Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 02, 2018 | |
Document and Entity [Abstract] | ||
Entity Registrant Name | CRAFT BREW ALLIANCE, INC. | |
Entity Central Index Key | 892,222 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 19,362,600 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 5,778 | $ 579 |
Accounts receivable, net | 36,999 | 27,784 |
Inventory, net | 14,522 | 13,844 |
Assets held for sale | 0 | 22,946 |
Other current assets | 1,874 | 4,335 |
Total current assets | 59,173 | 69,488 |
Property, equipment and leasehold improvements, net | 104,982 | 106,283 |
Goodwill | 12,917 | 12,917 |
Intangible, equity method investment and other assets, net | 20,469 | 20,949 |
Total assets | 197,541 | 209,637 |
Current liabilities: | ||
Accounts payable | 20,042 | 14,338 |
Accrued salaries, wages and payroll taxes | 4,673 | 5,877 |
Refundable deposits | 4,282 | 4,816 |
Deferred revenue | 4,685 | 3,385 |
Other accrued expenses | 3,163 | 2,368 |
Current portion of long-term debt and capital lease obligations | 807 | 699 |
Total current liabilities | 37,652 | 31,483 |
Long-term debt and capital lease obligations, net of current portion | 9,946 | 32,599 |
Fair value of derivative financial instruments | 47 | 221 |
Deferred income tax liability, net | 12,301 | 12,886 |
Other liabilities | 1,647 | 1,657 |
Total liabilities | 61,593 | 78,846 |
Commitments and contingencies (Note 12) | ||
Common shareholders' equity: | ||
Common stock, $0.005 par value. Authorized 50,000,000 shares; issued and outstanding 19,362,386 and 19,309,829 | 97 | 96 |
Additional paid-in capital | 143,004 | 142,196 |
Accumulated other comprehensive loss | (35) | (164) |
Accumulated deficit | (7,118) | (11,337) |
Total common shareholders' equity | 135,948 | 130,791 |
Total liabilities and common shareholders' equity | $ 197,541 | $ 209,637 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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) | 19,362,386 | 19,309,829 |
Common shares outstanding (in shares) | 19,362,386 | 19,309,829 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 65,253 | $ 64,204 | $ 115,338 | $ 110,970 |
Less excise taxes | 3,430 | 3,654 | 6,028 | 6,118 |
Net sales | 61,823 | 60,550 | 109,310 | 104,852 |
Cost of sales | 39,696 | 42,221 | 72,112 | 73,854 |
Gross profit | 22,127 | 18,329 | 37,198 | 30,998 |
Selling, general and administrative expenses | 15,857 | 15,560 | 30,605 | 31,029 |
Operating income (loss) | 6,270 | 2,769 | 6,593 | (31) |
Interest expense | (107) | (173) | (241) | (354) |
Other income, net | 21 | 10 | 55 | 13 |
Income (loss) before income taxes | 6,184 | 2,606 | 6,407 | (372) |
Income tax provision (benefit) | 1,732 | 882 | 1,794 | (309) |
Net income (loss) | $ 4,452 | $ 1,724 | $ 4,613 | $ (63) |
Basic and diluted net loss per share (usd per share) | $ 0.23 | $ 0.09 | $ 0.24 | $ 0 |
Shares used in basic diluted per share calculations (in shares) | 19,334 | 19,278 | 19,322 | 19,270 |
Shares used in diluted per share calculations (in shares) | 19,517 | 19,389 | 19,502 | 19,270 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 4,452 | $ 1,724 | $ 4,613 | $ (63) |
Unrealized gain (loss) on derivative hedge transactions, net of tax | 46 | (3) | 129 | 48 |
Comprehensive income (loss) | $ 4,498 | $ 1,721 | $ 4,742 | $ (15) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 4,613 | $ (63) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 5,387 | 5,468 |
(Gain) loss on sale or disposal of Property, equipment and leasehold improvements | (494) | 146 |
Deferred income taxes | (629) | (378) |
Stock-based compensation | 687 | 554 |
Other | 188 | 875 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (9,215) | (3,334) |
Inventories | (285) | 3,323 |
Other current assets | 1,761 | (1,093) |
Accounts payable and other accrued expenses | 7,889 | 7,299 |
Accrued salaries, wages and payroll taxes | (1,204) | (49) |
Refundable deposits | (241) | (397) |
Net cash provided by operating activities | 8,457 | 12,351 |
Cash flows from investing activities: | ||
Expenditures for Property, equipment and leasehold improvements | (4,284) | (4,920) |
Proceeds from sale of Property, equipment and leasehold improvements | 22,936 | 91 |
Restricted cash from sale of Property, equipment and leasehold improvements | 515 | 0 |
Net cash provided by (used in) investing activities | 19,167 | (4,829) |
Cash flows from financing activities: | ||
Principal payments on debt and capital lease obligations | (348) | (261) |
Net repayments under revolving line of credit | (22,199) | (5,756) |
Proceeds from issuances of common stock | 206 | 87 |
Tax payments related to stock-based awards | (84) | 0 |
Net cash used in financing activities | (22,425) | (5,930) |
Increase in Cash, cash equivalents and restricted cash | 5,199 | 1,592 |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 579 | 442 |
End of period | 5,778 | 2,034 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 285 | 363 |
Cash paid for income taxes, net | 126 | 176 |
Supplemental disclosure of non-cash information: | ||
Purchases of Property, equipment and leasehold improvements with capital leases | 0 | 180 |
Purchases of Property, equipment and leasehold improvements included in Accounts payable at end of period | $ 429 | $ 7,550 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
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, 2017 (“ 2017 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, Net income or Basic or diluted net income per share. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2018-02 In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows entities to reclassify accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Act”). This update is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the income tax rate change resulting from the Act is recognized. The early adoption of ASU 2018-02 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. 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 do not expect the adoption of ASU 2017-12 to have a material effect on our financial position, results of operations or cash flows. ASU 2017-09 In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting." ASU 2017-09 provides clarity and is expected to reduce both diversity in practice and the cost and complexity when accounting for a change to the terms of a stock-based award. ASU 2017-09 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, on a prospective basis. The adoption of ASU 2017-09 on January 1, 2018 did not have a material effect on 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 2016-18 In August 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash." ASU 2016-18 reduces the diversity in practice in the classification and the presentation of restricted cash within an entity's statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-18 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 addresses eight specific cash flow issues and how they should be reported on the statement of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-15 on January 1, 2018 did not 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 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. We are currently evaluating the potential impact of the adoption of ASU 2016-02 on our consolidated financial statements. We currently expect the adoption of this standard to result in a material increase to the assets and liabilities on our consolidated balance sheets. ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10).” ASU 2016-01 enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information by addressing certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendments simplify certain requirements and also reduce diversity in current practice for other requirements. ASU 2016-01 is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. ASU 2014-09, ASU 2016-10 and ASU 2016-12 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09, as amended, affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing." ASU 2016-10 clarifies aspects of Topic 606 related to identifying performance obligations and the licensing implementation guidance, while retaining the related core principles for those areas. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements in ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients." ASU 2016-12 clarifies aspects of Topic 606 related to the guidance on assessing collectibility, presentation of sales taxes, non-cash consideration, and completed contracts and contract modifications. The effective date and transition requirements for ASU 2016-12 are the same as the effective date and transition requirements in ASU 2014-09. The standards permit either the retrospective or the modified retrospective (cumulative effect) transition method. On January 1, 2018, we adopted the new accounting standard Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers" and all the related amendments to all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis. See also Note 8. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 , we did not 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 June 30, 2018 and December 31, 2017 , there were no bank overdrafts. 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. Restricted cash of $0.5 million at June 30, 2018 represents funds held in an escrow account from the sale of our Woodinville brewery related to a lien; we expect that the lien will be resolved in our favor and the restriction will be removed. We did not have any restricted cash at December 31, 2017 . |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
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, equity method investment and other assets, net on our Consolidated Balance Sheets. Inventories consisted of the following (in thousands): June 30, December 31, Raw materials $ 3,247 $ 4,290 Work in process 2,616 1,960 Finished goods 6,120 5,009 Packaging materials 1,322 956 Promotional merchandise 714 1,161 Brewpub food, beverages and supplies 503 468 $ 14,522 $ 13,844 Work in process is beer held in fermentation tanks prior to the filtration and packaging process. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of June 30, 2018 and December 31, 2017 , Anheuser-Busch, LLC ("A-B") owned approximately 31.3% and 31.4% , 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 will expire on December 31, 2018, 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 Six Months Ended 2018 2017 2018 2017 Gross sales to A-B and Ambev $ 50,283 $ 49,144 $ 87,851 $ 81,785 International distribution fee earned from ABWI 850 850 1,700 1,700 International distribution fee from ABWI, recorded in Deferred revenue 650 400 1,300 800 Contract Brewing fee earned from ABC 395 — 858 — Margin fee paid to A-B, classified as a reduction of Sales 687 669 1,205 1,157 Inventory management and other fees paid to A-B, classified in Cost of sales 100 101 190 192 Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses — 74 — 74 Amounts due to or from A-B and ABWI were as follows (in thousands): June 30, December 31, Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement $ 23,593 $ 15,663 Amounts due from ABWI and A-B related to international distribution fee 3,000 5,000 Refundable deposits due to A-B (1,982 ) (1,619 ) Amounts due to A-B for services rendered (9,002 ) (4,836 ) Net amount due from A-B and ABWI $ 15,609 $ 14,208 Transactions with Wynwood Brewing Co. ("Wynwood") As of June 30, 2018 and December 31, 2017 , we owned a 24.5% interest in Wynwood. The carrying value of our investment was $2.0 million as of June 30, 2018 . Transactions with Wynwood consisted of the following (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Master distributor fee earned $ 12 $ — $ 19 $ — Share of (gain) loss, classified as a component of Other income (expense), net (1 ) — 22 — Refund of investment, classified as a reduction in the carrying value of the equity method investment — — 23 — Amounts due to or from Wynwood were as follows (in thousands): June 30, December 31, Amounts receivable related to raw materials and alternating proprietorship fees $ 188 $ 148 Amounts receivable related to Brewery representative reimbursements — 32 Amounts due related to purchases of beer pursuant to the distributor agreement (123 ) (116 ) Amounts due related to Royalty fees — (4 ) Net amount receivable $ 65 $ 60 Operating Leases We lease our headquarters office space, restaurant 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. Lease payments to these lessors were as follows (in thousands) and are included in the Rent expense under all operating leases above: Three Months Ended Six Months Ended 2018 2017 2018 2017 $ 41 $ 31 $ 82 $ 61 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 include a shareholder who 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. Lease payments to this lessor were as follows (in thousands) and are included in the Rent expense under all operating leases above: Three Months Ended Six Months Ended 2018 2017 2018 2017 $ 147 $ 145 $ 290 $ 288 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
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 Bank of America, N.A. (“BofA”) for 75% of the 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 $6.8 million as of June 30, 2018 . 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 2.07% at June 30, 2018 . Effective January 4, 2016, we entered into a $9.1 million notional amount interest rate swap contract with BofA, which was set to expire January 1, 2019 , to hedge the variability of interest payments associated with our variable-rate borrowings on our line of credit. The notional amount fluctuated based on a predefined schedule based on our anticipated borrowings. This swap agreement was terminated effective January 18, 2018 as we paid off our line of credit, and we received interest of $27,000 . Since the interest rate swaps hedge the variability of interest payments on variable rate debt with similar terms, they qualify for cash flow hedge accounting treatment. As of June 30, 2018 , unrealized net losses of $0.05 million were recorded in Accumulated other comprehensive 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 six months of 2018 or 2017 . The fair value of our derivative instruments was as follows (in thousands): June 30, December 31, Fair value of interest rate swaps $ (47 ) $ (221 ) 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 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 2018 $ 61 Interest expense $ 17 2017 $ (5 ) Interest expense $ 40 Six Months Ended 2018 $ 173 Interest expense $ 39 2017 $ 77 Interest expense $ 93 See also Note 7. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (47 ) $ — $ (47 ) Fair Value at December 31, 2017 Interest rate swaps $ — $ (221 ) $ — $ (221 ) We did not have any assets measured at fair value on a recurring basis at June 30, 2018 or December 31, 2017 . 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 six months ended June 30, 2018 . 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): June 30, December 31, Fixed-rate debt on Consolidated Balance Sheets $ 1,718 $ 1,855 Estimated fair value of fixed-rate debt 1,746 1,915 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 | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition On January 1, 2018, we adopted the Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers" and all the related amendments (the "new revenue standard") for all of our revenue contracts, using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of Accumulated deficit. The adoption of ASC 606 did not have a material impact on our consolidated financial statements as of January 1, 2018 or for the three and six -month periods ended June 30, 2018 . The adjustments to our Consolidated Balance Sheets upon adoption of ASC 606, effective January 1, 2018 were as follows (in thousands): Balance at Adjustments due to Balance at Assets: Other current assets $ 4,335 $ (237 ) $ 4,098 Intangible, equity method investment and other assets, net 20,949 (157 ) 20,792 Common shareholders' equity: Accumulated deficit $ (11,337 ) $ (394 ) $ (11,731 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our Consolidated Balance Sheets and Consolidated Statements of Operations was as follows (in thousands): June 30, 2018 As Reported Balance without Effect of Change Consolidated Balance Sheets Assets: Other current assets $ 1,874 $ 2,111 $ (237 ) Intangible, equity method investment and other assets, net 20,469 20,508 (39 ) Liabilities: Deferred income tax liability, net 12,301 12,334 (33 ) Common shareholders' equity: Accumulated deficit $ (7,118 ) $ (7,427 ) $ (309 ) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 As Reported Balance without Effect of Change As Reported Balance without Effect of Change Consolidated Statements of Operations Selling, general and administrative expenses $ 15,857 $ 15,916 $ (59 ) $ 30,605 $ 30,723 $ (118 ) Income tax provision 1,732 1,715 17 1,794 1,761 33 Net income 4,452 4,410 42 4,613 4,528 85 The following table disaggregates our Sales by major source (in thousands): Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Beer Related 1 Brewpubs Total Beer Related 1 Brewpubs Total Product sold through distributor agreements 2 $ 54,148 $ — $ 54,148 $ 93,815 $ — $ 93,815 Alternating proprietorship and contract brewing fees 3,175 — 3,175 5,886 — 5,886 International distribution fees 850 — 850 1,700 — 1,700 Brewpubs 3 — 6,101 6,101 — 12,112 12,112 Other 4 979 — 979 1,825 — 1,825 $ 59,152 $ 6,101 $ 65,253 $ 103,226 $ 12,112 $ 115,338 (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 and six -month periods ended June 30, 2018 represented 77.9% and 77.3% 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) Brewpub sales include sales of promotional merchandise and sales of beer directly to customers. (4) Other sales include sales of beer related merchandise, hops, spent grain and an export manager fee. 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. 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. We have evaluated, on a quarterly basis, the qualitative factors, including current market conditions and our relationship with A-B, and we consider receiving $34.0 million over the 10 -year term of the IDA the most likely outcome under the IDA. 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 January 1, 2018, we had $3.4 million of deferred revenue recorded in Deferred revenue on the Consolidated Balance Sheets related to the IDA. As of June 30, 2018 , we earned the right to receive an additional $3.0 million pursuant to the IDA, of which we have recognized $1.7 million as Sales, resulting in deferred revenue of $4.7 million at June 30, 2018 . We will earn the right to receive an additional $3.0 million over the remaining two quarters in 2018 and we will earn the right to receive an additional $20.0 million in 2019. We expect to recognize an additional $1.7 million of deferred revenue as Sales in the remainder of 2018, $3.4 million in 2019, and $22.6 million thereafter. |
Segment Results and Concentrati
Segment Results and Concentrations | 6 Months Ended |
Jun. 30, 2018 | |
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 and Omission 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 June 30, 2018 Beer Brewpubs Total Net sales $ 55,722 $ 6,101 $ 61,823 Gross profit $ 21,942 $ 185 $ 22,127 Gross margin 39.4 % 3.0 % 35.8 % 2017 Net sales $ 53,435 $ 7,115 $ 60,550 Gross profit $ 17,620 $ 709 $ 18,329 Gross margin 33.0 % 10.0 % 30.3 % Six Months Ended June 30, 2018 Beer Brewpubs Total Net sales $ 97,198 $ 12,112 $ 109,310 Gross profit $ 36,652 $ 546 $ 37,198 Gross margin 37.7 % 4.5 % 34.0 % 2017 Net sales $ 91,286 $ 13,566 $ 104,852 Gross profit $ 29,890 $ 1,108 $ 30,998 Gross margin 32.7 % 8.2 % 29.6 % 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 June 30, Six Months Ended June 30, 2018 2017 2018 2017 77.9 % 76.8 % 77.3 % 74.2 % Receivables from A-B and ABWI represented the following percentage of our Accounts receivable balance: June 30, December 31, 71.9 % 74.4 % |
Significant Stock-Based Plan Ac
Significant Stock-Based Plan Activity and Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Cost of sales $ 14 $ 17 $ 66 $ 36 Selling, general and administrative expense 188 180 621 518 Total stock-based compensation expense $ 202 $ 197 $ 687 $ 554 At June 30, 2018 , we had total unrecognized stock-based compensation expense of $2.4 million , which will be recognized over the weighted average remaining vesting period of 2.0 years . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Weighted average common shares used for basic EPS 19,334 19,278 19,322 19,270 Dilutive effect of stock-based awards 183 111 180 — Shares used for diluted EPS 19,517 19,389 19,502 19,270 Stock-based awards not included in diluted per share calculations as they would be antidilutive — 2 — 125 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 consolidated lawsuit purports to be a class action brought on behalf of all persons who purchased Kona Brewing Company beer within the relevant statute of limitations period. The lawsuit alleges that the defendants misled customers regarding the state in which Kona Brewing Company beers are manufactured and in describing Kona Brewing Company beer as “craft beer.” We intend to vigorously defend against the foregoing action and, on April 28, 2017, we filed a motion to dismiss the complaint. The motion to dismiss was granted in part and denied in part on September 1, 2017. A hearing on class certification is scheduled for September 6, 2018. We have not recorded any liabilities with respect to the claims. |
Termination of Pabst Agreements
Termination of Pabst Agreements | 6 Months Ended |
Jun. 30, 2018 | |
Contractors [Abstract] | |
Termination of Pabst Agreements | Termination of Pabst Agreements Termination of Agreements with Pabst Effective May 1, 2017 , we reached an agreement with Pabst Brewing Company, LLC, and Pabst Northwest Brewing Company, LLC (collectively, "Pabst") to terminate the brewing agreements that provided for brewing selected brands owned by Pabst at our brewery in Woodinville, Washington, through December 31, 2018 . In conjunction with the termination of the brewing arrangements, Pabst's option to purchase the Woodinville brewery and adjacent pub pursuant to the Option and Agreement of Purchase and Sale dated as of January 8, 2016 (the "Option Agreement”) was also terminated. Pabst agreed to pay us $2.7 million in connection with the termination of the brewing agreements and Option Agreement. This payment is in addition to the $1.6 million of contract brewing volume shortfall fees for the 2016 calendar year recognized in the fourth quarter of 2016 and $1.7 million related to remaining volume shortfalls for the 2016 - 2017 contract year ended March 31, 2017, recognized in the first quarter of 2017. All payments were received from Pabst in the second quarter of 2017. See Note 14 for a discussion of the classification of the assets related to our Woodinville brewery as assets held for sale. |
Assets Held for Sale and Sale o
Assets Held for Sale and Sale of Woodinville, Washington Brewery | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale and Sale of Woodinville, Washington Brewery | Assets Held for Sale and Sale of Woodinville, Washington Brewery Assets held for sale at December 31, 2017 represented the assets related to our Woodinville, Washington Brewery, which was designated as held for sale on May 1, 2017 . At the end of 2017, a $493,000 impairment charge was recorded, as a component of Selling, general and administrative expenses in our Consolidated Statements of Operations, related to the sale of our Woodinville brewery, which was sold on January 12, 2018 to assignees of Sound Commercial Investment Holdings, LLC, for a total purchase price of $24.5 million (the "Sale Transaction"). The assets that were sold included the real property, equipment, fixtures, mechanical systems, and certain personal property used in our operation of the brewery and adjacent brewpub. We paid real estate brokerage commissions totaling $560,000 from the sale proceeds and recorded a gain of $500,000 during the quarter ended March 31, 2018 related to the Sale Transaction, which was recorded as a component of Selling, general and administrative expenses in our Consolidated Statements of Operations. In contemplation of the sale of certain brewing and bottling equipment included in the Sale Transaction, $0.5 million of the total purchase price was placed in escrow following the closing. If the purchaser of the equipment had sold it for less than $3.5 million , the shortfall would have been paid to the purchaser up to the amount held in escrow, with the balance, if any, paid to us. The Woodinville brewing and bottling equipment was sold for more than $3.5 million in the first quarter of 2018 and, accordingly, the $0.5 million in escrow was remitted to us. |
Recent Accounting Pronounceme21
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | Recent Accounting Pronouncements ASU 2018-02 In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows entities to reclassify accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Act”). This update is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the income tax rate change resulting from the Act is recognized. The early adoption of ASU 2018-02 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. 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 do not expect the adoption of ASU 2017-12 to have a material effect on our financial position, results of operations or cash flows. ASU 2017-09 In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting." ASU 2017-09 provides clarity and is expected to reduce both diversity in practice and the cost and complexity when accounting for a change to the terms of a stock-based award. ASU 2017-09 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, on a prospective basis. The adoption of ASU 2017-09 on January 1, 2018 did not have a material effect on 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 2016-18 In August 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash." ASU 2016-18 reduces the diversity in practice in the classification and the presentation of restricted cash within an entity's statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-18 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 addresses eight specific cash flow issues and how they should be reported on the statement of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-15 on January 1, 2018 did not 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 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. We are currently evaluating the potential impact of the adoption of ASU 2016-02 on our consolidated financial statements. We currently expect the adoption of this standard to result in a material increase to the assets and liabilities on our consolidated balance sheets. ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10).” ASU 2016-01 enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information by addressing certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendments simplify certain requirements and also reduce diversity in current practice for other requirements. ASU 2016-01 is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 on January 1, 2018 did not have a material effect on our financial position, results of operations or cash flows. ASU 2014-09, ASU 2016-10 and ASU 2016-12 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09, as amended, affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing." ASU 2016-10 clarifies aspects of Topic 606 related to identifying performance obligations and the licensing implementation guidance, while retaining the related core principles for those areas. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements in ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients." ASU 2016-12 clarifies aspects of Topic 606 related to the guidance on assessing collectibility, presentation of sales taxes, non-cash consideration, and completed contracts and contract modifications. The effective date and transition requirements for ASU 2016-12 are the same as the effective date and transition requirements in ASU 2014-09. The standards permit either the retrospective or the modified retrospective (cumulative effect) transition method. On January 1, 2018, we adopted the new accounting standard Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers" and all the related amendments to all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis. See also Note 8. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): June 30, December 31, Raw materials $ 3,247 $ 4,290 Work in process 2,616 1,960 Finished goods 6,120 5,009 Packaging materials 1,322 956 Promotional merchandise 714 1,161 Brewpub food, beverages and supplies 503 468 $ 14,522 $ 13,844 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Gross sales to A-B and Ambev $ 50,283 $ 49,144 $ 87,851 $ 81,785 International distribution fee earned from ABWI 850 850 1,700 1,700 International distribution fee from ABWI, recorded in Deferred revenue 650 400 1,300 800 Contract Brewing fee earned from ABC 395 — 858 — Margin fee paid to A-B, classified as a reduction of Sales 687 669 1,205 1,157 Inventory management and other fees paid to A-B, classified in Cost of sales 100 101 190 192 Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses — 74 — 74 Amounts due to or from A-B and ABWI were as follows (in thousands): June 30, December 31, Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement $ 23,593 $ 15,663 Amounts due from ABWI and A-B related to international distribution fee 3,000 5,000 Refundable deposits due to A-B (1,982 ) (1,619 ) Amounts due to A-B for services rendered (9,002 ) (4,836 ) Net amount due from A-B and ABWI $ 15,609 $ 14,208 Transactions with Wynwood consisted of the following (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Master distributor fee earned $ 12 $ — $ 19 $ — Share of (gain) loss, classified as a component of Other income (expense), net (1 ) — 22 — Refund of investment, classified as a reduction in the carrying value of the equity method investment — — 23 — Amounts due to or from Wynwood were as follows (in thousands): June 30, December 31, Amounts receivable related to raw materials and alternating proprietorship fees $ 188 $ 148 Amounts receivable related to Brewery representative reimbursements — 32 Amounts due related to purchases of beer pursuant to the distributor agreement (123 ) (116 ) Amounts due related to Royalty fees — (4 ) Net amount receivable $ 65 $ 60 |
Lease payments to lessors | Lease payments to this lessor were as follows (in thousands) and are included in the Rent expense under all operating leases above: Three Months Ended Six Months Ended 2018 2017 2018 2017 $ 147 $ 145 $ 290 $ 288 Lease payments to these lessors were as follows (in thousands) and are included in the Rent expense under all operating leases above: Three Months Ended Six Months Ended 2018 2017 2018 2017 $ 41 $ 31 $ 82 $ 61 |
Derivative Financial Instrume24
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative instrument | The fair value of our derivative instruments was as follows (in thousands): June 30, December 31, Fair value of interest rate swaps $ (47 ) $ (221 ) |
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 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 2018 $ 61 Interest expense $ 17 2017 $ (5 ) Interest expense $ 40 Six Months Ended 2018 $ 173 Interest expense $ 39 2017 $ 77 Interest expense $ 93 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 Level 1 Level 2 Level 3 Total Interest rate swap $ — $ (47 ) $ — $ (47 ) Fair Value at December 31, 2017 Interest rate swaps $ — $ (221 ) $ — $ (221 ) |
Fixed-rate debt | We had fixed-rate debt outstanding as follows (in thousands): June 30, December 31, Fixed-rate debt on Consolidated Balance Sheets $ 1,718 $ 1,855 Estimated fair value of fixed-rate debt 1,746 1,915 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The adjustments to our Consolidated Balance Sheets upon adoption of ASC 606, effective January 1, 2018 were as follows (in thousands): Balance at Adjustments due to Balance at Assets: Other current assets $ 4,335 $ (237 ) $ 4,098 Intangible, equity method investment and other assets, net 20,949 (157 ) 20,792 Common shareholders' equity: Accumulated deficit $ (11,337 ) $ (394 ) $ (11,731 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our Consolidated Balance Sheets and Consolidated Statements of Operations was as follows (in thousands): June 30, 2018 As Reported Balance without Effect of Change Consolidated Balance Sheets Assets: Other current assets $ 1,874 $ 2,111 $ (237 ) Intangible, equity method investment and other assets, net 20,469 20,508 (39 ) Liabilities: Deferred income tax liability, net 12,301 12,334 (33 ) Common shareholders' equity: Accumulated deficit $ (7,118 ) $ (7,427 ) $ (309 ) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 As Reported Balance without Effect of Change As Reported Balance without Effect of Change Consolidated Statements of Operations Selling, general and administrative expenses $ 15,857 $ 15,916 $ (59 ) $ 30,605 $ 30,723 $ (118 ) Income tax provision 1,732 1,715 17 1,794 1,761 33 Net income 4,452 4,410 42 4,613 4,528 85 |
Disaggregation of Revenue | The following table disaggregates our Sales by major source (in thousands): Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Beer Related 1 Brewpubs Total Beer Related 1 Brewpubs Total Product sold through distributor agreements 2 $ 54,148 $ — $ 54,148 $ 93,815 $ — $ 93,815 Alternating proprietorship and contract brewing fees 3,175 — 3,175 5,886 — 5,886 International distribution fees 850 — 850 1,700 — 1,700 Brewpubs 3 — 6,101 6,101 — 12,112 12,112 Other 4 979 — 979 1,825 — 1,825 $ 59,152 $ 6,101 $ 65,253 $ 103,226 $ 12,112 $ 115,338 (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 and six -month periods ended June 30, 2018 represented 77.9% and 77.3% 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) Brewpub sales include sales of promotional merchandise and sales of beer directly to customers. (4) Other sales include sales of beer related merchandise, hops, spent grain and an export manager fee. |
Segment Results and Concentra27
Segment Results and Concentrations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 Beer Brewpubs Total Net sales $ 55,722 $ 6,101 $ 61,823 Gross profit $ 21,942 $ 185 $ 22,127 Gross margin 39.4 % 3.0 % 35.8 % 2017 Net sales $ 53,435 $ 7,115 $ 60,550 Gross profit $ 17,620 $ 709 $ 18,329 Gross margin 33.0 % 10.0 % 30.3 % Six Months Ended June 30, 2018 Beer Brewpubs Total Net sales $ 97,198 $ 12,112 $ 109,310 Gross profit $ 36,652 $ 546 $ 37,198 Gross margin 37.7 % 4.5 % 34.0 % 2017 Net sales $ 91,286 $ 13,566 $ 104,852 Gross profit $ 29,890 $ 1,108 $ 30,998 Gross margin 32.7 % 8.2 % 29.6 % |
Concentration risks | Sales to wholesalers through the A-B distributor agreement represented the following percentage of our Sales: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 77.9 % 76.8 % 77.3 % 74.2 % Receivables from A-B and ABWI represented the following percentage of our Accounts receivable balance: June 30, December 31, 71.9 % 74.4 % |
Significant Stock-Based Plan 28
Significant Stock-Based Plan Activity and Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Cost of sales $ 14 $ 17 $ 66 $ 36 Selling, general and administrative expense 188 180 621 518 Total stock-based compensation expense $ 202 $ 197 $ 687 $ 554 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Weighted average common shares used for basic EPS 19,334 19,278 19,322 19,270 Dilutive effect of stock-based awards 183 111 180 — Shares used for diluted EPS 19,517 19,389 19,502 19,270 Stock-based awards not included in diluted per share calculations as they would be antidilutive — 2 — 125 |
Cash, Cash Equivalents and Re30
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Restricted cash | $ 500,000 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventories details [Abstract] | ||
Raw materials | $ 3,247 | $ 4,290 |
Work in process | 2,616 | 1,960 |
Finished goods | 6,120 | 5,009 |
Packaging materials | 1,322 | 956 |
Promotional merchandise | 714 | 1,161 |
Brewpub food, beverages and supplies | 503 | 468 |
Total inventories | $ 14,522 | $ 13,844 |
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 | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Percentage of stock owned by A-B | 31.30% | 31.30% | 31.40% | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) and Ambev | Gross sales | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | $ 50,283 | $ 49,144 | $ 87,851 | $ 81,785 | |
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) | International distribution fees | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | 850 | 850 | 1,700 | 1,700 | |
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) | International distribution fees recorded in Deferred revenue | |||||
Related Party Transaction [Line Items] | |||||
International distribution fee, recorded as deferred revenue in Other accrued expenses | 650 | 400 | 1,300 | 800 | |
Affiliated entity | Anheuser-Busch Companies, LLC (ABC) | Contract Brewing fee earned | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue or fee earned from related party | 395 | 0 | 858 | 0 | |
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 | 687 | 669 | 1,205 | 1,157 | |
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 | 100 | 101 | 190 | 192 | |
Affiliated entity | Anheuser-Busch, LLC (A-B) | Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses | |||||
Related Party Transaction [Line Items] | |||||
Fee paid to related party | 0 | $ 74 | 0 | $ 74 | |
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 | 23,593 | 23,593 | $ 15,663 | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) | Refundable deposits | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amounts due to related party | (1,982) | (1,982) | (1,619) | ||
Affiliated entity | Anheuser-Busch, LLC (A-B) | Services rendered | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amounts due to related party | (9,002) | (9,002) | (4,836) | ||
Affiliated entity | Anheuser-Busch Worldwide Investments, LLC (ABWI) And Anheuser Busch, LLC (A-B) | International distribution fees | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Amount due from related parties | 3,000 | 3,000 | 5,000 | ||
Anheuser-Busch Worldwide Investments, LLC (ABWI) And Anheuser Busch, LLC (A-B) | Anheuser-Busch, LLC (A-B) | |||||
Amounts due to or from Anheuser-Busch, LLC [Abstract] | |||||
Net amount due from related party | $ 15,609 | $ 15,609 | $ 14,208 |
Related Party Transactions - 33
Related Party Transactions - Transactions with Wynwood (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Affiliated entity | Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Fee earned from related party | $ 12 | $ 0 | $ 19 | $ 0 | |
Share of (gain) loss, classified as a component of Other income (expense), net | 22 | 0 | |||
Refund of investment classified as reduction in carrying value of equity method investment | 0 | 0 | 23 | $ 0 | |
Net amount due from related party | 65 | 65 | $ 60 | ||
Affiliated entity | Raw materials and alternating proprietorship fees | Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Amount due from related parties | 188 | 188 | 148 | ||
Affiliated entity | Brewery representative reimbursements | Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Amount due from related parties | 0 | 0 | 32 | ||
Affiliated entity | Beer purchases pursuant to distributor agreement | Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Amounts due to related party | (123) | (123) | (116) | ||
Affiliated entity | Royalty fees | Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Amounts due to related party | 0 | 0 | $ (4) | ||
Wynwood Brewing Company, LLC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of interest purchased in investment | 24.50% | ||||
Carrying value of investment | 2,000 | $ 2,000 | |||
Share of (gain) loss, classified as a component of Other income (expense), net | $ (1) | $ 0 |
Related Party Transactions - Op
Related Party Transactions - Operating Leases (Details) - Affiliated entity $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)periodcompany | Jun. 30, 2017USD ($) | |
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 | $ 31 | $ 82 | $ 61 |
Operating lease, Kona, Hawaii | ||||
Lease payments to lessors [Abstract] | ||||
Total lease payments to lessors | $ 147 | $ 145 | $ 290 | $ 288 |
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 |
Derivative Financial Instrume35
Derivative Financial Instruments (Details) - USD ($) | Jan. 18, 2018 | Jan. 04, 2016 | Jan. 23, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||||||||
Hedge ineffectiveness gain (loss) | $ 0 | $ 0 | ||||||
Fair value of derivative instrument [Abstract] | ||||||||
Fair value of interest rate swaps | $ (47,000) | (47,000) | $ (221,000) | |||||
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 | Jan. 1, 2019 | Sep. 30, 2023 | ||||||
Interest earned upon termination of swap agreement | $ 27,000 | |||||||
Notional amount | $ 9,100,000 | $ 6,800,000 | $ 6,800,000 | |||||
Fixed interest rate (in hundredths) | 2.86375% | |||||||
Interest Rate Swap Contracts | One Month LIBOR | ||||||||
Derivatives, Fair Value [Line Items] | ||||||||
One month variable interest rate (in hundredths) | 2.07% | 2.07% | ||||||
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 Recognized in Accumulated OCI (Effective Portion) | $ 61,000 | $ (5,000) | $ 173,000 | 77,000 | ||||
Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | $ 17,000 | $ 40,000 | $ 39,000 | $ 93,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | $ (47) | $ (221) |
Fixed-rate debt on Consolidated Balance Sheets | ||
Fixed-rate debt outstanding [abstract] | ||
Fixed-rate debt | 1,718 | 1,855 |
Estimated fair value of fixed-rate debt | ||
Fixed-rate debt outstanding [abstract] | ||
Fixed-rate debt | 1,746 | 1,915 |
Recurring | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | (47) | (221) |
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 | (47) | (221) |
Recurring | Level 3 | ||
Financial liability recorded at fair value on a recurring basis [Abstract] | ||
Interest rate swaps | $ 0 | $ 0 |
Revenue Recognition - Effect on
Revenue Recognition - Effect on Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Selling, general and administrative expenses | $ 15,857 | $ 15,560 | $ 30,605 | $ 31,029 | ||
Other current assets | 1,874 | 1,874 | $ 4,098 | $ 4,335 | ||
Intangible, equity method investment and other assets, net | 20,469 | 20,469 | 20,792 | 20,949 | ||
Accumulated deficit | (7,118) | (7,118) | $ (11,731) | (11,337) | ||
Deferred income tax liability, net | 12,301 | 12,301 | 12,886 | |||
Income tax provision (benefit) | 1,732 | 882 | 1,794 | (309) | ||
Net income (loss) | 4,452 | $ 1,724 | 4,613 | $ (63) | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Selling, general and administrative expenses | 15,916 | 30,723 | ||||
Other current assets | 2,111 | 2,111 | 4,335 | |||
Intangible, equity method investment and other assets, net | 20,508 | 20,508 | 20,949 | |||
Accumulated deficit | (7,427) | (7,427) | (11,337) | |||
Deferred income tax liability, net | 12,334 | 12,334 | ||||
Income tax provision (benefit) | 1,715 | 1,761 | ||||
Net income (loss) | 4,410 | 4,528 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Selling, general and administrative expenses | (59) | (118) | ||||
Other current assets | (237) | (237) | (237) | |||
Intangible, equity method investment and other assets, net | (39) | (39) | (157) | |||
Accumulated deficit | (309) | (309) | $ (394) | |||
Deferred income tax liability, net | (33) | (33) | ||||
Income tax provision (benefit) | 17 | 33 | ||||
Net income (loss) | $ 42 | $ 85 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 65,253 | $ 115,338 | ||
Product sold through distributor agreements2 | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 54,148 | 93,815 | ||
Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 3,175 | 5,886 | ||
International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 850 | 1,700 | ||
Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,101 | 12,112 | ||
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 979 | 1,825 | ||
Beer Related | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 59,152 | 103,226 | ||
Beer Related | Product sold through distributor agreements2 | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 54,148 | 93,815 | ||
Beer Related | Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 3,175 | 5,886 | ||
Beer Related | International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 850 | 1,700 | ||
Beer Related | Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | ||
Beer Related | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 979 | 1,825 | ||
Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,101 | 12,112 | ||
Brewpubs | Product sold through distributor agreements2 | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | ||
Brewpubs | Alternating proprietorship and contract brewing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | ||
Brewpubs | International distribution fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 0 | 0 | ||
Brewpubs | Brewpubs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,101 | 12,112 | ||
Brewpubs | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 0 | $ 0 | ||
Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration | 77.90% | 76.80% | 77.30% | 74.20% |
Revenue Recognition - Internati
Revenue Recognition - International Distribution Agreement (Details) - Anheuser-Busch, LLC (A-B) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | 80 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2019 | Aug. 31, 2026 | Jan. 01, 2018 | |
Disaggregation of Revenue [Line Items] | |||||
Remaining performance obligation | $ 34 | ||||
Remaining performance obligation, expected period of satisfaction | 10 years | ||||
Deferred revenue due to contract liabilities | $ 4.7 | $ 3.4 | |||
Deferred revenue recognized | $ 1.7 | ||||
Forecast | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue recognized | $ 1.7 | $ 3.4 | $ 22.6 |
Revenue Recognition - Revenue P
Revenue Recognition - Revenue Performance Obligations (Details) - Anheuser-Busch, LLC (A-B) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 34 |
Remaining performance obligation, expected period of satisfaction | 10 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3 |
Remaining performance obligation, expected period of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 20 |
Remaining performance obligation, expected period of satisfaction | 1 year |
Segment Results and Concentra41
Segment Results and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 61,823 | $ 60,550 | $ 109,310 | $ 104,852 | |
Gross profit | $ 22,127 | $ 18,329 | $ 37,198 | $ 30,998 | |
Gross margin (in hundredths) | 35.80% | 30.30% | 34.00% | 29.60% | |
Beer Related | Operating Segments | |||||
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 55,722 | $ 53,435 | $ 97,198 | $ 91,286 | |
Gross profit | $ 21,942 | $ 17,620 | $ 36,652 | $ 29,890 | |
Gross margin (in hundredths) | 39.40% | 33.00% | 37.70% | 32.70% | |
Brewpubs | Operating Segments | |||||
Net sales, gross profit and gross margin by segment [Abstract] | |||||
Net sales | $ 6,101 | $ 7,115 | $ 12,112 | $ 13,566 | |
Gross profit | $ 185 | $ 709 | $ 546 | $ 1,108 | |
Gross margin (in hundredths) | 3.00% | 10.00% | 4.50% | 8.20% | |
Sales | |||||
Sales and receivables from Anheuser-Busch, LLC [Abstract] | |||||
Percentage of concentration | 77.90% | 76.80% | 77.30% | 74.20% | |
Accounts Receivable | |||||
Sales and receivables from Anheuser-Busch, LLC [Abstract] | |||||
Percentage of concentration | 71.90% | 74.40% |
Significant Stock-Based Plan 42
Significant Stock-Based Plan Activity and Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-Based Compensation Expense [Abstract] | ||||
Total Stock-based compensation expense | $ 202 | $ 197 | $ 687 | $ 554 |
Unrecognized stock-based compensation expense | 2,400 | $ 2,400 | ||
Weighted average remaining vesting period | 2 years | |||
Selling, general and administrative expense | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Total Stock-based compensation expense | 188 | 180 | $ 621 | 518 |
Cost of sales | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Total Stock-based compensation expense | $ 14 | $ 17 | $ 66 | $ 36 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation of shares used for basic and diluted earnings per share [Abstract] | ||||
Shares used in basic diluted per share calculations (in shares) | 19,334 | 19,278 | 19,322 | 19,270 |
Dilutive effect of stock-based awards (in shares) | 183 | 111 | 180 | 0 |
Shares used for diluted EPS (in shares) | 19,517 | 19,389 | 19,502 | 19,270 |
Stock-based awards not included in diluted per share calculations as they would be antidilutive (in shares) | 0 | 2 | 0 | 125 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - claim | Apr. 07, 2017 | Mar. 06, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of class action lawsuits | 1 | 2 |
Termination of Pabst Agreemen45
Termination of Pabst Agreements (Details) - USD ($) $ in Millions | May 01, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | |||
Contract termination fee | $ 2.7 | ||
Contract brewing shortfall fees | $ 1.7 | $ 1.6 |
Assets Held for Sale and Sale46
Assets Held for Sale and Sale of Woodinville, Washington Brewery (Details) - Woodinville Brewery and Adjacent Pub - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jan. 12, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Purchase price of brewery sold | $ 24,500,000 | |||
Escrow placed in contemplation of sale of equipment | $ 500,000 | $ 500,000 | ||
Equipment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Benchmark to trigger reimbursement to purchaser from escrow | $ 3,500,000 | |||
Selling, general and administrative expense | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment charge | $ 493,000 | |||
Real estate brokerage commissions paid | 560,000 | |||
Gain recorded for sale of brewery | $ 500,000 |