<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
----------------
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE QUARTER ENDED JUNE 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM _______________ TO______________.
COMMISSION FILE NUMBER 0-27116
----------------
PYRAMID BREWERIES INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1258355
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
91 SO. ROYAL BROUGHAM WAY,
SEATTLE, WA 98134
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (206) 682-8322, ext. 246
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
Common Stock, par value of $.01 per share: 8,207,935 shares of Common Stock
outstanding as of June 30, 1997
Pages 1 of 14 sequentially numbered pages.
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<PAGE> 2
PYRAMID BREWERIES INC.
FORM 10-Q
FOR THE QUARTERLY AND SIX MONTH PERIOD ENDED JUNE 30, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PART I: FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements (unaudited)
Balance Sheets
-- June 30, 1997 and December 31, 1996...................... 3
Statements of Operations
-- Three Month and Six Month period ended June 30, 1997 and 4
1996........................................................
Statements of Cash Flows
-- Six Month period ended June 30, 1997 and 1996........... 5
Notes to Financial Statements............................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8
PART II: OTHER INFORMATION
Item 4 Submission of matters to a vote of security holders......... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
SIGNATURE..................................................................... 13
Exhibits...................................................................... 14
</TABLE>
2
<PAGE> 3
PART I.
ITEM 1 FINANCIAL STATEMENTS
PYRAMID BREWERIES INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
----------- -----------
1997 1996
----------- -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................... $ 602,665 $ 300,487
Investments............................................. 4,894,577 11,477,842
Accounts receivable..................................... 1,758,014 1,284,426
Inventories............................................. 1,353,633 920,252
Income taxes receivable................................. 653,572 289,561
Prepaid expenses and other.............................. 771,155 947,284
----------- -----------
Total current assets................................. 10,033,616 15,219,852
Fixed Assets, net......................................... 30,742,134 27,924,296
Other..................................................... 1,212,114 346,421
----------- -----------
Total assets.................................... $41,987,864 $43,490,569
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable........................................ $ 1,206,213 $ 3,527,256
Accrued expenses........................................ 1,121,509 623,845
Refundable deposits..................................... 689,353 459,870
----------- -----------
Total current liabilities............................ 3,017,075 4,610,971
Deferred Rent............................................. 437,897 291,820
Deferred Income Taxes..................................... 1,016,941 820,226
----------- -----------
Total liabilities............................... 4,471,913 5,723,017
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock, 10,000,000 shares authorized, none
issued................................................ -- --
Common stock, $.01 par value; 40,000,000 shares
authorized, 8,207,935 shares and 8,204,656 issued
and outstanding....................................... 82,079 82,047
Additional paid-in capital.............................. 35,133,735 35,124,037
Unrealized loss on investments.......................... (151,829) (184,350)
Retained earnings....................................... 2,451,966 2,745,818
----------- -----------
Total stockholders' equity...................... 37,515,951 37,767,552
----------- -----------
Total liabilities and stockholders' equity...... $41,987,864 $43,490,569
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
PYRAMID BREWERIES INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- ----------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Gross Sales 8,386,375 7,720,735 14,647,501 13,473,656
Less Excise Taxes 560,912 650,661 1,017,895 1,114,069
-------------------------- ----------------------------
Net Sales 7,825,463 7,070,074 13,629,606 12,359,587
Cost of Sales 5,722,243 4,074,028 10,001,376 7,380,767
-------------------------- ----------------------------
Gross Margin 2,103,220 2,996,046 3,628,230 4,978,820
Selling, General and Administrative Expenses 2,040,104 1,488,141 4,201,799 2,970,316
-------------------------- ----------------------------
Operating Income (Loss) 63,116 1,507,905 (573,569) 2,008,504
Other Income 45,933 227,709 131,035 476,420
-------------------------- ----------------------------
Income (Loss) Before Income Taxes 109,049 1,735,614 (442,534) 2,484,924
Provision (Benefit) for Income Taxes 40,784 553,868 (148,682) 740,383
-------------------------- ----------------------------
Net Income (Loss) 68,265 1,181,746 (293,852) 1,744,541
============ ============= ============= ============
Net Income (Loss) Per Share $ 0.01 $ 0.14 $ (0.03) $ 0.21
============ ============ ============== ============
Weighted Average Shares Outstanding 8,207,935 8,200,000 8,206,296 8,200,000
============ ============ ============== ============
Barrels Shipped 33,300 38,300 61,500 66,000
============ ============ ============== ============
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE> 5
PYRAMID BREWERIES INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1997 1996
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income................................ $ (293,852) $ 1,744,541
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization................. 1,357,991 562,007
Loss (gain) on sale of fixed assets........... 4,187 (1,960)
Deferred income taxes......................... 196,715 82,761
Realized loss on investments.................. 153,313 50,000
Deferred rent................................. 146,077 28,382
Changes in operating assets and liabilities:
Accounts receivable........................... (473,588) (287,117)
Inventories................................... (245,385) (146,435)
Prepaid expenses and other.................... (241,173) (288,059)
Income taxes receivable....................... (364,011) --
Accounts payable and accrued expenses......... (292,185) 1,505,075
Refundable deposits........................... 159,156 52,262
------------ ------------
Net cash provided by operating
activities............................. 17,493 3,301,457
------------ ------------
INVESTING ACTIVITIES:
Acquisition of Thomas Kemper Soda Company........ (575,802)
Acquisitions of fixed assets..................... (5,498,771) (5,231,956)
Proceeds from sales of fixed assets.............. 269,443 2,783
Purchases of investments......................... (5,705,317) (2,844,953)
Redemptions and sales of investments............. 12,167,790 --
------------ ------------
Net cash provided by (used in) investing
activities............................. 657,343 (8,074,126)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from the sale of common stock........... 9,731 --
Principal payments on Thomas Kemper Soda
long-term debt................................. (186,240) --
Principal payments on Thomas Kemper Soda
capital leases................................. (196,149) --
Repayments to related parties.................... -- (4,689,866)
------------ ------------
Net cash used in financing activities.... (372,658) (4,689,866)
------------ ------------
Increase (decrease) in cash and cash equivalents... 302,178 (9,462,535)
Cash and cash equivalents at beginning of period... 300,487 12,503,850
------------ ------------
Cash and cash equivalents at end of period......... $ 602,665 $ 3,041,315
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
PYRAMID BREWERIES INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION:
Pyramid Breweries Inc. (the "Company"), a Washington corporation, was
incorporated in 1984 and is engaged in the brewing, marketing and selling of
craft beers and premium sodas, under the brand names: "Pyramid" and "Thomas
Kemper." The products are sold primarily in Washington, Oregon and Northern
California. The Company's craft beers were distributed in 32 states at June 30,
1997.
The accompanying condensed financial statements have been prepared by the
Company, without audit, in accordance with generally accepted accounting
principles for interim financial information and pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements and should be read in
conjunction with the audited financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996. In the opinion
of management, the accompanying unaudited financial statements contain all
material adjustments, consisting only of those of a normal recurring nature,
considered necessary for a fair presentation of the Company's financial
position, results of operations and cash flows at the dates and for the periods
presented. The operating results for the interim periods presented are not
necessarily indicative of the results expected for the full year.
Certain prior period balances have been reclassified to conform to the current
period presentation.
2. INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- -----------
<S> <C> <C>
Finished goods.................... $ 653,156 $ 552,687
Raw materials..................... 700,477 367,565
---------- -----------
$1,353,633 $ 920,252
========== ===========
</TABLE>
Raw materials primarily include ingredients, flavorings and packaging
materials, as well as beer held in fermentation prior to the filtration and
packaging process. Finished goods include primarily product ready for shipment,
as well as promotional merchandise held for sale.
3. FIXED ASSETS:
Fixed assets consist of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ ----------
<S> <C> <C>
Land.................................. $ 26,000 $ 26,000
Building.............................. 274,384 274,384
Brewery equipment..................... 18,085,850 10,274,601
Retail equipment...................... 1,042,254 493,888
Furniture and fixtures................ 624,437 451,214
Leasehold improvements................ 13,984,212 2,815,547
Construction in progress.............. - 16,085,925
------------- -------------
34,037,137 30,421,559
Less accumulated depreciation......... (3,295,003) (2,497,263)
------------ -------------
$ 30,742,134 $ 27,924,296
============ =============
</TABLE>
At June 30, 1997 and December 31, 1996, accounts payable included
approximately $153,000 and $2,356,000, respectively, for the acquisition of
fixed assets.
6
<PAGE> 7
4. STOCK OPTIONS
Stock option activity during the six month period ending June 30, 1997 was
as follows:
<TABLE>
<CAPTION>
Options Price
------- ----------
<S> <C> <C>
Outstanding, December 31, 1996 399,500 4.75-19.00
Grants through June 30, 1997 7,500 3.25
------- ----------
Outstanding through June 30, 1997 407,000 3.25-19.00
</TABLE>
There were no exercises or forfeitures during the six month period ended June
30, 1997.
5. THOMAS KEMPER SODA COMPANY ACQUISITION:
On March 7, 1997, the Company acquired substantially all of the operating
assets and assumed certain liabilities of Thomas Kemper Soda Company for
approximately $1.7 million including certain transaction costs. The purchase
price was paid with approximately $576,000 in cash and the assumption of
approximately $1,124,000 of liabilities. In connection with the acquisition,
goodwill of approximately $803,000 has been recorded in other assets and is
being amortized over 10 years. During 1996, Thomas Kemper Soda Company had
annual sales of approximately $3.6 million.
6. COMMITMENTS AND CONTINGENCIES:
The Company is involved from time to time in claims, proceedings and
litigation arising in the ordinary course of business. The Company does not
believe that any such claim, proceeding or litigation, either alone or in the
aggregate, will have a material adverse effect on the Company's financial
position or results of operations.
7
<PAGE> 8
Item 2 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain selected
unaudited operating data, expressed as a percentage of net sales.
SELECTED UNAUDITED OPERATING DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
--------------------------------------------------------------
% OF % OF
1997 NET SALES 1996 NET SALES
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross Sales 8,386,375 7,720,735
Less Excise Taxes 560,912 650,661
--------- ---------
Net Sales 7,825,463 100.0% 7,070,074 100.0%
Cost of Sales 5,722,243 73.1% 4,074,028 57.6%
--------------------------------------------------------------
Gross Margin 2,103,220 26.9% 2,996,046 42.4%
Selling, General and Administrative Expenses 2,040,104 26.1% 1,488,141 21.1%
--------------------------------------------------------------
Operating Income 63,116 0.8% 1,507,905 21.3%
Other Income 45,933 0.6% 227,709 3.2%
--------------------------------------------------------------
Income Before Income Taxes 109,049 1.4% 1,735,614 24.5%
Provision for Income Taxes 40,784 0.5% 553,868 7.8%
--------------------------------------------------------------
Net Income 68,265 0.9% 1,181,746 16.7%
==============================================================
Net Income Per Share $ 0.01 $ 0.14
Weighted Average Shares Outstanding 8,207,935 8,200,000
Barrels Shipped 33,300 38,300
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------------------------------------------
% OF % OF
1997 NET SALES 1996 NET SALES
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross Sales 14,647,501 13,473,656
Less Excise Taxes 1,017,895 1,114,069
---------- ----------
Net Sales 13,629,606 100.0% 12,359,587 100.0%
Cost of Sales 10,001,376 73.4% 7,380,767 59.7%
--------------------------------------------------------------
Gross Margin 3,628,230 26.6% 4,978,820 40.3%
Selling, General and Administrative Expenses 4,201,799 30.8% 2,970,316 24.0%
--------------------------------------------------------------
Operating (Loss) Income (573,569) -4.2% 2,008,504 16.3%
Other Income 131,035 1.0% 476,420 3.8%
--------------------------------------------------------------
Income (Loss) Before Income Taxes (442,534) -3.2% 2,484,924 20.1%
Provision (Benefit) for Income Taxes (148,682) -1.0% 740,383 6.0%
--------------------------------------------------------------
Net Income (Loss) (293,852) -2.2% 1,744,541 14.1%
==============================================================
Net Income (Loss) Per Share $ (0.03) $ 0.21
Weighted Average Shares Outstanding 8,206,296 8,200,000
Barrels Shipped 61,500 66,000
</TABLE>
8
<PAGE> 9
QUARTER ENDED JUNE 30, 1997 COMPARED TO QUARTER ENDED JUNE 30, 1996
Gross Sales. Gross sales increased by 9.1% to $8.4 million for the second
quarter ended June 30, 1997 from $7.7 million in the same quarter of the prior
year. The increase resulted primarily from sales of Thomas Kemper Soda, acquired
in March of 1997 and an 80.0% increase in retail sales from $1.0 million to $1.8
million, due to the opening of the Berkeley Alehouse in February of 1997.
Wholesale craft beer sales decreased 14.9% to $5.7 million for the second
quarter of 1997 from $6.7 million in the same quarter of the prior year due to a
13.1% volume decrease, 5,000 barrels, to 33,300 and an increase in the
proportion of draft beer sales. The product mix shifted to a higher percentage
of draft sales (36% for the quarter ended June 30, 1997 versus 31% for the same
quarter of the prior year) which resulted in lower sales dollars per barrel
sold.
Excise Taxes. Excise taxes decreased to 7.2% of net sales for the second
quarter ended June 30, 1997 from 9.2% of net sales in the same quarter of the
prior year. The decrease in excise taxes as a percentage of net sales was due
primarily to an underestimate of the small brewers federal excise tax credit
during the second quarter of the prior year.
Gross Margin. Gross margin decreased to $2.1 million for the second quarter
ended June 30, 1997 from $3.0 million in the same quarter of the prior year.
Gross margin as a percentage of net sales declined to 26.9% for the second
quarter ended June 30, 1997 from 42.4% for the same quarter of the prior year.
This decrease as a percentage of net sales was due to higher fixed and
semi-fixed costs, including increases in depreciation, increased package design
costs, increased freight costs incurred servicing more distant markets and the
lower gross margin associated with the increase in sales from retail operations
(primarily sales of beer, food and branded merchandise at the Company's
Alehouses). Compared to the 1996 year, the Company expects its gross margin will
be adversely impacted by the addition of the Berkeley Brewery due to lower
utilization of brewing capacity. Changes in the cost of raw materials and
packaging did not, in the aggregate, have a significant impact on gross margin
during either period.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $2.0 million, or 26.1% of net sales, for
the second quarter ended June 30, 1997 from $1.5 million, or 21.1% of net sales,
for the same quarter of the prior year. This increase was due primarily to the
planned increase in selling and promotional expenditures attributable to the
geographic expansion of beer sales territories. The Company's sales and
marketing staff increased from 23 to 37 employees and it distributed its craft
beers in 32 states as of June 30, 1997, up from 20 states at June 30, 1996.
Management believes that sales and promotional expenses are necessary
investments for expansion of the Company, and expects these expenditures to
continue to adversely impact future earnings.
Other Income. Other income decreased to $45,933 for the second quarter
ended June 30, 1997 from $227,709 for the second quarter of the prior year. The
decrease in other income was due primarily to a decrease in interest income
earned from investing the net proceeds of the initial public stock offering,
which proceeds primarily were used to finance construction of the Company's
Berkeley Brewery and Alehouse and upgrades to the Seattle Brewery. The decrease
in tax exempt interest income resulted in an increase in the Company's effective
income tax rate for the second quarter of 1997.
Net Income. Net income for the quarter ended June 30,1997 was $68,265, a
decrease from $1.2 million reported for the second quarter of the prior year.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Gross Sales. Gross sales increased by 8.1% to $14.6 million for the six
month period ended June 30, 1997 from $13.5 million in the same six month period
of the prior year. Sales increased due to sales of Thomas Kemper Soda, acquired
in March of 1997 and a 68.4% increase in retail sales from $1.9 million to $3.2
million due to the opening of the Berkeley Alehouse in February of 1997.
Wholesale craft beer sales decreased 9.5% to $10.5 million from $11.6 million in
the same six month period of the prior year due to a 6.8% volume decrease, 4,500
barrels, to 61,500 and an increase in the proportion of draft beer sales. The
product mix shifted to a higher percentage of draft sales (38% as of June 30,
1997 versus 32% as of June 30, 1996) which resulted in lower sales dollars per
barrel sold.
9
<PAGE> 10
Excise Taxes. Excise taxes decreased to 7.5% of net sales for the six month
period ended June 30, 1997 from 9.0% of net sales for the same six month period
of the prior year. The decrease in excise taxes as a percentage of net sales was
due primarily to an underestimate of the small brewers federal excise tax credit
during the same period of the prior year.
Gross Margin. Gross margin decreased to $3.6 million for the six month
period ended June 30, 1997 from $5.0 million for the same six month period of
the prior year. Gross margin as a percentage of net sales declined to 26.6% for
the six month period ended June 30, 1997 from 40.3% for the same six month
period of the prior year. This decrease as a percentage of net sales was due to
higher fixed and semi-fixed costs, including increases in depreciation,
increased package design costs, increased freight costs incurred servicing more
distant markets and the lower gross margin associated with the increase in sales
from retail operations (primarily sales of beer, food and branded merchandise at
the Company's Alehouses). Compared to the 1996 year, the Company expects its
gross margin will be adversely impacted by the addition of the Berkeley Brewery
due to lower utilization of brewing capacity. Changes in the cost of raw
materials and packaging did not, in the aggregate, have a significant impact on
gross margin during either period.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $4.2 million, or 30.8% of net sales, for
the six month period ended June 30, 1997 from $3.0 million, or 24.0% of net
sales, from the same six month period of the prior year. This increase was due
primarily to the planned increase in selling and promotional expenditures
attributable to the geographic expansion of beer sales territories.
Other Income. Other income decreased to $131,035 for the six month period
ended June 30,1997 from $476,420 for the same six month period of the prior
year. The decrease in other income was due primarily to a decrease in interest
income earned from investing the net proceeds of the initial public stock
offering, which proceeds primarily were used to finance construction of the
Company's Berkeley Brewery and Alehouse, upgrades to the Seattle Brewery and
repayment of debt. The decrease in tax exempt interest income resulted in an
increase in the Company's effective income tax rate for the six month period
ended June 30, 1997.
Net (Loss) Income. The net loss for the six month period ended June 30,
1997 was ($293,852), as compared to net income of $1.7 million reported for the
same period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the six month period ended
June 30, 1997 decreased to $17,493 compared to $3.3 million for the same six
month period of the prior year. This decrease was due in part to the net loss of
$293,852 incurred for the six month period ended June 30, 1997 versus the net
income of $1.7 million for the same six month period of the prior year as well
as various changes in other operating assets and liabilities.
At June 30, 1997, the Company had working capital of $7.0 million compared
to $10.6 million at December 31, 1996.
Net cash provided by investing activities in the period ended June 30, 1997
was $657,343 compared to net cash used in investing activities of $8.1 million
for the same period of the prior year. The cash provided by investing activities
was primarily the redemptions and sales of investments. The cash used in
investing activities in 1996 primarily was applied to the construction of the
Berkeley Brewery and Alehouse and expansion of the Seattle Brewery.
The Company has a $15.0 million line of credit (the "Line of Credit") with
Bank of America. The Line of Credit revolves through April 30, 1999, during
which time the required payments are interest only. Borrowings under the Line of
Credit accrue interest, at the Company's option, at either the bank's prime
rate, or at 30, 60, 90 day LIBOR plus 1.0%. The Line provides for acquisition
financing with term out provisions. The Line of Credit also includes provisions
that require the Company to maintain certain financial ratios and a minimum
tangible net worth. The Company has not borrowed funds under this Line of Credit
in 1997.
Future capital requirements will vary depending on such factors as real
estate costs in the markets selected for future expansion, whether such real
estate is leased or purchased and the extent of improvements necessary. Capital
expenditures through June 30, 1997 was approximately $4.2 million, which
includes final payments on the Berkeley Brewery and Alehouse, the purchase of
the Thomas Kemper Soda Company, and the continued upgrading of brewery equipment
and facilities in the Company's existing breweries. While there can be no
assurance that current expectations will be realized and plans are subject to
change, the Company believes that the existing cash and investments together
with cash from operations and borrowings under the Line of Credit, will be
sufficient for the Company's working capital needs during 1997.
10
<PAGE> 11
The Company's future cash requirements and cash flow expectations are
closely related to its expansion plans. The Company generally expects to meet
future financing needs through cash flow from operations and, to the extent
required and available, additional bank borrowings, industrial development
bonds, and offerings of debt or equity securities.
Adoption of Accounting Standards
Statement No. 128 on Earnings per Share specifies the computation, presentation,
and disclosure requirements for earnings per share (EPS) for entities with
publicly held common stock or potential common stock. This Statement's objective
is to simplify the computation of earnings per share and to make the U.S.
standard for computing earnings per share more compatible with the EPS standards
of other countries and with that of the International Accounting Standards
Committee. This Statement shall be effective for financial statements for both
interim and annual periods ending after December 15, 1997. The Company plans to
adopt this statement upon the effective date.
Risk Factors and Forward Looking Statements
Certain statements contained herein are forward-looking statements that
involve a number of risks, uncertainties and factors that may cause actual
results to materially differ, including: lower than anticipated sales in new and
existing markets; increased seasonality of demand for craft beers; decreased
selling prices; increased competition; expenses and uncertainties associated
with construction and operation of new breweries and expansion of the
distribution network; increases in raw material and packaging costs; and other
risk factors as set forth in the Company's Annual Report dated December 31,
1996.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
PART II. -- OTHER INFORMATION
ITEM 1. NONE
ITEM 2. NONE
ITEM 3. NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pyramid Breweries Inc. held its annual meeting of stockholders on May 22, 1997.
The following items were voted upon at that time.
1. To elect two Class II Directors, John Stoddard and Thomas Schwalm,
to serve a three year term ending at the 2000 Annual Meeting. The results of the
vote were as follow:
<TABLE>
<CAPTION>
Director For Withheld
<S> <C> <C>
John Stoddard 7,771,523 57,626
Thomas Schwalm 7,772,023 57,126
</TABLE>
Resolved: That John Stoddard and Thomas Schwalm are hereby elected Class II
directors to hold office under the terms outlined above and until their
successors are duly elected and qualified.
ITEM 5. NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
11
<PAGE> 12
(A) EXHIBITS
The following exhibits are filed as part of this report.
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None filed during the quarter ended JUNE 30, 1997.
12
<PAGE> 13
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Seattle,
State of Washington, on August 12, 1997.
PYRAMID BREWERIES INC.
By: /s/ George Hancock
---------------------------------------
George Hancock
President and Chief Executive Officer
(Principal Accounting Officer)
DATE: August 12, 1997
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
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0
0
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