☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
MASSACHUSETTS 04-3284048
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A Common Stock. $0. 0 1 par value | SAM | New York Stock Exchange | ||
Class B Common Stock, $0. 0 1 par value | Not applicable | Unregistered |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Small er reporting company | ☐ | |||
Emerging growth company | ☐ |
Class A Common Stock, $.01 par value | 9,216,022 | |||
Class B Common Stock, $.01 par value | 2,817,983 | |||
(Title of each class) | (Number of shares | ) |
March 30,
PART I. | FINANCIAL INFORMATION | PAGE | ||||||||||
Item 1. | 3 | |||||||||||
| ||||||||||||
3 | ||||||||||||
4 | ||||||||||||
5 | ||||||||||||
6 | ||||||||||||
7- 19 | ||||||||||||
Item 2. | 20- 26 | |||||||||||
Item 3. | 26 | |||||||||||
Item 4. | 27 | |||||||||||
PART II. | OTHER INFORMATION | |||||||||||
Item | 27 | |||||||||||
| Item 1A. | 27 | ||||||||||
Item | ||||||||||||
28 | ||||||||||||
Item 3. | 28 | |||||||||||
Item | 28 | |||||||||||
Item 5. | 28 | |||||||||||
Item | ||||||||||||
29 | ||||||||||||
30 |
Item 1. | CONSOLIDATED FINANCIAL STATEMENTS |
March 30, | December 29, | |||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 102,887 | $ | 108,399 | ||||
Accounts receivable | 54,525 | 34,073 | ||||||
Inventories | 85,861 | 70,249 | ||||||
Prepaid expenses and other current assets | 16,754 | 13,136 | ||||||
Income tax receivable | 833 | 5,714 | ||||||
|
|
|
| |||||
Total current assets | 260,860 | 231,571 | ||||||
Property, plant and equipment, net | 398,882 | 389,789 | ||||||
Right-of-use assets | 26,177 | — | ||||||
Other assets | 14,418 | 14,808 | ||||||
Goodwill | 3,683 | 3,683 | ||||||
|
|
|
| |||||
Total assets | $ | 704,020 | $ | 639,851 | ||||
|
|
|
| |||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 61,620 | $ | 47,102 | ||||
Accrued expenses and other current liabilities | 66,655 | 73,412 | ||||||
Current lease liabilities | 3,727 | — | ||||||
|
|
|
| |||||
Total current liabilities | 132,002 | 120,514 | ||||||
Deferred income taxes, net | 50,198 | 49,169 | ||||||
Non-current lease liabilities | 27,161 | — | ||||||
Other liabilities | 4,841 | 9,851 | ||||||
|
|
|
| |||||
Total liabilities | 214,202 | 179,534 | ||||||
Commitments and Contingencies (See Note H) | ||||||||
Stockholders’ Equity: | ||||||||
Class A Common Stock, $.01 par value; 22,700,000 shares authorized; 8,634,806 and 8,580,593 issued and outstanding as of March 30, 2019 and December 29, 2018, respectively | 86 | 86 | ||||||
Class B Common Stock, $.01 par value; 4,200,000 shares authorized; 2,917,983 and 2,917,983 issued and outstanding as of March 30, 2019 and December 29, 2018, respectively | 29 | 29 | ||||||
Additionalpaid-in capital | 411,481 | 405,711 | ||||||
Accumulated other comprehensive loss, net of tax | (1,160 | ) | (1,197 | ) | ||||
Retained earnings | 79,382 | 55,688 | ||||||
|
|
|
| |||||
Total stockholders’ equity | 489,818 | 460,317 | ||||||
|
|
|
| |||||
Total liabilities and stockholders’ equity | $ | 704,020 | $ | 639,851 | ||||
|
|
|
|
September 28, | December 29, | |||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 27,128 | $ | 108,399 | ||||
Accounts receivable | 68,687 | 34,073 | ||||||
Inventories | 92,632 | 70,249 | ||||||
Prepaid expenses and other current assets | 14,965 | 13,136 | ||||||
Income tax receivable | 5,980 | 5,714 | ||||||
Total current assets | 209,392 | 231,571 | ||||||
Property, plant and equipment, net | 521,316 | 389,789 | ||||||
Operating right-of-use assets | 38,943 | — | ||||||
Goodwill | 112,529 | 3,683 | ||||||
Intangible assets | 104,335 | 2,099 | ||||||
Other assets | 29,661 | 12,709 | ||||||
Total assets | $ | 1,016,176 | $ | 639,851 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 71,035 | $ | 47,102 | ||||
Accrued expenses and other current liabilities | 92,850 | 73,412 | ||||||
Current operating lease liabilities | 2,599 | — | ||||||
Total current liabilities | 166,484 | 120,514 | ||||||
Deferred income taxes, net | 81,653 | 49,169 | ||||||
Non-current operating lease liabilities | 41,215 | — | ||||||
Other liabilities | 7,844 | 9,851 | ||||||
Total liabilities | 297,196 | 179,534 | ||||||
Commitments and Contingencies (See Note J ) | ||||||||
Stockholders’ Equity: | ||||||||
Class A Common Stock, $.01 par value; 22,700,000 shares authorized; 9,216,022 and 8,580,593 issued and outstanding as of September 28, 2019 and December 29, 2018, respectively | 92 | 86 | ||||||
Class B Common Stock, $.01 par value; 4,200,000 shares authorized; 2,817,983 and 2,917,983 issued and outstanding as of September 28, 2019 and December 29, 2018, respectively | 28 | 29 | ||||||
Additional paid-in capital | 568,047 | 405,711 | ||||||
Accumulated other comprehensive loss, net of tax | (1,154 | ) | (1,197 | ) | ||||
Retained earnings | 151,967 | 55,688 | ||||||
Total stockholders’ equity | 718,980 | 460,317 | ||||||
Total liabilities and stockholders’ equity | $ | 1,016,176 | $ | 639,851 | ||||
(unaudited)
Thirteen weeks ended | ||||||||
March 30, 2019 | March 31, 2018 | |||||||
Revenue | $ | 267,559 | $ | 201,831 | ||||
Less excise taxes | 15,908 | 11,374 | ||||||
|
|
|
| |||||
Net revenue | 251,651 | 190,457 | ||||||
Cost of goods sold | 127,111 | 94,360 | ||||||
|
|
|
| |||||
Gross profit | 124,540 | 96,097 | ||||||
Operating expenses: | ||||||||
Advertising, promotional and selling expenses | 71,723 | 67,521 | ||||||
General and administrative expenses | 23,374 | 19,338 | ||||||
|
|
|
| |||||
Total operating expenses | 95,097 | 86,859 | ||||||
|
|
|
| |||||
Operating income | 29,443 | 9,238 | ||||||
Other income (expense), net: | ||||||||
Interest income, net | 637 | 205 | ||||||
Other expense, net | (252 | ) | (285 | ) | ||||
|
|
|
| |||||
Total other income (expense), net | 385 | (80 | ) | |||||
|
|
|
| |||||
Income before income tax provision (benefit) | 29,828 | 9,158 | ||||||
Income tax provision (benefit) | 6,134 | (152 | ) | |||||
|
|
|
| |||||
Net income | $ | 23,694 | $ | 9,310 | ||||
|
|
|
| |||||
Net income per common share - basic | $ | 2.04 | $ | 0.79 | ||||
|
|
|
| |||||
Net income per common share - diluted | $ | 2.02 | $ | 0.78 | ||||
|
|
|
| |||||
Weighted-average number of common shares - Class A basic | 8,606 | 8,714 | ||||||
|
|
|
| |||||
Weighted-average number of common shares - Class B basic | 2,918 | 3,018 | ||||||
|
|
|
| |||||
Weighted-average number of common shares - diluted | 11,636 | 11,831 | ||||||
|
|
|
| |||||
Net income | $ | 23,694 | $ | 9,310 | ||||
|
|
|
| |||||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | 37 | 11 | ||||||
|
|
|
| |||||
Comprehensive income | $ | 23,731 | $ | 9,321 | ||||
|
|
|
|
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | $ | 402,691 | $ | 326,852 | $ | 1,008,893 | $ | 818,257 | ||||||||
Less excise taxes | 24,225 | 19,982 | 60,369 | 47,830 | ||||||||||||
Net revenue | 378,466 | 306,870 | 948,524 | 770,427 | ||||||||||||
Cost of goods sold | 190,631 | 149,643 | 477,147 | 375,133 | ||||||||||||
Gross profit | 187,835 | 157,227 | 471,377 | 395,294 | ||||||||||||
Operating expenses: | ||||||||||||||||
Advertising, promotional and selling expenses | 96,570 | 87,765 | 262,372 | 241,796 | ||||||||||||
General and administrative expenses | 31,429 | 22,734 | 81,552 | 65,951 | ||||||||||||
Impairment of assets | — | — | 243 | 517 | ||||||||||||
Total operating expenses | 127,999 | 110,499 | 344,167 | 308,264 | ||||||||||||
Operating income | 59,836 | 46,728 | 127,210 | 87,030 | ||||||||||||
Other income (expense), net: | ||||||||||||||||
Interest (expense) income, net | (138 | ) | 343 | 472 | 821 | |||||||||||
Other income (expense), net | (764 | ) | (51 | ) | (818 | ) | (539 | ) | ||||||||
Total other income (expense), net | (902 | ) | 292 | (346 | ) | 282 | ||||||||||
Income before income tax provision | 58,934 | 47,020 | 126,864 | 87,312 | ||||||||||||
Income tax provision | 14,205 | 9,013 | 30,585 | 16,460 | ||||||||||||
Net income | $ | 44,729 | $ | 38,007 | $ | 96,279 | $ | 70,852 | ||||||||
Net income per common share — basic | $ | 3.70 | $ | 3.25 | $ | 8.16 | $ | 6.02 | ||||||||
Net income per common share — diluted | $ | 3.65 | $ | 3.21 | $ | 8.07 | $ | 5.96 | ||||||||
Weighted-average number of common shares — Class A basic | 9,136 | 8,557 | 8,797 | 8,646 | ||||||||||||
Weighted-average number of common shares — Class B basic | 2,862 | 3,018 | 2,899 | 3,018 | ||||||||||||
Weighted-average number of common shares — diluted | 12,150 | 11,702 | 11,823 | 11,773 | ||||||||||||
Net income | $ | 44,729 | $ | 38,007 | $ | 96,279 | $ | 70,852 | ||||||||
Other comprehensive income: | ||||||||||||||||
Foreign currency translation adjustment | 1 | (13 | ) | 43 | 4 | |||||||||||
Comprehensive income | $ | 44,730 | $ | 37,994 | $ | 96,322 | $ | 70,856 | ||||||||
Class A Common Shares | Class A Common Stock, Par | Class B Common Shares | Class B Common Stock, Par | Additional Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 29, 2018 | 8,580 | $ | 86 | 2,918 | $ | 29 | $ | 405,711 | $ | (1,197 | ) | $ | 55,688 | $ | 460,317 | |||||||||||||||||
Net income | 23,694 | 23,694 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 54 | — | 3,704 | 3,704 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 2,066 | 2,066 | ||||||||||||||||||||||||||||||
Currency translation adjustment | 37 | 37 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at March 30, 2019 | 8,634 | $ | 86 | 2,918 | $ | 29 | $ | 411,481 | $ | (1,160 | ) | $ | 79,382 | $ | 489,818 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Class A Common Shares | Class A Common Stock, Par | Class B Common Shares | Class B Common Stock, Par | Additional Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 30, 2017 | 8,603 | $ | 86 | 3,018 | $ | 30 | $ | 372,590 | $ | (1,288 | ) | $ | 52,105 | $ | 423,523 | |||||||||||||||||
Net income | 9,310 | 9,310 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 188 | 2 | 20,232 | 20,234 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 1,491 | 1,491 | ||||||||||||||||||||||||||||||
Repurchase of Class A Common Stock | (91 | ) | (1 | ) | (16,638 | ) | (16,639 | ) | ||||||||||||||||||||||||
Currency translation adjustment | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||
One time effect of adoption of ASU2014-09, Revenue from Contracts with Customers, net of tax of $329 | (982 | ) | (982 | ) | ||||||||||||||||||||||||||||
One time effect of adoption of ASU2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | (210 | ) | 210 | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance at March 31, 2018 | 8,700 | $ | 87 | 3,018 | $ | 30 | $ | 394,313 | $ | (1,509 | ) | $ | 44,005 | $ | 436,926 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common Shares | Class A Common Stock, Par | Class B Common Shares | Class B Common Stock, Par | Additional Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 29, 2018 | 8,580 | $ | 86 | 2,918 | $ | 29 | $ | 405,711 | $ | (1,197 | ) | $ | 55,688 | $ | 460,317 | |||||||||||||||||
Net income | 23,694 | 23,694 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 54 | — | 3,704 | 3,704 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 2,066 | 2,066 | ||||||||||||||||||||||||||||||
Currency translation adjustment | 37 | 37 | ||||||||||||||||||||||||||||||
Balance at March 30, 2019 | 8,634 | $ | 86 | 2,918 | $ | 29 | $ | 411,481 | $ | (1,160 | ) | $ | 79,382 | $ | 489,818 | |||||||||||||||||
Net income | 27,856 | 27,856 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 21 | 1 | 1,377 | 1,378 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 3,744 | 3,744 | ||||||||||||||||||||||||||||||
Currency translation adjustment | 5 | 5 | ||||||||||||||||||||||||||||||
Balance at June 29, 2019 | 8,655 | $ | 87 | 2,918 | $ | 29 | $ | 416,602 | $ | (1,155 | ) | $ | 107,238 | $ | 522,801 | |||||||||||||||||
Net income | 44,729 | 44,729 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 31 | — | 3,473 | 3,473 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 3,233 | 3,233 | ||||||||||||||||||||||||||||||
Shares issued in connection with Dogfish Head merger | 430 | 4 | 144,739 | 144,743 | ||||||||||||||||||||||||||||
Conversion from Class B to Class A | 100 | 1 | (100 | ) | (1 | ) | — | |||||||||||||||||||||||||
Currency translation adjustment | 1 | 1 | ||||||||||||||||||||||||||||||
Balance at September 28, 2019 | 9,216 | $ | 92 | 2,818 | $ | 28 | $ | 568,047 | $ | (1,154 | ) | $ | 151,967 | $ | 718,980 | |||||||||||||||||
Class A Common Shares | Class A Common Stock, Par | Class B Common Shares | Class B Common Stock, Par | Additional Paid-in Capital | Accumulated Other Comprehensive Loss, net of tax | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||
Balance at December 30, 2017 | 8,603 | $ | 86 | 3,018 | $ | 30 | $ | 372,590 | $ | (1,288 | ) | $ | 52,105 | $ | 423,523 | |||||||||||||||||
Net income | 9,310 | 9,310 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 188 | 2 | 20,232 | 20,234 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 1,491 | 1,491 | ||||||||||||||||||||||||||||||
Repurchase of Class A Common Stock | (91 | ) | (1 | ) | (16,638 | ) | (16,639 | ) | ||||||||||||||||||||||||
Currency translation adjustment | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||
One time effect of adoption of ASU 2014-09, Revenue from Contracts with Customers, net of tax of $329 | (982 | ) | (982 | ) | ||||||||||||||||||||||||||||
One time effect of adoption of ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | (210 | ) | 210 | — | ||||||||||||||||||||||||||||
Balance at March 31, 2018 | 8,700 | $ | 87 | 3,018 | $ | 30 | $ | 394,313 | $ | (1,509 | ) | $ | 44,005 | $ | 436,926 | |||||||||||||||||
Net income | 23,535 | 23,535 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 32 | — | 2,224 | 2,224 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 3,079 | 3,079 | ||||||||||||||||||||||||||||||
Repurchase of Class A Common Stock | (97 | ) | (1 | ) | (23,084 | ) | (23,085 | ) | ||||||||||||||||||||||||
Currency translation adjustment | (7 | ) | (7 | ) | ||||||||||||||||||||||||||||
Balance at June 30, 2018 | 8,635 | $ | 86 | 3,018 | $ | 30 | $ | 399,616 | $ | (1,516 | ) | $ | 44,456 | $ | 442,672 | |||||||||||||||||
Net income | 38,007 | 38,007 | ||||||||||||||||||||||||||||||
Stock options exercised and restricted shares activities | 2 | — | 15 | 15 | ||||||||||||||||||||||||||||
Stock-based compensation expense | 2,425 | 2,425 | ||||||||||||||||||||||||||||||
Repurchase of Class A Common Stock | (162 | ) | (1 | ) | (48,585 | ) | (48,586 | ) | ||||||||||||||||||||||||
Currency translation adjustment | 13 | 13 | ||||||||||||||||||||||||||||||
Balance at September 29, 2018 | 8,475 | $ | 85 | 3,018 | $ | 30 | $ | 402,056 | $ | (1,503 | ) | $ | 33,878 | $ | 434,546 | |||||||||||||||||
Thirteen weeks ended | ||||||||
March 30, 2019 | March 31, 2018 | |||||||
Cash flows provided by (used in) operating activities: | ||||||||
Net income | $ | 23,694 | $ | 9,310 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 12,863 | 12,820 | ||||||
Loss on disposal of property, plant and equipment | 271 | 143 | ||||||
Lease expense | 859 | — | ||||||
Bad debt expense | — | 47 | ||||||
Stock-based compensation expense | 2,066 | 1,491 | ||||||
Deferred income taxes | 1,029 | 178 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (20,452 | ) | (16,615 | ) | ||||
Inventories | (15,353 | ) | (8,166 | ) | ||||
Prepaid expenses, income tax receivable and other assets | 1,336 | (4,689 | ) | |||||
Accounts payable | 14,400 | 2,299 | ||||||
Accrued expenses and other current liabilities | (6,465 | ) | (6,575 | ) | ||||
Net lease liabilities | (624 | ) | — | |||||
Other liabilities | 19 | (658 | ) | |||||
|
|
|
| |||||
Net cash provided by (used in) operating activities | 13,643 | (10,415 | ) | |||||
|
|
|
| |||||
Cash flows used in investing activities: | ||||||||
Purchases of property, plant and equipment | (22,080 | ) | (11,477 | ) | ||||
Proceeds from disposal of property, plant and equipment | 1 | 2 | ||||||
Change in restricted cash | 28 | 111 | ||||||
|
|
|
| |||||
Net cash used in investing activities | (22,051 | ) | (11,364 | ) | ||||
|
|
|
| |||||
Cash flows provided by financing activities: | ||||||||
Repurchase of Class A Common Stock | — | (16,640 | ) | |||||
Proceeds from exercise of stock options | 2,768 | 19,304 | ||||||
Cash paid on note payable | (72 | ) | (63 | ) | ||||
Net proceeds from sale of investment shares | 200 | 186 | ||||||
|
|
|
| |||||
Net cash provided by financing activities | 2,896 | 2,787 | ||||||
|
|
|
| |||||
Change in cash and cash equivalents | (5,512 | ) | (18,992 | ) | ||||
Cash and cash equivalents at beginning of year | 108,399 | 65,637 | ||||||
|
|
|
| |||||
Cash and cash equivalents at end of period | $ | 102,887 | $ | 46,645 | ||||
|
|
|
| |||||
Supplemental disclosure of cash flow information: | ||||||||
Income taxes paid | $ | 207 | $ | 459 | ||||
|
|
|
| |||||
Cash paid for amounts included in measurement of lease liabilities | $ | 901 | $ | — | ||||
|
|
|
| |||||
Right-of-use assets obtained in exchange for lease obligations | $ | 27,037 | — | |||||
|
|
|
| |||||
Decrease in accounts receivable for ASU2014-09 adoption | $ | — | $ | (1,310 | ) | |||
|
|
|
| |||||
Increase in accounts payable for purchase of property, plant and equipment | $ | 118 | $ | 2,741 | ||||
|
|
|
|
Thirty-nine weeks ended | ||||||||
September 28, 2019 | September 29, 2018 | |||||||
Cash flows provided by operating activities: | ||||||||
Net income | $ | 96,279 | $ | 70,852 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 41,841 | 38,860 | ||||||
Impairment of assets | 243 | 517 | ||||||
Loss on disposal of property, plant and equipment | 449 | 45 | ||||||
Change in ROU assets | 2,734 | — | ||||||
Bad debt (recovery) expense | 53 | 39 | ||||||
Stock-based compensation expense | 9,043 | 6,995 | ||||||
Deferred income taxes | 14,047 | 12,818 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (26,532 | ) | (20,412 | ) | ||||
Inventories | (16,847 | ) | (20,836 | ) | ||||
Prepaid expenses, income tax receivable and other assets | (13,903 | ) | (8,385 | ) | ||||
Accounts payable | 22,388 | 20,560 | ||||||
Accrued expenses and other current liabilities | 14,949 | 6,309 | ||||||
Change in operating lease liability | (2,270 | ) | — | |||||
Other liabilities | 207 | 693 | ||||||
Net cash provided by operating activities | 142,681 | 108,055 | ||||||
Cash flows used in investing activities: | ||||||||
Purchases of property, plant and equipment | (66,760 | ) | (38,752 | ) | ||||
Proceeds from disposal of property, plant and equipment | 144 | 2 | ||||||
Cash paid for acquisition of intangible assets | — | 5 | ||||||
Investment in Dogfish Head, net of cash acquired | (165,517 | ) | — | |||||
Other investing activities | (10 | ) | 131 | |||||
Net cash used in investing activities | (232,143 | ) | (38,614 | ) | ||||
Cash flows provided by (used in) financing activities: | ||||||||
Repurchase of Class A Common Stock | — | (88,311 | ) | |||||
Proceeds from exercise of stock options | 7,619 | 21,528 | ||||||
Net cash paid on note payable and capital lease | (246 | ) | (78 | ) | ||||
Cash borrowed on line of credit | 97,000 | — | ||||||
Cash paid on line of credit | (97,000 | ) | — | |||||
Net proceeds from sale of investment shares | 818 | 670 | ||||||
Net cash provided (used in) by financing activities | 8,191 | (66,191 | ) | |||||
Change in cash and cash equivalents | (81,271 | ) | 3,250 | |||||
Cash and cash equivalents at beginning of year | 108,399 | 65,637 | ||||||
Cash and cash equivalents at end of period | $ | 27,128 | $ | 68,887 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Non cash consideration issued in Dogfish Head Transaction (Refer to Note B) | $ | 144,743 | $ | — | ||||
Income taxes paid | $ | 16,759 | $ | 11,252 | ||||
Cash paid for amounts included in measurement of lease liabilities | $ | 3,443 | $ | — | ||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | 41,678 | $ | — | ||||
Right-of-use assets obtained in exchange for capital lease obligations | $ | 2,837 | $ | — | ||||
Interest paid on revolving credit facility | $ | 349 | $ | — | ||||
Decrease in accounts receivable for ASU 2014-09 adoption | $ | — | $ | (1,310 | ) | |||
Decrease in accounts payable for purchase of property, plant and equipment | $ | (2,076 | ) | $ | 3,346 | |||
A. | Organization and Basis of Presentation |
B. | Dogfish Head Brewery Transaction |
Total (In Thousands) | ||||
Cash and cash equivalents | $ | 7,476 | ||
Accounts receivable | 8,081 | |||
Inventories | 9,286 | |||
Prepaid expenses and other current assets | 847 | |||
Property, plant and equipment | 106,964 | |||
Goodwill | 108,846 | |||
Brand | 98,500 | |||
Other intangible assets | 3,800 | |||
Other assets | 378 | |||
Total assets acquired | 344,178 | |||
Accounts payable | 3,861 | |||
Accrued expenses and other current liabilities | 4,085 | |||
Deferred income taxes | 18,437 | |||
Other liabilities | 59 | |||
Total liabilities assumed | 26,442 | |||
Net assets acquired | $ | 317,736 | ||
Cash consideration | $ | 172,993 | ||
Nominal value of equity issued | 162,999 | |||
Fair Value reduction due to liquidity | (18,256 | ) | ||
Estimated total purchase price | $ | 317,736 | ||
(i) | Depreciation and amortization expenses were updated to reflect the fair value adjustments to Dogfish Head property, plant and equipment and intangible assets beginning December 31, 2017. |
(ii) | Transaction costs incurred in the thirteen and thirty-nine weeks ended September 28, 2019 have been re-assigned to the first period of the comparative fiscal year. |
(iii) | Interest expense has been included at a rate of approximately 3% which is consistent with the borrowing rate on the Company’s current line of credit. |
(iv) | The tax effects of the pro forma adjustments at an estimated statutory rate of 25.6%. |
(v) | Earnings per share amounts are calculated using the Company’s historical weighted average shares outstanding plus the 429,291 shares issued in the merger. |
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
Net revenue | $ | 379,205 | $ | 335,954 | $ | 1,002,939 | $ | 852,611 | ||||||||
Net income | $ | 46,445 | $ | 42,638 | $ | 103,105 | $ | 77,541 | ||||||||
Basic earnings per share | $ | 3.84 | $ | 3.51 | $ | 8.74 | $ | 6.36 | ||||||||
Diluted earnings per share | $ | 3.79 | $ | 3.48 | $ | 8.64 | $ | 6.30 |
C. | Goodwill and Intangible Assets |
Thirty-nine weeks ended | ||||||||
September 28, | September 29, | |||||||
2019 | 2018 | |||||||
Goodwill as of beginning of period | $ | 3,683 | $ | 3,683 | ||||
Acquired goodwill | 108,846 | — | ||||||
Impairment of goodwill | — | — | ||||||
Goodwill as of end of period | $ | 112,529 | $ | 3,683 | ||||
No impairment of existing goodwill was recorded in the period.
As of September 28, 2019 | As of December 29, 2018 | |||||||||||||||||||||||||||
Estimated Useful | Gross Carrying | Accumulated | Net Book | Gross Carrying | Accumulated | Net Book | ||||||||||||||||||||||
Life (Years) | Value | Amortization | Value | Value | Amortization | Value | ||||||||||||||||||||||
Custmer Relationships | 15 | $ | 3,800 | $ | (64 | ) | $ | 3,736 | $ | — | $ | — | $ | — | ||||||||||||||
Trade Names | Indefinite | 100,599 | — | 100,599 | 2,099 | — | 2,099 | |||||||||||||||||||||
Total intangible assets | $ | 104,399 | $ | (64 | ) | $ | 104,335 | $ | 2,099 | $ | — | $ | 2,099 | |||||||||||||||
Fiscal Year | Amount | |||
Remainder of 2019 | $ | 63 | ||
2020 | 253 | |||
2021 | 253 | |||
2022 | 253 | |||
2023 | 253 | |||
2024 | 253 |
D. | Recent Accounting Pronouncements |
C. Revenue Recognition
E. | Revenue Recognition |
Shipments The Company benefited from a reduction in federal excise taxes of $6.6 million and $4.8 million for the quarter increased atthirty-nine weeks ended September 28, 2019 and September 29, 2018, respectively, as a significantly higher rate than depletionsresult of the Tax Cuts and resulted in significantly higher distributor inventory asJobs Act of March 30, 2019 when compared to March 31, 2018. The Company believes distributor inventory as2017.
F. | Inventories |
September 28, 2019 | December 29, 2018 | |||||||
(in thousands) | ||||||||
Current inventory: | ||||||||
Raw materials | $ | 51,322 | $ | 44,655 | ||||
Work in process | 13,270 | 8,252 | ||||||
Finished goods | 28,040 | 17,342 | ||||||
Total current inventory | 92,632 | 70,249 | ||||||
Long term inventory | 15,369 | 11,619 | ||||||
Total inventory | $ | 108,001 | $ | 81,868 | ||||
March 30, | December 29, | |||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Current inventory: | ||||||||
Raw materials | $ | 51,207 | $ | 44,655 | ||||
Work in process | 9,198 | 8,252 | ||||||
Finished goods | 25,456 | 17,342 | ||||||
|
|
|
| |||||
Total current inventory | 85,861 | 70,249 | ||||||
Long term inventory | 11,360 | 11,619 | ||||||
|
|
|
| |||||
Total inventory | $ | 97,221 | $ | 81,868 | ||||
|
|
|
|
E. Leases
G. | Leases |
Classification | Leases | |||||
Right-of-use assets | (in thousands) | |||||
Operating lease assets | Operating right-of-use assets | $ | 38,943 | |||
Capital lease assets | Property, plant and equipment, net | 2,663 | ||||
Lease Liabilities | ||||||
Current | ||||||
Operating lease liabilities | Current operating lease liabilities | 2,599 | ||||
Capital lease liabilities | Accrued expenses and other current l iabilities | 541 | ||||
Non-current | ||||||
Operating lease liabilities | Non-current operating lease liabilities | 41,215 | ||||
Capital lease liabilities | Other liabilities | 2,178 |
Aggregate lease expense for the thirty-nine weeks ended September 28, 2019 was $4.9 million, consisting of $3.9 million in lease expense for lease liabilities recorded on the Company’s balance sheet and $1.0 million in short-term lease expense.
Operating | Weighted-Average | |||||||
Leases | Remaining Term in Years | |||||||
(in thousands) | ||||||||
2019 | $ | 3,482 | ||||||
2020 | 4,946 | |||||||
2021 | 4,809 | |||||||
2022 | 4,513 | |||||||
2023 | 4,395 | |||||||
After 2023 | 13,179 | |||||||
|
| |||||||
Total lease payments | 35,324 | |||||||
Less imputed interest (based on 3.4% weighted-average discount rate) | (4,436 | ) | ||||||
|
|
|
| |||||
Present value of lease liability | $ | 30,888 | 7.5 | |||||
|
|
|
|
The Company has additional
Operating | Capital | Weighted-Average Remaining Term in Years | ||||||||||||||
Leases | Leases | Operating Leases | Capital Leases | |||||||||||||
(in thousands) | ||||||||||||||||
2019 | $ | 1,466 | $ | 155 | ||||||||||||
2020 | 2,642 | 626 | ||||||||||||||
2021 | 5,754 | 626 | ||||||||||||||
2022 | 5,453 | 626 | ||||||||||||||
2023 | 5,313 | 626 | ||||||||||||||
After 2023 | 32,191 | 288 | ||||||||||||||
Total lease payments | 52,819 | 2,947 | ||||||||||||||
Less imputed interest (based on 3.5% weighted-average discount rate) | (9,005 | ) | (228 | ) | ||||||||||||
Present value of lease liability | $ | 43,814 | $ | 2,719 | 4.7 | 9.9 |
follows:
Leases | ||||
(in thousands) | ||||
2019 | $ | 4,446 | ||
2020 | 4,530 | |||
2021 | 4,370 | |||
2022 | 3,559 | |||
2023 | 1,672 | |||
Thereafter | 7,582 | |||
Total | $ | 26,159 | ||
H. | Net Income per Share |
Thirteen weeks ended | ||||||||
March 30, | March 31, | |||||||
2019 | 2018 | |||||||
(in thousands, except per share data) | ||||||||
Net income | $ | 23,694 | $ | 9,310 | ||||
|
|
|
| |||||
Allocation of net income for basic: | ||||||||
Class A Common Stock | $ | 17,525 | $ | 6,872 | ||||
Class B Common Stock | 5,942 | 2,380 | ||||||
Unvested participating shares | 227 | 58 | ||||||
|
|
|
| |||||
$ | 23,694 | $ | 9,310 | |||||
Weighted average number of shares for basic: | ||||||||
Class A Common Stock | 8,606 | 8,714 | ||||||
Class B Common Stock* | 2,918 | 3,018 | ||||||
Unvested participating shares | 111 | 73 | ||||||
|
|
|
| |||||
11,635 | 11,805 | |||||||
Net income per share for basic: | ||||||||
Class A Common Stock | $ | 2.04 | $ | 0.79 | ||||
|
|
|
| |||||
Class B Common Stock | $ | 2.04 | $ | 0.79 | ||||
|
|
|
|
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | |||||||||||||||
Net income | $ | 44,729 | $ | 38,007 | $ | 96,279 | $ | 70,852 | ||||||||
Allocation of net income for basic: | ||||||||||||||||
Class A Common Stock | $ | 33,776 | $ | 27,786 | $ | 71,761 | $ | 52,051 | ||||||||
Class B Common Stock | 10,581 | 9,800 | 23,652 | 18,169 | ||||||||||||
Unvested participating shares | 372 | 421 | 866 | 632 | ||||||||||||
$ | 44,729 | $ | 38,007 | $ | 96,279 | $ | 70,852 | |||||||||
Weighted average number of shares for basic: | ||||||||||||||||
Class A Common Stock | 9,136 | 8,557 | 8,797 | 8,646 | ||||||||||||
Class B Common Stock* | 2,862 | 3,018 | 2,899 | 3,018 | ||||||||||||
Unvested participating shares | 101 | 130 | 106 | 105 | ||||||||||||
12,099 | 11,705 | 11,802 | 11,769 | |||||||||||||
Net income per share for basic: | ||||||||||||||||
Class A Common Stock | $ | 3.70 | $ | 3.25 | $ | 8.16 | $ | 6.02 | ||||||||
Class B Common Stock | $ | 3.70 | $ | 3.25 | $ | 8.16 | $ | 6.02 | ||||||||
* | Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on November 1, 2018 and100,000 shares to Class A Common stock on August 8, 2019 with the ending number of shares reflecting the weighted average for the period. |
Thirteen weeks ended | ||||||||||||||||||||||||
March 30, 2019 | March 30, 2018 | |||||||||||||||||||||||
Earnings to | Earnings to | |||||||||||||||||||||||
Common | Common | |||||||||||||||||||||||
Shareholders | Common Shares | EPS | Shareholders | Common Shares | EPS | |||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||
As reported—basic | $ | 17,525 | 8,606 | $ | 2.04 | $ | 6,872 | 8,714 | $ | 0.79 | ||||||||||||||
Add: effect of dilutive potential common shares | ||||||||||||||||||||||||
Share-based awards | — | 112 | — | 99 | ||||||||||||||||||||
Class B Common Stock | 5,942 | 2,918 | 2,380 | 3,018 | ||||||||||||||||||||
Net effect of unvested participating shares | 2 | — | 1 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Net income per common share—diluted | $ | 23,469 | 11,636 | $ | 2.02 | $ | 9,253 | 11,831 | $ | 0.78 | ||||||||||||||
|
|
|
|
|
|
|
|
Weighted-average
Thirteen weeks ended | ||||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
Earnings to Common Shareholders | Common Shares | EPS | Earnings to Common Shareholders | Common Shares | EPS | |||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||
As reported — basic | $ | 33,776 | 9,136 | $ | 3.70 | $ | 27,786 | 8,557 | $ | 3.25 | ||||||||||||||
Add: effect of dilutive potential common shares | ||||||||||||||||||||||||
Share-based awards | — | 152 | — | 127 | ||||||||||||||||||||
Class B Common Stock | 10,581 | 2,862 | 9,800 | 3,018 | ||||||||||||||||||||
Net effect of unvested participating shares | 4 | — | 5 | — | ||||||||||||||||||||
Net income per common share — diluted | $ | 44,361 | 12,150 | $ | 3.65 | $ | 37,591 | 11,702 | $ | 3.21 | ||||||||||||||
Thirty-nine weeks ended | ||||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||
Earnings to Common Shareholders | Common Shares | EPS | Earnings to Common Shareholders | Common Shares | EPS | |||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||
As reported — basic | $ | 71,761 | 8,797 | $ | 8.16 | $ | 52,051 | 8,646 | $ | 6.02 | ||||||||||||||
Add: effect of dilutive potential common shares | ||||||||||||||||||||||||
Share-based awards | — | 127 | — | 109 | ||||||||||||||||||||
Class B Common Stock | 23,652 | 2,899 | 18,169 | 3,018 | ||||||||||||||||||||
Net effect of unvested participating shares | 8 | — | 5 | — | ||||||||||||||||||||
Net income per common share — diluted | $ | 95,421 | 11,823 | $ | 8.07 | $ | 70,225 | 11,773 | $ | 5.96 |
G. Comprehensive Income or Loss
I. | Comprehensive Income or Loss |
H. Commitments and Contingencies
J. | Commitments and Contingencies |
On October 11, 2018, the Company amended an existing brewing services agreement to include a minimum capacity availability commitment by the third-party brewery. The amendment grants the Company the right to extend the agreement beyond the December 31, 2021 termination date on an annual basis through December 31, 2025. The amendment requires the Company to pay up to $4 million in both 2018 and 2019 for capital improvements at the third party’s brewing facilities. At March 30, 2019, $3.5 million of the 2018 payment was included in prepaid expenses and other current assets, and the $4 million 2019 payment was included in the Company’s contractual obligations.
I. Income Taxes
K. | Income Taxes |
penalties recorded in other liabilities.
Thirteen weeks ended | ||||||||
March 30, | March 31, | |||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Summary of income tax provision (benefit) | ||||||||
Tax provision based on net income | $ | 7,909 | $ | 2,571 | ||||
Benefit of ASU2016-09 | (1,775 | ) | (2,723 | ) | ||||
|
|
|
| |||||
Total income tax provision (benefit) | $ | 6,134 | $ | (152 | ) | |||
|
|
|
|
Thirteen weeks ended | ||||||||
September 28, | September 29, | |||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Summary of income tax provision | ||||||||
Tax provision based on net income | $ | 16,047 | $ | 13,671 | ||||
Accounting Method Changes | — | (4,529 | ) | |||||
Benefit of ASU 2016-09 | (1,842 | ) | (129 | ) | ||||
Total income tax provision | $ | 14,205 | $ | 9,013 | ||||
Thirty-nine weeks ended | ||||||||
September 28, | September 29, | |||||||
2019 | 2018 | |||||||
(in thousands) | ||||||||
Summary of income tax provision | ||||||||
Tax provision based on net income | $ | 34,455 | $ | 24,969 | ||||
Accounting Method Changes | — | (4,529 | ) | |||||
Benefit of ASU 2016-09 | (3,870 | ) | (3,980 | ) | ||||
Total income tax provision | $ | 30,585 | $ | 16,460 |
J. Revolving Line2018 and no similar
ASU
L. | Revolving Line of Credit |
K. Fair Value Measures
M. | Fair Value Measures |
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
L. Common Stock and Stock-Based Compensation
respectively
N. | Common Stock and Stock-Based Compensation |
Aggregate Intrinsic | ||||||||||||||||
Weighted-Average | Weighted-Average Remaining | Value | ||||||||||||||
Shares | Exercise Price | Contractual Term in Years | (in thousands) | |||||||||||||
Outstanding at December 29, 2018 | 366,829 | $ | 155.75 | |||||||||||||
Granted | 15,524 | 312.74 | ||||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | — | — | ||||||||||||||
Exercised | (33,983 | ) | 85.78 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Outstanding at March 30, 2019 | 348,370 | $ | 169.58 | 5.63 | $ | 43,879 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Exercisable at March 30, 2019 | 135,926 | $ | 127.73 | 3.43 | $ | 22,717 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Vested and expected to vest at March 30, 2019 | 316,274 | $ | 166.69 | 5.49 | $ | 40,747 | ||||||||||
|
|
|
|
|
|
|
|
Shares | Weighted-Average Exercise Price | Weighted-Average RemainingContractual Term in Years | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding at December 29, 2018 | 366,829 | $ | 155.75 | |||||||||||||
Granted | 31,286 | 313.56 | ||||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | — | — | ||||||||||||||
Exercised | (72,937 | ) | 104.47 | |||||||||||||
Outstanding at September 28, 2019 | 325,178 | $ | 182.44 | 5.83 | $ | 55,196 | ||||||||||
Exercisable at September 28, 2019 | 102,613 | $ | 139.16 | 3.96 | $ | 21,859 | ||||||||||
Vested and expected to vest at September 28, 2019 | 300,886 | $ | 180.81 | 5.76 | $ | 51,563 | ||||||||||
Number of Shares | Weighted Average Fair Value | |||||||
Non-vested at December 29, 2018 | 126,720 | $ | 192.74 | |||||
Granted | 24,579 | $ | 258.92 | |||||
Vested | (20,230 | ) | $ | 163.83 | ||||
Forfeited | (611 | ) | $ | 134.61 | ||||
|
| |||||||
Non-vested at March 30, 2019 | 130,458 | $ | 209.96 | |||||
|
|
stock awards:
Number of Shares | Weighted Average Fair Value | |||||||
Non-vested at December 29, 2018 | 126,720 | $ | 192.74 | |||||
Granted | 30,410 | $ | 269.91 | |||||
Vested | (33,201 | ) | $ | 188.63 | ||||
Forfeited | (1,550 | ) | $ | 142.00 | ||||
Non-vested at September 28, 2019 | 122,379 | $ | 213.67 | |||||
M. Subsequent Events
O. | Employee Retirement Plans |
P. | Related Party Transactions |
Q. | Subsequent Events |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Thirteen Weeks Ended (in thousands, except per barrel) | ||||||||||||||||||||||||||||||||||||
March 30, 2019 | March 31, 2018 | Amount change | % change | Per barrel change | ||||||||||||||||||||||||||||||||
Barrels sold | 1,076 | 813 | 264 | 32.5 | % | |||||||||||||||||||||||||||||||
Per barrel | % of net revenue | Per barrel | % of net revenue | |||||||||||||||||||||||||||||||||
Net revenue | $ | 251,651 | $ | 233.77 | 100.0 | % | $ | 190,457 | $ | 234.37 | 100.0 | % | $ | 61,194 | 32.1 | % | $ | (0.60 | ) | |||||||||||||||||
Cost of goods | 127,111 | 118.08 | 50.5 | % | 94,360 | 116.12 | 49.5 | % | 32,751 | 34.7 | % | 1.96 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Gross profit | 124,540 | 115.69 | 49.5 | % | 96,097 | 118.25 | 50.5 | % | 28,443 | 29.6 | % | (2.56 | ) | |||||||||||||||||||||||
Advertising, promotional and selling expenses | 71,723 | 66.63 | 28.5 | % | 67,521 | 83.09 | 35.5 | % | 4,202 | 6.2 | % | (16.46 | ) | |||||||||||||||||||||||
General and administrative expenses | 23,374 | 21.71 | 9.3 | % | 19,338 | 23.80 | 10.2 | % | 4,036 | 20.9 | % | (2.09 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total operating expenses | 95,097 | 88.34 | 37.8 | % | 86,859 | 106.89 | 45.6 | % | 8,238 | 9.5 | % | (18.55 | ) | |||||||||||||||||||||||
Operating income | 29,443 | 27.35 | 11.7 | % | 9,238 | 11.37 | 4.9 | % | 20,205 | 218.7 | % | 15.98 | ||||||||||||||||||||||||
Other income (expense), net | 385 | 0.36 | 0.2 | % | (80 | ) | (0.10 | ) | 0.0 | % | 465 | -581.3 | % | 0.46 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Income before income tax expense (benefit) | 29,828 | 27.71 | 11.9 | % | 9,158 | 11.27 | 4.8 | % | 20,670 | 225.7 | % | 16.44 | ||||||||||||||||||||||||
Income tax expense (benefit) | 6,134 | 5.70 | 2.4 | % | (152 | ) | (0.19 | ) | -0.1 | % | 6,286 | -4135.5 | % | 5.89 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net income | $ | 23,694 | $ | 22.01 | 9.4 | % | $ | 9,310 | $ | 11.46 | 4.9 | % | $ | 14,384 | 154.5 | % | $ | 10.55 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended (in thousands, except per barrel) | ||||||||||||||||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | Amount change | % change | Per barrel change | ||||||||||||||||||||||||||||||||
Barrels sold | 1,594 | 1,338 | 255 | 19.1 | % | |||||||||||||||||||||||||||||||
Per barrel | % of net revenue | Per barrel | % of net revenue | |||||||||||||||||||||||||||||||||
Net revenue | $ | 378,466 | $ | 237.46 | 100.0 | % | $ | 306,870 | $ | 229.27 | 100.0 | % | $ | 71,596 | 23.3 | % | $ | 8.19 | ||||||||||||||||||
Cost of goods | 190,631 | 119.61 | 50.4 | % | 149,643 | 111.80 | 48.8 | % | 40,988 | 27.4 | % | 7.81 | ||||||||||||||||||||||||
Gross profit | 187,835 | 117.85 | 49.6 | % | 157,227 | 117.47 | 51.2 | % | 30,608 | 19.5 | % | 0.38 | ||||||||||||||||||||||||
Advertising, promotional and selling expenses | 96,570 | 60.59 | 25.5 | % | 87,765 | 65.57 | 28.6 | % | 8,805 | 10.0 | % | (4.98 | ) | |||||||||||||||||||||||
General and administrative expenses | 31,429 | 19.72 | 8.3 | % | 22,734 | 16.99 | 7.4 | % | 8,695 | 38.2 | % | 2.73 | ||||||||||||||||||||||||
Total operating expenses | 127,999 | 80.31 | 33.8 | % | 110,499 | 82.56 | 36.0 | % | 17,500 | 15.8 | % | (2.25 | ) | |||||||||||||||||||||||
Operating income | 59,836 | 37.54 | 15.8 | % | 46,728 | 34.91 | 15.2 | % | 13,108 | 28.1 | % | 2.63 | ||||||||||||||||||||||||
Other (expense) income | (902 | ) | (0.57 | ) | -0.2 | % | 292 | 0.22 | 0.1 | % | (1,194 | ) | -408.9 | % | (0.79 | ) | ||||||||||||||||||||
Income before income tax expense | 58,934 | 36.98 | 15.6 | % | 47,020 | 35.13 | 15.3 | % | 11,914 | 25.3 | % | 1.85 | ||||||||||||||||||||||||
Income tax expense | 14,205 | 8.91 | 3.8 | % | 9,013 | 6.73 | 2.9 | % | 5,192 | 57.6 | % | 2.18 | ||||||||||||||||||||||||
Net income | $ | 44,729 | $ | 28.06 | 11.8 | % | $ | 38,007 | $ | 28.40 | 12.4 | % | $ | 6,722 | 17.7 | % | $ | (0.34 | ) | |||||||||||||||||
Shipments for the quarter increased at a significantly higher rate than depletions and resulted in significantly higher distributor inventory as of March 30, 2019 when compared to March 31, 2018.
increases and the impact of Dogfish Head brand higher revenue per barrel.
higher temporary labor requirements at Company-owned breweries to support increased variety pack volumes, partially offset by price increases and cost saving initiatives at Company-owned breweries.
the addition of Dogfish Head brand related expenses beginning July 3, 2019.
administrative expenses beginning July 3, 2019.
Thirty-nine Weeks Ended (in thousands, except per barrel) | Amount change | % change | Per barrel change | |||||||||||||||||||||||||||||||||
September 28, 2019 | September 29, 2018 | |||||||||||||||||||||||||||||||||||
Barrels sold | 4,045 | 3,328 | 717 | 21.5 | % | |||||||||||||||||||||||||||||||
Per barrel | % of net revenue | Per barrel | % of net revenue | |||||||||||||||||||||||||||||||||
Net revenue | $ | 948,524 | $ | 234.51 | 100.0 | % | $ | 770,427 | $ | 231.51 | 100.0 | % | $ | 178,097 | 23.1 | % | $ | 3.00 | ||||||||||||||||||
Cost of goods | 477,147 | 117.97 | 50.3 | % | 375,133 | 112.73 | 48.7 | % | 102,014 | 27.2 | % | 5.24 | ||||||||||||||||||||||||
Gross profit | 471,377 | 116.54 | 49.7 | % | 395,294 | 118.79 | 51.3 | % | 76,083 | 19.2 | % | (2.25 | ) | |||||||||||||||||||||||
Advertising, promotional and selling expenses | 262,372 | 64.87 | 27.7 | % | 241,796 | 72.66 | 31.4 | % | 20,576 | 8.5 | % | (7.79 | ) | |||||||||||||||||||||||
General and administrative expenses | 81,552 | 20.16 | 8.6 | % | 65,951 | 19.82 | 8.6 | % | 15,601 | 23.7 | % | 0.34 | ||||||||||||||||||||||||
Impairment of assets | 243 | 0.06 | 0.0 | % | 517 | 0.16 | 0.1 | % | (274 | ) | -53.0 | % | (0.10 | ) | ||||||||||||||||||||||
Total operating expenses | 344,167 | 85.09 | 36.3 | % | 308,264 | 92.63 | 40.0 | % | 35,903 | 11.6 | % | (7.54 | ) | |||||||||||||||||||||||
Operating income | 127,210 | 31.45 | 13.4 | % | 87,030 | 26.15 | 11.3 | % | 40,180 | 46.2 | % | 5.30 | ||||||||||||||||||||||||
Other (expense) income, net | (346 | ) | (0.09 | ) | 0.0 | % | 282 | 0.08 | 0.0 | % | (628 | ) | -222.7 | % | (0.17 | ) | ||||||||||||||||||||
Income before income tax expense | 126,864 | 31.37 | 13.4 | % | 87,312 | 26.24 | 11.3 | % | 39,552 | 45.3 | % | 5.13 | ||||||||||||||||||||||||
Income tax expense | 30,585 | 7.56 | 3.2 | % | 16,460 | 4.95 | 2.1 | % | 14,125 | 85.8 | % | 2.61 | ||||||||||||||||||||||||
Net income | $ | 96,279 | $ | 23.80 | 10.2 | % | $ | 70,852 | $ | 21.29 | 9.2 | % | $ | 25,427 | 35.9 | % | $ | 2.51 | ||||||||||||||||||
gross profit per barrel of $2.25 was primarily the result of an increase in cost of goods sold per barrel partially offset by an increase in net revenue per barrel. Gross margin was 49.7% for the thirty-nine weeks ended September 28, 2019, as compared to 51.3% for the thirty-nine weeks ended September 29, 2018. The decline in gross margin primarily resulted from higher processing costs due to increased production at third party breweries and higher temporary labor requirements at Company-owned breweries to support increased variety pack volumes, partially offset by price increases and cost saving initiatives at Company-owned breweries.
20192020 Outlook
As disclosed
There were noreliable information about the Company’s results of operations and financial condition. No material changes to the Company’s critical accounting policies, as previously disclosed, have occurred during the three-monthfirst nine months of 2019, except for the addition of the Company’s Business Combinations policy and the Company’s Valuation of Goodwill and Indefinite Lived Intangible Assets policy as discussed below and in Note B and Note C to the interim consolidated financial statements included in Item 1 of this Form
not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. CONTROLS AND PROCEDURES
Item 4. | CONTROLS AND PROCEDURES |
PART II. | OTHER INFORMATION |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
During the thirteenthirty-nine weeks ended March 30,September 28, 2019, the Company did not repurchase any shares of its Class A Common Stock under the previously announced repurchase program.
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||||
December 30, 2018 to February 2, 2019 | 116 | $ | 127.05 | — | $ | 90,335 | ||||||||||
February 3, 2019 to March 2, 2019 | 219 | 115.78 | — | 90,335 | ||||||||||||
March 3, 2019 to March 30, 2019 | 13 | 187.54 | — | 90,335 | ||||||||||||
|
|
|
| |||||||||||||
Total | 348 | $ | 122.22 | — | $ | 90,335 | ||||||||||
|
|
|
|
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||||||||
December 30, 2018 to February 2, 2019 | 116 | $ | 127.05 | — | $ | 90,335 | ||||||||||
February 3, 2019 to March 2, 2019 | 219 | 115.78 | — | 90,335 | ||||||||||||
March 3, 2019 to March 30, 2019 | 13 | 187.54 | — | 90,335 | ||||||||||||
March 31, 2019 to May 4, 2019 | 107 | 182.03 | — | 90,335 | ||||||||||||
May 5, 2019 to June 1, 2019 | 79 | 175.67 | — | 90,335 | ||||||||||||
June 2, 2019 to June 29, 2019 | 32 | 187.54 | — | 90,335 | ||||||||||||
June 30, 2019 to August 3, 2019 | 73 | 114.14 | — | 90,335 | ||||||||||||
August 4, 2019 to August 31, 2019 | 261 | 135.26 | — | 90,335 | ||||||||||||
September 1, 2019 to September 28, 2019 | — | — | — | 90,335 | ||||||||||||
Total | 900 | $ | 139.47 | — | 90,335 | |||||||||||
Item 3. DEFAULTS UPON SENIOR SECURITIES
Item 3. | DEFAULTS UPON SENIOR SECURITIES |
Item 4. MINE SAFETY DISCLOSURES
Item 4. | MINE SAFETY DISCLOSURES |
Item 5. | OTHER INFORMATION |
Item 6. | EXHIBITS |
|
| |||
Exhibit No. | Title | |||
| ||||
**10.1 | ||||
| ||||
**10.2 | ||||
**10.3 | ||||
**10.4 | ||||
**10.5 | ||||
*31.1 | ||||
| ||||
*31.2 | ||||
| ||||
*32.1 |
| ||||
*32.2 | ||||
*101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||
*101.SCH | XBRL Taxonomy Extension Schema Document | |||
*101.CAL | XBRL Taxonomy Calculation Linkbase Document | |||
*101.LAB | XBRL Taxonomy Label Linkbase Document | |||
*101.PRE | XBRL Taxonomy Presentation Linkbase Document | |||
*101.DEF | XBRL Definition Linkbase Document | |||
*104 | The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 28, 2019, formatted in Inline XBRL (formatted as Inline XBRL and contained in Exhibit 101). |
* | Filed with this report |
** | Designates management contract or compensatory plan or arrangement |
THE BOSTON BEER COMPANY, INC. (Registrant) | ||||||||
Date: October 29, 2019 | /s/ David A. Burwick | |||||||
David A. Burwick | ||||||||
President and Chief Executive Officer | ||||||||
| ||||||||
(principal executive officer) |
Date: October 29, 2019 | /s/ Frank H. Smalla | |||||
Frank H. Smalla | ||||||
Chief Financial Officer | ||||||
| ||||||
(principal financial officer) |
21