E-Malt.com News article: USA: The Boston Beer Company reports volume increases both in Q4 and FY2014

The Boston Beer Company, Inc. reported on February 24 fourth quarter 2014 net revenue of $217.8 million, an increase of $12.4 million or 6% over the same period last year, mainly due to core shipment growth of 4%.

Net income for the fourth quarter was $19.1 million, or $1.40 per diluted share, an increase of $1.0 million or $.07 per diluted share from the fourth quarter of 2013. This increase was primarily due to shipment increases partially offset by a higher tax rate.

Earnings per diluted share for the 52-week period ended December 27, 2014 were $6.69, an increase of $1.51, or 29%, from the comparable 52-week period in 2013. Net revenue for the 52-week period ended December 27, 2014 was $903.0 million, an increase of $163.9 million, or 22%, from the comparable 52-week period in 2013.

Jim Koch, Chairman and Founder of the Company, commented, "I am pleased with our depletion growth in 2014 and that The Boston Beer Company after 30 years of brewing continues to help lead the craft beer industry both in innovation and variety. Our drinkers still get excited by our beers, and our growth is attributable to great beer innovation, coupled with strong sales execution and support from our distributors and retailers. I am especially proud of our employees for growing Samuel Adams in a very competitive environment and learning to brew, manage and sell a more complicated portfolio. At the end of the fourth quarter, we had a smooth transition to our spring seasonal Samuel Adams Cold Snap, which is in its second year. Cold Snap is a unique and approachable white ale brewed with a blend of exotic spices that has been well received by drinkers and retailers alike. In the first quarter we began a national rollout of our new session IPA, Samuel Adams Rebel Rider IPA and our new double IPA, Samuel Adams Rebel Rouser IPA, which we expect will complement Samuel Adams Rebel IPA, which had a successful launch in 2014. We remain confident about the long-term outlook for the craft category and our Samuel Adams brand."


4th Quarter 2014 Summary of Results

Depletions grew 13% from the comparable 13-week period in the prior year, reflecting increases across the Angry Orchard®, Twisted Tea®, Samuel Adams® and Traveler® brands.

Core shipment volume was approximately 983,000 barrels, a 4% increase over the fourth quarter of 2013.

Gross margin at 50% for the fourth quarter was lower than the 51% realized in the fourth quarter of the prior year, primarily due to higher brewery processing costs and unfavorable product mix effects that were partially offset by price increases.


Full Year 2014 Summary of Results

Depletions grew by 22% from the comparable 52-week period in 2013, reflecting increases across the Angry Orchard, Twisted Tea, Samuel Adams and Traveler brands.

Core shipment volume was approximately 4.1 million barrels, a 20% increase from the comparable 52-week period in 2013.

General and administrative expenses increased by $3.6 million from the comparable 52-week period in 2013, primarily due to increases in salary costs.

The Company expects that its cash balance of $76.4 million as of December 27, 2014, along with future operating cash flow and the Company's unused line of credit of $150.0 million, will be sufficient to fund future cash requirements.

During the fourth quarter and the period from December 28, 2014 through February 20, 2015, the Company repurchased 31,900 shares of its Class A Common Stock for an aggregate purchase price of approximately $8.6 million. As of February 20, 2015 the Company had approximately $41.9 million remaining on the $350.0 million share buyback expenditure limit set by the Board of Directors.

Depletion Estimates

Year-to-date depletions through the seven weeks ended February 14, 2015 are estimated by the Company to be up approximately 12% from the comparable period in 2014.

2015 Outlook

The Company currently projects full year 2015 earnings per diluted share to be between $7.10 and $7.50. The Company's actual 2015 earnings per share could vary significantly from the current projection. Underlying the Company's current 2015 projection are the following full-year estimates and targets:

Depletions and shipments percentage growth of between 8% and 12%.

National price increases of between 1% and 2%.

Gross margin of between 51% and 53%.

Increased investment in advertising, promotional and selling expenses of between $25 million and $35 million. This does not include any increases in freight costs for the shipment of products to the Company's distributors.

Increased expenditures of between $10 million to $15 million for continued investment in Alchemy & Science brands, which are included in our full-year estimated increases in advertising, promotional and selling expenses. These estimates could change significantly and 2015 volume from these brands is unlikely to cover these and other potential Alchemy & Science brand investments.

Effective tax rate of approximately 38% based upon current tax laws and underlying regulations.

Estimated capital spending of between $80 million and $110 million, which could be significantly higher, depending on capital required to meet future growth. These estimates include capital investments for existing Alchemy & Science projects of between $3 million and $5 million.


25 February, 2015