EXHIBIT 99
BOSTON BEER REPORTS FIRST QUARTER VOLUME,
REVENUE AND EARNINGS
BOSTON, MA (4/15/03) -- The Boston Beer Company, Inc. (NYSE: SAM) today
announced first quarter 2003 volume, revenue and earnings compared to the first
quarter 2002.
1ST QUARTER RESULTS
For the 13 week period ended March 29, 2003, The Boston Beer Company recorded
net sales of $45.3 million, a 0.7% decline from the 1st quarter in 2002. Net
revenue per barrel increased by 1.1% during the quarter due to product mix
changes and normal price increases. As reflected on the following chart,
reported sales volume for the period was 270,000 barrels, a 1.8% decline from
prior year.
Barrels Q1-2003 Q1-2002 %Chg
------------- ------------- ----
Total Boston Beer Brands 269,000 274,000 -1.8%
3rd Party Contract Brewing 1,000 1,000 0%
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Total Company 270,000 275,000 -1.8%
The Company recorded a net loss of ($109,000) or ($.01) per diluted share for
the quarter versus net income of $1.3 million and $.08 per diluted share for the
same period last year. Gross margins as a percent of net sales were 58.6% as
compared to 59.5% in the prior year first quarter. The decrease in gross profit
is due to a combination of factors including adjustments to the returns
allowance to reflect increased wholesaler inventories particularly of Seasonals;
and increased brewery operating costs in Cincinnati, that were partially offset
by normal price increases. Operating expenses for the quarter were up 8% in
comparison to the same period last year. Significant changes in operating
expenses included increased advertising and promotional expenses, primarily
related to the continued support of Sam Adams Light(R). Other operating expenses
were consistent with normal cost inflation compared to the 1st quarter of 2002.
Boston Beer Brand distributor sales to retail (depletions) totaled 252,000
barrels, approximately a 2% increase from the same period 2002. Shipments and
orders in-hand suggest that core shipments for April and May 2003 will be down
approximately 13% as compared to the same period 2002. Actual shipments for the
current quarter may differ, however, and no inferences should be drawn with
respect to shipments in future periods.
Jim Koch, Chairman of The Boston Beer Company, said, "The first quarter 2003 was
a challenging quarter for the beer industry, driven primarily by soft on-premise
business. Wholesaler-reported depletion volume for Boston Beer brands grew at a
rate below that expected during the first quarter, probably due to a combination
of weak economy and consumer confidence, tough weather conditions in the
Northeast, and recent world events. This shortfall to expectations has impacted
orders in-hand for April and May. Shipment volume during the first half of 2003
is now anticipated to be down single-digits as compared to the first six months
of 2002, due to declines accross all Samuel Adams brands, except for Sam Adams
Light, resulting from difficult business conditions and other inventory build
factors in the first half of 2002. Sam Adams Light continues to contribute
approximately 20% of the Company's volume and we were delighted that Sam Adams
Light has been chosen by Market Watch magazine as a "Hot
Brand" in 2002. We are actively working to minimize the cannibalization of
Samuel Adams Boston Lager and Seasonals by Sam Adams Light which has affected
our total growth rate, and to grow the entire Samuel Adams Family in this
difficult business climate. We continue to expect earnings improvement for the
full year of 2003 as compared to 2001."
Martin Roper, Boston Beer President and CEO, reported on the Company's
initiatives, "We are encouraged by the results of the Sam Adams Light rollout
and its long-term potential. Our strategy is to maximize total family growth,
through continued investment behind our brands on the media that is most
effective for the messaging. In the last three months we have introduced a new
radio campaign for Sam Adams Light and a new TV campaign for Samuel Adams Boston
Lager. We believe that the Samuel Adams Boston Lager TV will support the entire
Samuel Adams Brand Family with a quality message, while we continue to maximize
the opportunity behind Sam Adams Light with radio and other support. We believe
this approach positions us well for growth. Assuming pricing stability, with
some potential improvements on costs, we should see slightly higher margins than
2002 for the full year."
During the first quarter of 2003, the Company repurchased 365,000 shares of its
Class A Common Stock for an aggregate purchase price of $5.0 million. In April
2003, the Company's Board of Directors increased the aggregate expenditure
limitation on the Company's Class A Common Stock from $50.0 million to $60.0
million. As of April 15, 2003, the Company has $10.0 million remaining on the
authorized share buyback expenditure limit. Since the beginning of the share
repurchase program, the Company has repurchased a total of approximately 5.4
million shares of its Class A Common Stock for an aggregate purchase price of
$49.9 million through April 15, 2003. As of April 15, 2003, the Company has 11.4
million shares of Class A Common Stock outstanding and 4.1 million shares of
Class B Common Stock outstanding.
The Boston Beer Company is America's leading brewer of world-class beer. Founded
in 1984 by sixth-generation brewer Jim Koch, the Company has won more than 500
international awards for its better-tasting beers. Samuel Adams Boston Lager(R)
is the Company's flagship brand, celebrated worldwide for its high-quality
ingredients and traditional brewing techniques. The result is a beer renowned by
drinkers for its full flavor, balance, complexity, and consistent quality. For
more information, visit the web-site at www.samadams.com or visit
www.bostonbeer.com for financial information.
Statements made in this press release that state the Company's or management's
intentions, hopes, beliefs, expectations or predictions of the future are
forward-looking statements. It is important to note that the Company's actual
results could differ materially from those projected in such forward-looking
statements. Additional information concerning factors that could cause actual
results to differ materially from those in the forward-looking statements is
contained from time to time in the Company's SEC filings, including but not
limited to the Company's report on Form 10-K for the year ended December 28,
2002 and for December 29, 2001. Copies of these documents may be obtained by
contacting the Company or the SEC.
Tuesday, April 15, 2003
THE BOSTON BEER COMPANY, INC.
FINANCIAL RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
OPERATING RESULTS:
(unaudited)
QUARTER ENDED
MARCH 29, MARCH 30,
2003 2002
-------- --------
Barrels sold 270 275
Gross sales $ 50,123 $ 50,478
Less excise taxes 4,804 4,818
-------- --------
Net sales 45,319 45,660
Cost of goods sold 18,772 18,512
-------- --------
Gross profit 26,547 27,148
Advertising, promotional and selling expenses 23,310 21,685
General and administrative expenses 3,803 3,419
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Total operating expenses 27,113 25,104
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Operating (loss) income (566) 2,044
Interest income, net 394 199
Other income, net (8) (6)
-------- --------
(Loss) income before income taxes (180) 2,237
Provision (benefit) for income taxes (71) 917
-------- --------
Net (loss) income $ (109) $ 1,320
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Net (loss) income per share - basic $ (0.01) $ 0.08
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Net (loss) income per share - diluted $ (0.01) $ 0.08
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Weighted average number of common shares - basic 15,734 16,352
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Weighted average number of common shares - diluted 15,991 16,695
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COPIES OF THE BOSTON BEER COMPANY'S PRESS RELEASES, INCLUDING QUARTERLY
FINANCIAL RESULTS, ARE AVAILABLE ON THE INTERNET AT WWW.SAMADAMS.COM
CONFERENCE CALL BEGINS AT 4:00 P.M. (ET)
DIAL IN # (630) 395-0040 PASSWORD: BOSTON
Contact: Kara Rappaport (617) 368-5108
CONSOLIDATED BALANCE SHEETS:
(unaudited)
MARCH 29, DECEMBER 28,
2003 2002
------------ ------------
Assets
Current Assets:
Cash and cash equivalents $ 11,608 $ 20,608
Short-term investments 35,187 32,001
Accounts receivable, net of allowance for doubtful accounts of
$687 and $689 as of March 29, 2003 and December 28, 2002,
respectively 17,986 17,830
Inventories 10,741 8,342
Prepaid expenses 1,305 1,284
Deferred income taxes 1,959 1,959
Other current assets 1,484 1,513
------------ ------------
Total current assets 80,270 83,537
Property, plant and equipment, net 19,650 20,202
Other assets 1,472 1,690
Goodwill 1,377 1,377
------------ ------------
Total assets $ 102,769 $ 106,806
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Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 11,914 $ 8,997
Accrued expenses 13,570 15,874
------------ ------------
Total current liabilities 25,484 24,871
Deferred income taxes 2,406 2,406
Other long-term liabilities 697 697
Commitments and Contingencies
Stockholders' Equity
Class A Common Stock, $.01 par value;
22,700,000 shares authorized; 16,744,604 and 16,674,556 issued
as of March 29, 2003 and December 28, 2002, respectively 167 166
Class B Common Stock, $.01 par value;
4,200,000 shares authorized; 4,107,355 issued and outstanding 41 41
Additional paid-in capital 59,893 59,144
Unearned compensation (334) (189)
Other comprehensive income 268 419
Retained earnings 64,091 64,200
Treasury stock, at cost
5,377,067 and 5,011,947 shares as of March 29, 2003 and
December 28, 2002, respectively (49,944) (44,949)
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Total stockholders' equity 74,182 78,832
------------ ------------
Total liabilities and stockholders' equity $ 102,769 $ 106,806
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CONSOLIDATED STATEMENTS OF CASH FLOWS:
(unaudited)
QUARTER ENDED
-----------------------
MARCH 29, MARCH 30,
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (109) $ 1,320
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 1,383 1,373
Loss (gain) on disposal of fixed assets -- (110)
Stock option compensation expense 22 25
Changes in assets and liabilities:
Accounts receivable (156) (786)
Inventories (2,399) (858)
Prepaid expenses (21) 192
Other current assets 98 84
Other assets -- 37
Accounts payable 2,917 (2,109)
Accrued expenses (2,304) (1,503)
Other long-term liabilities 132 (80)
-------- --------
Net cash used in operating activities (437) (2,415)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (595) (570)
Proceeds on disposal of fixed assets -- 180
Maturities of held-to-maturity investments -- 2,028
Purchases of available-for-sale securities (3,337) (5,000)
Purchases of held-to-maturity securities -- (8,973)
-------- --------
Net cash used in investing activities (3,932) (12,335)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock (4,995) --
Proceeds from exercise of stock options 320 119
Net proceeds from the sale of Investment Shares 44 25
-------- --------
Net cash (used in) provided by financing activities (4,631) 144
-------- --------
Change in cash and cash equivalents (9,000) (14,606)
Cash and cash equivalents at beginning of period 20,608 45,838
-------- --------
Cash and cash equivalents at end of period $ 11,608 $ 31,232
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Supplemental disclosure of cash flow information:
Interest paid $ -- $ --
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Taxes paid $ 1,073 $ 845
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