E-Malt.com News article: USA, OR: Craft Brew Alliance reports first quarter 2012 results

Craft Brew Alliance, Inc. ("CBA"), an independent craft brewing company, reported net sales of $38.5 mln and net income of $0.7 mln for the first quarter ended March 31, 2012 as compared with net sales of $32.3 mln and break-even net income a year ago. The brewery reported $0.04 earnings per share on a fully diluted basis for the quarter as compared with no earnings or loss per share for the same quarter last year.

"The first quarter of 2012 continued to demonstrate the success of our investments in our innovative portfolio of beers and our marketing and sales capabilities, resulting in top-line growth and positive net income. We remain dedicated to being true to our customers through delivery of the most diverse portfolio of high quality craft beers and brands in the industry, which provide unique beer experiences for multiple occasions," said Terry Michaelson, CBA's CEO. "We are committed to delivering long-term profit growth for our shareholders by continuing to invest in the underlying strengths of our brands and strategy. We are encouraged by our first quarter results and look forward to building on that success for the full year."

Net sales for the quarter ended March 31, 2012 were $38.5 mln, an increase of $6.2 mln, or 19 percent, from net sales of $32.3 mln for the same quarter of 2011. A combination of factors drove the increase, including increased shipments to wholesalers, a decrease in master distributor fees, price increases for the beers sold to wholesalers and an increase in revenues earned from the pubs.

Total shipments for the quarter ended March 31, 2012 were 169,900 barrels, an increase of 22,000 barrels, or 15 percent, from 147,900 barrels for the same quarter of 2011, primarily reflecting the increase in shipments to wholesalers and growth in the contract brewing business. Shipment growth excluding contract shipments was 10 percent.

Cost of sales as a percentage of net sales improved 184 basis points for the quarter ended March 31, 2012, reflecting operating leverage on increased volumes, decreased distributor fees and an increased selling price for our beers. These favorable factors were partially offset by increased transportation costs in the first quarter of 2012 as compared with the same period of 2011.

Selling, general and administrative expense of $10.4 mln for the first quarter of 2012 increased $1.1 mln, or 12 percent, from $9.3 mln for the same period of 2011. This increase reflects the investment in selling and marketing initiatives that have led to sales and profit growth, partially offset by lower professional fees.

"The CBA team executed our brewing, sales and marketing initiatives well during the quarter, generating significant sales growth. We saw net income improve to $0.7 mln for the quarter from break-even in the same period last year while we continue to reinvest our increased gross profits in growth strategies for our brands," said Mark Moreland, CBA's CFO. "We remain cautiously optimistic about our top and bottom line growth for 2012 and believe that the overall health of our business and our strategic marketing and sales spend will continue to drive increased value of CBA."

Cash provided by operating activities was $4.6 mln for the quarter ended March 31, 2012 compared with $1.5 mln for the same period of 2011. The $3.1 mln increase was primarily due to improved operating results and improved working capital. Capital expenditures for the quarters ended March 31, 2012 and 2011 were $1.8 mln and $2.0 mln, respectively. Capital expenditures in both periods included projects designed to increase the capacity and improve efficiency.

About Craft Brew Alliance

CBA is an independent, publicly traded craft brewing company that was formed with the merger of leading Pacific Northwest craft brewers - Widmer Brothers Brewing and Redhook Ale Brewery - in 2008. With an eye toward preserving and growing one-of-a-kind craft beers and brands, CBA was joined by Kona Brewing Company in 2010.


11 May, 2012