Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Document and Entity [Abstract] | ||
Entity Registrant Name | CRAFT BREW ALLIANCE, INC. | |
Entity Central Index Key | 0000892222 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,466,244 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 11,782 | $ 1,200 |
Accounts receivable, net | 18,357 | 29,998 |
Inventory, net | 21,500 | 17,216 |
Other current assets | 4,025 | 3,121 |
Total current assets | 55,664 | 51,535 |
Property, equipment and leasehold improvements, net | 110,924 | 113,189 |
Operating lease right-of-use assets | 23,841 | 0 |
Goodwill | 21,935 | 21,986 |
Trademarks | 44,211 | 44,289 |
Intangible and other assets, net | 5,473 | 5,048 |
Total assets | 262,048 | 236,047 |
Current liabilities: | ||
Accounts payable | 19,475 | 17,552 |
Accrued salaries, wages and payroll taxes | 5,881 | 5,635 |
Refundable deposits | 3,467 | 4,123 |
Deferred revenue | 3,251 | 6,015 |
Other accrued expenses | 8,142 | 3,618 |
Current portion of long-term debt and finance lease obligations | 1,498 | 919 |
Total current liabilities | 41,714 | 37,862 |
Deferred revenue, non-current | 20,300 | 0 |
Long-term debt and finance lease obligations, net of current portion | 33,124 | 46,573 |
Fair value of derivative financial instruments | 332 | 116 |
Deferred income tax liability, net | 9,562 | 12,381 |
Long-term operating lease liabilities | 24,269 | 0 |
Other liabilities | 1,188 | 2,680 |
Total liabilities | 130,489 | 99,612 |
Commitments and contingencies (Note 15) | ||
Common shareholders' equity: | ||
Common stock, $0.005 par value. Authorized 50,000,000 shares; issued and outstanding 19,466,244 and 19,382,641 | 97 | 97 |
Additional paid-in capital | 145,276 | 144,013 |
Accumulated other comprehensive loss | (247) | (86) |
Accumulated deficit | (13,567) | (7,589) |
Total common shareholders' equity | 131,559 | 136,435 |
Total liabilities and common shareholders' equity | $ 262,048 | $ 236,047 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, issued (in shares) | 19,465,244 | 19,382,641 |
Common shares outstanding (in shares) | 19,465,244 | 19,382,641 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 50,349 | $ 55,639 | $ 163,932 | $ 170,977 |
Less excise taxes | 3,188 | 2,750 | 9,220 | 8,778 |
Net sales | 47,161 | 52,889 | 154,712 | 162,199 |
Cost of sales | 33,857 | 36,190 | 101,938 | 108,302 |
Gross profit | 13,304 | 16,699 | 52,774 | 53,897 |
Selling, general and administrative expenses | 16,465 | 16,712 | 61,411 | 47,317 |
Operating income (loss) | (3,161) | (13) | (8,637) | 6,580 |
Interest expense | (616) | (107) | (1,428) | (348) |
Other income (expense), net | 24 | (13) | 57 | 42 |
Income (loss) before income taxes | (3,753) | (133) | (10,008) | 6,274 |
Income tax provision (benefit) | (2,529) | (194) | (4,030) | 1,600 |
Net income (loss) | $ (1,224) | $ 61 | $ (5,978) | $ 4,674 |
Basic and diluted net income (loss) per share (usd per share) | $ (0.06) | $ 0 | $ (0.31) | $ 0.24 |
Shares used in basic per share calculations (in shares) | 19,466 | 19,370 | 19,435 | 19,338 |
Shares used in diluted per share calculations (in shares) | 19,466 | 19,545 | 19,435 | 19,525 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (1,224) | $ 61 | $ (5,978) | $ 4,674 |
Unrealized gain (loss) on derivative hedge transactions, net of tax | (25) | 38 | (161) | 167 |
Comprehensive income (loss) | $ (1,249) | $ 99 | $ (6,139) | $ 4,841 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2017 | 19,310,000 | ||||
Balance at Dec. 31, 2017 | $ 130,791 | $ 96 | $ 142,196 | $ (164) | $ (11,337) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation, net of shares withheld for tax payments | 485 | 485 | |||
Unrealized gain (loss) on derivative financial instruments, net of tax | 83 | 83 | |||
Net income (loss) | 161 | 161 | |||
Balance (in shares) at Mar. 31, 2018 | 19,310,000 | ||||
Balance at Mar. 31, 2018 | 131,126 | $ 96 | 142,681 | (81) | (11,570) |
Balance (in shares) at Dec. 31, 2017 | 19,310,000 | ||||
Balance at Dec. 31, 2017 | 130,791 | $ 96 | 142,196 | (164) | (11,337) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Unrealized gain (loss) on derivative financial instruments, net of tax | 167 | ||||
Net income (loss) | 4,674 | ||||
Balance (in shares) at Sep. 30, 2018 | 19,382,000 | ||||
Balance at Sep. 30, 2018 | 136,632 | $ 97 | 143,589 | 3 | (7,057) |
Balance (in shares) at Mar. 31, 2018 | 19,310,000 | ||||
Balance at Mar. 31, 2018 | 131,126 | $ 96 | 142,681 | (81) | (11,570) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares under stock plans, net of shares withheld for tax payments (in shares) | 23,000 | ||||
Issuance of shares under stock plans, net of shares withheld for tax payments | 206 | $ 0 | 206 | ||
Stock-based compensation, net of shares withheld for tax payments (in shares) | 29,000 | ||||
Stock-based compensation, net of shares withheld for tax payments | 202 | $ 1 | 201 | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | 46 | 46 | |||
Tax payments related to stock-based awards | (84) | (84) | |||
Net income (loss) | 4,452 | 4,452 | |||
Balance (in shares) at Jun. 30, 2018 | 19,362,000 | ||||
Balance at Jun. 30, 2018 | 135,948 | $ 97 | 143,004 | (35) | (7,118) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares under stock plans, net of shares withheld for tax payments (in shares) | 20,000 | ||||
Issuance of shares under stock plans, net of shares withheld for tax payments | 221 | $ 0 | 221 | ||
Stock-based compensation, net of shares withheld for tax payments (in shares) | 0 | ||||
Stock-based compensation, net of shares withheld for tax payments | 372 | $ 0 | 372 | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | 38 | 38 | |||
Tax payments related to stock-based awards | (8) | (8) | |||
Net income (loss) | 61 | 61 | |||
Balance (in shares) at Sep. 30, 2018 | 19,382,000 | ||||
Balance at Sep. 30, 2018 | $ 136,632 | $ 97 | 143,589 | 3 | (7,057) |
Balance (in shares) at Dec. 31, 2018 | 19,382,641 | 19,383,000 | |||
Balance at Dec. 31, 2018 | $ 136,435 | $ 97 | 144,013 | (86) | (7,589) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation, net of shares withheld for tax payments (in shares) | 29,000 | ||||
Stock-based compensation, net of shares withheld for tax payments | 418 | $ 0 | 418 | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | (47) | (47) | |||
Tax payments related to stock-based awards | (157) | (157) | |||
Net income (loss) | (7,364) | (7,364) | |||
Balance (in shares) at Mar. 31, 2019 | 19,412,000 | ||||
Balance at Mar. 31, 2019 | $ 129,285 | $ 97 | 144,274 | (133) | (14,953) |
Balance (in shares) at Dec. 31, 2018 | 19,382,641 | 19,383,000 | |||
Balance at Dec. 31, 2018 | $ 136,435 | $ 97 | 144,013 | (86) | (7,589) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Unrealized gain (loss) on derivative financial instruments, net of tax | (161) | ||||
Net income (loss) | $ (5,978) | ||||
Balance (in shares) at Sep. 30, 2019 | 19,465,244 | 19,466,000 | |||
Balance at Sep. 30, 2019 | $ 131,559 | $ 97 | 145,276 | (247) | (13,567) |
Balance (in shares) at Mar. 31, 2019 | 19,412,000 | ||||
Balance at Mar. 31, 2019 | 129,285 | $ 97 | 144,274 | (133) | (14,953) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation, net of shares withheld for tax payments (in shares) | 53,000 | ||||
Stock-based compensation, net of shares withheld for tax payments | 835 | $ 0 | 835 | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | (89) | (89) | |||
Tax payments related to stock-based awards | (168) | (168) | |||
Net income (loss) | 2,610 | 2,610 | |||
Balance (in shares) at Jun. 30, 2019 | 19,465,000 | ||||
Balance at Jun. 30, 2019 | 132,473 | $ 97 | 144,941 | (222) | (12,343) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation, net of shares withheld for tax payments (in shares) | 1,000 | ||||
Stock-based compensation, net of shares withheld for tax payments | 336 | $ 0 | 335 | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | (25) | (25) | |||
Net income (loss) | $ (1,224) | (1,224) | |||
Balance (in shares) at Sep. 30, 2019 | 19,465,244 | 19,466,000 | |||
Balance at Sep. 30, 2019 | $ 131,559 | $ 97 | $ 145,276 | $ (247) | $ (13,567) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Unrealized gains (losses) on derivative financial instruments, tax | $ 9 | $ 31 | $ 16 | $ 13 | $ 15 | $ 29 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (5,978) | $ 4,674 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 7,993 | 7,985 |
Gain on sale or disposal of Property, equipment and leasehold improvements | (8) | (549) |
Deferred income taxes | (2,764) | (673) |
Stock-based compensation | 1,589 | 1,058 |
Lease expense | 171 | |
Other | (189) | 206 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 11,975 | (676) |
Inventories | (3,851) | (2,905) |
Other current assets | (1,120) | 2,360 |
Accounts payable and other accrued expenses | 8,986 | 4,922 |
Deferred revenue | 17,537 | 1,950 |
Accrued salaries, wages and payroll taxes | 247 | (1,128) |
Refundable deposits | (114) | (560) |
Net cash provided by operating activities | 34,474 | 16,664 |
Cash flows from investing activities: | ||
Expenditures for Property, equipment and leasehold improvements | (10,478) | (6,216) |
Proceeds from sale of Property, equipment and leasehold improvements | 55 | 22,998 |
Restricted cash from sale of Property, equipment and leasehold improvements | 0 | 515 |
Business combinations and asset acquisitions | (274) | 0 |
Net cash provided by (used in) investing activities | (10,697) | 17,297 |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 5,192 | 0 |
Principal payments on debt and finance lease obligations | (798) | (520) |
Net repayments under revolving line of credit | (17,264) | (22,199) |
Proceeds from issuances of common stock | 0 | 427 |
Tax payments related to stock-based awards | (325) | (92) |
Net cash used in financing activities | (13,195) | (22,384) |
Increase in Cash, cash equivalents and restricted cash | 10,582 | 11,577 |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 1,200 | 579 |
End of period | 11,782 | 12,156 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,414 | 396 |
Cash paid for income taxes, net | 559 | 450 |
Cash paid for amounts included in measurement of lease liabilities | 2,369 | |
Supplemental disclosure of non-cash information: | ||
Right-of-use assets obtained in exchange for operating lease obligations | 24,898 | |
Right-of-use assets obtained in exchange for finance lease obligations | 2,538 | |
Purchases of Property, equipment and leasehold improvements included in Accounts payable at end of period | $ 937 | $ 205 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Report”). These consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements are unaudited but, in the opinion of management, reflect all material adjustments necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods presented. All such adjustments were of a normal, recurring nature. The results of operations for such interim periods are not necessarily indicative of the results of operations for the full year. Reclassifications Certain reclassifications have been made to the prior year's data to conform to the current year's presentation. None of the changes affect our previously reported consolidated Net sales, Gross profit, Operating income (loss), Net income (loss) or Basic and diluted net income (loss) per share. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2018-15 In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are still evaluating the effect of the adoption of ASU 2018-15. ASU 2018-13 In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 removes, modifies and adds certain disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are still evaluating the effect of the adoption of ASU 2018-13. ASU 2017-12 In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 refines and expands hedge accounting for both financial and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. ASU 2017-12 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018, on a prospective basis. We did not adopt ASU 2017-12 as it was not applicable to our financial position, results of operations or cash flows. ASU 2017-04 In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment." ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, if applicable. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. The same impairment test also applies to any reporting unit with a zero or negative carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We do not expect the adoption of ASU 2017-04 to have a material effect on our financial position, results of operations or cash flows. ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)." ASU 2016-13 addresses accounting for credit losses for assets that are not measured at fair value through net income on a recurring basis. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted for fiscal years beginning after December 15, 2018. We do not expect the adoption of ASU 2016-13 to have a material effect on our financial position, results of operations or cash flows. ASU 2016-02, ASU 2018-10 and ASU 2018-11 In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases." ASU 2018-10 provides narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. ASU 2018-10 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements." ASU 2018-11 provides an optional transition method, that allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The new leases guidance affects all companies and organizations that lease assets, and requires them to record on their balance sheet right-of-use ("ROU") assets and lease liabilities for the rights and obligations created by those leases. Under ASC 842, a lease is an arrangement that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The new guidance retains a distinction between finance leases and operating leases, while requiring companies to recognize both types of leases on their balance sheet. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the criteria for distinguishing between capital leases and operating leases in legacy U.S. GAAP - ASC 840. Lessor accounting remains substantially the same as ASC 840, but with some targeted improvements to align lessor accounting with the lessee accounting model and with the revised revenue recognition guidance under ASC 606. The new standard and amendments require new qualitative and quantitative disclosures for both lessees and lessors. On January 1, 2019, we adopted ASC 842 and elected the optional transition method under which we initially applied the standard on that date without adjusting amounts for prior periods, which we continue to present in accordance with ASC 840, including related disclosures. We evaluated the potential cumulative effect of applying the new leases guidance and determined that such an adjustment would be immaterial. In connection with our adoption, we: • elected the package of three practical expedients available under the transition provisions which allowed us to: (i) not reassess whether expired or existing contracts were or contained leases, (ii) not reassess the lease classification for expired or existing leases, and (iii) not reassess initial direct costs for existing leases. • determined the land easement practical expedient was not applicable. • as applicable, used hindsight for specified determinations and assessments in applying the new leases guidance. • did not separate lease and associated non-lease components for transitioned leases, but instead are accounting for them together as a single lease component. • elected to utilize the recognition exemption for short-term leases of one year or less at inception Our adoption did not change the classification of lease-related expenses in the Consolidated Statements of Operations, and we do not expect significant changes to our pattern of expense recognition. As a result, we expect our adoption will not materially affect our cash flows. The adjustments to our Consolidated Balance Sheets upon adoption of ASC 842, effective January 1, 2019 were as follows (in thousands): Balance at Adjustments due to Balance at Assets Accounts receivable $ 29,998 $ 300 $ 30,298 Other current assets 3,121 (216 ) 2,905 Property, equipment and leasehold improvements, net 113,189 (2,538 ) 110,651 Operating lease right-of-use assets — 19,726 19,726 Intangible and other assets, net 5,048 1,140 6,188 Liabilities Other accrued expenses 3,618 269 3,887 Long-term lease liabilities — 18,143 18,143 |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash We maintain cash balances with financial institutions that may exceed federally insured limits. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2019 and December 31, 2018 , we did no t have any cash equivalents. As part of our cash management system, we use a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued but not yet presented to banks may result in overdraft balances for accounting purposes. As of September 30, 2019 there were no bank overdrafts. As of December 31, 2018 there were $0.6 million of bank overdrafts included in Accounts payable on our Consolidated Balance Sheet. Changes in bank overdrafts from period to period are reported in the Consolidated Statements of Cash Flows as a component of operating activities within Accounts payable and Other accrued expenses. Cash and cash equivalents that are restricted as to withdrawal or use under terms of certain contractual agreements are recorded in Cash, cash equivalents and restricted cash on our Consolidated Balance Sheets. As of September 30, 2019 we no longer had any restricted cash. Restricted cash of $0.5 million at December 31, 2018 represents funds held in an escrow account from the sale of our Woodinville brewery related to a lien; the lien was resolved in our favor and the restriction was removed in the third quarter of 2019. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of standard cost or net realizable value. We regularly review our inventories for the presence of obsolete product attributed to age, seasonality and quality. If our review indicates a reduction in utility below the product’s carrying value, we reduce the product to a new cost basis. We record the cost of inventory for which we estimate we have more than a twelve-month supply as a component of Intangible and other assets, net on our Consolidated Balance Sheets. Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 8,741 $ 7,146 Work in process 3,370 3,219 Finished goods 5,740 4,319 Packaging materials 2,486 891 Promotional merchandise 600 1,139 Brewpub food, beverages and supplies 563 502 $ 21,500 $ 17,216 Work in process is beer held in fermentation tanks prior to the filtration and packaging process. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We lease office space, restaurant and production facilities, warehouse and storage space, land and equipment under operating leases that expire at various dates through the year ending December 31, 2064. Certain leases contain renewal options for varying periods and escalation clauses for adjusting rent to reflect changes in price indices or scheduled adjustments. We exercise judgment in determining the reasonably certain lease term based on the provisions of the underlying agreement, the economic value of leasehold improvements and other relevant factors. Certain leases require us to pay for insurance, taxes and maintenance applicable to the leased property. Under the terms of the land lease for our New Hampshire Brewery, we hold a first right of refusal to purchase the property should the lessor decide to sell the property. We lease equipment under finance leases that expire at various dates through the year ending December 31, 2024. Ownership of the leased equipment transfers to us at the end of each lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. If our leases do not provide an implicit rate, we develop an estimated incremental borrowing rate at the commencement date based on the estimated rate at which we would borrow, in the current economic environment, an amount equal to the lease payments over a similar term on a collateralized basis which is used to in determine the present value of lease payments. There were no new operating lease obligations recognized at adoption in comparison to our operating lease obligations disclosed as of December 31, 2018 . Our accounting for finance (formerly capital) leases is substantially unchanged. As described further in Note 2, we adopted ASC 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting under ASC 840. Lease-related liabilities consisted of the following (in thousands): September 30, December 31, Operating lease liabilities: Current lease liabilities included in Other accrued expenses $ 863 $ — Long-term lease liabilities 24,269 — Total operating lease liabilities 25,132 — Financing lease liabilities: Current portion included in Current portion of long-term debt and finance lease obligations 391 477 Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion 879 1,101 Total financing lease liabilities 1,270 1,578 Total lease liabilities $ 26,402 $ 1,578 Weighted-average remaining lease term: Operating leases 25 years Finance leases 4 years Weighted-average discount rate: Operating leases 4.72 % Finance leases 3.56 % As of September 30, 2019 , the maturities of our operating lease liabilities were as follows (in thousands): Operating Leases Remainder of 2019 $ 518 2020 2,002 2021 2,028 2022 2,091 2023 1,958 Thereafter 34,234 Total minimum lease payments 42,831 Less: present value adjustment (17,699 ) Operating lease liabilities $ 25,132 As of September 30, 2019 , the maturities of our finance lease liabilities were as follows (in thousands): Finance Leases Remainder of 2019 $ 180 2020 333 2021 266 2022 199 2023 199 Thereafter 199 Total minimum lease payments 1,376 Less: present value adjustment (106 ) Finance lease liabilities $ 1,270 Components of lease cost were as follows (in thousands): Three Months Ended Nine Months Ended Operating lease cost (1) $ 904 $ 2,642 Finance lease cost: Amortization of right-of-use asset 42 127 Interest on lease liabilities 15 37 Sublease income (69 ) (138 ) Total lease cost $ 892 $ 2,668 (1) Includes short-term, month-to-month lease and variable lease costs, which were immaterial. Total future minimum lease payments as of December 31, 2018 consisted of (in thousands): Operating Lease Obligations Capital Lease Obligations 2019 $ 11,208 $ 529 2020 1,937 333 2021 1,863 266 2022 1,793 199 2023 1,465 199 Thereafter 25,446 199 $ 43,712 1,725 Amount representing interest (148 ) $ 1,577 |
Leases | Leases We lease office space, restaurant and production facilities, warehouse and storage space, land and equipment under operating leases that expire at various dates through the year ending December 31, 2064. Certain leases contain renewal options for varying periods and escalation clauses for adjusting rent to reflect changes in price indices or scheduled adjustments. We exercise judgment in determining the reasonably certain lease term based on the provisions of the underlying agreement, the economic value of leasehold improvements and other relevant factors. Certain leases require us to pay for insurance, taxes and maintenance applicable to the leased property. Under the terms of the land lease for our New Hampshire Brewery, we hold a first right of refusal to purchase the property should the lessor decide to sell the property. We lease equipment under finance leases that expire at various dates through the year ending December 31, 2024. Ownership of the leased equipment transfers to us at the end of each lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. If our leases do not provide an implicit rate, we develop an estimated incremental borrowing rate at the commencement date based on the estimated rate at which we would borrow, in the current economic environment, an amount equal to the lease payments over a similar term on a collateralized basis which is used to in determine the present value of lease payments. There were no new operating lease obligations recognized at adoption in comparison to our operating lease obligations disclosed as of December 31, 2018 . Our accounting for finance (formerly capital) leases is substantially unchanged. As described further in Note 2, we adopted ASC 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting under ASC 840. Lease-related liabilities consisted of the following (in thousands): September 30, December 31, Operating lease liabilities: Current lease liabilities included in Other accrued expenses $ 863 $ — Long-term lease liabilities 24,269 — Total operating lease liabilities 25,132 — Financing lease liabilities: Current portion included in Current portion of long-term debt and finance lease obligations 391 477 Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion 879 1,101 Total financing lease liabilities 1,270 1,578 Total lease liabilities $ 26,402 $ 1,578 Weighted-average remaining lease term: Operating leases 25 years Finance leases 4 years Weighted-average discount rate: Operating leases 4.72 % Finance leases 3.56 % As of September 30, 2019 , the maturities of our operating lease liabilities were as follows (in thousands): Operating Leases Remainder of 2019 $ 518 2020 2,002 2021 2,028 2022 2,091 2023 1,958 Thereafter 34,234 Total minimum lease payments 42,831 Less: present value adjustment (17,699 ) Operating lease liabilities $ 25,132 As of September 30, 2019 , the maturities of our finance lease liabilities were as follows (in thousands): Finance Leases Remainder of 2019 $ 180 2020 333 2021 266 2022 199 2023 199 Thereafter 199 Total minimum lease payments 1,376 Less: present value adjustment (106 ) Finance lease liabilities $ 1,270 Components of lease cost were as follows (in thousands): Three Months Ended Nine Months Ended Operating lease cost (1) $ 904 $ 2,642 Finance lease cost: Amortization of right-of-use asset 42 127 Interest on lease liabilities 15 37 Sublease income (69 ) (138 ) Total lease cost $ 892 $ 2,668 (1) Includes short-term, month-to-month lease and variable lease costs, which were immaterial. Total future minimum lease payments as of December 31, 2018 consisted of (in thousands): Operating Lease Obligations Capital Lease Obligations 2019 $ 11,208 $ 529 2020 1,937 333 2021 1,863 266 2022 1,793 199 2023 1,465 199 Thereafter 25,446 199 $ 43,712 1,725 Amount representing interest (148 ) $ 1,577 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions O n October 10, 2018, we purchased the intellectual property assets of Cisco Brewers ("Cisco") and we increased our ownership interest in Wynwood Brewing Co. ("Wynwood") from 24.5% to 100% . The purchase transaction of Cisco was accounted for as an asset acquisition. The increase in our ownership interest in Wynwood was accounted for under the acquisition method of accounting as a step acquisition. As required by this method, we remeasured our preexisting 24.5% equity interest to its acquisition-date fair value. On November 29, 2018, we acquired substantially all the assets of Appalachian Mountain Brewery ("AMB"). The acquisition of AMB was accounted for under the acquisition method of accounting and all assets acquired and liabilities assumed were recorded at their respective acquisition-date fair values. Given the close proximity of the closing dates of the acquisitions to the end of our fiscal year and the potential for working capital adjustments that may impact recognized amounts, the allocation of the purchase price to the underlying net assets was preliminary as of December 31, 2018 . During 2019 , we recorded immaterial adjustments to the allocation of the purchase price for the Cisco asset purchase and the AMB and Wynwood acquisitions. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values recorded as of December 31, 2018 . We expect to finalize these amounts during the fourth quarter of 2019 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of September 30, 2019 and December 31, 2018 , Anheuser-Busch, LLC ("A-B") owned approximately 31.2% and 31.3% , respectively, of our outstanding common stock. Transactions with A-B, Ambev and Anheuser-Busch Worldwide Investments, LLC (“ABWI”) In December 2015, we partnered with Ambev, the Brazilian subsidiary of Anheuser-Busch InBev SA, to distribute Kona beers into Brazil. In August 2016, we also entered into an International Distribution Agreement with ABWI, an affiliate of A-B, pursuant to which ABWI distributes our malt beverage products in jurisdictions outside the United States, subject to the terms and conditions of our prior agreement with our other international distributor, CraftCan Travel LLC, and certain other limitations. Contract Brewing Arrangement with Anheuser-Busch Companies, LLC ("ABC") On January 30, 2018, we entered into a Contract Brewing Agreement (the “Brewing Agreement”) with ABC, an affiliate of A-B, pursuant to which we brew, package, and palletize certain malt beverage products of A-B's craft breweries at our Portland, Oregon, and Portsmouth, New Hampshire, breweries as selected by ABC. Under the terms of the Brewing Agreement, ABC pays us a per barrel fee that varies based on the annual volume of the specified product brewed by us, plus (a) our actual incremental costs of brewing the product and (b) certain capital costs and costs of graphics and labeling that we incur in connection with the brewed products. The Brewing Agreement, as extended, will expire on December 31, 2019, unless the arrangement is extended at the mutual agreement of the parties. The Brewing Agreement contains specified termination rights, including, among other things, the right of either party to terminate the Brewing Agreement if (i) the other party fails to perform any material obligation under the Brewing Agreement or any other agreement between the parties, subject to certain cure rights, or (ii) the Master Distributor Agreement is terminated. Transactions with A-B, Ambev, ABWI and ABC consisted of the following (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Gross sales to A-B and Ambev $ 38,740 $ 41,737 $ 129,779 $ 129,588 International distribution fee earned from ABWI 812 850 2,436 2,550 International distribution fee from ABWI, recorded in Deferred revenue, net 19,188 650 17,564 1,950 Contract brewing fee earned from ABC 139 821 781 1,679 Margin fee paid to A-B, classified as a reduction of Sales 574 601 1,839 1,806 Inventory management and other fees paid to A-B, classified in Cost of sales 98 97 295 287 Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses — 192 — 192 Amounts due to or from A-B and ABWI were as follows (in thousands): September 30, December 31, Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement $ 12,631 $ 17,946 Amounts due from ABWI and A-B related to international distribution fee and media reimbursement — 6,000 Refundable deposits due to A-B (3,712 ) (2,840 ) Amounts due to A-B for services rendered (6,725 ) (5,140 ) Net amount due from A-B and ABWI $ 2,194 $ 15,966 Transactions with Wynwood Brewing Co. ("Wynwood") As of September 30, 2019 and December 31, 2018 , Wynwood was a wholly owned subsidiary. During the nine -month period ended September 30, 2018 , we owned a 24.5% interest in Wynwood. The carrying value of our investment was $2.0 million as of September 30, 2018 . Transactions with Wynwood prior to its becoming a wholly owned subsidiary consisted of the following (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Master distributor fee earned $ — $ 3 $ — $ 22 Share of loss, classified as a component of Other income (expense), net — 22 — 44 Refund of investment, classified as a reduction in the carrying value of the equity method investment — — — 23 Related Party Operating Leases We lease our headquarters office space, banquet space and storage facilities located in Portland, land and certain equipment from two limited liability companies, both of whose members include our former Board Chair, who is also a significant shareholder, and his brother, who continues to be employed by us. This lease is included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to these lessors were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 41 $ 41 $ 123 $ 123 We hold lease and sublease obligations for certain office space and the land underlying the brewery and pub location in Kona, Hawaii, with a company whose owners have a charitable foundation that owns more than 5% of our common stock. The sublease contracts expire on various dates through 2020 , with an extension at our option for two five -year periods. We exercised our option to extend these leases commencing in September 2020. These leases are included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to this lessor were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 172 $ 145 $ 511 $ 435 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following (in thousands): September 30, 2019 December 31, 2018 Term loan, due September 30, 2023 $ 8,494 $ 8,823 Line of credit, due September 30, 2023 19,828 37,092 Secured borrowing, due June 21, 2026 5,030 — 33,352 45,915 Less current portion, term loan and secured borrowing (1,107 ) (442 ) $ 32,245 $ 45,473 Credit Agreement On October 10, 2018, we executed a First Amendment (the " First Amendment") to our Amended and Restated Credit Agreement with Bank of America, N.A. ("BofA") dated November 30, 2015 (the "Credit Agreement"). The Credit Agreement as amended by the First Amendment provides for a revolving line of credit (“Line of Credit”), including provisions for cash borrowings and up to $2.5 million notional amount of letters of credit, and a $10.8 million term loan (“Term Loan”). The primary changes effected by the First Amendment were to increase the maximum amount available under the Line of Credit from $40.0 million to $45.0 million and to extend the maturity date of the Line of Credit from November 30, 2020 to September 30, 2023, which is also the maturity date of the Term Loan. The maximum amount of the Line of Credit is subject to loan commitment reductions in the amount of $750,000 each quarter beginning March 31, 2020. The First Amendment also increased the limit on the total amount of investments that we may make in other craft brewers, other than the acquisition of all or substantially all of the assets or controlling ownership interests, from $5.0 million to $10.0 million . We may draw upon the Line of Credit for working capital and general corporate purposes. As of September 30, 2019 , we had $25.2 million in funds available to be drawn upon from our Line of Credit and $19.8 million of borrowings outstanding. At September 30, 2019 , $8.5 million was outstanding under the Term Loan. Under the Credit Agreement as in effect at September 30, 2019 , interest accrues at an annual rate based on the London Inter-Bank Offered Rate (“LIBOR”) Daily Floating Rate plus a marginal rate. The marginal rate varies from 0.75% to 2.00% for the Line of Credit and Term Loan based on our funded debt ratio. At September 30, 2019 , our marginal rate was 2.00% , resulting in an annual interest rate of 4.09% . Accrued interest for the Term Loan is due and payable monthly. Principal payments on the Term Loan are due monthly in accordance with an agreed-upon schedule set forth in the Credit Agreement, with any unpaid principal balance and unpaid accrued interest due and payable on September 30, 2023. The Credit Agreement authorizes acquisitions within the same line of business as long as we remain in compliance with the financial covenants of the Credit Agreement and there is at least $5.0 million of availability remaining on the Line of Credit following the acquisition. Effective May 7, 2019, we executed a Second Amendment to the Credit Agreement with BofA (the “Second Amendment”). EBITDA, as defined in the Second Amendment, includes certain adjustments specified in the Second Amendment. Per the Second Amendment, beginning July 1, 2019, and in each fiscal quarter thereafter, the maximum Consolidated Leverage Ratio is 3.50 to 1.00, as A-B did not make a Qualifying Offer as defined in the International Distribution Agreement. Effective September 25, 2019, we executed a Third Amendment to the Credit Agreement with BofA that allows us to net Consolidated Funded Indebtedness with Qualified Cash and Cash Equivalents on hand in an amount not to exceed $10 million , to arrive at Consolidated Net Funded Indebtedness . The Credit Agreement as in effect at September 30, 2019 required us to satisfy the following financial covenants: (i) a Consolidated Leverage Ratio (defined as Consolidated Net Funded Indebtedness to Consolidated EBITDA) of up to 3.50 to 1.00 and (ii) a Fixed Charge Coverage Ratio of at least 1.20 to 1.00. Failure to maintain compliance with these covenants is an event of default and would give BofA the right to declare the entire outstanding loan balance immediately due and payable. At September 30, 2019 , we were in compliance with all applicable contractual financial covenants of the Credit Agreement. Secured Borrowing On June 20, 2019, we executed an agreement with BofA, pursuant to our Master Lease Agreement, for $5.2 million in cash in exchange for a secured interest in our previously installed can line at our Portland brewing facility. The maturity date of the secured borrowing is June 21, 2026. We used the funds to pay down our Line of Credit. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Interest Rate Swap Contracts Our risk management objectives are to ensure that business and financial exposures to risk that have been identified and measured are minimized using the most effective and efficient methods to reduce, transfer and, when possible, eliminate such exposures. Operating decisions contemplate associated risks and management strives to structure proposed transactions to avoid or reduce risk whenever possible. We have assessed our vulnerability to certain business and financial risks, including interest rate risk associated with our variable-rate long-term debt. To mitigate this risk, effective January 23, 2014, we entered into an interest rate swap contract with BofA for 75% of the term loan ("Term Loan") balance, to hedge the variability of interest payments associated with our variable-rate borrowings under our Term Loan with BofA. The Term Loan contract and the interest rate swap terminate on September 30, 2023 . The Term Loan contract had a total notional value of $6.4 million as of September 30, 2019 . Through this swap agreement, we pay interest at a fixed rate of 2.86% and receive interest at a floating-rate of the one-month LIBOR, which was 2.04% at September 30, 2019 . Since the interest rate swap hedges the variability of interest payments on variable rate debt with similar terms, it qualifies for cash flow hedge accounting treatment. As of September 30, 2019 , an unrealized net loss of $0.3 million was recorded in Accumulated other comprehensive income (loss) as a result of these hedges. The effective portion of the gain or loss on the derivatives is reclassified into Interest expense in the same period during which we record Interest expense associated with the related debt. There was no hedge ineffectiveness during the first nine months of 2019 or 2018 . The fair value of our derivative instruments recorded as a component of Other liabilities on our Consolidated Balance Sheets was as follows (in thousands): September 30, December 31, Fair value of interest rate swap liability $ (332 ) $ (116 ) The effect of our interest rate swap contracts that were accounted for as a derivative instrument on our Consolidated Statements of Operations was as follows (in thousands): Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Accumulated OCI (Effective Portion) Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended 2019 $ (34 ) Interest expense $ 10 2018 $ 52 Interest expense $ 13 Nine Months Ended 2019 $ (216 ) Interest expense $ 22 2018 $ 225 Interest expense $ 52 See also Note 10. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories: • Level 1 – quoted prices in active markets for identical securities as of the reporting date; • Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and • Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value. The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following table summarizes liabilities measured at fair value on a recurring basis (in thousands): Fair Value at September 30, 2019 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (332 ) $ — $ (332 ) Fair Value at December 31, 2018 Interest rate swaps $ — $ (116 ) $ — $ (116 ) We did not have any assets measured at fair value on a recurring basis at September 30, 2019 or December 31, 2018 . The fair value of our interest rate swaps was based on quarterly statements from the issuing bank. There were no changes to our valuation techniques during the nine months ended September 30, 2019 . We believe the carrying amounts of Cash, cash equivalents and restricted cash, Accounts receivable, Other current assets, Accounts payable, Accrued salaries, wages and payroll taxes, and Other accrued expenses are a reasonable approximation of the fair value of those financial instruments because of the nature of the underlying transactions and the short-term maturities involved. We had fixed-rate debt outstanding as follows (in thousands): September 30, December 31, Fixed-rate debt on Consolidated Balance Sheets $ 6,300 $ 1,577 Estimated fair value of fixed-rate debt 6,576 1,591 We calculate the estimated fair value of our fixed-rate debt using a discounted cash flow methodology. Using estimated current interest rates based on a similar risk profile and duration (Level 2), the fixed cash flows are discounted and summed to compute the fair value of the debt. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following table disaggregates our Sales by major source (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Beer Related (1) Brewpubs Total Beer Related (1) Brewpubs Total Product sold through distributor agreements (2) $ 42,667 $ — $ 42,667 $ 139,700 $ — $ 139,700 Alternating proprietorship and contract brewing fees (3) 381 — 381 1,581 — 1,581 International distribution fees 812 — 812 2,436 — 2,436 Brewpubs (4) — 5,991 5,991 — 18,260 18,260 Other (5) 498 — 498 1,955 — 1,955 $ 44,358 $ 5,991 $ 50,349 $ 145,672 $ 18,260 $ 163,932 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Beer Related (1) Brewpubs Total Beer Related (1) Brewpubs Total Product sold through distributor agreements (2) $ 45,326 $ — $ 45,326 $ 139,141 $ — $ 139,141 Alternating proprietorship and contract brewing fees (3) 2,863 — 2,863 8,748 — 8,748 International distribution fees 850 — 850 2,550 — 2,550 Brewpubs (4) — 6,166 6,166 — 18,278 18,278 Other (5) 434 — 434 2,260 — 2,260 $ 49,473 $ 6,166 $ 55,639 $ 152,699 $ 18,278 $ 170,977 (1) Beer Related sales include sales to A-B subsidiaries including Ambev, ABWI and ABC. Sales to wholesalers through the A-B distributor agreement in the three-month period ended September 30, 2019 and 2018 represented 77.7% and 76.9% of our Sales, respectively. Sales to wholesalers through the A-B distributor agreement in the nine -month period ended September 30, 2019 and 2018 represented 80.0% and 77.2% of our Sales, respectively. (2) Product sold through distributor agreements included domestic and international sales of owned and non-owned brands pursuant to terms in our distributor agreements. (3) Alternating proprietorship fees ceased in the fourth quarter of 2018. (4) Brewpub sales include sales of promotional merchandise and sales of beer directly to customers. (5) Other sales include sales of beer related merchandise, hops and spent grain. Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally this occurs when the product arrives at distribution centers or when the wholesaler takes possession. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. We consider customer purchase orders, which in some cases are governed by a master agreement, to be the contracts with a customer. For each contract related to the production of beer, we consider the promise to transfer products, each of which is distinct, to be the identified performance obligation. The transaction price for each performance obligation is specifically identified within the contract with our customer and represents the fair standalone selling price. Discounts are recognized as a reduction to Sales at the time we recognize the revenue. We generally do not grant return privileges, except in limited and specific circumstances. As of September 30, 2019 , we had receivables related to contracts with customers of $18.4 million , net of the allowance for doubtful accounts of $25,000 . As of December 31, 2018 , we had receivables related to contracts with customers of $30.0 million , net of the allowance for doubtful accounts of $25,000 . As of September 30, 2019 and December 31, 2018 , contract liabilities, which consisted of obligations associated with our gift card programs, were $0.2 million and $0.4 million , respectively, and were included in Other accrued expenses on the Consolidated Balance Sheets. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of accounting pursuant to ASC 606. In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligation is distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. We entered into an International Distribution Agreement ("IDA") with A-B for the rights to serve as our exclusive distributor in international territories defined by the IDA for a 10 -year period. The IDA represents a single international license to all territories defined in the IDA. Revenue is recognized on a straight-line basis over the 10 -year term of the agreement. In accordance with ASC 606, we evaluate the factors used in our estimates of variable consideration to be received under contracts on a quarterly basis. We estimate variable consideration as the most likely amount to which we expect to be entitled. During the third quarter of 2019, we received the final payment under the IDA which resulted in total consideration received of $34.0 million . We consider the 10 -year contractual term of the IDA as the most likely term of the agreement and will recognize the revenue from these payments over that period. We believe that the possibility of a significant reversal of cumulative revenue recognized from this agreement under this conclusion is remote. Under the IDA, A-B has the right to issue purchase orders to distribute product in international territories defined by the IDA. Each purchase order placed under the IDA is a distinct performance obligation. The transaction price for each performance obligation is a sales-based royalty, which is recognized as revenue in accordance with the sales-based royalty exception. Accordingly, royalty revenue is recognized as the variability associated with the royalty is resolved, which is upon A-B's subsequent sale of our product. In cases where all conditions to a sale are not met at the time of sale, revenue recognition is deferred until all conditions are met. As of December 31, 2018 , Deferred revenue on our Consolidated Balance Sheets included $6.0 million related to the IDA. On August 23, 2019, ABC announced it would not make a Qualifying Offer and we received a one-time incentive payment in the amount of $20.0 million on that date as required by the terms of the IDA. For the nine months ended September 30, 2019 , we recognized $2.4 million as Sales, resulting in Deferred revenue of $23.6 million at September 30, 2019 . We expect to recognize an additional $0.8 million of Deferred revenue as Sales in the remainder of 2019, $3.2 million in 2020, and $19.5 million thereafter. |
Segment Results and Concentrati
Segment Results and Concentrations | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Results and Concentrations | Segment Results and Concentrations Our chief operating decision maker monitors Net sales and gross margins of our Beer Related operations and our Brewpubs operations. Beer Related operations include the brewing operations and related domestic and international beer and cider sales of our Kona, Widmer Brothers, Redhook, Omission, AMB, Cisco, and Wynwood beer brands and Square Mile cider brand. Brewpubs operations primarily include our brewpubs, some of which are located adjacent to our Beer Related operations. We do not track operating results beyond the gross margin level or our assets on a segment level. Net sales, Gross profit and gross margin information by segment was as follows (dollars in thousands): Three Months Ended September 30, 2019 Beer Brewpubs Total Net sales $ 41,170 $ 5,991 $ 47,161 Gross profit $ 12,692 $ 612 $ 13,304 Gross margin 30.8 % 10.2 % 28.2 % 2018 Net sales $ 46,723 $ 6,166 $ 52,889 Gross profit $ 16,261 $ 438 $ 16,699 Gross margin 34.8 % 7.1 % 31.6 % Nine Months Ended September 30, 2019 Beer Brewpubs Total Net sales $ 136,452 $ 18,260 $ 154,712 Gross profit $ 50,876 $ 1,898 $ 52,774 Gross margin 37.3 % 10.4 % 34.1 % 2018 Net sales $ 143,921 $ 18,278 $ 162,199 Gross profit $ 52,913 $ 984 $ 53,897 Gross margin 36.8 % 5.4 % 33.2 % The segments use many of the same assets. For internal reporting purposes, we do not allocate assets by segment and, therefore, no asset by segment information is provided to our chief operating decision maker. In preparing this financial information, certain expenses were allocated between the segments based on management estimates, while others were based on specific factors such as headcount. These factors can have a significant impact on the amount of Gross profit for each segment. While we believe we have applied a reasonable methodology, assignment of other reasonable cost allocations to each segment could result in materially different segment Gross profit. Sales to wholesalers through the A-B distributor agreement represented the following percentage of our Sales: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 77.7 % 76.9 % 80.0 % 77.2 % Receivables from A-B and ABWI represented the following percentage of our Accounts receivable balance: September 30, December 31, 68.8 % 79.8 % |
Significant Stock-Based Plan Ac
Significant Stock-Based Plan Activity and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Significant Stock-Based Plan Activity and Stock-Based Compensation | Significant Stock-Based Plan Activity and Stock-Based Compensation Stock-Based Compensation Stock-based compensation expense was recognized in our Consolidated Statements of Operations as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of sales $ (3 ) $ 42 $ 79 $ 108 Selling, general and administrative expense 339 329 1,510 950 Total stock-based compensation expense $ 336 $ 371 $ 1,589 $ 1,058 At September 30, 2019 , we had total unrecognized stock-based compensation expense of $1.8 million , which will be recognized over the weighted average remaining vesting period of 2.0 years . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The reconciliation between the number of shares used for the basic and diluted per share calculations, as well as other related information, is as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Weighted average common shares used for basic EPS 19,466 19,370 19,435 19,338 Dilutive effect of stock-based awards — 175 — 187 Shares used for diluted EPS 19,466 19,545 19,435 19,525 Stock-based awards not included in diluted per share calculations as they would be antidilutive 71 — 65 — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The disclosure of purchase commitments in these consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2018 . The disclosures below relate to legal commitments with significant events occurring during the nine months ended September 30, 2019 . General We are subject to various claims and pending or threatened lawsuits in the normal course of business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course of business or the proceeding described below will have a material adverse effect on our financial position, results of operations or cash flows, we cannot predict this with certainty. Legal On February 28, 2017 and March 6, 2017, respectively, two lawsuits, Sara Cilloni and Simone Zimmer v. Craft Brew Alliance, Inc., and Theodore Broomfield v. Kona Brewing Co. LLC, Kona Brew Enterprises, LLP, Kona Brewery LLC, and Craft Brew Alliance, Inc., were filed in the United States District Court for the Northern Division of California. On April 7, 2017, the two lawsuits were consolidated into a single complaint under the Broomfield case. The lawsuit alleges that the defendants misled customers regarding the state in which Kona Brewing Company beers are manufactured. On April 28, 2017, we filed a motion to dismiss the complaint, which was granted in part and denied in part on September 1, 2017. On September 26, 2018, the Court granted Plaintiffs’ motion for class certification, forming a class of persons within the state of California who purchased certain Kona Brewing Company products within the relevant statute of limitations period. Our motion for reconsideration was denied on October 16, 2018. On May 30, 2019, we announced our entry into a definitive settlement agreement, which received preliminary approval from the Court on June 14, 2019. We recorded a charge of $4.7 million on a pre-tax basis in the quarter ended March 31, 2019, based on our estimate of the probable costs of settling the litigation. The settlement claims period ended October 7, 2019. The total cost of settling the litigation is not expected to be materially in excess of $4.7 million . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 11, 2019, Craft Brew Alliance, Inc., a Washington corporation (the “Company”), Anheuser-Busch Companies, LLC, a Delaware limited liability company (“A-B”), and Barrel Subsidiary, Inc., a Washington corporation and wholly owned subsidiary of A-B (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Agreement”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving entity in the Merger as a direct subsidiary of A-B. A-B, which currently owns 31.2% of the outstanding shares of the Company’s common stock, has agreed to acquire the remaining outstanding shares for $16.50 per share in cash (the “Merger Consideration”). The Agreement provides that, at the Effective Time, each then outstanding option to purchase Shares (a “Company Option”), whether vested or unvested, shall, automatically and without any action on the part of the holder thereof, fully vest (to the extent unvested) and shall be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of (i) the number of Shares subject to the Company Option immediately prior to the Effective Time multiplied by (ii) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per Share of such Company Option. In addition, each then outstanding restricted stock unit award corresponding to Shares (a “Company RSU Award”) shall, automatically and without any required action on the part of the holder thereof, be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of (i) the number of Shares subject to such Company RSU Award (which number, for any performance-based Company RSU Awards, shall equal (x) for Company RSU Awards for the 2017-2019 performance cycle, thirty-three percent of the number of Shares that would be earned based on target performance and (y) for Company RSU Awards for the 2018-2020 and 2019-2021 performance cycles, one hundred percent of the number of Shares that would be earned on target performance), multiplied by (ii) the Merger Consideration. Completion of the transaction is contingent on the satisfaction of customary closing conditions, including approval by a majority of the outstanding shares held by shareholders not affiliated with A-B and certain regulatory approvals. The transaction is expected to close in 2020. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2018-15 In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are still evaluating the effect of the adoption of ASU 2018-15. ASU 2018-13 In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 removes, modifies and adds certain disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are still evaluating the effect of the adoption of ASU 2018-13. ASU 2017-12 In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 refines and expands hedge accounting for both financial and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. ASU 2017-12 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018, on a prospective basis. We did not adopt ASU 2017-12 as it was not applicable to our financial position, results of operations or cash flows. ASU 2017-04 In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment." ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, if applicable. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. The same impairment test also applies to any reporting unit with a zero or negative carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019, on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We do not expect the adoption of ASU 2017-04 to have a material effect on our financial position, results of operations or cash flows. ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)." ASU 2016-13 addresses accounting for credit losses for assets that are not measured at fair value through net income on a recurring basis. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted for fiscal years beginning after December 15, 2018. We do not expect the adoption of ASU 2016-13 to have a material effect on our financial position, results of operations or cash flows. ASU 2016-02, ASU 2018-10 and ASU 2018-11 In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases." ASU 2018-10 provides narrow amendments that clarify how to apply certain aspects of the guidance in ASU 2016-02. ASU 2018-10 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements." ASU 2018-11 provides an optional transition method, that allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The new leases guidance affects all companies and organizations that lease assets, and requires them to record on their balance sheet right-of-use ("ROU") assets and lease liabilities for the rights and obligations created by those leases. Under ASC 842, a lease is an arrangement that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The new guidance retains a distinction between finance leases and operating leases, while requiring companies to recognize both types of leases on their balance sheet. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the criteria for distinguishing between capital leases and operating leases in legacy U.S. GAAP - ASC 840. Lessor accounting remains substantially the same as ASC 840, but with some targeted improvements to align lessor accounting with the lessee accounting model and with the revised revenue recognition guidance under ASC 606. The new standard and amendments require new qualitative and quantitative disclosures for both lessees and lessors. On January 1, 2019, we adopted ASC 842 and elected the optional transition method under which we initially applied the standard on that date without adjusting amounts for prior periods, which we continue to present in accordance with ASC 840, including related disclosures. We evaluated the potential cumulative effect of applying the new leases guidance and determined that such an adjustment would be immaterial. In connection with our adoption, we: • elected the package of three practical expedients available under the transition provisions which allowed us to: (i) not reassess whether expired or existing contracts were or contained leases, (ii) not reassess the lease classification for expired or existing leases, and (iii) not reassess initial direct costs for existing leases. • determined the land easement practical expedient was not applicable. • as applicable, used hindsight for specified determinations and assessments in applying the new leases guidance. • did not separate lease and associated non-lease components for transitioned leases, but instead are accounting for them together as a single lease component. • elected to utilize the recognition exemption for short-term leases of one year or less at inception Our adoption did not change the classification of lease-related expenses in the Consolidated Statements of Operations, and we do not expect significant changes to our pattern of expense recognition. As a result, we expect our adoption will not materially affect our cash flows. The adjustments to our Consolidated Balance Sheets upon adoption of ASC 842, effective January 1, 2019 were as follows (in thousands): Balance at Adjustments due to Balance at Assets Accounts receivable $ 29,998 $ 300 $ 30,298 Other current assets 3,121 (216 ) 2,905 Property, equipment and leasehold improvements, net 113,189 (2,538 ) 110,651 Operating lease right-of-use assets — 19,726 19,726 Intangible and other assets, net 5,048 1,140 6,188 Liabilities Other accrued expenses 3,618 269 3,887 Long-term lease liabilities — 18,143 18,143 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of Adjustments to Consolidated Balance Sheets Upon Adoption of ASC 842 | The adjustments to our Consolidated Balance Sheets upon adoption of ASC 842, effective January 1, 2019 were as follows (in thousands): Balance at Adjustments due to Balance at Assets Accounts receivable $ 29,998 $ 300 $ 30,298 Other current assets 3,121 (216 ) 2,905 Property, equipment and leasehold improvements, net 113,189 (2,538 ) 110,651 Operating lease right-of-use assets — 19,726 19,726 Intangible and other assets, net 5,048 1,140 6,188 Liabilities Other accrued expenses 3,618 269 3,887 Long-term lease liabilities — 18,143 18,143 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 8,741 $ 7,146 Work in process 3,370 3,219 Finished goods 5,740 4,319 Packaging materials 2,486 891 Promotional merchandise 600 1,139 Brewpub food, beverages and supplies 563 502 $ 21,500 $ 17,216 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease-related Liabilities | Lease-related liabilities consisted of the following (in thousands): September 30, December 31, Operating lease liabilities: Current lease liabilities included in Other accrued expenses $ 863 $ — Long-term lease liabilities 24,269 — Total operating lease liabilities 25,132 — Financing lease liabilities: Current portion included in Current portion of long-term debt and finance lease obligations 391 477 Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion 879 1,101 Total financing lease liabilities 1,270 1,578 Total lease liabilities $ 26,402 $ 1,578 Weighted-average remaining lease term: Operating leases 25 years Finance leases 4 years Weighted-average discount rate: Operating leases 4.72 % Finance leases 3.56 % |
Maturities of Operating Lease Liabilities | As of September 30, 2019 , the maturities of our operating lease liabilities were as follows (in thousands): Operating Leases Remainder of 2019 $ 518 2020 2,002 2021 2,028 2022 2,091 2023 1,958 Thereafter 34,234 Total minimum lease payments 42,831 Less: present value adjustment (17,699 ) Operating lease liabilities $ 25,132 |
Maturities of Finance Lease Liabilities | As of September 30, 2019 , the maturities of our finance lease liabilities were as follows (in thousands): Finance Leases Remainder of 2019 $ 180 2020 333 2021 266 2022 199 2023 199 Thereafter 199 Total minimum lease payments 1,376 Less: present value adjustment (106 ) Finance lease liabilities $ 1,270 |
Components of Lease Cost | Components of lease cost were as follows (in thousands): Three Months Ended Nine Months Ended Operating lease cost (1) $ 904 $ 2,642 Finance lease cost: Amortization of right-of-use asset 42 127 Interest on lease liabilities 15 37 Sublease income (69 ) (138 ) Total lease cost $ 892 $ 2,668 (1) Includes short-term, month-to-month lease and variable lease costs, which were immaterial. hese leases are included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to this lessor were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 172 $ 145 $ 511 $ 435 This lease is included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to these lessors were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 41 $ 41 $ 123 $ 123 |
Schedule of Future Minimum Lease Payments for Capital Leases | Total future minimum lease payments as of December 31, 2018 consisted of (in thousands): Operating Lease Obligations Capital Lease Obligations 2019 $ 11,208 $ 529 2020 1,937 333 2021 1,863 266 2022 1,793 199 2023 1,465 199 Thereafter 25,446 199 $ 43,712 1,725 Amount representing interest (148 ) $ 1,577 |
Schedule of Future Minimum Lease Payments for Operating Leases | Total future minimum lease payments as of December 31, 2018 consisted of (in thousands): Operating Lease Obligations Capital Lease Obligations 2019 $ 11,208 $ 529 2020 1,937 333 2021 1,863 266 2022 1,793 199 2023 1,465 199 Thereafter 25,446 199 $ 43,712 1,725 Amount representing interest (148 ) $ 1,577 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions with related parties | Transactions with A-B, Ambev, ABWI and ABC consisted of the following (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Gross sales to A-B and Ambev $ 38,740 $ 41,737 $ 129,779 $ 129,588 International distribution fee earned from ABWI 812 850 2,436 2,550 International distribution fee from ABWI, recorded in Deferred revenue, net 19,188 650 17,564 1,950 Contract brewing fee earned from ABC 139 821 781 1,679 Margin fee paid to A-B, classified as a reduction of Sales 574 601 1,839 1,806 Inventory management and other fees paid to A-B, classified in Cost of sales 98 97 295 287 Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses — 192 — 192 Amounts due to or from A-B and ABWI were as follows (in thousands): September 30, December 31, Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement $ 12,631 $ 17,946 Amounts due from ABWI and A-B related to international distribution fee and media reimbursement — 6,000 Refundable deposits due to A-B (3,712 ) (2,840 ) Amounts due to A-B for services rendered (6,725 ) (5,140 ) Net amount due from A-B and ABWI $ 2,194 $ 15,966 Transactions with Wynwood prior to its becoming a wholly owned subsidiary consisted of the following (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Master distributor fee earned $ — $ 3 $ — $ 22 Share of loss, classified as a component of Other income (expense), net — 22 — 44 Refund of investment, classified as a reduction in the carrying value of the equity method investment — — — 23 |
Lease payments to lessors | Components of lease cost were as follows (in thousands): Three Months Ended Nine Months Ended Operating lease cost (1) $ 904 $ 2,642 Finance lease cost: Amortization of right-of-use asset 42 127 Interest on lease liabilities 15 37 Sublease income (69 ) (138 ) Total lease cost $ 892 $ 2,668 (1) Includes short-term, month-to-month lease and variable lease costs, which were immaterial. hese leases are included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to this lessor were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 172 $ 145 $ 511 $ 435 This lease is included in the ROU asset and lease liabilities recorded on our Consolidated Balance Sheets. Lease payments to these lessors were as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 $ 41 $ 41 $ 123 $ 123 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt | Long-term debt consisted of the following (in thousands): September 30, 2019 December 31, 2018 Term loan, due September 30, 2023 $ 8,494 $ 8,823 Line of credit, due September 30, 2023 19,828 37,092 Secured borrowing, due June 21, 2026 5,030 — 33,352 45,915 Less current portion, term loan and secured borrowing (1,107 ) (442 ) $ 32,245 $ 45,473 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative instrument | The fair value of our derivative instruments recorded as a component of Other liabilities on our Consolidated Balance Sheets was as follows (in thousands): September 30, December 31, Fair value of interest rate swap liability $ (332 ) $ (116 ) |
Effect of interest rate swap contract on Consolidated Statements of Operations | The effect of our interest rate swap contracts that were accounted for as a derivative instrument on our Consolidated Statements of Operations was as follows (in thousands): Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Accumulated OCI (Effective Portion) Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended 2019 $ (34 ) Interest expense $ 10 2018 $ 52 Interest expense $ 13 Nine Months Ended 2019 $ (216 ) Interest expense $ 22 2018 $ 225 Interest expense $ 52 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured on recurring basis | The following table summarizes liabilities measured at fair value on a recurring basis (in thousands): Fair Value at September 30, 2019 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (332 ) $ — $ (332 ) Fair Value at December 31, 2018 Interest rate swaps $ — $ (116 ) $ — $ (116 ) |
Fixed-rate debt | We had fixed-rate debt outstanding as follows (in thousands): September 30, December 31, Fixed-rate debt on Consolidated Balance Sheets $ 6,300 $ 1,577 Estimated fair value of fixed-rate debt 6,576 1,591 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our Sales by major source (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Beer Related (1) Brewpubs Total Beer Related (1) Brewpubs Total Product sold through distributor agreements (2) $ 42,667 $ — $ 42,667 $ 139,700 $ — $ 139,700 Alternating proprietorship and contract brewing fees (3) 381 — 381 1,581 — 1,581 International distribution fees 812 — 812 2,436 — 2,436 Brewpubs (4) — 5,991 5,991 — 18,260 18,260 Other (5) 498 — 498 1,955 — 1,955 $ 44,358 $ 5,991 $ 50,349 $ 145,672 $ 18,260 $ 163,932 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Beer Related (1) Brewpubs Total Beer Related (1) Brewpubs Total Product sold through distributor agreements (2) $ 45,326 $ — $ 45,326 $ 139,141 $ — $ 139,141 Alternating proprietorship and contract brewing fees (3) 2,863 — 2,863 8,748 — 8,748 International distribution fees 850 — 850 2,550 — 2,550 Brewpubs (4) — 6,166 6,166 — 18,278 18,278 Other (5) 434 — 434 2,260 — 2,260 $ 49,473 $ 6,166 $ 55,639 $ 152,699 $ 18,278 $ 170,977 (1) Beer Related sales include sales to A-B subsidiaries including Ambev, ABWI and ABC. Sales to wholesalers through the A-B distributor agreement in the three-month period ended September 30, 2019 and 2018 represented 77.7% and 76.9% of our Sales, respectively. Sales to wholesalers through the A-B distributor agreement in the nine -month period ended September 30, 2019 and 2018 represented 80.0% and 77.2% of our Sales, respectively. (2) Product sold through distributor agreements included domestic and international sales of owned and non-owned brands pursuant to terms in our distributor agreements. (3) Alternating proprietorship fees ceased in the fourth quarter of 2018. (4) Brewpub sales include sales of promotional merchandise and sales of beer directly to customers. (5) Other sales include sales of beer related merchandise, hops and spent grain. |
Segment Results and Concentra_2
Segment Results and Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Net sales, gross profit and gross margin by segment | Net sales, Gross profit and gross margin information by segment was as follows (dollars in thousands): Three Months Ended September 30, 2019 Beer Brewpubs Total Net sales $ 41,170 $ 5,991 $ 47,161 Gross profit $ 12,692 $ 612 $ 13,304 Gross margin 30.8 % 10.2 % 28.2 % 2018 Net sales $ 46,723 $ 6,166 $ 52,889 Gross profit $ 16,261 $ 438 $ 16,699 Gross margin 34.8 % 7.1 % 31.6 % Nine Months Ended September 30, 2019 Beer Brewpubs Total Net sales $ 136,452 $ 18,260 $ 154,712 Gross profit $ 50,876 $ 1,898 $ 52,774 Gross margin 37.3 % 10.4 % 34.1 % 2018 Net sales $ 143,921 $ 18,278 $ 162,199 Gross profit $ 52,913 $ 984 $ 53,897 Gross margin 36.8 % 5.4 % 33.2 % |
Concentration risks | Sales to wholesalers through the A-B distributor agreement represented the following percentage of our Sales: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 77.7 % 76.9 % 80.0 % 77.2 % Receivables from A-B and ABWI represented the following percentage of our Accounts receivable balance: September 30, December 31, 68.8 % 79.8 % |
Significant Stock-Based Plan _2
Significant Stock-Based Plan Activity and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense | Stock-based compensation expense was recognized in our Consolidated Statements of Operations as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Cost of sales $ (3 ) $ 42 $ 79 $ 108 Selling, general and administrative expense 339 329 1,510 950 Total stock-based compensation expense $ 336 $ 371 $ 1,589 $ 1,058 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of shares used for basic and diluted earnings per share | The reconciliation between the number of shares used for the basic and diluted per share calculations, as well as other related information, is as follows (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Weighted average common shares used for basic EPS 19,466 19,370 19,435 19,338 Dilutive effect of stock-based awards — 175 — 187 Shares used for diluted EPS 19,466 19,545 19,435 19,525 Stock-based awards not included in diluted per share calculations as they would be antidilutive 71 — 65 — |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Accounts receivable, net | $ 18,357 | $ 30,298 | $ 29,998 |
Other current assets | 4,025 | 2,905 | 3,121 |
Property, equipment and leasehold improvements, net | 110,924 | 110,651 | 113,189 |
Operating lease right-of-use assets | 23,841 | 19,726 | 0 |
Intangible and other assets, net | 5,473 | 6,188 | 5,048 |
Liabilities and Shareholders' Equity | |||
Other accrued expenses | 8,142 | 3,887 | 3,618 |
Long-term operating lease liabilities | $ 24,269 | 18,143 | $ 0 |
Adjustments due to ASC 842 | |||
Assets | |||
Accounts receivable, net | 300 | ||
Other current assets | (216) | ||
Property, equipment and leasehold improvements, net | (2,538) | ||
Operating lease right-of-use assets | 19,726 | ||
Intangible and other assets, net | 1,140 | ||
Liabilities and Shareholders' Equity | |||
Other accrued expenses | 269 | ||
Long-term operating lease liabilities | $ 18,143 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Bank overdrafts | 0 | 600,000 |
Restricted cash | $ 0 | $ 500,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories details [Abstract] | ||
Raw materials | $ 8,741 | $ 7,146 |
Work in process | 3,370 | 3,219 |
Finished goods | 5,740 | 4,319 |
Packaging materials | 2,486 | 891 |
Promotional merchandise | 600 | 1,139 |
Brewpub food, beverages and supplies | 563 | 502 |
Total inventories | $ 21,500 | $ 17,216 |
Leases - Lease-related Liabilit
Leases - Lease-related Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating lease liabilities: | |||
Current lease liabilities included in Other accrued expenses | $ 863 | ||
Long-term lease liabilities | 24,269 | $ 18,143 | $ 0 |
Total operating lease liabilities | 25,132 | ||
Financing lease liabilities: | |||
Current portion included in Current portion of long-term debt and finance lease obligations | 391 | ||
Current portion included in Current portion of long-term debt and finance lease obligations | 477 | ||
Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion | 879 | ||
Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion | 1,101 | ||
Total financing lease liabilities | 1,270 | ||
Total financing lease liabilities | $ 1,578 | ||
Total lease liabilities | $ 26,402 | ||
Weighted-average remaining lease term: | |||
Operating leases | 25 years | ||
Finance leases | 4 years | ||
Weighted-average discount rate: | |||
Operating leases | 4.72% | ||
Finance leases | 3.56% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 518 |
2020 | 2,002 |
2021 | 2,028 |
2022 | 2,091 |
2023 | 1,958 |
Thereafter | 34,234 |
Total minimum lease payments | 42,831 |
Less: present value adjustment | (17,699) |
Operating lease liabilities | $ 25,132 |
Leases - Maturities of Finance
Leases - Maturities of Finance Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 180 |
2020 | 333 |
2021 | 266 |
2022 | 199 |
2023 | 199 |
Thereafter | 199 |
Total minimum lease payments | 1,376 |
Less: present value adjustment | (106) |
Finance lease liabilities | $ 1,270 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 904 | $ 2,642 |
Finance lease cost: | ||
Amortization of right-of-use asset | 42 | 127 |
Interest on lease liabilities | 15 | 37 |
Sublease income | (69) | (138) |
Total lease cost | $ 892 | $ 2,668 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Lease Obligations | |
2019 | $ 11,208 |
2020 | 1,937 |
2021 | 1,863 |
2022 | 1,793 |
2023 | 1,465 |
Thereafter | 25,446 |
Future minimum lease payments | 43,712 |
Capital Lease Obligations | |
2019 | 529 |
2020 | 333 |
2021 | 266 |
2022 | 199 |
2023 | 199 |
Thereafter | 199 |
Future minimum lease payments | 1,725 |
Amount representing interest | (148) |
Future minimum lease payments, including amount representing interest | $ 1,577 |
Acquisitions (Details)
Acquisitions (Details) - Wynwood | Oct. 10, 2018 | Oct. 09, 2018 |
Business Acquisition [Line Items] | ||
Equity interest in acquiree immediately prior to acquisition | 24.50% | |
Equity interest in acquiree upon completion of acquisition | 100.00% |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Anheuser-Busch, LLC (A-B), Ambev and Anheuser-Busch Worldwide Investments, LLC (ABWI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Percentage of stock owned by A-B | 31.20% | 31.20% | 31.30% | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) and Ambev | Gross sales | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | $ 38,740 | $ 41,737 | $ 129,779 | $ 129,588 | |
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) | International distribution fees | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | 812 | 850 | 2,436 | 2,550 | |
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) | International distribution fees recorded in Deferred revenue, net | |||||
Related Party Transaction [Line Items] | |||||
International distribution fee, recorded as deferred revenue in Other accrued expenses | 19,188 | 650 | 17,564 | 1,950 | |
Affiliated entity | Anheuser-Busch Companies, LLC (ABC) | Contract Brewing fee earned | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | 139 | 821 | 781 | 1,679 | |
Affiliated entity | Anheuser-Busch, LLC (A-B) | Margin fee paid, classified as a reduction of Sales | |||||
Related Party Transaction [Line Items] | |||||
Fee paid to related party | 574 | 601 | 1,839 | 1,806 | |
Affiliated entity | Anheuser-Busch, LLC (A-B) | Inventory management and other fees paid, classified in Cost of sales | |||||
Related Party Transaction [Line Items] | |||||
Fee paid to related party | 98 | 97 | 295 | 287 | |
Affiliated entity | Anheuser-Busch, LLC (A-B) | Media and other reimbursement, classified as a reduction of Selling, general and administrative expenses | |||||
Related Party Transaction [Line Items] | |||||
Fee paid to related party | 0 | $ 192 | 0 | $ 192 | |
Affiliated entity | Anheuser-Busch, LLC (A-B) | Amounts due related to beer sales | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amount due from related parties | 12,631 | 12,631 | $ 17,946 | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) | Refundable deposits | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amounts due to related party | (3,712) | (3,712) | (2,840) | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) | Services rendered | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amounts due to related party | (6,725) | (6,725) | (5,140) | ||
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) And Anheuser Busch, LLC (A-B) | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Net amount due from related party | 2,194 | 2,194 | 15,966 | ||
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) And Anheuser Busch, LLC (A-B) | Fees due related to international distribution fee and media reimbursement | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amount due from related parties | $ 0 | $ 0 | $ 6,000 |
Related Party Transactions - _2
Related Party Transactions - Transactions with Wynwood (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Affiliated entity | Wynwood Brewing Company, LLC | ||||
Related Party Transaction [Line Items] | ||||
Master distributor fee earned | $ 0 | $ 3 | $ 0 | $ 22 |
Share of loss, classified as a component of Other income (expense), net | 0 | 22 | 0 | 44 |
Refund of investment, classified as a reduction in the carrying value of the equity method investment | $ 0 | $ 0 | $ 0 | $ 23 |
Wynwood Brewing Company, LLC | ||||
Related Party Transaction [Line Items] | ||||
Percentage of interest purchased in investment | 24.50% | 24.50% | ||
Carrying value of investment | $ 2,000 | $ 2,000 |
Related Party Transactions - Op
Related Party Transactions - Operating Leases (Details) - Affiliated entity $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)periodcompany | Sep. 30, 2018USD ($) | |
Operating lease, Portland, Oregon | ||||
Related Party Transaction [Line Items] | ||||
Number of limited liability companies | company | 2 | |||
Lease payments to lessors [Abstract] | ||||
Total lease payments to lessors | $ 41 | $ 123 | ||
Total lease payments to lessors | $ 41 | $ 123 | ||
Operating lease, Kona, Hawaii | ||||
Lease payments to lessors [Abstract] | ||||
Total lease payments to lessors | $ 172 | $ 511 | ||
Total lease payments to lessors | $ 145 | $ 435 | ||
Percentage of common stock held by lessor (in hundredths) | 5.00% | |||
Sublease contracts expire date | Dec. 31, 2020 | |||
Number of additional lease renewal periods | period | 2 | |||
Sublease contract option period | 5 years | 5 years |
Debt (Details)
Debt (Details) | Jun. 20, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | May 07, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 10, 2018USD ($) | Oct. 09, 2018USD ($) |
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 33,352,000 | $ 45,915,000 | |||||
Less current portion, term loan and secured borrowing | (1,107,000) | (442,000) | |||||
Long-term debt, net of current portion | 32,245,000 | 45,473,000 | |||||
Secured Borrowing [Abstract] | |||||||
Cash exchanged for secured interest in previously installed can line at Portland brewing facility | $ 5,192,000 | $ 0 | |||||
First Amendment | |||||||
Credit Agreement [Abstract] | |||||||
Variable marginal rate on debt | 2.00% | ||||||
Stated interest rate (in hundredths) | 4.089% | ||||||
First Amendment | Minimum | |||||||
Credit Agreement [Abstract] | |||||||
Variable marginal rate on debt | 0.75% | ||||||
First Amendment | Maximum | |||||||
Credit Agreement [Abstract] | |||||||
Variable marginal rate on debt | 2.00% | ||||||
Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 8,494,000 | 8,823,000 | |||||
Credit Agreement [Abstract] | |||||||
Term loan borrowing capacity | $ 10,800,000 | ||||||
Term loan | First Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 8,500,000 | ||||||
Credit Agreement [Abstract] | |||||||
Consolidated leverage ratio maximum | 3.50 | ||||||
Fixed charge coverage ratio minimum | 1.20 | ||||||
Term loan | Second Amendment | Beginning July 1, 2019 and in each fiscal quarter thereafter as long as no Qualifying Offer has been made | |||||||
Credit Agreement [Abstract] | |||||||
Consolidated leverage ratio maximum | 3.50 | ||||||
Maximum Consolidated Net Funded Indebtedness | $ 10,000,000 | ||||||
Line of credit | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 19,828,000 | 37,092,000 | |||||
Line of credit | First Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 19,800,000 | ||||||
Credit Agreement [Abstract] | |||||||
Maximum borrowing capacity | 45,000,000 | $ 40,000,000 | |||||
Quarterly loan commitment reductions revolving facility is subject to | 750,000 | ||||||
Maximum total amount of investments in other craft brewers, other than acquisition of all or substantially all assets or controlling ownership interest | 10,000,000 | $ 5,000,000 | |||||
Amount available to be drawn | 25,200,000 | ||||||
Required availability of line of credit required for acquisitions | 5,000,000 | ||||||
Secured borrowing | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 5,030,000 | $ 0 | |||||
Secured Borrowing [Abstract] | |||||||
Cash exchanged for secured interest in previously installed can line at Portland brewing facility | $ 5,200,000 | ||||||
Letter of credit | First Amendment | |||||||
Credit Agreement [Abstract] | |||||||
Maximum borrowing capacity | $ 2,500,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) | Jan. 23, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||||||
Hedge ineffectiveness gain (loss) | $ 0 | $ 0 | ||||
Fair value of interest rate swap liability | $ (332,000) | $ (332,000) | $ (116,000) | |||
Interest Rate Swap Contracts | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Percentage of Term Loan balance covered under interest rate swap contract | 75.00% | |||||
Termination of contract date | Sep. 30, 2023 | |||||
Notional amount | $ 6,400,000 | $ 6,400,000 | ||||
Fixed interest rate (in hundredths) | 2.86375% | |||||
Unrealized net gains recorded in Accumulated other comprehensive loss | $ 300,000 | |||||
Interest Rate Swap Contracts | One Month LIBOR | ||||||
Derivatives, Fair Value [Line Items] | ||||||
One month variable interest rate (in hundredths) | 2.04% | 2.04% | ||||
Interest Rate Swap Contracts | Derivatives in Cash Flow Hedging Relationships | Interest Expense | ||||||
Effect of interest rate swap contract accounted for derivative instrument on Consolidated Statements of Income [Abstract] | ||||||
Amount of Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | $ (34,000) | $ 52,000 | $ (216,000) | 225,000 | ||
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | $ 10,000 | $ 13,000 | $ 22,000 | $ 52,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | $ (332) | $ (116) |
Fixed-rate debt on Consolidated Balance Sheets | ||
Fixed-rate debt outstanding [abstract] | ||
Fixed-rate debt | 6,300 | 1,577 |
Estimated fair value of fixed-rate debt | ||
Fixed-rate debt outstanding [abstract] | ||
Fixed-rate debt | 6,576 | 1,591 |
Recurring | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | (332) | (116) |
Recurring | Level 1 | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | 0 | 0 |
Recurring | Level 2 | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | (332) | (116) |
Recurring | Level 3 | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | $ 0 | $ 0 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 50,349 | $ 55,639 | $ 163,932 | $ 170,977 |
Product sold through distributor agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 42,667 | 45,326 | 139,700 | 139,141 |
Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 381 | 2,863 | 1,581 | 8,748 |
International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 812 | 850 | 2,436 | 2,550 |
Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,991 | 6,166 | 18,260 | 18,278 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 498 | 434 | 1,955 | 2,260 |
Beer Related | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 44,358 | 49,473 | 145,672 | 152,699 |
Beer Related | Product sold through distributor agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 42,667 | 45,326 | 139,700 | 139,141 |
Beer Related | Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 381 | 2,863 | 1,581 | 8,748 |
Beer Related | International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 812 | 850 | 2,436 | 2,550 |
Beer Related | Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Beer Related | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 498 | 434 | 1,955 | 2,260 |
Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,991 | 6,166 | 18,260 | 18,278 |
Brewpubs | Product sold through distributor agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Brewpubs | Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Brewpubs | International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Brewpubs | Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,991 | 6,166 | 18,260 | 18,278 |
Brewpubs | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration | 77.70% | 76.90% | 80.00% | 77.20% |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | Aug. 23, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disaggregation of Revenue [Line Items] | |||||
Receivables related to contracts with customers | $ 18,357 | $ 18,357 | $ 30,298 | $ 29,998 | |
Allowance for doubtful accounts | 25 | 25 | 25 | ||
Contract liabilities | $ 200 | $ 200 | 400 | ||
Anheuser-Busch, LLC (A-B) | |||||
Disaggregation of Revenue [Line Items] | |||||
Remaining performance obligation, expected period of satisfaction | 10 years | 10 years | |||
Total consideration received | $ 34,000 | ||||
Deferred revenue due to contract liabilities | $ 6,000 | ||||
One-time incentive payment received | $ 20,000 | ||||
Deferred revenue recognized | $ 2,400 |
Revenue Recognition - Revenue P
Revenue Recognition - Revenue Performance Obligations (Details) - Anheuser-Busch, LLC (A-B) $ in Millions | Sep. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected period of satisfaction | 10 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0.8 |
Remaining performance obligation, expected period of satisfaction | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3.2 |
Remaining performance obligation, expected period of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 23.6 |
Remaining performance obligation, expected period of satisfaction |
Segment Results and Concentra_3
Segment Results and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 47,161 | $ 52,889 | $ 154,712 | $ 162,199 | |
Gross profit | $ 13,304 | $ 16,699 | $ 52,774 | $ 53,897 | |
Gross margin (in hundredths) | 28.20% | 31.60% | 34.10% | 33.20% | |
Beer Related | Operating Segments | |||||
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 41,170 | $ 46,723 | $ 136,452 | $ 143,921 | |
Gross profit | $ 12,692 | $ 16,261 | $ 50,876 | $ 52,913 | |
Gross margin (in hundredths) | 30.80% | 34.80% | 37.30% | 36.80% | |
Brewpubs | Operating Segments | |||||
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 5,991 | $ 6,166 | $ 18,260 | $ 18,278 | |
Gross profit | $ 612 | $ 438 | $ 1,898 | $ 984 | |
Gross margin (in hundredths) | 10.20% | 7.10% | 10.40% | 5.40% | |
Sales | |||||
Sales and receivables from Anheuser-Busch, LLC [Abstract] | |||||
Percentage of concentration | 77.70% | 76.90% | 80.00% | 77.20% | |
Accounts Receivable | |||||
Sales and receivables from Anheuser-Busch, LLC [Abstract] | |||||
Percentage of concentration | 68.80% | 79.80% |
Significant Stock-Based Plan _3
Significant Stock-Based Plan Activity and Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | $ 336 | $ 371 | $ 1,589 | $ 1,058 |
Unrecognized stock-based compensation expense | 1,800 | $ 1,800 | ||
Weighted average remaining vesting period | 2 years | |||
Cost of sales | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | (3) | 42 | $ 79 | 108 |
Selling, general and administrative expense | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Total stock-based compensation expense | $ 339 | $ 329 | $ 1,510 | $ 950 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reconciliation of shares used for basic and diluted earnings per share [Abstract] | ||||
Weighted average common shares used for basic EPS (in shares) | 19,466 | 19,370 | 19,435 | 19,338 |
Dilutive effect of stock-based awards (in shares) | 0 | 175 | 0 | 187 |
Shares used for diluted EPS (in shares) | 19,466 | 19,545 | 19,435 | 19,525 |
Stock-based awards not included in diluted per share calculations as they would be antidilutive (in shares) | 71 | 0 | 65 | 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019USD ($) | Apr. 07, 2017claim | Mar. 06, 2017claim | |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of class action lawsuits | claim | 1 | 2 | |
Incremental charge based on current estimate of probable cost of settling litigation, pre-tax | $ | $ 4.7 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Nov. 11, 2019 | |
Scenario, Forecast | Performance-Based Company RSU Awards | Company RSU Awards for the 2017-2019 Performance Cycle | ||
Subsequent Event [Line Items] | ||
Percent of number of Shares that would be earned based on target performance | 33.00% | |
Scenario, Forecast | Performance-Based Company RSU Awards | Company RSU Awards for the 2019-2020 and 2019-2021 Performance Cycles | ||
Subsequent Event [Line Items] | ||
Percent of number of Shares that would be earned based on target performance | 100.00% | |
Anheuser-Busch, LLC (A-B) | Craft Brew Alliance, Inc | ||
Subsequent Event [Line Items] | ||
Equity interest in acquiree immediately prior to acquisition | 31.20% | |
Anheuser-Busch, LLC (A-B) | Craft Brew Alliance, Inc | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Agreement to acquire remaining outstanding shares, price per share in cash (in dollars per share) | $ 16.50 |
Uncategorized Items - brew-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (394,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (394,000) |