UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from .........to..........
Commission file number 1-14092
THE BOSTON BEER COMPANY, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3284048
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
75 Arlington Street, Boston, Massachusetts 02116
(Address of principal executive offices)
(Zip Code)
(617) 368-5000
(Registrant's telephone number, including area code)
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
As of November 1, 1996, there were 15,958,878 shares outstanding of the
Registrant's Class A Common Stock ($.01 par value) and 4,107,355 shares
outstanding of the Company's Class B Common Stock ($.01 par value).
<PAGE>
THE BOSTON BEER COMPANY, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
September 28, 1996 and December 31, 1995
Consolidated Statements of Income for the
Three months ended September 28, 1996 and
September 30, 1995, and the nine months ended
September 28, 1996 and September 30, 1995
Consolidated Statements of Cash Flows
Nine months ended September 28, 1996 and
September 30, 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Exhibit Index
Exhibit 11.
SIGNATURES
Page 2
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<TABLE>
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
<CAPTION>
September 28, 1996 December 31,1995
<S> <C> <C>
ASSETS
Current Assets:
Cash & cash equivalents $32,606 $36,607
Investments in marketable 3,875 -
securities at fair value
Accounts receivable 21,320 16,265
Allowance for doubtful accounts (808) (175)
Inventories 14,262 9,280
Prepaid expenses 639 437
Deferred income taxes 1,011 1,011
Other current assets 1,502 1,858
________ _________
Total current assets 74,407 65,283
Restricted investments 611 602
Equipment and leasehold improve-
ments, at cost 18,239 9,690
Less: accumulated depreciation (5,405) (3,531)
Deferred income taxes 1,777 1,777
Other assets 2,700 2,869
________ ________
Total assets $92,329 $76,690
======== ========
LIABILITIES AND STOCKHOLDERS'EQUITY
Current Liabilities:
Accounts payable $16,239 $8,604
Accrued expenses 11,907 11,338
Current maturities of
long-term debt 75 75
________ ________
Total current liabilities 28,221 20,017
Long-term debt,less current maturities 1,800 1,875
Commitments and Contingencies (Note H) - -
Stockholders' Equity:
Class A Common Stock, $.01 par
value; 20,300,000 shares
authorized; 15,869,555 and
15,643,664 issued and outstanding
as of September 28, 1996 and as
of December 31, 1995,
respectively 159 156
Class B Common Stock, $.01 par value;
4,200,000 shares authorized;
4,107,355 issued and outstanding 41 41
Additional paid-in-capital 54,019 53,482
Unearned compensation (426) (509)
Unrealized loss on investments in
marketable securities (410) -
Retained earnings 8,925 1,628
________ ________
Total stockholders' equity 62,308 54,798
________ ________
Total liabilities and
stockholders' equity $92,329 $76,690
======== ========
The accompanying notes are an integral part of the financial statements.
Page 3
</TABLE>
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<TABLE>
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
<CAPTION>
Quarter Ended Nine Months Ended
--------------------------- ----------------------------
September 28, September 30, September 28, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Sales $51,598 $44,512 $160,457 $121,895
Less excise taxes 5,486 4,702 17,145 12,990
_______ _______ ________ ________
Net sales 46,112 39,810 143,312 108,905
Cost of sales 22,901 19,249 71,831 52,615
_______ _______ ________ ________
Gross profit 23,211 20,561 71,481 56,290
Operating expenses:
Advertising,
promotional and
selling expenses 16,907 16,391 50,783 43,408
General and
administrative
expenses 2,613 1,762 8,956 5,455
_______ _______ _______ _______
Total operating
expenses 19,520 18,153 59,739 48,863
_______ _______ _______ _______
Operating income 3,691 2,408 11,742 7,427
Other income
(expense):
Interest income 522 48 1,455 203
Interest expense (57) (58) (182) (173)
Other, net (28) 814 (32) 804
________ ________ ________ ________
Total other income 437 804 1,241 834
Income before taxes 4,128 3,212 12,983 8,261
Income taxes 1,832 1,384 <F1> 5,686 3,559 <F1>
________ ________ ________ ________
Net income $ 2,296 $ 1,828 <F1> $ 7,297 $ 4,702 <F1>
======== ======== ======== ========
Earnings per common
and common equiv-
alent shares $0.11 $0.10 <F1> $0.36 $0.26 <F1>
======== ======== ======== ========
Weighted average
number of
common and
common equivalent
shares 20,427 17,949 <F1> 20,397 17,949 <F1>
======== ======== ======== ========
<FN>
<F1> Pro forma, see Notes 3 and 4.
</FN>
The accompanying notes are an integral part of the financial statements.
Page 4
</TABLE>
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<TABLE>
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<CAPTION>
Nine months ended
____________________________
September 28, September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,297 $ 8,261 <F1>
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 1,874 1,806
(Gain) loss on disposal of fixed assets - (19)
Bad debt 670 100
Stock option compensation expense 132 188
Changes in assets & liabilities:
Accounts receivable (5,091) (5,113)
Inventory (4,982) (730)
Prepaid expenses (202) (406)
Other current assets 354 (598)
Other assets 169 (703)
Accounts payable 7,635 (2,731)
Accrued expenses 569 1,508
_______ _________
Total adjustments 1,128 (7,418)
_________ _________
Net cash provided by (used for)
operating activities 8,425 843
========= =========
Cash flows from investing activities:
Additions to fixed assets (8,549) (1,535)
Proceeds on disposal of fixed assets - 45
Purchase of marketable securities (4,286) -
Purchases of restricted investments 1,213 (612)
Maturities of restricted investments (1,222) 615
_________ _________
Net cash used in investing activities (12,844) (1,487)
Cash flows from financing activities:
Incentive options 493 -
Principal payments on long-term debt (75) (50)
Partners' distributions - (5,555)
_________ _________
Net cash provided by financing
activities 418 (5,605)
_________ _________
Net decrease in cash and cash equivalents (4,001) (6,249)
Cash and cash equivalents at beginning of
period 36,607 7,801
_________ _________
Cash and cash equivalents at end of period $ 32,606 $ 1,552
========= =========
<FN>
<F1> Net income for nine month period ended September 30, 1995 is pre-tax
earnings. See Notes 1 and 3.
</FN>
The accompanying notes are an integral part of the financial statements.
Page 5
</TABLE>
<PAGE>
THE BOSTON BEER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The Boston Beer Company, Inc., (the "Company"), is engaged in the business of
brewing, marketing and selling beer and ale products. On November 20, 1995, in
connection with the initial public offering of the Company's stock effected
that date, the non-corporate limited partners of the Boston Beer Company
Limited Partnership, (the "Partnership"), transferred their respective
partnership interests to the Company and the stockholders of the general
partner and corporate limited partners transferred their respective shares of
stock in such entities to the Company. In exchange, the transferors received an
aggregate of 16,641,740 shares of the Company's common stock on a pro rata
basis, based on their then respective percentage equity interests in the
Partnership. The aforementioned transactions are collectively referred to
hereinafter as the "Recapitalization".
The accompanying consolidated 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, 1995.
The statement of cash flow information for the nine months ended September 30,
1995 does not show the pro forma historical financial information had the
Company operated as a corporation during this period. The net income for this
period has not been adjusted for estimated income taxes at an effective rate
of 43.1%.
In the opinion of management, the accompanying unaudited financial statements
contain all 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.
2. INVENTORIES:
Inventories, which consist principally of hops, bottles, and packaging, are
stated at the lower of cost, determined on a first-in, first-out (FIFO) basis,
or market.
Inventories consist of the following (in thousands):
September 28, December 31,
1996 1995
_____________ ____________
Raw materials, principally hops $ 13,137 $ 8,543
Work in process - 518
Finished goods 1,125 219
_____________ ____________
$ 14,262 $ 9,280
============= ============
Page 6
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THE BOSTON BEER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. INCOME TAXES:
The financial statements of the Company for the periods prior to the
Recapitalization do not include a provision for income taxes because the
taxable income of the Company, up until November 20, 1995, is included in
the income tax returns of the Partnership's partners. For informational
purposes, the statement of income for the three months ended September 30,
1995 and for the nine months ended September 30, 1995 includes a pro forma
income tax provision on taxable income for financial statement purposes using
an effective tax rate of 43.1%, which approximates the statutory federal rate
plus the statutory state rate net of the federal benefit, plus the effect of
non deductible expenses.
As of the effective date of the Recapitalization, the Company recognized a
$2,788,000 deferred income tax asset reflecting $1,960,000 recorded upon the
change in tax status of the entity as required by SFAS 109, a tax benefit of
$235,000 for the period from November 21, 1995 to December 31, 1995, and a
$593,000 net deferred tax asset of the corporate limited partners recorded
upon Recapitalization. Based upon prior earnings history and expected future
taxable income, the Company does not believe that a valuation allowance is
required for the net deferred tax asset.
4. PRO FORMA EARNINGS PER SHARE:
Earnings per share are presented on a pro forma basis for the three months
ended September 30, 1995 and the nine months ended September 30, 1995 for
comparative purposes with the three months ended September 28, 1996 and the
nine months ended September 28, 1996, respectively (see notes 1 and 3 above).
Pro forma earnings per share is based on the weighted average number of
common and common equivalent shares outstanding during the period, assuming
a conversion of partnership units for periods prior to the Recapitalization.
In addition, pursuant to the rules of the Securities and Exchange Commission,
approximately 965,000 shares have been included in the pro forma share
calculation representing distributions in excess of net income. The
calculations include approximately 375,000 and 686,000 common equivalent
shares for the three months ended September 28, 1996 and September 30, 1995,
and 434,000 and 686,000 for the nine months ended September 28, 1996 and
September 30, 1995 respectively, using the treasury stock method. Fully
diluted earnings per share is not materially different from primary earnings
per share.
5. INITIAL PUBLIC OFFERING:
On November 20, 1995 the Company completed an initial public offering and
sold an aggregate of 3,109,279 shares of Common Stock, of which 990,000
shares were sold for $15.00 per share in a best efforts offering and
2,119,279 shares were sold for $20.00 in an underwritten offering, resulting
in net proceeds, after deducting underwriting discounts and expenses, of
$49,691,000.
Page 7
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results
of operations of the Company for the nine-month period ended September 28,
1996 as compared to the nine-month period ended September 30, 1995. It should
be read in conjunction with the "Consolidated Financial Statements" of the
Company and related "Notes to the Financial Statements" included in this
Form 10-Q.
RESULTS OF OPERATIONS
Three Months Ended September 28, 1996 compared to Three Months Ended
September 30, 1995.
Sales volume increased by 20% from 246,000 barrels in the three months
ended September 30, 1995 to 294,000 barrels in the three months ended
September 28,1996. Net sales increased by 16% from $39,810,000 in the three
month period ended September 30, 1995 to $46,112,000 in the three month period
ended September 28, 1996. The net sales percentage increase was lower than the
sales volume percentage increase due to the fact that a higher-priced
specialty beer was sold during the three months ended September 30, 1995 and
not during the three month period ended September 28, 1996. Sales volume
reflected continued growth in Samuel Adams Boston Lager and Seasonal beers,
and our new brews, Golden Pilsner and Longshot. It is probable that the sales
volume during the last quarter of 1996 will not exceed that of the last
quarter of 1995 by as large a percentage as that by which the three month
period ended September 28, 1996 exceeded the three month period ended
September 30, 1995.
Gross profit increased by 13% from $20,561,000 in the three months ended
September 30, 1995 to $23,211,000 in the three months ended September 28, 1996.
Cost of sales increased to 50% of net sales in the three months ended
September 28, 1996 from 48% in the three months ended September 30, 1995. This
increase was primarily due to increases in raw materials costs, especially
malt, freight on inbound material, obsolescence expense, and depreciation
(primarily due to the newly purchased Sankey kegs), and a decrease in deposit
credits, partially offset by a decrease in raw material costs other than
malt due to the absence of a higher cost specialty beer shipped during the
third quarter of 1995, and a decrease in packaging design expense. While malt
cost increases appear to have stabilized, malt costs are expected to remain
at a higher level than in 1995 throughout the remainder of 1996.
Advertising, promotional, and selling expenses in total increased by 3%
from $16,391,000 in the three months ended September 30, 1995 to $16,907,000
in the three months ended September 28, 1996. This slight increase was
primarily attributable to increased promotions, packaging redesign,
volume-driven outbound freight, and salaries and related employee benefits due
to additional sales force hires, partially offset by a rescheduling of certain
media and a decrease in new hire expenses. As a percentage of net sales, total
advertising, promotional, and selling expenses decreased from 41% in the three
months ended September 30, 1995 to 37% in the three months ended September 28,
1996.
General and administrative expenses increased by 48% from $1,762,000 in
the three months ended September 30, 1995 to $2,613,000 in the three months
ended September 28, 1996. This increase was primarily due to increases in
salaries and related employee benefits, increases in legal and consulting
Page 8
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
fees, bad debt expense, the leasing of additional office space, and public
reporting (in particular, shareholder services). As a percentage of net
sales, general and administrative expenses increased from 4% in the three
months ended September 30, 1995 to 6% in the three months ended September 28,
1996.
Other income (expense) net, for the three months ended September 28, 1996
was $437,000, representing an increase of $440,000 over other income (expense)
net, for the three months ended September 30, 1995, before giving effect to the
non-recurring income from the sale of certain distribution rights. Total other
income (expense) net, for the three months ended Septmeber 30, 1995 was
$804,000, including $807,000 from the sale of the distribution rights and
($3,000) from other items. The increase in other income for the three months
ended September 28, 1996 is due primarily to interest income earned on the
remaining proceeds from the Company's November 1995 sale of shares of its
Class A Common Stock.
Net income increased by 26% to $2,296,000 in the three months ended
September 28, 1996 compared to $1,828,000 in the three months ended
September 30, 1995. Excluding the tax effected income generated from the sale
of the distribution rights mentioned previously, net income increased by 68%
to $2,296,000 in the three months ended September 28, 1996 compared to
$1,369,000 in the three months ended September 30, 1995. The combined
effective tax rate increased to 44.4% in the three months ended September 28,
1996 compared to 43.1% in the three months ended September 30, 1995, due
primarily to higher projected income levels for 1996.
Nine Months Ended September 28, 1996 compared to Nine Months Ended
September 30, 1995.
Sales volume increased by 33% from 688,000 barrels in the first nine
months of 1995 to 913,000 barrels in the first nine months of 1996. The
year-to-date sales volume of 913,000 for the nine months ended September 28,
1996, includes a 2,000 barrel upward adjustment from the three month period
ended June 29, 1996. The revenue associated with this adjustment was correctly
reflected in the second quarter 1996 figures previously reported. Net sales
increased by 32% from $108,905,000 in first nine months of 1995 to
$143,312,000 in the first nine months of 1996. The net sales percentage
increase was lower than the sales volume percentage increase due to the fact
that a higher-priced specialty beer was sold during the nine month period
ended September 30, 1995 and not during the nine month period ended
September 28, 1996. Sales volume reflected continued growth in Samuel Adams
Boston Lager, Seasonal beers, and the introduction of Golden Pilsner and
Longshot beers. During the last three months of 1996, it is probable that the
sales volume will not exceed that of the last three months of 1995 by as large
a percentage as that by which the nine month period ended September 28, 1996
exceeded the nine month period ended September 30, 1995.
Gross profit increased by 27% from $56,290,000 in the first nine months
of 1995 to $71,481,000 in the first nine months of 1996. Cost of sales
increased to 50% of net sales in the nine months ended September 28, 1996
from 48% in the nine months ended September 30, 1995. This increase was
primarily due to increases in raw material costs, especially malt, freight on
inbound material, obsolescence expense, and depreciation (primarily due to
Page 9
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
the newly purchased Sankey kegs and brewing equipment), and a reduction in
used glass credits, partially offset by a decrease in raw material costs,
other than malt (primarily due to a higher cost specialty beer shipped during
the third quarter of 1995). Malt costs are expected to remain at a higher
level than in 1995 throughout the remainder of 1996.
Advertising, promotional, and selling expenses in total increased by 17%
from $43,408,000 in the first nine months of 1995 to $50,783,000 in the first
nine months of 1996. This increase was primarily attributable to increased
purchases of point of sales materials, new product development, volume-driven
outbound freight and promotions, and salaries and related employee benefits
due to additional sales force hires, partially offset by a rescheduling of
certain media and a decrease in new hire expenses. As a percentage of net
sales, total advertising, promotional, and selling expenses decreased from 40%
in the first nine months of 1995 to 35% in the first nine months 1996.
General and administrative expenses increased by 64% from $5,455,000 in
the first nine months of 1995 to $8,956,000 in the first nine months of 1996.
This increase was primarily due to increases in salaries and related employee
benefits, increases in consulting due to the installation of new computer
software, and increases in legal, accounting, bad debt expense, and public
reporting, due to the change from a privately held limited partnership to a
publicly held corporation. As a percentage of net sales, general and
administrative expenses increased from 5% in the first nine months of 1995 to
6% in the first nine months 1996.
Other income (expense) net, increased to $1,241,000 in the first nine
months of 1996 compared to $834,000 for the first nine months of 1995. During
the third quarter of 1995, the Company sold its distribution rights to a
portion of a major metropolitan area. This event resulted in the recognition
of approximately $807,000 as other income. Excluding this sale, other income
(expense) net, for the nine months ended September 30,1995 would have been
$27,000. This would have resulted in a net increase of $1,214,000 from the
nine months ended September 30, 1995 to the nine months ended September 28,
1996. This net increase is due primarily to interest earned on the remaining
proceeds of the November 1995 sale of common stock.
Net income increased by 55% to $7,297,000 in the first nine months of
1996 compared to $4,702,000 in the first nine months of 1995. Excluding the
tax effected income generated from the sale of the distribution rights mentioned
previously, net income increased by 72% to $7,297,000 in the nine months ended
September 28, 1996 compared to $4,241,000 in the nine months ended
September 30, 1995. Income taxes increased by $2,127,000. The combined
effective tax rate increased to 43.8% in the first nine months of 1996 compared
to 43.1% in the first nine months of 1995, due primarily to higher projected
income levels for 1996.
Liquidity and Capital Resources
During the first nine months of 1996, the Company recorded net income of
$7,297,000, while net cash provided by operating activities was $8,425,000.
This $1,128,000 difference is primarily due to the increase in invemtory, which
Page 10
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
reflects an increase of glass and packaging material, and the increase in
accounts receivable, offset by increases in accounts payable and accrued
expenses and a reduction in non-trade receivables.
During the first nine months of 1996, the Company used $12,844,000 in
investing activities. This primarily reflects the addition to fixed assets for
brewery and packaging equipment as well as computer equipment and new business
software and the purchase of marketable securities for investment purposes.
While, during the first nine months of 1996, the Company borrowed against
its revolving line of credit. As of September 28, 1996, the Company had no
outstanding net borrowings under the line of credit.
The Company believes that working capital as of September 28, 1996 of
$46,186,000 (of which 71% is in cash and equivalents) in conjunction with
existing lines of credit should be sufficient to meet the Company's operating,
capital, and debt service requirements during the remainder of 1996.
Page 11
<PAGE>
THE BOSTON BEER COMPANY, INC.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not Applicable
Item 2. CHANGES IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following is a list of exhibits filed as part of this report:
Exhibit No. Title
3.1 Articles of Organization (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement
No. 33-96162).
3.2 By-Laws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement
No. 33-96162).
3.3 Restated Articles of Organization of the Company
(incorporated by reference to Exhibit 3.3 to the
Company's Form 10-K filed on April 1, 1996).
3.4 Amended and Restated By-laws of the Company
(incorporated by reference to Exhibit 3.4 to the
Company's Form 10-K filed on April 1, 1996).
Page 12
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K (continued)
4.1 Form of Class A Common Stock Certificate (incorporated
by reference to Exhibit 4.1 to the Company's
Registration Statement No. 33-96164).
10.1 Revolving Credit Agreement between Fleet Bank of
Massachusetts, N.A. and Boston Beer Company Limited
Partnership (the "Partnership"), dated as of May 2,
1995 (incorporated by reference to Exhibit 10.1 to the
Company's Registration Statement No. 33-96162).
10.2 Loan Security and Trust Agreement, dated October 1,
1987, among Massachusetts Industrial Finance Agency,
the Partnership and the First National Bank of
Boston, as Trustee, as amended (incorporated by
reference to Exhibit 10.2 to the Company's
Registration Statement No. 33-96164).
10.3 Deferred Compensation Agreement between the Partnership
and Alfred W. Rossow, Jr., effective December 1, 1992
(incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement No. 33-96162).
10.4 The Boston Beer Company, Inc. Employee Equity Incentive
Plan, as adopted effective November 20, 1995 and
amended effective February 23, 1996 (incorporated by
reference to Exhibit 4.1 to the Company's
Registration Statement No. 333-1798).
10.5 Form of Employment Agreement between the Partnership
and employees (incorporated by reference to Exhibit
10.5 to the Company's Registration Statement
No. 33-96162).
10.6 Services Agreement between The Boston Beer Company,
Inc. and Chemical Mellon Shareholder Services, dated
as of October 27, 1995 (incorporated by reference to
Exhibit 10.6 to the Company's Form 10-K filed on
April 1, 1996).
10.7 Form of Indemnification Agreement between the
Partnership and certain employees and Advisory
Committee members (incorporated by reference to
Exhibit 10.7 to the Company's Registration Statement
No. 33-96162).
10.8 Stockholder Rights Agreement, dated as of December,
1995, among The Boston Beer Company, Inc. and the
initial Stockholders (incorporated by reference to
Exhibit 10.8 to the Company's Form 10-K filed on
April 1, 1996).
+ 10.9 Agreement between Boston Brewing Company, Inc. and The
Stroh Brewery Company, dated as of January 31, 1994
(incorporated by reference to Exhibit 10.9 to the
Company's Registration Statement No. 33-96164).
+ 10.10 Agreement between Boston Brewing Company, Inc. and the
Genesee Brewing Company, dated as of July 25, 1995
(incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement No. 33-96164).
Page 13
<PAGE>
THE BOSTON BEER COMPANY, INC.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K (continued)
+ 10.11 Amended and Restated Agreement between Pittsburgh
Brewing Company and Boston Brewing Company, Inc., dated
as of February 28, 1989 (incorporated by reference to
Exhibit 10.11 to the Company's Registration Statement
No. 33-96164).
10.12 Amendment to Amended and Restated Agreement between
Pittsburgh Brewing Company, Boston Brewing Company, Inc.
and G. Heileman Brewing Company, Inc., dated December 13,
1989 (incorporated by reference to Exhibit 10.13 to the
Company's Registration Statement No. 33-96162).
+ 10.13 Second Amendment to Amended and Restated Agreement between
Pittsburgh Brewing Company and Boston Brewing Company, Inc.
dated as of August 3, 1992 (incorporated by reference to
Exhibit 10.13 to the Company's Registration Statement
No. 33-96164).
+ 10.14 Third Amendment to Amended and Restated Agreement between
Pittsburgh Brewing Company and Boston Brewing Company,
Inc., dated December 1, 1994 (incorporated by reference
to Exhibit 10.14 to the Company's Registration Statement
No. 33-96164).
10.15 Fourth Amendment to Amended and Restated Agreement between
Pittsburgh Brewing Company and Boston Brewing Company,
Inc., dated as of April 7, 1995 (incorporated by
reference to Exhibit 10.16 to the Company's Registration
Statement No. 33-96162).
+ 10.16 Letter Agreement between Boston Beer Company Limited
Partnership and Joseph E. Seagram & Sons, Inc.
(incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement No. 33-96162).
10.17 Services Agreement and Fee Schedule of Mellon Bank, N.A.
Escrow Agent for The Boston Beer Company, Inc., dated as
of October 27, 1995 (incorporated by reference to Exhibit
10.17 to the Company's Form 10-K filed on April 1, 1996).
10.18 Amendment to Revolving Credit Agreement between Fleet Bank
of Massachusetts, N.A. and the Partnership (incorporated
by reference to Exhibit 10.18 to the Company's Form 10-K
filed on April 1, 1996).
+ Portions of this Exhibit have been omitted pursuant to an
application for an order declaring confidential treatment filed
with the Securities and Exchange Commission.
(b) Reports on Form 8-K.
Not Applicable.
Page 14
<PAGE>
THE BOSTON BEER COMPANY, INC.
EXHIBIT INDEX
Exhibit Number Description of Exhibits
11. Statement Regarding Computation of Net
Earnings Per Share
Page 15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized.
THE BOSTON BEER COMPANY, INC.
(Registrant)
Date: 11/13/96 By: C. JAMES KOCH
-------------------- -------------------------------------
C. James Koch
President, Chief Executive
Officer, Clerk and Director
(principal executive officer)
Date: 11/13/96 By: ALFRED W. ROSSOW, JR.
----------------------- -------------------------------------
Alfred W. Rossow, Jr. Chief Operating
Officer, Treasurer, Chief Financial
Officer (principal financial and
accounting officer) and Director
Page 16
<TABLE>
Exhibit 11.
THE BOSTON BEER COMPANY, INC.
STATEMENT REGARDING COMPUTATION OF NET EARNINGS PER SHARE
(in thousands, except per share data)
(Unaudited)
<CAPTION>
Quarter ended Nine months ended
--------------------- --------------------
Sept.28, Sept.30, Sept. 28, Sept. 30,
1996 1995 1996 1995
---- ---- ---- ----
(Pro (Pro
forma) <F1> forma) <F1>
<S> <C> <C> <C> <C>
Weighted Average of
Common Shares
Outstanding 20,051,470 16,991,001 19,963,466 16,991,001
Add: Common equivalent
shares representing
shares issuable
upon conversion of
stock options
(using the treasury
stock method) 375,217 685,511 433,505 685,511
Add: Common equivalent
shares per SAB
Topic 1B (3) - 272,884 - 272,884
----------- ----------- ---------- --------
Weighted average number
of common and common
equivalent shares 20,426,687 17,949,396 20,396,971 17,949,396
=========== =========== =========== ==========
Net income $ 2,296 $ 1,828 $ 7,297 $ 4,702
=========== =========== =========== ==========
Primary and fully
diluted earnings
per share $ 0.11 $ 0.10 $ 0.36 $ 0.26
=========== =========== =========== ==========
<FN>
<F1> Pro forma, see Note 4 on the accompanying Notes to the Consolidated
Financial Statements.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BOSTON
BEER COMPANY, INC.'S CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF
INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-28-1996
<EXCHANGE-RATE> 1.000
<CASH> 32,606
<SECURITIES> 3,875
<RECEIVABLES> 21,320
<ALLOWANCES> 808
<INVENTORY> 14,262
<CURRENT-ASSETS> 74,407
<PP&E> 18,239
<DEPRECIATION> 5,405
<TOTAL-ASSETS> 92,329
<CURRENT-LIABILITIES> 28,221
<BONDS> 0
0
0
<COMMON> 200<F1>
<OTHER-SE> 62,108
<TOTAL-LIABILITY-AND-EQUITY> 92,329
<SALES> 160,457
<TOTAL-REVENUES> 143,312
<CGS> 71,831
<TOTAL-COSTS> 131,570
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> 12,983
<INCOME-TAX> 5,686
<INCOME-CONTINUING> 11,742
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,297
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
<FN>
<F1>THIS NUMBER INCLUDES 15,869,555 SHARES OF CLASS A STOCK WITH A PAR VALUE OF
$159,000 AND 4,107,355 SHARES OF CLASS B STOCK WITH A PAR VALUE OF $41,000.
</FN>
</TABLE>
