specified in its charter)
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MASSACHUSETTS
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04-3284048 |
(State or other jurisdiction of incorporation
or organization)
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(I.R.S. Employer
Identification No.) |
One Design Center Place, Suite 850, Boston, Massachusetts
(Address of principal executive offices)
02210
(Zip Code)
(617) 368-5000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act.)
Yes o No þ
Number of shares outstanding of each of the issuers classes of common stock, as of May 2, 2008:
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Class A Common Stock, $.01 par value
Class B Common Stock, $.01 par value
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9,921,895
4,107,355 |
(Title of each class)
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(Number of shares) |
THE BOSTON BEER COMPANY, INC.
FORM 10-Q
QUARTERLY REPORT
MARCH 29, 2008
TABLE OF CONTENTS
2
PART I.
Item 1. FINANCIAL INFORMATION
THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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March 29, |
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December 29, |
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2008 |
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2007 |
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(unaudited) |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
71,162 |
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$ |
79,289 |
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Short-term investments |
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16,200 |
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Accounts receivable, net of allowance for
doubtful accounts of $355 and $249 as of March
29, 2008 and December 29, 2007, respectively |
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20,164 |
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17,972 |
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Inventories |
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24,934 |
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18,090 |
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Prepaid expenses and other assets |
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3,726 |
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2,152 |
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Deferred income taxes |
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2,090 |
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2,090 |
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Total current assets |
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122,076 |
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135,793 |
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Property, plant and equipment, net |
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50,526 |
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46,198 |
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Other assets |
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12,547 |
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12,487 |
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Goodwill |
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1,377 |
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1,377 |
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Total assets |
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$ |
186,526 |
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$ |
195,855 |
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Liabilities and Stockholders Equity |
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Current Liabilities: |
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Accounts payable |
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$ |
17,112 |
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$ |
17,708 |
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Accrued expenses |
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45,703 |
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40,349 |
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Total current liabilities |
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62,815 |
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58,057 |
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Deferred income taxes |
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1,215 |
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1,215 |
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Other liabilities |
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2,848 |
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2,995 |
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Total liabilities |
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66,878 |
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62,267 |
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Commitments and Contingencies |
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Stockholders Equity: |
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Class A Common Stock, $.01 par value;
22,700,000 shares authorized; 9,859,115 and
10,095,573 shares issued and outstanding as of
March 29, 2008 and December 29, 2007,
respectively |
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99 |
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101 |
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Class B Common Stock, $.01 par value; 4,200,000
shares authorized; 4,107,355 shares issued and
outstanding |
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41 |
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41 |
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Additional paid-in capital |
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93,875 |
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88,754 |
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Accumulated other comprehensive loss, net of tax |
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(204 |
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(204 |
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Retained earnings |
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25,837 |
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44,896 |
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Total stockholders equity |
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119,648 |
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133,588 |
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Total liabilities and stockholders equity |
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$ |
186,526 |
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$ |
195,855 |
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The accompanying notes are an integral part of these consolidated financial statements.
3
THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
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Three months ended |
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March 29, |
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March 31, |
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2008 |
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2007 |
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Revenue (net of product recall returns of $9,080 in 2008) |
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$ |
84,278 |
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$ |
79,734 |
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Less excise taxes |
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8,155 |
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7,286 |
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Net revenue |
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76,123 |
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72,448 |
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Cost of goods sold (including costs associated with
product recall of $5,931 in 2008) |
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44,473 |
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32,126 |
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Gross profit |
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31,650 |
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40,322 |
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Operating expenses: |
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Advertising, promotional and selling expenses |
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31,501 |
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26,506 |
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General and administrative expenses |
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7,511 |
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5,298 |
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Total operating expenses |
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39,012 |
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31,804 |
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Operating (loss) income |
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(7,362 |
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8,518 |
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Other income, net: |
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Interest income |
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760 |
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965 |
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Other income, net |
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110 |
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167 |
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Total other income, net |
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870 |
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1,132 |
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(Loss) income before income taxes |
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(6,492 |
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9,650 |
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Income taxes (benefit) provision |
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(2,753 |
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3,882 |
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Net (loss) income |
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$ |
(3,739 |
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$ |
5,768 |
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Net (loss) income per common share basic |
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$ |
(0.27 |
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$ |
0.41 |
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Net (loss) income per common share diluted |
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$ |
(0.27 |
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$ |
0.40 |
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Weighted-average number of common shares basic |
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13,853 |
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14,118 |
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Weighted-average number of common shares diluted |
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13,853 |
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14,595 |
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The accompanying notes are an integral part of these consolidated financial statements.
4
THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Three months ended |
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March 29, |
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March 31, |
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2008 |
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2007 |
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Cash flows provided by (used in) operating activities: |
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Net (loss) income |
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$ |
(3,739 |
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$ |
5,768 |
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Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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1,979 |
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1,386 |
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Gain on disposal of property, plant and equipment |
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(2 |
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Bad debt expense |
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106 |
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33 |
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Stock-based compensation expense |
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893 |
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486 |
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Excess tax benefit from stock-based compensation arrangements |
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(1,426 |
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(1,270 |
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Purchases of trading securities |
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(10,665 |
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Proceeds from sale of trading securities |
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16,200 |
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9,863 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(2,298 |
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(2,000 |
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Inventories |
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(6,844 |
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(1,917 |
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Prepaid expenses and other assets |
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(892 |
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(917 |
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Accounts payable |
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(596 |
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(3,320 |
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Accrued expenses |
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6,780 |
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526 |
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Other liabilities |
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(147 |
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(102 |
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Net cash provided by (used in) operating activities |
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10,016 |
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(2,131 |
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Cash flows used in investing activities: |
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Purchases of property, plant and equipment |
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(6,271 |
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(2,538 |
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Proceeds from disposal of property, plant and equipment |
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2 |
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Deposits and costs related to proposed brewery acquisition |
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(47 |
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Net cash used in investing activities |
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(6,318 |
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(2,536 |
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Cash flows (used in) provided by financing activities: |
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Repurchase of Class A common stock |
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(15,324 |
) |
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Proceeds from exercise of stock options |
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1,961 |
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1,620 |
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Excess tax benefit from stock-based compensation arrangements |
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1,426 |
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1,270 |
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Net proceeds from sale of investment shares |
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112 |
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79 |
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Net cash (used in) provided by financing activities |
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(11,825 |
) |
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2,969 |
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Change in cash and cash equivalents |
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(8,127 |
) |
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(1,698 |
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Cash and cash equivalents at beginning of period |
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79,289 |
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63,147 |
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Cash and cash equivalents at end of period |
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$ |
71,162 |
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$ |
61,449 |
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Supplemental disclosure of cash flow information: |
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Income taxes paid |
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$ |
3,177 |
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$ |
592 |
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The accompanying notes are an integral part of these consolidated financial statements.
5
THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Organization and Basis of Presentation
The Boston Beer Company, Inc. and its subsidiaries (the Company) are engaged in the business of
selling low alcohol beverages throughout the United States and in selected international markets,
under the trade names, The Boston Beer Company, Twisted Tea Brewing Company and HardCore
Cider Company. The Companys Samuel Adams® beer and Sam Adams Light® are produced and sold under
the trade name, The Boston Beer Company. The accompanying consolidated statement of financial
position as of March 29, 2008 and the statements of consolidated operations and consolidated cash
flows for the interim periods ended March 29, 2008 and March 31, 2007 have been prepared by the
Company, without audit, in accordance with U.S. generally accepted accounting principles for
interim financial information and pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and footnotes
required for complete financial statements by generally accepted accounting principles and should
be read in conjunction with the audited financial statements included in the Companys Annual
Report on Form 10-K for the year ended December 29, 2007.
Managements Opinion
In the opinion of the Companys management, the Companys unaudited consolidated financial position
as of March 29, 2008 and the results of its consolidated operations and consolidated cash flows for
the interim periods ended March 29, 2008 and March 31, 2007, reflect all adjustments (consisting
only of normal and recurring adjustments) necessary to present fairly the results of the interim
periods presented. The operating results for the interim periods presented are not necessarily
indicative of the results expected for the full year.
B. Short-Term Investments
In January 2008, the Company liquidated all of its short-term investments. The Companys
short-term investments consisted of municipal auction rate securities as of December 29, 2007,
and were classified as trading securities which are recorded at fair market value and whose
change in fair market value is recorded in earnings. The Company recorded no realized gains or
losses on short-term investments for the interim periods ended March 29, 2008 and March 31, 2007.
C. Inventories
Inventories consist of raw materials, work in process and finished goods. Raw materials, which
principally consist of hops, other brewing materials and packaging, are stated at the lower of
cost, determined on the first-in, first-out basis, or market. The cost elements of work in process
and finished goods inventory consist of raw materials, direct labor and manufacturing overhead.
Inventories consist of the following:
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March 29, |
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December 29, |
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2008 |
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2007 |
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(in thousands) |
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Raw materials |
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$ |
15,922 |
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$ |
11,229 |
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Work in process |
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5,352 |
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4,116 |
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Finished goods |
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3,660 |
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2,745 |
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$ |
24,934 |
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$ |
18,090 |
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6
THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
D. Net Income per Share
The following table sets forth the computation of basic and diluted net income per share:
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Three months ended |
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March 29, |
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March 31, |
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2008 |
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2007 |
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(in thousands, except per share |
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data) |
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Net (loss) income |
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$ |
(3,739 |
) |
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$ |
5,768 |
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Weighted average shares of Class A Common Stock |
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9,746 |
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|
10,011 |
|
Weighted average shares of Class B Common Stock |
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4,107 |
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4,107 |
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Shares used in net (loss) income per common share basic |
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13,853 |
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14,118 |
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Effect of dilutive securities: |
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Stock options |
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460 |
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Non-vested investment shares and restricted stock |
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17 |
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Dilutive potential common shares |
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477 |
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Shares used in net (loss) income per common share diluted |
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13,853 |
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14,595 |
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Net (loss) income per common share basic |
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$ |
(0.27 |
) |
|
$ |
0.41 |
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Net (loss) income per common share diluted |
|
$ |
(0.27 |
) |
|
$ |
0.40 |
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|
Basic net (loss) income per common share for each share of Class A Common Stock and Class B Common
Stock is $(0.27) and $0.41 for the three months ended March 29, 2008 and March 31, 2007,
respectively, as each share of Class A and Class B participates equally in earnings. Shares of
Class B are convertible at any time into shares of Class A on a one-for-one basis at the option of
the stockholder.
During the three months ended March 29, 2008, the Company had 0.5 million dilutive potential common
shares, which were not included in the computation of net loss per diluted share because these
shares would be antidilutive.
E. Comprehensive Income or Loss
Comprehensive income or loss represents net income or loss, plus defined benefit plans liability
adjustment, net of tax effect. The defined benefit plans liability adjustments for the interim
periods ended March 29, 2008 and March 31, 2007 were not material.
F. Commitments and Contingencies
Purchase Commitments
The Company had outstanding non-cancelable purchase commitments related to advertising contracts
of approximately $11.6 million at March 29, 2008.
In 2007, the Company entered into a Contract of Sale to purchase from Diageo North America, Inc.
a brewery located in Lehigh Valley, Pennsylvania (the Pennsylvania Brewery) for $55.0 million.
As of March 29, 2008, the Company has paid total deposits of $10.0 million and incurred $1.6
million in acquisition costs, which are included in other assets in the accompanying consolidated
balance sheet. The Company expects to close on the purchase of the Pennsylvania Brewery and pay
the remaining $45.0 million of the purchase price in June 2008, barring any unforeseen
circumstances. In addition to the purchase price of $55.0 million, the Company expects to have
spent between $45.0 million and $55.0
million in capital improvements and due diligence by the end of 2008. As of March 29, 2008, the
Company has committed to $15.6 million and spent $5.1 million of this capital plan, the latter of
which is included in property, plant and equipment, net, in the accompanying consolidated balance
sheet.
7
The Company has entered into contracts for the supply of a portion of its hops requirements.
These purchase contracts extend through crop year 2015 and specify both the quantities and
prices, mostly denominated in euros, to which the Company is committed. Hops purchase
commitments outstanding at March 29, 2008 totaled $48.1 million, based on the exchange rates on
that date.
Other outstanding purchase commitments totaled $2.8 million at March 29, 2008.
Contingent Excise Tax Liability
During the third quarter of 2007, the Alcohol and Tobacco Tax and Trade Bureau of the U.S.
Treasury Department (the TTB) performed a routine audit
of the Companys brewery in Cincinnati, Ohio (the Cincinnati Brewery) and
other breweries where some of the Companys products are produced (the TTB Audit). In February
2008, the TTB formally disputed the Companys regulatory and tax treatment of certain of its 2006
and 2007 Twisted Tea shipments and the Company received a notice of demand for additional excise
taxes plus interest and penalties of approximately $8.5 million. The TTB has asserted that these
shipments were not classified consistent with TTB regulations that took effect January 1, 2006.
Based on the Companys analysis to date, it believes that most of its Twisted Tea shipments were
in compliance with applicable regulations. The Company is in discussions with the TTB regarding
the differences in the methodologies used to ascertain regulatory compliance. Based on the
information previously collected and its earlier assessment of likely outcomes, the Company
recorded a provision of $3.9 million in the third quarter of 2007. The Company continues to
maintain this provision in its March 29, 2008 financial statements related to this
contingency. Based on communications it has received from the
TTB to date, the Company currently estimates that its maximum possible exposure related to the issue raised
by the TTB is approximately $8.5 million.
G. Stock Option Grant to Chief Executive Officer
Effective January 1, 2008, the Company granted the Chief Executive Officer an option to purchase
753,864 shares of its Class A Common Stock, which vest over a five-year period, commencing on
January 1, 2014, at the rate of 20% per year. The exercise price is determined by multiplying
$42.00 by the aggregate change in the DJ Wilshire 5000 Index from and after January 1, 2008
through the close of business on the trading date next preceding each date on which the option is
exercised. The exercise price will not be less than $37.65 per share and the excess of the fair
value of the Companys Class A Common Stock cannot exceed $70 per share over the exercise price.
The Company is accounting for this award as a market-based award under the Monte Carlo Simulation
pricing model and calculated the weighted average fair value per share to be $8.41. During the
three months ended March 29, 2008, the Company recorded stock-based compensation expense of $0.2
million related to this stock option grant.
H. Income Taxes
As of March 29, 2008 and December 29, 2007, the Company had approximately $5.7 million and $6.6
million, respectively, of unrecognized income tax benefits. The change in the balance of
unrecognized tax benefits is primarily due to a decrease related to a payment made in connection
with the completion of an Internal Revenue Service (IRS) examination.
The Companys practice is to classify interest and penalties related to income tax matters in
income tax expense. As of March 29, 2008, the Company had $1.2 million accrued for interest and
penalties.
During the three months ended March 29, 2008, the IRS completed an examination of the Companys
2004 and 2005 consolidated corporate income tax returns. At the completion of the IRS examination,
the Company made a payment to the IRS of $0.8 million, including tax and interest. As a result,
the Company reduced its unrecognized tax benefits by $0.5 million and recognized a tax benefit of
$0.1 million.
8
The Companys state income tax returns remain subject to examination for three or four years
depending on the states statute of limitations. In addition, the Company is generally obligated
to report changes in taxable income arising from federal income tax audits.
It is reasonably possible that the Companys unrecognized tax benefits may increase or decrease
significantly in 2008 due to the commencement or completion of certain state income tax audits.
However, the Company cannot estimate the range of such possible changes. The Company does not
expect that any potential changes would have a material impact on the Companys financial
position, results of operations or cash flows.
I. Fair Value Measurements
The Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements, on December 30, 2007, the first day of its fiscal year 2008. SFAS No. 157 defines
fair value as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date, an exit price. The
standard outlines a valuation framework and creates a fair value hierarchy in order to increase the
consistency and comparability of fair value measurements and the related disclosures. Under
existing accounting pronouncements, certain assets and liabilities are measured at fair value and
SFAS No. 157 expands the disclosures that are required for items measured at fair value. Further,
under SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding
an amendment of FASB Statement No. 115, entities are permitted to choose to measure many financial
instruments and certain other items at fair value. The Company did not elect the fair value
measurement option under SFAS No. 159 for any of its financial assets or liabilities.
On the date of the adoption, or December 30, 2007, the Company applied the provisions of SFAS No.
157 to its short-term investments which consisted of trading securities. To measure the fair value
of its short-term investments, the Company used Level 1 inputs from a fair value hierarchy of three
levels according to SFAS No. 157, under which inputs represent unadjusted quoted prices in active
markets for identical items. On the date of the adoption of SFAS No. 157, the remeasured fair
value of the Companys short-term investments equals their carrying value, and therefore, no
adjustments were made. Further, during the three months ended March 29, 2008, the Company sold all
of its short-term investments without incurring any gains or losses.
The Company currently does not have nonfinancial assets and nonfinancial liabilities that are
required to be measured at fair value on a recurring basis.
As permitted by Financial Accounting Standards Board Staff Position No. 157-2, the Company will not
apply the provisions of SFAS No. 157 to the following items until 2009: property, plant and
equipment and goodwill. The Company is in the process of evaluating the impact of the deferred
provisions of SFAS No. 157 on its 2009 consolidated financial position, operations and cash flows.
J. Product Recall
On April 7, 2008, the Company announced a voluntary product recall of certain glass bottles of its
Samuel Adams® products. The recall was a precautionary step and resulted from routine quality
control inspections at the Cincinnati Brewery that detected glass inclusions in
certain bottles of beer. The bottles were from a single glass plant that supplies bottles to the
Company. The glass plant in question supplied approximately 25% of the Companys glass bottles
year-to-date.
9
As a result of the recall, the Company recorded an estimated accrual for product returns of $9.1
million and an estimated accrual for recall-related costs of $4.2 million and wrote-off $1.7
million of affected inventory, representing an estimate of 200,000 cases, for the three months
ended March 29, 2008. The estimated returns have been recorded as a reduction of revenue and the
costs of the recall and the inventory write-off have been included in cost of goods sold since
substantially all of the costs incurred are a direct
result of the packaging defect. The recorded recall charges resulted in a total reduction to
operating income and income before income taxes of $15.0 million and a reduction to net income of $8.8
million for the three months ended March 29, 2008.
The accrual for returns is based on a preliminary estimate of 550,000 affected cases of the
Companys products at retail and wholesale, and sell prices of relevant products. Such estimates
are provided by distributors and are based on information available to the Company as of April 23,
2008. The recall-related costs primarily include fees and incentives to retailers and wholesalers
for their effort to return the products, freight and destruction charges for returned products,
warehouse and inspection fees, repackaging materials, point-of-sale materials and other costs.
These costs are calculated based upon the estimated number of affected bottles, the Companys
historical costs for various activities such as freight, destruction and warehousing, agreed upon
incentives with retailers and wholesalers and costs incurred to-date. The Company is still in the
process of sorting through over 100,000 cases of suspected product and depending on the results of
that sorting process, actual cases affected and costs associated could be different from these
estimates. The Company expects to have incurred the majority of the direct costs related to the recall
within the next three to six months.
The Company currently believes it may have claims against the supplier of these glass bottles for
the impact of the recall, but it is impossible to predict the outcome of such potential claims,
given the early stage of the product recall. Consequently, no amounts have been recorded as
receivable as of March 29, 2008 for any potential recoveries of any amounts from third parties and
there can be no assurance there will be any potential recoveries. The Company carries product
liability insurance, but does not carry product recall insurance.
10
PART I.
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following is a discussion of the
significant factors affecting the consolidated operating results, financial condition and
liquidity and cash flows of The Boston Beer Company, Inc. (the Company or
Boston Beer) for the three-month period ended March 29, 2008 as compared to the
three-month period ended March 31, 2007. This discussion should be read in conjunction with
the Managements Discussion and Analysis of Financial Condition and Results of Operations,
and the Consolidated Financial Statements of the Company and Notes thereto included in the
Companys Annual Report on Form 10-K for the fiscal year ended December 29, 2007.
PRODUCT RECALL
On April 7, 2008, the Company announced a voluntary product recall of certain glass bottles of its
Samuel Adams® products. The recall was a precautionary step and resulted from routine quality
control inspections at the Companys brewery in Cincinnati, Ohio
(the Cincinnati Brewery), that detected glass inclusions in
certain bottles of beer. The bottles were from a single glass plant that supplies bottles to the
Company. The glass plant in question supplied approximately 25% of the Companys glass bottles
year-to-date.
Within two weeks of this announcement, the Company estimated it had quarantined for destruction
approximately 750,000 cases of the affected products, of which approximately 200,000 cases had been
under its control at its breweries or warehouses. The full costs of this effort include drinker
rebates, product credits, fees and incentives to retailers and wholesalers for the recall, lost
product, freight and destruction charges for returned product, warehouse and inspection fees,
repackaging materials, point-of-sale materials and other costs. The Company also faces the
potential for lost sales at retail.
The Company currently believes it may have claims against the supplier of these glass bottles for
the impact of the recall, but it is impossible to predict the outcome of such potential claims,
given the early stage of the product recall. Consequently, no amounts have been recorded as
receivable as of March 29, 2008 for any potential recoveries of any amounts from third parties and
there can be no assurance there will be any potential recoveries. The Company carries product
liability insurance, but does not carry product recall insurance.
As a result of the recall, the Company recorded charges that negatively impacted its operating
results before tax by $15.0 million and net income by $8.8 million for the three months ended March 29, 2008. The recorded charges
are based on information available to the Company as of April 23, 2008. The Company is still in
the process of sorting through over 100,000 cases of suspected product and depending on the results
of that sorting process, actual cases affected and costs associated could be different from these
estimates. The Company expects to have incurred the majority of the direct costs related to the recall
within the next three to six months.
RESULTS OF OPERATIONS
Boston Beers flagship product is Samuel Adams Boston Lagerâ. For purposes of this
discussion, Boston Beers core brands include all products sold under the Samuel Adamsâ,
Sam Adamsâ, Twisted Teaâ and HardCoreâ trademarks. Core brands do not include
the products brewed at the Cincinnati Brewery under contract
arrangements for third parties which are not significant to the Companys total sales.
Three Months Ended March 29, 2008 compared to Three Months Ended March 31, 2007
Net revenue. Net revenue increased by $3.7 million, or 5.1%, to $76.1 million for the three months
ended March 29, 2008, as compared to $72.4 million for the three months ended March 31, 2007. The
increase was primarily due to an increase in the shipment volume of Boston Beers core brands, net
of anticipated returns of 40,000 barrels (or 550,000 cases) of products as a result of the product
recall, as well as an increase of approximately 3% in net revenue per barrel. The estimated effect
of the anticipated returns of
550,000 cases was $9.1 million, which was based on the best available information through April 23,
2008. Actual returns related to the product recall could differ from this estimate.
11
Volume. Total shipment volume, net of the estimated 40,000 barrels of recalled products, increased
by 2.0% to 404,000 barrels for the three months ended March 29, 2008, as compared to 396,000
barrels for the three months ended March 31, 2007. Shipment volume for the core brands increased
by 1.8% to 398,000 barrels, due primarily to increases in the Samuel Adams® brand family
and the Twisted Tea® brand family shipments. Prior to the reversal of shipments
related to the recall, volume increase was approximately 12% as a result of the growth in the
Samuel Adams® brand family shipments, driven by double-digit growth rates in Samuel
Adams® Seasonals and Samuel Adams® Brewmasters Collection.
Shipments
and orders in-hand, net of product recall returns, suggest that core
shipments through May of 2008 are estimated to be up approximately
12% as compared to the same period in 2007. Actual shipments may
differ, however, and no inferences should be drawn with respect to
shipments in future periods.
Depletions, or sales by the wholesalers to retailers, of the Companys core products for the first
quarter of 2008 increased by approximately 12% over the same period
in 2007. April year-to-date depletions reported to the Company are
estimated to be up approximately 13% over 2007, but this number may
not be indicative of actual business trends in April due to some
inconsistency in reporting due to the recall. The Company believes
that wholesaler inventory levels at March 29, 2008 were consistent with levels for this time of
year, as reflected in shipments exceeding depletions by a similar amount to the same period of the
prior year. The Company expects this inventory build to unwind through the rest of the year.
Further, the recall of approximately 550,000 cases from retail and wholesale locations during the
second quarter will reduce these levels significantly and second quarter shipments are expected to
be higher than usual to bring these inventory levels back to the desired level.
Net Selling Price. The selling price per barrel for core brands increased by 3.3% to $190.10 for
the three months ended March 29, 2008, as compared to $184.11 for the same period last year. This
increase in net revenue per barrel is primarily due to price increases combined with lower discount
rates implemented in the first quarter, a net effect of approximately 5% increase compared to the
same period last year, but slightly offset by the effect of the recall.
Gross profit. Gross profit for core products was $79.34 per barrel for the three months ended
March 29, 2008, as compared to $102.70 for the three months ended March 31, 2007. Gross margin for
core products was 41.7% for the three months ended March 29, 2008, as compared to 55.8% for the
three months ended March 31, 2007. The decreases in gross profit per barrel and gross margin are
primarily due to a $5.9 million charge for estimated costs associated with the product recall, such
as fees and incentives to retailers and wholesalers for their effort to return the products,
freight and destruction charges for returned products, warehouse and inspection fees, repackaging
materials, and point-of-sale materials costs. The effect of the charge for product recall costs on
gross margin was approximately 13 percentage points. To a lesser extent, the decreases in gross
profit per barrel and gross margin resulted from an increase in cost of goods sold per barrel as
compared to the prior year, partially offset by increases in the Companys net selling price.
Cost of
goods sold for core brands increased by $14.45 per barrel to $95.86 per barrel and was
50.4% as a percentage of net revenue for the three months ended March 29, 2008, as compared to
$81.41 per barrel and 44.2% as a percentage of net revenue for the three months ended March 31,
2007. The cost per barrel increase is primarily due to the costs of products sold for which the
associated revenue was reversed due to the product recall. The remaining increase in cost per
barrel resulted from higher ingredient, package material, production and depreciation costs and a
shift in product mix, partially offset by a slight change in package mix. The Company expects most
of the year-on-year cost pressures to continue during the remainder of the year.
Excluding the impact of the product recall, 2008 full year gross margin as a percent of net revenue
could be down as much as three percentage points below full year 2007 levels based on available
cost increase information and preliminary pricing expectations.
12
The Company includes freight charges related to the movement of finished goods from its
manufacturing locations to distributor locations in its advertising, promotional and selling
expense line item. As such, the Companys gross margins may not be comparable to other entities
that classify costs related to distribution differently.
Advertising, promotional and selling. Advertising, promotional and selling expenses increased by
$5.0 million, or 18.9%, to $31.5 million for the three months ended March 29, 2008, as compared to
$26.5 million for the three months ended March 31, 2007. The increase is primarily due to
increases in freight expenses to wholesalers, advertising and salaries and benefit costs.
Advertising, promotional and selling expenses for core brands were 41.6% of net revenue, or $79.15
per barrel, for the three months ended March 29, 2008, as compared to 36.8% of net revenue, or
$67.79 per barrel, for the three months ended March 31, 2007. The increases in advertising,
promotional and selling expenses per barrel and as a percentage of net revenue are due to the
effect of the product recall on net revenue. The Company will invest in advertising and
promotional campaigns that it believes are effective, but there is no guarantee that such
investment will generate sales growth.
The Company conducts certain advertising and promotional activities in the wholesalers markets,
and the wholesalers make contributions to the Company for such efforts. These amounts are included
in the Companys statement of operations as reductions to advertising, promotional and selling
expenses. Historically, contributions from wholesalers for advertising and promotional activities
have amounted to between 2% and 4% of net sales. The Company may adjust its promotional efforts in
the wholesalers markets if changes occur in these promotional contribution arrangements, depending
on the industry and market conditions.
General and administrative. General and administrative expenses increased by $2.2 million, or
41.5%, to $7.5 million for the three months ended March 29, 2008, as compared to $5.3 million for
the same period last year. The increase primarily resulted from increases in salary and benefit
costs.
Total other income, net. Total other income, net, decreased by $0.2 million to $0.9 million for
the three months ended March 29, 2008 primarily due to less interest earned on lower average cash
and investment balances during the first fiscal quarter of 2008 as compared to the same period in
2007.
Provision for income taxes. The Company recorded an income tax benefit of $2.8 million for the
three months ended March 29, 2008, compared to an income tax provision of $3.9 million for the
three months ended March 31, 2007. The income tax benefit for the three months ended March 29,
2008 resulted from the impact of the charges associated with the product recall to operating
results. The Companys effective tax rate increased to approximately 42.4% for the three months
ended March 29, 2008 from 40.2% for the same period last year. The increase in the effective tax
rate is due to an increase in permanent differences, specifically related to meals and
entertainment.
LIQUIDITY AND CAPITAL RESOURCES
Cash and short term investments decreased to $71.2 million as of March 29, 2008 from $95.5
million as of December 29, 2007, primarily due to repurchases of common stock and purchases of
property, plant and equipment, partially offset by cash flows provided by operating activities
and proceeds from stock option exercises.
Cash flows provided by operating activities consist of net income or net loss, adjusted for
certain non-cash items, such as depreciation and amortization, stock-based compensation expense
and related excess tax benefit, and other non-cash items included in operating results. Also
affecting cash flows provided by operating activities are changes in operating assets and
liabilities, such as accounts receivable, inventory, accounts payable and accrued expenses.
13
Cash flows provided by operating activities of $10.0 million for the three months ended March 29,
2008 primarily resulted from the sale of all of the Companys remaining trading securities of
$16.2 million and non-cash items of $1.6 million, partially offset by a net loss of $3.7 million
and a net increase in operating
assets and liabilities of $4.0 million. The net increase in operating assets and liabilities for
the three months ended March 29, 2008 primarily resulted from a $6.8 million increase in
inventory due to the receipt of the 2007 hop crop and higher general inventory levels in support
of growth and a $2.3 million increase in accounts receivable due to the timing of sales
transactions in the period, offset by a $6.8 million increase in accrued expenses as a result of
the provisions for product returns and costs associated with the product recall. Cash flows used
in operating activities of $2.1 million for the three months ended March 31, 2007 primarily
consisted of a net increase in operating assets and liabilities of $7.7 million and net purchases
of trading securities of $0.8 million, partially offset by net income of $5.8 million and
non-cash items of $0.6 million.
Comparing the three month periods ended March 29, 2008 and March 31, 2007, cash flows provided by
operating activities increased by $12.1 million primarily as a result of $17.0 million in
increased sales of trading securities, offset by a $9.5 million decrease in net income. The net
increase in operating assets and liabilities of $4.0 million for the three months ended March 29,
2008, as compared to the $7.7 million net increase for the three months ended March 31, 2007,
also contributed to the increase in cash flows provided by operating activities.
The Company used $6.3 million in investing activities during the three months ended March 29,
2008, as compared to $2.5 million during the three months ended March 31, 2007. The $3.8 million
increase in investing activities primarily resulted from $3.0 million in equipment purchases to
upgrade the Pennsylvania Brewery and higher purchases of kegs.
Cash used in financing activities was $11.8 million during the three months ended March 29, 2008,
as compared to $3.0 million of cash provided by financing activities during the three months ended
March 31, 2007. The $14.8 million change in cash used for financing activities is primarily due to
$15.3 million in repurchases by the Company of shares of its Class A Common Stock under its Stock
Repurchase Program.
During the three months ended March 29, 2008, the Company repurchased 0.4 million shares of its
Class A Common Stock for a total cost of $15.3 million. As of March 29, 2008, the Company has
repurchased a cumulative total of approximately 8.5 million shares of its Class A Common Stock for
an aggregate purchase price of $114.0 million and had approximately $6.0 million remaining on the
$120.0 million share buyback expenditure limit. Since March 29, 2008, the Company has not
repurchased additional shares of its Class A Common Stock.
During the three months ended March 29, 2008, the Companys available cash was primarily invested
in high-grade tax-exempt and taxable money-market funds. In January 2008, the Company liquidated
its then existing investments in high grade Municipal Auction Rate Securities, without incurring
gains or losses, in order to fund various capital projects related to the acquisition of the
brewery in Lehigh Valley, Pennsylvania (the Pennsylvania Brewery). The Companys investment
objectives are to preserve principal, maintain liquidity, optimize return on investment and
minimize fees, transaction costs and expenses associated with the selection and management of the
investment securities.
On March 10, 2008, the Company increased the borrowing limit under its credit facility from $20.0
million to $50.0 million and extended the expiration date of the credit facility from March 31,
2008 to March 31, 2013. The Company was not in violation of any of its covenants to the lender
under the credit facility and there were no amounts outstanding under the credit facility as of
the date of this filing.
The Company continues to estimate total capital expenditures in 2008 to be between $110.0 and
$125.0 million, of which $45.0 million is the balance of
the purchase price for the Pennsylvania Brewery, and $45.0 to $55.0 million relates to
capital expenditures necessary to restart and upgrade the Pennsylvania Brewery. The Companys
capital investments in 2008 would be significantly higher if other major brewery investment
projects were initiated.
14
During the third quarter of 2007, the Alcohol and Tobacco Tax and Trade Bureau of the U.S.
Treasury Department (the TTB) performed a routine audit of the Cincinnati Brewery and
other breweries where some of the Companys products are produced (the TTB Audit). In February
2008, the
TTB formally disputed the Companys regulatory and tax treatment of certain of its 2006 and 2007
Twisted Tea shipments and the Company received a notice of demand for additional excise taxes
plus interest and penalties of approximately $8.5 million. The TTB has asserted that these
shipments were not classified consistent with TTB regulations that took effect January 1, 2006.
Based on the Companys analysis to-date, it believes that most of its Twisted Tea shipments were
in compliance with applicable regulations. The Company is in discussions with the TTB regarding
the differences in the methodologies used to ascertain regulatory compliance. Based
on communications it has received from the TTB to date,
the Company currently estimates that its maximum possible exposure related to the issue raised by the TTB is approximately $8.5 million.
Based upon current projections, including the estimated expenditure related to the product
recall, the Company expects that its working capital of $59.3 million at March 29, 2008, cash
flows from operations and the credit facility should be sufficient to meet its short-term and
long-term operating and capital requirements.
2008 Outlook
While the effects of the recall and the first quarter price increase are not fully visible, the
Company still expects to achieve full-year depletions growth, prior to the recall effects, in the
low double digits, consistent with its first quarter performance, and its outlook on full year
earnings results has not changed with the exception of the impact of the recall costs. Including
the impact of the recall, but without taking into account any potential recoveries, the Company
expects 2008 earnings per diluted share to be between $1.15 and $1.45. The earnings per share range
estimate does not include any significant change in currently planned levels of brand support or
any additional expenses above the current estimates for the startup and acquisition of the
Pennsylvania Brewery, product recall or the provision for excise tax liability reported in the
third quarter 2007, which remains at $3.9 million at March 29, 2008. The Companys ability to
achieve this level of earnings growth in 2008 is dependent on its ability to achieve challenging
targets for volume, pricing and costs.
THE POTENTIAL IMPACT OF KNOWN FACTS, COMMITMENTS, EVENTS AND UNCERTAINTIES
Off-balance Sheet Arrangements
At March 29, 2008, the Company did not have off-balance sheet arrangements as defined in
03(a)(4)(ii) of Regulation S-K.
Contractual Obligations
There were no material changes outside of the ordinary course of the Companys business to
contractual obligations during the three month period ended March 29, 2008.
Critical Accounting Policies
There were no material changes to the Companys critical accounting policies during the three month
period ended March 29, 2008, except for the following:
Product Recall
Prior to announcing the voluntary product
recall on April 7, 2008, the Company had not had a significant product recall. The Company establishes reserves for product recalls on a product-specific basis when circumstances
giving rise to the recall become known. Facts and circumstances related to any recall, including
where the product affected by the recall is located (for example, with wholesale, retail and
consumers or in the Companys inventory) and cost estimates for any fees and incentives to
retailers and wholesalers for their effort to return the products, freight and destruction charges
for returned products, warehouse and inspection fees, repackaging materials, point-of-sale
materials and other costs are considered when establishing reserves for product recall. These
factors are updated and reevaluated each period and the
related reserves are adjusted when these factors indicate that the recall reserves are either
insufficient to cover or exceed the estimated product recall expenses.
15
Significant changes in the assumptions used to develop estimates for product recall reserves could
affect key financial information, including accounts receivable, inventories, net revenues, gross
profit, operating expenses and net income. In addition, estimating product recall reserves
requires a high degree of judgment in areas such as estimating the quantity of recalled products
not yet consumed, the allocation of recalled products sold to consumers and the portion held at
retail and wholesale, incentives to be earned by retailers and wholesalers for their effort to
return the products, future freight rates, and the way in which drinkers might be compensated for their claims or affected products they hold.
In connection with the recall announced in April 2008, the Company recorded an estimated accrual
for product returns of $9.1 million and an estimated accrual for recall-related costs of $4.2
million and wrote-off $1.7 million of affected inventory as of March 29, 2008. The Company
believes that its reserves for the product recalls at March 29, 2008 are adequate and appropriate.
However, due to the high degree of judgment involved in making such estimates and the early stage of the product recall, actual returns and costs may be different from the
reserves. Consequently, the reserves for the product recall may not be sufficient to cover such
losses.
Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 157, Fair Value Measurements. This statement defines fair value,
establishes a framework for measuring fair value and expands disclosures about fair value
measurements. In February 2008, the FASB issued Staff Position (FSP) No. 157-2, delaying the
effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities. The Company
adopted the provisions of SFAS No. 157 related to financial assets and liabilities and items that
are recognized at fair value on a recurring basis on December 30, 2007, the first day of its fiscal
year 2008. This partial adoption of SFAS No. 157 related to financial assets and financial
liabilities did not have an effect on the Companys consolidated financial position, operations and
cash flows for the three months ended March 29, 2008.
As permitted by FSP No. 157-2, the Company will not apply the provisions of SFAS No. 157 to the
following items until 2009: property, plant and equipment and goodwill. The Company is in the
process of evaluating the impact of the deferred provisions of SFAS No. 157 on its 2009
consolidated financial position, operations and cash flows.
In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106 and 132(R), which
applies to all plan sponsors who offer defined benefit postretirement plans. SFAS No. 158 requires
recognition of the funded status of a defined benefit postretirement plan in the statement of
financial position and expanded disclosures in the notes to financial statements. The Company
adopted this provision for the year ended December 30, 2006 and the adoption did not have a
material impact on its consolidated financial position. In addition, SFAS No. 158 requires
measurement of plan assets and benefit obligations as of the date of the plan sponsors fiscal year
end. The Company is required to adopt the measurement provision of SFAS No. 158 for its fiscal
year ending December 27, 2008. The Company does not believe the measurement provision of SFAS No.
158 to have a material effect on its 2008 consolidated financial position, operations and cash
flows.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial LiabilitiesIncluding an amendment of FASB Statement No. 115. SFAS No. 159 permits
companies to choose to measure many financial instruments at fair value, that are not currently
required to be measured at fair value, at specified election dates under its fair value option.
Unrealized gains and losses on items for which the fair value option has been elected are reported
in earnings at each subsequent reporting date. This Statement also establishes presentation and
disclosure requirements designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of
assets and liabilities. The Company adopted the provisions of SFAS No. 159 in the first quarter of
2008, but did not elect the fair value option for any of its financial assets and financial
liabilities.
16
In December 2007, the FASB issued SFAS No. 141 (revised) (SFAS No. 141R), Business Combinations,
which replaces SFAS No 141, Business Combinations. SFAS No. 141R will significantly change the
accounting for business combinations and an acquiring entity will be required to recognize all the
assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with
limited exceptions. In addition to new financial statements disclosures, SFAS No. 141R will also
change the accounting treatment for certain specific items, including the expensing of acquisition
costs and restructuring costs associated with a business combination, and changes in deferred tax
asset valuation allowances and income tax uncertainties after the acquisition date which generally
will affect income tax expense. SFAS No. 141R applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the Companys fiscal 2009 period, with
the exception of the accounting of valuation allowances on deferred tax assets and acquired tax
contingencies for which the adoption is retrospective. The Company is in the process of evaluating
the impact of SFAS No. 141R, if any, on its consolidated financial position, operations and cash
flows.
FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q and in other documents incorporated herein, as well as in
oral statements made by the Company, statements that are prefaced with the words may, will,
expect, anticipate, continue, estimate, project, intend, designed and similar
expressions, are intended to identify forward-looking statements regarding events, conditions,
and financial trends that may affect the Companys future plans of operations, business strategy,
results of operations and financial position. These statements are based on the Companys current
expectations and estimates as to prospective events and circumstances about which the Company can
give no firm assurance. Further, any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation to update any
forward-looking statement to reflect subsequent events or circumstances. Forward-looking
statements should not be relied upon as a prediction of actual future financial condition or
results. These forward-looking statements, like any forward-looking statements, involve risks and
uncertainties that could cause actual results to differ materially from those projected or
anticipated. Such risks and uncertainties include the factors set forth below in addition to the
other information set forth in this Quarterly Report on Form 10-Q and in the section titled
Other Risks and Uncertainties in the Companys Annual Report on Form 10-K for the year ended
December 29, 2007.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Since December 29, 2007, there have been no significant changes in the Companys exposures to
interest rate or foreign currency rate fluctuations. The Company currently does not enter into
derivatives or other market risk sensitive instruments for the purpose of hedging or for trading
purposes.
Item 4. CONTROLS AND PROCEDURES
As of March 29, 2008, the Company conducted an evaluation under the supervision and with the
participation of the Companys management, including the Companys Chief Executive Officer and
Chief Financial Officer (its principal executive officer and principal financial officer,
respectively) regarding the effectiveness of the design and operation of the Companys disclosure
controls and procedures as defined in Rule 13a-15 of the Securities Exchange Act of 1934 (the
Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Companys disclosure controls and procedures were effective to ensure
that information required to be disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the requisite time periods
and that such disclosure controls and procedures were effective to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to its management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
17
There was no change in the Companys internal control over financial reporting that occurred
during the quarter ended March 29, 2008 that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time the Company has been, and expects to continue to be, subject to legal proceedings
and claims in the ordinary course of its business. In addition to the Companys possible claims against third parties, claims may also be brought against the Company
by persons affected by the issues that caused the product recall. Such claims, even if not meritorious, could
result in the expenditure of significant financial and managerial resources. Currently, the Company
is not a party to any pending or threatened litigation.
Item 1A. RISK FACTORS
In addition to the other information set forth in this report, careful consideration should be
given to the factors discussed in Part I, Item 1A. Risk Factors in the Companys Annual Report on
Form 10-K for the year ended December 29, 2007, which could materially affect the Companys
business, financial condition or future results. The risks described in the Companys Annual
Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties
not currently known to the Company or that it currently deems to be immaterial also may materially
adversely affect its business, financial condition and/or operating results.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On February 13, 2008, the Board of Directors of the Company increased the aggregate expenditure
limit for the Companys Stock Repurchase Program by $10.0 million, thereby increasing the limit
from $110.0 million to $120.0 million. As of May 2, 2008, the Company has repurchased a cumulative
total of approximately 8.5 million shares of its Class A Common Stock for an aggregate purchase
price of $114.0 million and had $6.0 million remaining on the $120.0 million share buyback
expenditure limit.
During the three months ended March 29, 2008, the Company repurchased 428,779 shares of its Class A
Common Stock as illustrated in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
|
Approximate Dollar |
|
|
|
Total |
|
|
|
|
|
|
Shares Purchased as |
|
|
Value of Shares that |
|
|
|
Number of |
|
|
Average |
|
|
Part of Publicly |
|
|
May Yet be Purchased |
|
|
|
Shares |
|
|
Price Paid |
|
|
Announced Plans or |
|
|
Under the Plans or |
|
Period |
|
Purchased |
|
|
per Share |
|
|
Programs |
|
|
Programs |
|
December 30, 2007 to February 2,
2008 |
|
|
277,100 |
|
|
$ |
35.62 |
|
|
|
277,100 |
|
|
$ |
1,442,079 |
|
February 3, 2008 to March 1, 2008 |
|
|
83,000 |
|
|
|
36.84 |
|
|
|
83,000 |
|
|
|
8,384,675 |
|
March 2, 2008 to March 29, 2008 |
|
|
68,679 |
|
|
|
34.89 |
|
|
|
68,679 |
|
|
|
5,988,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
428,779 |
|
|
$ |
35.74 |
|
|
|
428,779 |
|
|
$ |
5,988,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the current period, there were no repurchases of unvested investment shares issued under the
Investment Share Program of the Companys Employee Equity Incentive Plan.
As of May 2, 2008, the Company
had 9.9 million shares of Class A Common Stock outstanding and 4.1
million shares of Class B Common Stock outstanding.
18
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS
|
|
|
|
|
Exhibit No. |
|
Title |
|
|
|
|
|
|
*10.63 |
|
|
Stock Option Agreement between
the Company and Martin F. Roper entered into effective as of
January 1, 2008. |
|
|
|
|
|
|
*10.64 |
|
|
Amendment
to Credit Agreement by and among the Company and Boston Beer
Corporation, as borrowers, and Bank of America, N.A., as the lender,
effective as of March 10, 2008. |
|
|
|
|
|
|
11.1 |
|
|
The information required by Exhibit 11 has been
included in Note D of the notes to the consolidated financial statements. |
|
|
|
|
|
|
*31.1 |
|
|
Certification of the President and Chief Executive
Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*31.2 |
|
|
Certification of the Chief Financial Officer pursuant
to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*32.1 |
|
|
Certification of the President and Chief Executive
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*32.2 |
|
|
Certification of the Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
THE BOSTON BEER COMPANY, INC.
(Registrant)
|
|
Date: May 6, 2008 |
/s/ Martin F. Roper
|
|
|
Martin F. Roper |
|
|
President and Chief Executive Officer
(principal executive officer) |
|
|
|
|
Date: May 6, 2008 |
/s/ William F. Urich
|
|
|
William F. Urich |
|
|
Chief Financial Officer
(principal accounting and financial officer) |
|
20
EXHIBIT
INDEX
|
|
|
|
|
Exhibit No. |
|
Title |
|
|
|
|
|
|
*10.63 |
|
|
Stock Option Agreement between
the Company and Martin F. Roper entered into effective as of
January 1, 2008. |
|
|
|
|
|
|
*10.64 |
|
|
Amendment
to Credit Agreement by and among the Company and Boston Beer
Corporation, as borrowers, and Bank of America, N.A., as the lender,
effective as of March 10, 2008. |
|
|
|
|
|
|
11.1 |
|
|
The information required by Exhibit 11 has been
included in Note D of the notes to the consolidated financial statements. |
|
|
|
|
|
|
*31.1 |
|
|
Certification of the President and Chief Executive
Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*31.2 |
|
|
Certification of the Chief Financial Officer pursuant
to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*32.1 |
|
|
Certification of the President and Chief Executive
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
*32.2 |
|
|
Certification of the Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
21