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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NUMBER 0-26542
---------------------------
REDHOOK ALE BREWERY, INCORPORATED
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1141254
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3400 PHINNEY AVENUE NORTH, SEATTLE, WASHINGTON 98103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (206) 548-8000
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 $.005 per share: 7,685,886 shares outstanding
as of March 31, 1997.
Page 1 of 12 sequentially numbered pages
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REDHOOK ALE BREWERY, INCORPORATED
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets
March 31, 1997 and December 31, 1996.............. 3
Statements of Income
Three Months Ended March 31, 1997 and 1996........ 4
Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996........ 5
Notes to Financial Statements............................. 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................. 7
PART II. OTHER INFORMATION
ITEM 2. Exhibits and Reports on Form 8-K.............................. 11
</TABLE>
2
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PART I.
ITEM 1. FINANCIAL STATEMENTS
REDHOOK ALE BREWERY, INCORPORATED
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents ..................................... $ 35,006 $ 1,162,352
Accounts Receivable ........................................... 2,312,372 2,051,591
Inventories ................................................... 2,447,600 2,229,376
Income Taxes Receivable ....................................... 344,897 427,075
Other ......................................................... 670,871 1,725,942
----------- -----------
Total Current Assets ........................................ 5,810,746 7,596,336
Fixed Assets, Net ............................................... 88,128,844 86,357,559
Other Assets .................................................... 1,098,957 1,170,144
----------- -----------
Total Assets .............................................. $95,038,547 $95,124,039
=========== ===========
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND COMMON STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable .............................................. $ 3,208,152 $ 4,075,699
Accrued Salaries, Wages, and Payroll Taxes .................... 1,054,783 1,220,212
Refundable Deposits ........................................... 926,480 950,926
Other Accrued Expenses ........................................ 472,925 367,025
Current Portion of Long-Term Debt ............................. 134,754 132,554
----------- -----------
Total Current Liabilities ................................... 5,797,094 6,746,416
----------- -----------
Long-Term Debt, Net of Current Portion .......................... 7,655,839 6,190,764
----------- -----------
Deferred Income Taxes ........................................... 3,471,347 3,582,692
----------- -----------
Other Liabilities ............................................... 49,266 52,461
----------- -----------
Convertible Redeemable Preferred Stock .......................... 15,932,955 15,921,855
----------- -----------
Common Stockholders' Equity:
Common Stock, Par Value $0.005 per Share, Authorized, 50,000,000
Shares; Issued and Outstanding, 7,685,886 Shares in 1997 and
7,685,486 Shares in 1996 .................................... 38,430 38,428
Additional Paid-In Capital .................................... 56,654,094 56,652,764
Retained Earnings ............................................. 5,439,522 5,938,659
----------- -----------
Total Common Stockholders' Equity ......................... 62,132,046 62,629,851
----------- -----------
Total Liabilities, Preferred Stock and
Common Stockholders' Equity ........................... $95,038,547 $95,124,039
=========== ===========
</TABLE>
See Accompanying Notes
3
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REDHOOK ALE BREWERY, INCORPORATED
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Sales ............................................. $ 8,868,210 $ 8,554,845
Less Excise Taxes ................................. 874,356 833,739
----------- -----------
Net Sales ......................................... 7,993,854 7,721,106
Cost of Sales ..................................... 6,371,882 5,055,061
----------- -----------
Gross Profit ...................................... 1,621,972 2,666,045
Selling, General and Administrative Expenses ...... 2,421,142 1,532,166
----------- -----------
Operating Income (Loss) ........................... (799,170) 1,133,879
Other Income, Net ................................. 18,311 257,506
----------- -----------
Income (Loss) before Income Taxes ................ (780,859) 1,391,385
Provision (Benefit) for Income Taxes .............. (292,822) 507,855
----------- -----------
Net Income (Loss) ................................. $ (488,037) $ 883,530
=========== ===========
Net Income (Loss) per Share ....................... $ (0.06) $ 0.10
=========== ===========
Weighted Average Common and Common
Equivalent Shares Outstanding ................... 7,685,619 9,206,700
=========== ===========
</TABLE>
See Accompanying Notes
4
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REDHOOK ALE BREWERY, INCORPORATED
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) .................................... $ (488,037) $ 883,530
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided by Operating Activities:
Depreciation and Amortization .................... 801,202 415,279
Deferred Income Tax Provision .................... (111,345) 251,513
Net Change in Operating Assets and Liabilities ... (108,274) (284,411)
------------ ------------
Net Cash Provided by Operating Activities ............ 93,546 1,265,911
------------ ------------
INVESTING ACTIVITIES
Expenditures for Fixed Assets ........................ (2,683,840) (10,564,222)
Other ................................................ (5,659) (3,873)
------------ ------------
Net Cash Used in Investing Activities ................ (2,689,499) (10,568,095)
------------ ------------
FINANCING ACTIVITIES
Proceeds from Debt ................................... 2,050,000 5,500,000
Repayments on Debt .................................. (582,725) (5,530,320)
Other ................................................ 1,332 6,813
------------ ------------
Net Cash Provided by (Used in) Financing Activities .. 1,468,607 (23,507)
------------ ------------
Decrease in Cash and Cash Equivalents ................ (1,127,346) (9,325,691)
Cash and Cash Equivalents:
Beginning of Year .................................. 1,162,352 24,676,600
------------ ------------
End of Period ...................................... $ 35,006 $ 15,350,909
============ ============
</TABLE>
See Accompanying Notes
5
<PAGE> 6
REDHOOK ALE BREWERY, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements and related notes should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K. The accompanying financial statements
include the accounts of Redhook Ale Brewery, Incorporated (the "Company") and
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. These financial statements are unaudited, condensed and do
not contain all of the information required by generally accepted accounting
principles to be included in a full set of financial statements. In the opinion
of management, all material adjustments necessary to present fairly the
financial position, results of operations and cash flows of the Company, for the
periods presented, have been made. All such adjustments are of a normal,
recurring nature. The results of operations for such interim periods are not
necessarily indicative of the results of operations for the full year.
2. EARNINGS PER SHARE
Earnings per share is based on the weighted average common and common
equivalent shares outstanding during the respective periods. The calculation of
average common equivalent shares outstanding includes the effect of all
outstanding convertible redeemable preferred stock and outstanding stock options
for the quarter ended March 31, 1996. The convertible preferred stock and
outstanding stock options have been excluded from the calculation for the
quarter ended March 31, 1997 because their effect is anti-dilutive. The
calculation uses the treasury stock method in determining the resulting
incremental common equivalent shares outstanding.
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---------- ----------
<S> <C> <C>
Finished goods ........................... $1,114,891 $1,264,480
Raw materials ............................ 646,987 282,603
Promotional merchandise .................. 477,542 511,089
Packaging materials ...................... 208,180 171,204
---------- ----------
$2,447,600 $2,229,376
========== ==========
</TABLE>
Finished goods include beer held in fermentation prior to the filtration and
packaging process.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto included herein.
OVERVIEW
Since its formation, the Company has focused its business activities on the
brewing, marketing and selling of craft beers. For the three months ended March
31, 1997, the Company had gross sales of $8,868,000, an increase of 3.7% over
the same period in 1996. The Company believes that period-to-period comparisons
of its financial results should not be relied upon as an accurate indicator of
future performance. The Company's sales consist predominantly of sales of beer
to third-party distributors and Anheuser-Busch, Inc. ("A-B") through the
Distribution Alliance. In addition, the Company derives other revenues from the
sale of beer, food, apparel and other retail items in its brewery pubs. The
Company is required to pay federal excise taxes on sales of its beer. The excise
tax burden on beer sales increases from $7 to $18 per barrel on annual
production over 60,000 barrels and thus, as the Company increases its sales
volume, federal excise taxes will increase as a percentage of sales.
The Company's sales growth slowed significantly in late 1996 and that trend
has continued into 1997. In addition to the level of consumer demand in existing
markets, the Company's sales are also affected by other factors such as the
opening of new distribution territories, new product introductions and
competitive considerations, including the increasing number of craft brewers and
promotional pricing. Sales in the craft beer industry generally reflect a degree
of seasonality, with the first quarter historically being the weakest and the
second half of the year typically demonstrating stronger sales in connection
with summer activities and fall and early winter holidays. The Company has
historically operated with little or no backlog, and its ability to predict
sales for future periods is limited.
Under normal circumstances, the Company generally operates its brewing
facilities up to five days per week, two shifts per day. To meet the increasing
demand for its products, the Company has increased its annual production
capacity, from approximately 3,000 barrels at its first brewery in the Ballard
neighborhood of Seattle in 1982 to approximately 425,000 barrels as of March 31,
1997. Production capacity of each facility is added in phases until the facility
reaches its maximum designed production capacity. The timing of each phase is
affected by the availability of capital, construction constraints and the
Company's plans for an orderly entry into selected new markets and growth in
existing markets. The Portsmouth, New Hampshire brewery began commercial
production during October 1996. The Portsmouth brewery's initial production
capacity is approximately 100,000 barrels per year and its maximum designed
production capacity is approximately 250,000 barrels per year. Additional
capital expenditures and production personnel will be required to bring the
Portsmouth Brewery to its maximum designed capacity.
The Company's capacity utilization has a significant impact on its gross
profit. When facilities are operating at their maximum designed production
capacity, profitability is favorably affected by spreading fixed and
semivariable operating costs, such as depreciation and production salaries, over
a larger sales base. The Company's utilization rate of its 575,000 barrel annual
maximum designed capacity declined significantly upon the opening of the
Portsmouth brewery. Most capital costs associated with building a new brewery
and fixed and semivariable costs related to operating a new brewery are incurred
prior to, or upon commencement of, production at a facility. Because the initial
production level is substantially below the facility's maximum designed
production capacity, gross margins are negatively impacted. This impact is
reduced as the facility's actual production increases.
In addition to capacity utilization, the Company expects other factors to
influence profit margins, including higher costs associated with the opening of
new distribution territories, such as increased shipping, marketing and sales
personnel costs; fees related to the distribution agreement with A-B; changes in
packaging and other material costs; and changes in product sales mix. The
incremental cost of shipping beer from the Company's breweries will continue to
increase as the volume of beer supplied to more distant markets increases. The
commencement of full-scale production at the Portsmouth Brewery has reduced
shipping expenses to eastern U.S. markets. Also, the
7
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Company's direct connection to the City of Portsmouth water, effective March 31,
1997, will reduce water-related costs. Until the direct connection was complete,
the cost of tankering water from the City of Portsmouth's system, for production
purposes at the Portsmouth Brewery, negatively impacted gross profit.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Certain Considerations: Issues and Uncertainties."
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items
from the Company's Statements of Income expressed as a percentage of net sales.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
------- -------
<S> <C> <C>
Sales ................................................. 110.9% 110.8%
Less Excise Taxes ..................................... 10.9 10.8
------- -------
Net Sales ............................................. 100.0 100.0
Cost of Sales ......................................... 79.7 65.5
------- -------
Gross Profit .......................................... 20.3 34.5
Selling, General and Administrative Expenses .......... 30.3 19.8
------- -------
Operating Income (Loss) ............................... (10.0) 14.7
Other Income, Net ..................................... 0.2 3.3
------- -------
Income (Loss) Before Income Taxes ..................... (9.8) 18.0
Provision (Benefit) for Income Taxes .................. (3.7) 6.6
------- -------
Net Income (Loss) ..................................... (6.1)% 11.4%
======= =======
</TABLE>
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Sales. Sales increased by 3.7% to $8,868,000 in the first quarter of 1997
from $8,555,000 in the comparable 1996 period, primarily due to an over 20%
increase in total sales volumes in states other than Washington, California, and
Oregon, substantially offset by a decline in shipments to those West Coast
states. West Coast sales decreased approximately 6% for the same period,
including a 7% decline in Washington state, the Company's largest market. At
March 31, 1997, the Company was selling beer in 47 states compared to 38 states
at March 31, 1996. Total first quarter sales volumes increased 3.4% to 51,400
barrels compared to 49,700 barrels in the 1996 first quarter. The competitive
landscape has been affected by the continued increase in the number of craft
beer companies and the number of different products they offer. The Company's
other sales totaled $628,000 for the first quarter of 1997, compared to $591,000
for the same period in 1996.
Excise Taxes. Excise taxes increased to $874,000, or 10.9% of net sales in
the first quarter of 1997, from $834,000, or 10.8% of net sales in the
comparable quarter of 1996, reflecting increased sales volumes and the higher
excise tax rate applicable to annual production in excess of 60,000 barrels.
Cost of Sales. Cost of sales increased to $6,372,000 in the first quarter
of 1997 from $5,055,000 in the comparable quarter of 1996, primarily due to the
impact of the operating costs related to the new brewery in Portsmouth, New
Hampshire and the increase in sales volume. Cost of sales, as a percentage of
net sales, increased to 79.7% in the first quarter of 1997 compared to 65.5% in
comparable period of 1996, primarily due to an increase in fixed and
semi-variable costs associated with operating the new brewery, partially offset
by freight savings on shipments from the Portsmouth Brewery to eastern markets.
The utilization rate of the breweries' maximum designed capacity was 36% and 61%
in the three months ended March 31, 1997 and 1996, respectively. The utilization
rate decreased in the 1997 period due to the commissioning of the Portsmouth
brewery during the fourth quarter of 1996.
8
<PAGE> 9
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $2,421,000 in the first quarter of 1997
from $1,532,000 in the comparable quarter of 1996. The increase is primarily
related to the Company's expansion into new markets in new states and within
states previously served. These expenses increased as a percentage of net sales
to 30.3% in 1997 from 19.8% in 1996, primarily attributable to additional sales
personnel in the new markets and related expenses, including promotional and
marketing support.
Other Income, Net. Other income, net, decreased to $18,000 in first quarter
of 1997 compared to $258,000 in the comparable quarter of 1996 period. The
decrease is due primarily to a decline in income from short-term investments as
available funds were invested in the Portsmouth and Woodinville breweries.
Income Taxes. The Company's effective income tax rate increased to 37.5% in
1997 from 36.5% in 1996. The increase is the result of the Company's expansion
into new states and the corresponding expected increase in state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $35,000 and $1,162,000 of cash and cash equivalents at
March 31, 1997 and December 31, 1996, respectively. At March 31, 1997, the
Company had working capital of $14,000. The Company's long-term debt as a
percentage of total capitalization (long-term debt, preferred stock and common
stockholders' equity) was 9.1% and 7.5% as of March 31, 1997 and December 31,
1996, respectively.
The Company has a $10 million secured bank facility (the "Secured
Facility") through June 5, 1997 that may be converted to a five-year term loan
with a 20-year amortization schedule. In addition, the Company has a $10 million
unsecured revolving credit facility with the same bank through June 5, 1998.
Interest accrues at a variable rate based on the Inter Bank Offered Rate
("IBOR"), plus 1.00% to 2.50%, depending on the Company's debt-to-tangible net
worth ratio. The Company can fix the rate by selecting IBOR for one- to
twelve-month periods as a base. As of March 31, 1997, there were $6,000,000 in
borrowings outstanding under these bank facilities and the Company's one-month
IBOR-based borrowing rate was approximately 6.69%.
The Company requires capital principally for the construction and
development of its technologically advanced production facilities. To date, the
Company has financed its capital requirements through cash flow from operations,
bank borrowings and the sale of common and preferred stock.
Capital expenditures for the first quarter of 1997 totaled $2,684,000. The
capital expenditures related primarily to the kegging and cold storage facility
under construction at the Woodinville Brewery. This facility is expected to cost
approximately $6 million and will be used to supplement the supply of Redhook
draft beer in western states. Capital expenditures for 1997 are expected to
total approximately $5 million.
The Company expects to meet its future financing needs, including working
capital and capital expenditure requirements, through cash on hand, operating
cash flow and, to the extent required and available, bank borrowings and
offerings of debt or equity securities.
The Company has certain commitments, contingencies and uncertainties
relating to its normal operations. Management believes that any such
commitments, contingencies or uncertainties, including any environmental
uncertainties, will not have a material adverse effect on the Company's
financial position or results of operations.
CERTAIN CONSIDERATIONS: ISSUES AND UNCERTAINTIES
The Company does not provide forecasts of future financial performance or
sales volumes, but this Quarterly Report does contain certain other types of
forward-looking statements that involve risks and uncertainties. The Company
may, in discussions of its future plans, objectives and expected performance in
periodic reports filed by the Company with the Securities and Exchange
Commission (or documents incorporated by reference therein) and
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in written and oral presentations made by the Company, include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 or
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are based on assumptions which the Company believes
are reasonable, but are by their nature inherently uncertain. In all cases,
there can be no assurance that such assumptions will prove correct or that
projected events will occur. Actual results could differ materially from those
projected depending on a variety of factors, including, but not limited to, the
issues discussed below, the successful execution of expansion and other plans
and the availability of financing. While Company management is optimistic about
the Company's long-term prospects, the following issues and uncertainties, among
others, should be considered in evaluating its growth outlook and any
forward-looking statements.
Effect of Competition on Future Growth. The domestic market in which the
Company's craft beers are sold is highly competitive due to the continuing
proliferation of small craft brewers, including contract brewers, the increase
in the number of products offered by such brewers and the introduction of
fuller-flavored products by major national brewers. The Company's revenue growth
rate began to slow in late 1996, due primarily to slower than expected sales in
our highly competitive West Coast markets. If the West Coast sales trends were
to continue or growth in other markets were to slow, the Company's future growth
rate could be materially adversely affected. The Company has historically
operated with little or no backlog and, therefore, its ability to predict sales
for future periods is limited.
Sales Prices. Future prices the Company charges for its products may
decrease from historical levels, depending on competitive factors in the
Company's various markets. In certain markets, the Company has participated in
price promotions with its wholesalers and their retail customers. The number of
markets in which the Company participates in price promotions and the frequency
of such promotions is expected to increase in the future.
Variability of Gross Margin and Cost of Sales. The Company anticipates that
its future gross margins will fluctuate and may decline as a result of many
factors, including disproportionate depreciation and other fixed and
semivariable operating costs, during periods when the Company's breweries are
producing below maximum designed production capacity. The Company's high level
of fixed and semivariable operating costs causes gross margin to be very
sensitive to relatively small increases or decreases in sales volume. In
addition, other factors that could affect cost of sales include changes in:
shipping costs, availability and prices of raw materials and packaging
materials, mix between draft and bottled product sales, and Federal or state
excise taxes. Also, as sales volumes through the Company's Distribution Alliance
with Anheuser-Busch, Incorporated ("A-B") increase, the alliance fee, and other
staging and administrative costs, will increase.
Advertising and Promotional Costs. While the Company has historically done
very limited advertising, market and competitive considerations could make a
significant increase in such spending appropriate. In addition, market and
competitive considerations could require a significant increase in other
promotional costs associated with developing existing and new markets.
Relationship with A-B. Most of the Company's future sales are expected to
be through the Distribution Alliance with A-B. If the Distribution Alliance were
to be terminated, or if the relationship between A-B and the Company were to
deteriorate, the Company's sales growth and profitability could be materially
adversely affected. While the Company believes that the benefits of the
Distribution Alliance, in particular increased sales volume, access to
distributors and distribution efficiencies, offset related costs associated with
the Alliance, there can be no assurance that these costs will not have a
negative impact on the Company's profit margins in the future.
Dependence on Third-Party Distributors. The Company relies heavily on
third-party distributors for the sale of its products to retailers. The
Company's most significant non-Alliance wholesaler, K&L Distributors, Inc., an
A-B affiliated wholesaler in the Seattle area, accounted for approximately 18%
of the Company's sales during 1996. Substantially all of the remaining sales
volumes are now through the Distribution Alliance to A-B affiliated
distributors, most of whom are independent wholesalers. The loss of K&L or the
termination of the Distribution Alliance could have a material adverse impact on
the Company's sales growth and profitability.
10
<PAGE> 11
Customer Acceptance, Consumer Trends and Public Attitudes. If consumers
were unwilling to accept the Company's products or if the recent trends toward
drinking craft beers were to change, it could adversely impact the Company's
sales growth and profitability. The alcoholic beverage industry has become the
subject of considerable societal and political attention in recent years due to
increasing public concern over alcohol-related social problems, including drunk
driving, underage drinking and health consequences from the misuse of alcohol.
If beer consumption in general were to come into disfavor among domestic
consumers, or if the domestic beer industry were subjected to significant
additional governmental regulation, the Company's sales growth and profitability
could be adversely affected.
NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior interim and annual
periods. Under the new requirements for calculating "basic" (primary) earnings
per share, the dilutive effect of common stock equivalents such as outstanding
convertible preferred stock and stock options will be excluded from the
calculation. The impact will result in a $0.02 per share increase in previously
reported earnings per share for the quarter ended March 31, 1996. There will be
no effect on the net loss per share for the quarter ended March 31, 1997,
because the effect of common stock equivalents is antidilutive and, therefore,
is excluded from the calculation. The impact of Statement 128 on the calculation
of "diluted" (fully diluted) earnings per share for these quarters is not
expected to be material.
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following exhibits are filed as part of this report.
11.1 Computation of Earnings Per Share
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
None filed during the quarter ended March 31, 1997.
ITEMS 1, 2, 3, 4 AND 5 OF PART II ARE NOT APPLICABLE AND HAVE BEEN
OMITTED.
11
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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 May 8, 1997.
REDHOOK ALE BREWERY, INCORPORATED
BY: /s/ Bradley A. Berg
-------------------------------
Bradley A. Berg
Executive Vice President and
Chief Financial Officer
BY: /s/ David H. Kirske
-------------------------------
David H. Kirske
Controller and Treasurer
(Principal Accounting Officer)
DATE: May 8, 1997
12
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EXHIBIT 11.1
REDHOOK ALE BREWERY, INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Primary and fully-diluted earnings per common share:
Weighted average common shares outstanding ........... 7,685,619 7,684,228
Weighted average common equivalent shares outstanding:
Series B convertible redeemable preferred stock .... -- 1,289,872
Stock options, net ................................. -- 232,600
----------- -----------
Weighted average common and common
equivalent shares outstanding ...................... 7,685,619 9,206,700
=========== ===========
Net Income (Loss) ...................................... $ (488,037) $ 883,530
=========== ===========
Earnings (Loss) per share .............................. $ (0.06) $ 0.10
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 35,006
<SECURITIES> 0
<RECEIVABLES> 2,322,372
<ALLOWANCES> 10,000
<INVENTORY> 2,447,600
<CURRENT-ASSETS> 5,810,746
<PP&E> 94,881,225
<DEPRECIATION> 6,752,381
<TOTAL-ASSETS> 95,038,547
<CURRENT-LIABILITIES> 5,797,094
<BONDS> 7,655,839
15,932,955
0
<COMMON> 38,430
<OTHER-SE> 62,093,616
<TOTAL-LIABILITY-AND-EQUITY> 95,038,547
<SALES> 7,993,854<F1>
<TOTAL-REVENUES> 7,993,854<F1>
<CGS> 6,371,882
<TOTAL-COSTS> 8,793,024
<OTHER-EXPENSES> (18,311)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (780,859)
<INCOME-TAX> (292,822)
<INCOME-CONTINUING> (488,037)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (488,037)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
<FN>
<F1>SALES AND TOTAL REVENUES ARE NET OF FEDERAL AND STATE EXCISE TAXES
</FN>
</TABLE>
