Boston Beer Reports Fourth Quarter Financial Results

BOSTON, Feb. 25, 2025 (GLOBE NEWSWIRE) -- The Boston Beer Company, Inc. (NYSE: SAM), today reported financial results for the fourth quarter ended December 28, 2024. Key results were: Fourth Quarter 2024 Summary: Depletions were flat and shipments decreased 0.5%Net revenue increased 2.2% to $402.3 millionGross margin of 39.9% up 230 basis points year over yearGAAP diluted loss per share of $3.38, which includes a previously announced contract settlement expense of $1.70 per shareNon-GAAP diluted loss per share of $1.68 Full Year 2024 Summary: Depletions decreased 2% and shipments decreased 2.4%Net revenue increased 0.2% to $2.01 billionGross margin of 44.4% up 200 basis points year over yearGAAP diluted earnings per share of $5.06, which includes a non-cash brand impairment charge and contract settlement expense together totaling $4.37 per shareNon-GAAP diluted earnings per share of $9.43, or 31.5% growth year over year Capital Structure Generated $249 million in operating cash flow for the full year 2024Ended the year with $212 million in cash and no debtRepurchased $239 million in shares in 2024 and $29 million in 2025 through February 21, 2025 “We were pleased to deliver improved operational and financial performance in 2024,” said Chairman and Founder Jim Koch. “I’m confident we have the right strategy and team in place and we will be stepping up advertising investment in 2025 to further strengthen our brands and drive long-term sustainable growth. Our strong balance sheet and cash flow generation allow us to both increase advertising investment and continue to return cash to shareholders through share repurchases.” “The fourth quarter provided a solid finish to 2024 with flat depletions, gross margin expansion and strong cash generation,” said President and CEO Michael Spillane. “We are entering 2025 as a stronger company focused on end-to-end execution which is showing progress in a dynamic operating environment. We remain committed to our strategy of a diversified portfolio of core brands and strong innovation supported by increased advertising investment, transforming our supply chain and leveraging our industry leading salesforce.” Details of the results were as follows: Fourth Quarter 2024 (13 weeks ended December 28, 2024) Summary of Results Depletions for the fourth quarter were flat from the prior year. Shipment volume for the quarter was approximately 1.5 million barrels, a 0.5% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were partially offset by growth in the Company’s Twisted Tea, Sun Cruiser and Hard Mountain Dew brands. The Company believes distributor inventory as of December 28, 2024 averaged approximately four weeks on hand and was at an appropriate level for each of its brands compared to five and one half weeks on hand at the end of the third quarter. Net revenue for the quarter increased 2.2% due to price increases, the comparison against an international sales tax adjustment in the prior year and lower returns, partially offset by lower volumes and increased excise taxes. Gross margin of 39.9% increased 230 basis points from the 37.6% margin realized in the prior year. Gross margin benefited from increased revenue and procurement savings, which more than offset increased inflationary costs. The fourth quarter gross margin of 39.9% includes $8.3 million of shortfall fees, which negatively impacted gross margin by approximately 205 basis points on an absolute basis, and a non-cash expense of third-party production pre-payments of $3.7 million that negatively impacted gross margins by approximately 90 basis points on an absolute basis. Advertising, promotional and selling expenses for the fourth quarter of 2024 increased $10.9 million or 8.5% from the fourth quarter of 2023, due to increased brand and selling costs partially offset by decreased freight to distributors of $1.3 million from improved efficiencies and lower volumes. Brand and selling costs increased $12.2 million due to increased brand media investments and higher salaries and benefits. General and administrative expenses increased by $4.0 million or 9.1% from the fourth quarter of 2023, primarily due to increased indirect taxes and professional fees. Contract settlement costs reflect a $26 million cash payment resulting from a previously announced amendment of a supplier contract. This amendment was executed to better match the company’s future production requirements and results in increased production flexibility and more favorable termination rights to the Company. The Company incurred impairment costs for brewery equipment and other brewery related assets of $3.4 million in the fourth quarter of 2024 and $1.5 million in the fourth quarter of 2023. The Company’s effective tax rate benefit for the fourth quarter was 27.7% compared to 18.3% in the prior year. The increase in the tax benefit rate was primarily due to an increase in tax expense in the fourth quarter of 2023 related to non-deductible stock compensation. Fourth quarter GAAP net loss of $38.8 million or $3.38 per diluted share, represented an increase of $20.6 million or $1.89 per diluted share compared to the prior year. This increase between periods was primarily driven by contract settlement costs and higher advertising, promotional and selling expenses. partially offset by higher revenue and higher gross margins. Fourth quarter Non-GAAP net loss of $19.3 million or $1.68 per diluted share excludes $1.70 per diluted share for the net of tax impact of the contract settlement cost. Full Year 2024 (52 weeks ended December 28, 2024) Summary of Results Net revenue of $2.01 billion increased 0.2% compared to 2023 due to price increases and lower returns partially offset by lower volumes. Depletions decreased 2% from the prior year. Shipment volume was approximately 7.5 million barrels, a 2.4% decrease from the prior year, primarily due to declines in Truly Hard Seltzer that were partially offset by growth in Twisted Tea and Sun Cruiser brands. Gross margin of 44.4% increased from the 42.4% margin realized in 2023, or an increase of 200 basis points year over year. Gross margin primarily benefited from price increases, procurement savings and lower returns, partially offset by higher brewery processing costs per barrel due to lower volumes and increased inflationary costs. Gross margin of 44.4% includes $13.0 million of shortfall fees, which negatively impacted gross margin by approximately 65 basis points on an absolute basis and a non-cash expense of third-party production pre-payments of $20.1 million that negatively impacted gross margins by approximately 100 basis points on an absolute basis. Advertising, promotional and selling expenses decreased $4.0 million or 0.7% from 2023, primarily due to decreased freight to distributors of $10.5 million from lower rates and volumes. Brand and selling costs increased $6.5 million, primarily due to increased brand media investments and higher salaries and benefits. General and administrative expenses increased by $15.4 million or 8.8% from 2023, primarily due to higher salaries and benefits costs resulting from Chief Executive Officer transition costs recorded in the first quarter as well as increased inflationary costs. Impairment of intangible assets reflects a $42.6 million non-cash impairment charge recorded primarily for the Dogfish Head brand, taken as a result of the Company’s annual impairment analysis as of September 1, 2024. In the third quarter of 2023, the Company recorded an impairment charge of $16.4 million for the Dogfish Head brand. Contract settlement costs reflect a $26 million cash payment resulting from a previously announced amendment of a supplier contract. The Company incurred impairment costs for brewery equipment and other brewery related assets of $7.2 million in the full year of 2024 and $5.4 million in the full year of 2023. The Company’s effective tax rate was 31.9% compared to 30.2% in full year 2023 is due to lower pre-tax income with no corresponding reduction in non-deductible expenses. The Company estimates the lower pre-tax income resulting from the impairment of intangible assets and the contract settlement negatively impacted the 2024 effective tax rate by approximately 300 basis points. Full-year GAAP net income of $59.7 million or $5.06 per share, represented a decrease of $16.6 million or $1.15 per diluted share compared to 2023. This decrease between periods was primarily driven by contract settlement costs and increased brand impairment partially offset by higher gross margins. Full-year Non-GAAP net income of $111.1 million or $9.43 per diluted share excludes $4.37 per diluted share for the combined net of tax impact of the non-cash impairment charge of $42.6 million and the contract settlement costs of $26 million. Prior year Non-GAAP net income of $88.0 million or $7.17 excludes $0.96 per diluted share for the net of tax impact of the non-cash impairment charge of $16.4 million recorded in 2023. The Company expects that its December 28, 2024 cash balance of $211.8 million, together with its projected future operating cash flows and the unused balance on its $150.0 million line of credit, will be sufficient to fund future cash requirements. During the 52-week period ended December 28, 2024 and the period from December 30, 2024 through February 21, 2025, the Company repurchased shares of its Class A Common Stock in the amounts of $238.9 million and $29.0 million, respectively, for a total of $267.9 million. As of February 21, 2025, the Company had approximately $398 million remaining on the $1.6 billion share buyback expenditure limit set by the Board of Directors. Depletions Estimate Year-to-date depletions through the 8-week period ended February 21, 2025 are estimated by the Company to be flat to the comparable period in 2024. Full-Year 2025 Projections The Company’s actual 2025 results could vary significantly from the current projection and are highly sensitive to changes in volume projections and supply chain performance as well as inflationary impacts. The Company’s projections below do not include any impact related to potential tariffs. Full Year 2025 GuidanceDepletions and Shipments Percentage ChangeDown low single digit to up low single digitPrice Increases1% to 2%Gross Margin45% to 47%Advertising, Promotion, and Selling Expense Year Over Year Increase ($ million)$30 to $50Effective Tax Rate29% to 30%GAAP EPS$8.00 to $10.50Capital Spending ($ million)$90 to $110 Underlying the Company's current 2025 projections are the following full-year estimates and targets: The Company’s business is seasonal, with the first quarter and fourth quarter being lower volume quarters and the fourth quarter typically the lowest absolute gross margin rate of the year.First half 2025 shipments are expected to be at the high end of the full year guidance range due to timing of estimated demand and wholesaler inventory levels for certain brands and styles, primarily driven by Sun Cruiser, Hard Mountain Dew and Truly Unruly.During full year 2025, the Company estimates shortfall fees will negatively impact gross margin by 60 to 80 basis points and non-cash expense of third-party production pre-payments will negatively impact gross margins by 40 to 60 basis pointsThe advertising, selling and promotional expense projection does not include any changes in freight costs for the shipment of products to the Company’s distributors. The dollar increases in advertising, selling and promotional expense for the year are expected to occur primarily in the first half of the year with a significant year over year increase in the first quarterThe benefit of lapping CEO transition costs incurred in 2024 is expected to be offset by an increase in estimated incentive compensation at target for 2025 compared to 2024 achievement. Use of Non-GAAP Measures Non-GAAP EPS is not a defined term under U.S. generally accepted accounting principles (“GAAP”). Non-GAAP EPS, or Non-GAAP fourth quarter earnings per diluted share, excludes from fourth quarter GAAP EPS $1.70 per diluted share for the net of tax impact of the contract settlement of $26 million recognized in the fourth quarter of fiscal 2024. Non-GAAP EPS, or Non-GAAP full-year earnings per diluted share, excludes from full-year GAAP EPS $4.37 per diluted share for the net of tax impact of the combined contract settlement of $26 million recognized in the fourth quarter of fiscal 2024 and the non-cash asset impairment charge of $42.6 million, recognized in the third quarter of fiscal 2024 relating primarily to the Dogfish Head brand. These non-GAAP measures should not be considered in isolation or as a substitute for diluted earnings per share prepared in accordance with GAAP, and may not be comparable to calculations of similarly titled measures by other companies. Management uses this non-GAAP financial measure to make operating and strategic decisions and to evaluate the Company’s underlying business performance. Management believes this non-GAAP measure provides meaningful and useful information to investors and analysts regarding the Company’s outlook for its ongoing financial and business performance or trends and facilitates period to period comparisons of its forecasted financial performance. Forward-Looking Statements 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, 2024 and subsequent reports filed by the Company with the SEC on Forms 10-Q and 8-K. Copies of these documents are available from the SEC and may be found on the Company’s website, www.bostonbeer.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements. About the Company The Boston Beer Company, Inc. (NYSE: SAM) began brewing Samuel Adams beer in 1984 and has since grown to become one of the largest and most respected craft brewers in the United States. We consistently offer the highest-quality products to our drinkers, and we apply what we’ve learned from making great-tasting craft beer to making great-tasting and innovative “beyond beer” products. Boston Beer Company has pioneered not only craft beer but also hard cider, hard seltzer and hard tea. Our core brands include household names like Angry Orchard Hard Cider, Dogfish Head, Sun Cruiser, Truly Hard Seltzer, Twisted Tea Hard Iced Tea, and Samuel Adams. We have taprooms and hospitality locations in California, Delaware, Massachusetts, New York and Ohio. For more information, please visit our website at www.bostonbeer.com, which includes links to our respective brand websites. THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands, except per share data) (unaudited) December 28, December 30, December 28, December 30, 2024 (13 weeks) 2023 (13 weeks) 2024 (52 weeks) 2023 (52 weeks) Barrels sold 1,496 1,503 7,493 7,678 Revenue$429,247 $417,409 $2,137,802 $2,133,292 Less excise taxes 26,948 23,687 124,876 124,667 Net revenue 402,299 393,722 2,012,926 2,008,625 Cost of goods sold 241,614 245,826 1,119,194 1,156,256 Gross profit 160,685 147,896 893,732 852,369 Operating expenses: Advertising, promotional, and selling expenses 139,549 128,629 552,033 555,998 General and administrative expenses 47,680 43,714 189,906 174,548 Impairment of intangible asset - - 42,584 16,426 Impairment of brewery assets 3,433 1,480 7,184 5,396 Contract settlement costs 26,052 - 26,052 — Total operating expenses 216,714 173,823 817,759 752,368 Operating (loss) income (56,029) (25,927) 75,973 100,001 Other income, net: Interest income, net 3,228 4,018 13,249 10,995 Other expense, net (825) (271) (1,620) (1,408)Total other income, net 2,403 3,747 11,629 9,587 (Loss) income before income tax (benefit) provision (53,626) (22,180) 87,602 109,588 Income tax (benefit) provision (14,871) (4,056) 27,907 33,338 Net (loss) income$(38,755) $(18,124) $59,695 $76,250 Net (loss) income per common share - basic$(3.38) $(1.49) $5.07 $6.23 Net (loss) income per common share - diluted$(3.38) $(1.49) $5.06 $6.21 Weighted-average number of common shares - basic 11,460 12,166 11,774 12,243 Weighted-average number of common shares - diluted 11,452 12,190 11,766 12,258 Net (loss) income$(38,755) $(18,124) $59,695 $76,250 Other comprehensive (loss) income: Currency translation adjustment (534) 166 (715) 166 Defined benefit plans liability adjustment 76 (13) 76 (13)Total other comprehensive (loss) income, net of tax: (458) 153 (639) 153 Comprehensive (loss) income$(39,213) $(17,971) $59,056 $76,403 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except share data) December 28, December 30, 2024 2023 Assets Current Assets: Cash and cash equivalents $211,819 $298,491 Accounts receivable 61,423 66,997 Inventories 117,159 115,773 Prepaid expenses and other current assets 20,209 20,538 Income tax receivable 6,681 1,711 Total current assets 417,291 503,510 Property, plant, and equipment, net 616,242 642,509 Operating right-of-use assets 27,837 35,559 Goodwill 112,529 112,529 Intangible assets 16,446 59,644 Third-party production prepayments 14,473 33,581 Note receivable 16,738 — Other assets 28,462 42,661 Total assets $1,250,018 $1,429,993 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $87,276 $87,245 Accrued expenses and other current liabilities 138,618 126,930 Current operating lease liabilities 5,735 9,113 Total current liabilities 231,629 223,288 Deferred income taxes, net 65,803 85,721 Non-current operating lease liabilities 30,205 36,161 Other liabilities 6,194 6,894 Total liabilities 333,831 352,064 Stockholders' Equity: Class A Common Stock, $0.01 par value; 22,700,000 shares authorized; 9,263,198 and 10,033,303 issued and outstanding as of December 28, 2024 and December 30, 2023, respectively 93 100 Class B Common Stock, $0.01 par value; 4,200,000 shares authorized; 2,068,000 issued and outstanding at December 28, 2024 and December 30, 2023 21 21 Additional paid-in capital 676,454 656,297 Accumulated other comprehensive loss (696) (57)Retained earnings 240,315 421,568 Total stockholders' equity 916,187 1,077,929 Total liabilities and stockholders' equity $1,250,018 $1,429,993 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) December 28, December 30, 2024 (52 weeks) 2023 (52 weeks) Cash flows provided by operating activities: Net income $59,695 $76,250 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 93,992 88,141 Impairment of intangible assets 42,584 16,426 Impairment of brewery assets 7,184 5,396 Change in right-of-use assets 7,722 7,678 Stock-based compensation expense 18,954 16,971 Deferred income taxes (19,918) (10,871)Other non-cash (income) expense (237) 224 Changes in operating assets and liabilities: Accounts receivable 5,548 (10,340)Inventories 6,907 31,500 Prepaid expenses, income tax receivable, and other current assets (4,660) 13,979 Third-party production prepayments 19,108 27,758 Other assets 6,156 (5,849)Accounts payable 2,602 2,763 Accrued expenses, other current liabilities, and other liabilities 12,320 13,884 Operating lease liabilities (9,065) (8,759)Net cash provided by operating activities 248,892 265,151 Cash flows used in investing activities: Purchases of property, plant, and equipment (76,277) (64,087)Proceeds from sale of property, plant, and equipment 23 1,709 Cash paid for note receivable (20,000) — Net cash used in investing activities (96,254) (62,378)Cash flows used in financing activities: Repurchases and retirement of Class A common stock (238,614) (92,877)Proceeds from exercise of stock options and sale of investment shares 3,597 11,723 Net cash paid on finance leases and notes payable (1,886) (1,575)Payment of tax withholding on stock-based payment awards and investment shares (2,407) (2,113)Net cash used in financing activities (239,310) (84,842)Change in cash and cash equivalents (86,672) 117,931 Cash and cash equivalents and restricted cash at beginning of period 298,491 180,560 Cash and cash equivalents and restricted cash at end of period $211,819 $298,491 Copies of The Boston Beer Company's press releases,including quarterly financial results, are available at www.bostonbeer.com Investor Relations Contact: Media Contact:Jennifer Larson Dave DeCecco(617) 368-5152 (914) 261-6572jennifer.larson@bostonbeer.com dave.dececco@bostonbeer.com

Boston Beer Reports Fourth Quarter Financial Results

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