<PAGE>
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 MARCH 28, 1998
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 of incorporation (I.R.S. Employer
or organization) Identification No.)
75 ARLINGTON STREET, BOSTON, MASSACHUSETTS
(Address of principal executive offices)
02116
(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
--- ---
Number of shares outstanding of each of the issuer's classes of common stock, as
of May 1, 1998:
CLASS A COMMON STOCK, $.01 PAR VALUE 16,381,561
Class B Common Stock, $.01 par value 4,107,355
(Title of each class) (Number of shares)
1
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THE BOSTON BEER COMPANY, INC.
FORM 10-Q
QUARTERLY REPORT
MARCH 28, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets
March 28, 1998 and December 27, 1997 3
Consolidated Statements of Operations for the
Three Months Ended March 28, 1998 and
March 29, 1997 4
Consolidated Statements of Cash Flows for the
Three Months Ended March 28, 1998 and
March 29, 1997 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10-13
SIGNATURES 14
</TABLE>
2
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THE BOSTON BEER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
March 28, December 27,
1998 1997
---------------------- -----------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 295 $ 13
Short term investments 36,132 35,787
Accounts receivable 21,288 17,636
Allowance for doubtful accounts (1,150) (1,153)
Inventories 12,655 13,675
Prepaid expenses 1,645 4,344
Deferred income taxes 2,266 2,266
Other current assets 1,378 1,308
--------------- ------------
Total current assets 74,509 73,876
Equipment and leasehold improvements, at cost 41,850 39,652
Accumulated depreciation (12,096) (10,871)
Other assets 2,663 2,742
--------------- ------------
Total assets $106,926 $105,399
=============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,925 $ 9,556
Line of credit 1,517 -
Accrued expenses 10,913 13,770
--------------- ------------
Total current liabilities 20,355 23,326
Long-term debt, less current maturities 10,000 10,000
Long-term deferred taxes 789 789
Stockholders' Equity:
Class A Common Stock, $.01 par value;
20,300,000 shares authorized; 16,376,829 and
16,337,744
issued and outstanding as of March 28, 1998 and
December 27, 1997, respectively 164 163
Class B Common Stock, $.01 par value;
4,200,000 shares authorized; 4,107,355
issued and outstanding as of March 28, 1998 and
and December 27, 1997 41 41
Additional paid-in-capital 56,518 56,445
Unearned compensation (330) (423)
Unrealized loss on investments in marketable - (2,223)
security
Unrealized loss on forward exchange contract (258) (290)
Retained earnings 19,647 17,571
--------------- ------------
Total stockholders' equity 75,782 71,284
--------------- ------------
Total liabilities and stockholders' equity $106,926 $105,399
=============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements
3
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THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
March 28, March 29,
1998 1997
-------------- ----------------
<S> <C> <C>
Sales $51,660 $46,799
Less excise taxes 6,412 4,944
-------------- ----------------
Net sales 45,248 41,855
Cost of sales 21,428 21,907
-------------- ----------------
Gross profit 23,820 19,948
Operating expenses:
Advertising, promotional and selling expenses 13,540 14,558
General and administrative expenses 3,224 2,930
-------------- ----------------
Total operating expenses 16,764 17,488
-------------- ----------------
Operating income 7,056 2,460
Other income (expense):
Interest income 466 451
Interest expense (170) (108)
Other income (expense), net (2,556) 7
-------------- ----------------
Total other income (2,260) 350
Income before income taxes 4,796 2,810
Provision for income taxes 2,720 1,230
-------------- ----------------
Net income $ 2,076 $ 1,580
============== ================
Earnings per share - basic $0.10 $0.08
============== ================
Earnings per share - diluted $0.10 $0.08
============== ================
Weighted average shares - basic 20,459 20,099
============== ================
Weighted average shares - diluted 20,551 20,356
============== ================
</TABLE>
The accompanying notes are an integral part of the financial statements
4
<PAGE>
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
March 28, March 29,
1998 1997
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,076 $ 1,580
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,225 966
Bad debt expense 58 39
Stock option compensation expense 59 52
Changes in assets and liabilities:
Accounts receivable (3,713) (2,996)
Inventory 1,020 (1,252)
Prepaid expenses 2,699 464
Other current assets (38) (489)
Other assets 79 (102)
Accounts payable (1,631) (5,410)
Accrued expenses (2,857) (887)
--------------- ---------------
Total adjustments (3,099) (9,615)
--------------- ---------------
Net cash used in operating activities (1,023) (8,035)
--------------- ---------------
Cash flows for investing activities:
Purchases of fixed assets (2,198) (6,463)
Write down of marketable security 2,317 -
Purchases of government securities (438) (390)
Purchases of restricted investments - (625)
Proceeds from maturities of restricted investments - 609
--------------- ---------------
Net cash used in investing activities (319) (6,869)
--------------- ---------------
Cash flows from financing activities:
Proceeds from exercise of management incentive options 37 -
Proceeds from sale under stock purchase plan 75 5
Repurchase of shares under employee investment and (5) -
incentive share plans
Net borrowings under line of credit 1,517 9,871
--------------- ---------------
Net cash provided by financing activities 1,624 9,876
--------------- ---------------
Net decrease in cash and cash equivalents 282 (5,028)
Cash and cash equivalents at beginning of period 13 5,060
--------------- ---------------
Cash and cash equivalents at end of period $ 295 $ 32
=============== ===============
Supplemental disclosure of cash flow information:
Interest paid $ 193 $ 112
=============== ===============
Income taxes paid 47 385
=============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements
5
<PAGE>
THE BOSTON BEER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION:
The Boston Beer Company, Inc. (the "Company") is engaged in the business of
brewing and selling beer, ale and cider products throughout the United States
and select international markets. The accompanying consolidated financial
position as of March 28, 1998 and the results of its consolidated operations and
consolidated cash flows for the quarter ended March 28, 1998 and March 29, 1997
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 27,
1997.
MANAGEMENT'S OPINION
In the opinion of the management of the Company, the Company's unaudited
consolidated financial position as of March 28, 1998 and the results of its
consolidated operations and consolidated cash flows for the interim periods
ended March 28, 1998 and March 29, 1997, reflect all adjustments (consisting
only of normal and recurring adjustments) necessary to present fairly the
results of the interim periods presented. The operating results for the interim
periods presented are not necessarily indicative of the results expected for the
full year.
B. SHORT TERM INVESTMENTS:
Short term investments consist of a marketable equity security having a cost of
$4,286,000 and a market value of $1,969,000 and $2,063,000 at March 28, 1998 and
December 27, 1997, respectively. Effective March 28, 1998, the Company
determined that the loss on this marketable security is other than temporary
and recorded an unrealized loss. This resulted in a non operating charge, booked
to other income, of $2,317,000 at March 28, 1998 versus an unrealized loss,
which had previously been recorded in equity, of $2,223,000 at December 27,
1997.
In addition, the Company has investments in money market funds backed by U.S.
Government securities having a cost of $34,163,000 and $33,725,000 at March 28,
1998 and December 27, 1997, respectively, which approximate fair value.
C. INVENTORIES:
Inventories, which consist principally of hops, brewery materials 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):
<TABLE>
<CAPTION>
March 28, December 27,
1998 1997
----------------- ------------------
<S> <C> <C>
Raw materials, principally hops $10,973 $12,481
Work in process 703 511
Finished goods 979 683
----------------- ------------------
$12,655 $13,675
================= ==================
</TABLE>
6
<PAGE>
THE BOSTON BEER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
D. INCOME TAXES:
The Company's effective tax rate increased to 56.7% for the three months ended
March 28, 1998 from 43.8% for the three months ended March 29, 1997, due
exclusively to the write down of the marketable security referred to in note B.
This non-operating charge of $2,317,000 reduced the Company's income before tax.
The Company was unable to fully offset this capital loss resulting in a higher
effective tax rate. The following schedule details this transaction.
<TABLE>
<S> <C>
Operating income $7,056,000
Other income (expenses), net ($2,260,000)
------------
Income before income taxes $4,796,000
Write down of marketable security $2,317,000
Capital gains available to offset loss ($800,000)
------------
Taxable income $6,313,000
Tax rate 43.09%
------------
Net tax $2,720,000
</TABLE>
E. COMPREHENSIVE INCOME:
The Company adopted SFAS No. 130 "Reporting Comprehensive Income" in the first
quarter of 1998. This standard requires disclosure of total nonowner changes in
stockholders' equity, which is defined as net income plus direct adjustments to
stockholders' equity such as foreign currency items and unrealized gains and
losses on certain investments. Comprehensive income for the first quarter of
1998 totaled $4,331,000 and for the first quarter of 1997 totaled $690,000.
<TABLE>
<CAPTION>
FOR QUARTER ENDED FOR QUARTER ENDED
MARCH 28, 1998 MARCH 29, 1997
---------------------------------------- -------------------------------
FOREIGN UNREALIZED FOREIGN UNREALIZED
CURRENCY LOSS CURRENCY LOSS
ITEMS ON SECURITY ITEMS ON SECURITY
----- ----------- ----- -----------
<S> <C> <C> <C> <C>
Beginning balance $ (290,000) $(2,223,000) $ 31,000 $ (442,000)
Current-period change 32,000 (94,000) (109,000) (781,000)
Plus: reclassification adjustment for
capital losses realized in net income - 2,317,000
----------- ----------- --------- ------------
Ending balance $(258,000) $ - $ (78,000) $ (1,223,000)
=========== =========== ========= ============
Net income $ 2,076,000 $ 1,580,000
----------- ------------
Other comprehensive income, net of tax:
Foreign currency translation adjustments 32,000 (109,000)
Unrealized loss on security:
Unrealized holding losses arising during
period (94,000) (781,000)
Plus: reclassification adjustments for
capital losses included in net income 2,317,000 2,223,000 - (781,000)
----------- ----------- --------- ------------
Other comprehensive income 2,255,000 (890,000)
----------- ------------
Comprehensive income $4,331,000 $ 690,000
=========== ============
</TABLE>
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 three-month period ended March 28, 1998 as
compared to the three-month period ended March 29, 1997. 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 MARCH 28, 1998 COMPARED TO THREE MONTHS ENDED MARCH 29, 1997
SALES. Volume increased by 10.7% to 311,000 barrels in the three months ended
March 28, 1998 from 281,000 barrels in the three months ended March 29, 1997.
This increase was due to the introduction of White Ale which began shipping in
January of 1998 and the inclusion of production at the Company's brewery in
Cincinnati for a full three months. The Company purchased the brewery located in
Cincinnati on March 1, 1997; therefore only one month of brewing operations is
reflected in the 1997 numbers. Net sales increased by 8% to $45,248,000 in the
three-month period ended March 28, 1998 from $41,855,000 in the three-month
period ended March 29, 1997. Net sales increased primarily due to increased
volumes, a shift in packaging mix (a higher percentage of bottles shipped versus
same period last year, which produced higher revenue per barrel) and to a lesser
extent, price increases. Despite this, net sales per barrel declined 2.3% to
$145.49 per barrel in the three-month period ended March 28, 1998 from $148.95
per barrel in the three month period ended March 29, 1997. This decrease is
primarily caused by increases in discounts and allowances and sales of non-
company products produced by the Company's brewery in Cincinnati.
GROSS PROFIT. Gross profit increased by 19.4% to $23,820,000 in the three
months ended March 28, 1998 from $19,948,000 in the three months ended March 29,
1997. Cost of sales decreased to 47.4% of net sales in the three months ended
March 28, 1998 from 52.3% in the three months ended March 29, 1997. This
decrease is due to favorable raw material and packaging costs.
ADVERTISING, PROMOTIONAL AND SELLING. Advertising, promotional and selling
expenses decreased by 7.0% to $13,540,000 in the three months ended March 28,
1998 from $14,558,000 in the three months ended March 29, 1997. This decrease
was primarily attributable to a reduction in employee-related expenses, a
reduction in POS-related expenses, and a decrease in promotional spending.
Partially offsetting this decrease was an increase in advertising expense. As a
percentage of net sales, total advertising, promotional and selling expenses
decreased to 29.9% in the three months ended March 28, 1998 from 34.8% in the
three months ended March 29, 1997.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased by
10.0% to $3,224,000 in the three months ended March 28, 1998 from $2,930,000 in
the three months ended March 29, 1997. This increase is due to the inclusion of
general and administrative expenses of the Companies brewery in Cincinnati. As
noted above, the Company purchased the brewery in Cincinnati on March 1, 1997;
therefore, only one month of brewing operations is reflected in the expense for
the comparable 1997 period. As a percentage of net sales, general and
administrative expenses remained stable at 7.1% for the three months ended March
28, 1997 from 7.0% for the three months ended March 29, 1997.
OPERATING INCOME. Operating income increased by 187% to $7,056,000 in the
three months ended March 28,1998 from $2,460,000 in the three months ended March
29, 1997. This increase was due to higher sales effected by the White Ale
introduction, a shift in packaging mix, savings in cost of sales and lower
spending in promotional and selling expenses.
OTHER INCOME (EXPENSE), NET: Other income (expense) net, was ($2,260,000) for
the three months ended March 28, 1998, versus $350,000 for the three months
ended March 29, 1997. This decrease is due to the write down of a marketable
security of $2,317,000 and an increase in interest expense due to increased
borrowings against the revolving line of credit.
8
<PAGE>
THE BOSTON BEER COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
NET INCOME. Net income increased by 31.4% to $2,076,000 in the three months
ended March 28, 1998 from $1,580,000 in the three months ended March 29, 1997.
The increase is primarily due to increased sales volume, a shift in the
packaging mix, reductions in cost of sales, and lower spending in promotional
and selling expenses, offset by the write down of the marketable security.
Income tax expense increased to 56.7% of profit before tax or $2,720,000 for the
three months ended March 28,1998 from 43.8% of profit before tax or $1,230,000
for the three months ended March 29, 1997. This increase in the tax rate is
caused by the write down of a marketable security, without a fully offsetting
capital gain. This reduced the profit before taxes from a financial standpoint
but not for tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
During the first three months of 1998, the Company recorded net income of
$2,076,000, while net cash used in operating activities was $1,023,000. This
$3,099,000 difference is primarily due to increases in accounts receivable and
reductions in accounts payable and accrued expenses, which were offset by a
decrease in inventory and prepaid expenses.
During the first three months of 1998, the Company used $319,000 in investing
activities. This reflects the purchase of $438,000 in government securities,
the purchase of $2,198,000 of fixed assets, consisting of brewery and packaging
equipment for the brewery in Cincinnati, and the addition of new sankey kegs and
the offsetting write down of $2,317,000 in a marketable security.
During the first three months of 1998, the Company generated $1,624,000 from
financing activities which primarily reflects amounts borrowed against the
Company's revolving lines of credit. As of March 28, 1998, net borrowings were
$11,517,000.
Assuming there is no significant change in the Company's business, the Company
believes that working capital of $54,154,000 as of March 28, 1998 (of which
67.3% is in cash and equivalents and short term investments), in conjunction
with existing lines of credit, should be sufficient to meet the Company's
operating, capital and debt service requirements over the next few years.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This Form 10-Q filing contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are based on management's current
expectations and involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements.
Factors which may cause actual future results to differ from forward-looking
statements include, among others, the following: changes in consumer
preferences; general economic and business conditions; increasing competition in
the craft-brewed and high-end beer segments; success of operating initiatives;
possible future increases in operating costs; advertising and promotional
efforts; changes in brand awareness; the existence or absence of adverse
publicity; changes in business strategy; quality of management; availability,
terms and deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs; change
in, or the failure to comply with, government regulations; and other factors.
9
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THE BOSTON BEER COMPANY, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to certain claims and litigation in the
ordinary course of business. The Company does not believe any of
these proceedings will result, individually or in the aggregate,
in a material adverse effect upon its financial condition or
results of operations.
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
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. TITLE
- ----------- -----
<C> <S>
3.1 Articles of Organization (incorporated by reference to Exhibit
3.2 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).
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).
</TABLE>
10
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THE BOSTON BEER COMPANY, INC.
PART II. OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
EXHIBIT INDEX (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT NO. TITLE
- ----------- -----
<C> <S>
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 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 the Company's Form 10-K, filed on
April 1, 1996).
+10.10 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).
+10.11 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).
+10.12 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).
</TABLE>
11
<PAGE>
THE BOSTON BEER COMPANY, INC.
PART II. OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
EXHIBIT INDEX (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT NO. TITLE
- ----------- -----
<C> <S>
10.13 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 10.12 to the Company's Registration
Statement No. 33-96162).
+10.14 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).
+10.15 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).
10.16 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).
+10.17 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).
10.18 Services Agreement and Fee Schedule of Mellon Bank, N.A. Escrow
Agent Services for The Boston Beer Company, Inc. dated as of
October 27, 1995 (incorporated by reference to the Company's
Registration Statement No. 33-96162).
10.19 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 Registration
Statement No. 33-96164).
10.20 1996 Stock Option Plan for Non-Employee Directors (incorporated
by reference to the Company's Form 10-K, filed on March 28,
1997).
+10.21 Production Agreement between The Stroh Brewery Company and Boston
Beer Company Limited Partnership, dated January 14, 1997
(incorporated by reference to the Company's Form 10-K, filed on
March 28, 1997).
+10.22 Letter Agreement between The Stroh Brewery Company and Boston
Beer Company Limited Partnership, dated January 14, 1997
(incorporated by reference to the Company's Form 10-K, filed on
March 28, 1997).
+10.23 Agreement between Boston Beer Company Limited Partnership and The
Schoenling Brewing Company, dated May 22, 1996 (incorporated by
reference to the Company's Form 10-K, filed on March 28, 1997).
</TABLE>
12
<PAGE>
THE BOSTON BEER COMPANY, INC.
PART II. OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
EXHIBIT INDEX (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT NO. TITLE
- ----------- -----
<C> <S>
10.24 Revolving Credit Agreement between Fleet Bank of Massachusetts,
N.A. and The Boston Beer Company, Inc., dated as of March 21,
1997 (incorporated by reference to the Company's Form 10-Q,
filed on May 12, 1997).
+10.25 Amended and Restated Agreement between Boston Brewing
Company, Inc. and the Genesee Brewing Company, Inc. dated April
30, 1997 (incorporated by reference to the Company's Form 10-Q,
filed on August 11, 1997).
+10.26 Fifth Amendment, dated December 31, 1997, to Amended and
Restated Agreement between Pittsburgh Brewing Company and Boston
Brewing Company, Inc. (incorporated by reference to the
Company's Form 10-K, filed on March 27, 1998).
+10.27 Extension letters, dated August 19, 1997, November 19, 1997,
December 19, 1997, January 22, 1998, February 25, 1998 and March
11, 1998 between The Stroh Brewery Company and Boston Brewing
Company, Inc. (incorporated by reference to the Company's Form
10-K, filed on March 27, 1998).
+10.28 Employee Equity Incentive Plan, as amended and effective on
December 19, 1997 (incorporated by reference to the Company's
Form 10-K, filed on March 27, 1998).
+10.29 1996 Stock Option Plan for Non-Employee Directors, as amended
and effective on December 19, 1997 (incorporated by reference to
the Company's Form 10-K, filed on March 27, 1998).
*11 Schedule of Computation of Net Earnings Per Share.
21.1 List of subsidiaries of The Boston Beer Company, Inc.
(incorporated by reference to the Company's Form 10-K, filed on
March 28, 1997).
*27 Financial Data Schedule (electronic filing only).
</TABLE>
* Filed with this report.
+ 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.
The Company filed no reports on Form 8-K with the Securities and Exchange
Commission during the quarter ended March 28, 1998.
13
<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: May 7, 1998 By: /s/: C. JAMES KOCH
-------------- ----------------------------
C. James Koch
President, Chief Executive
Officer, Clerk and Director
(principal executive officer)
Date: May 7, 1998 By: /s/: ALFRED W. ROSSOW, JR.
-------------- ----------------------------
Alfred W. Rossow, Jr.
Executive Vice President,
Chief Financial Officer (principal
financial and accounting officer)
Treasurer and Director
<PAGE>
Exhibit 11
THE BOSTON BEER COMPANY,INC.
STATEMENT REGARDING COMPUTATION OF NET EARNINGS PER SHARE
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended
---------------------------------
March 28, March 29,
1998 1997
------------ -----------
<S> <C> <C>
Weighted average number of common shares outstanding 20,459,172 20,099,422
Add: Common equivalent shares representing shares issuable
upon conversion of stock options (using the treasury stock method) 92,082 256,358
------------ -----------
Weighted average number of common and common equivalent shares 20,551,254 20,355,780
============ ============
Net Income $ 2,076 $ 1,580
============ ============
Earnings per share - Basic $ 0.10 $ 0.08
============ ============
Earnings per share - Diluted $ 0.10 $ 0.08
============ ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BOSTON BEER COMPANY, INC.'S
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-START> DEC-28-1997
<PERIOD-END> MAR-28-1998
<EXCHANGE-RATE> 1
<CASH> 295
<SECURITIES> 36,132
<RECEIVABLES> 21,288
<ALLOWANCES> (1,150)
<INVENTORY> 12,655
<CURRENT-ASSETS> 74,509
<PP&E> 41,850
<DEPRECIATION> (12,096)
<TOTAL-ASSETS> 106,926
<CURRENT-LIABILITIES> 20,355
<BONDS> 0
0
0
<COMMON> 205<F1>
<OTHER-SE> 75,577
<TOTAL-LIABILITY-AND-EQUITY> 106,926
<SALES> 51,660
<TOTAL-REVENUES> 45,248
<CGS> 21,428
<TOTAL-COSTS> 38,192
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (170)
<INCOME-PRETAX> 4,796
<INCOME-TAX> 2,720
<INCOME-CONTINUING> 2,076
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,076
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
<FN>
<F1> THIS NUMBER INCLUDES 16,376,829 SHARES OF CLASS A COMMON STOCK WITH A PAR
VALUE OF $164,000 AND 4,107,355 SHARES OF CLASS B STOCK WITH A PAR VALUE OF
$41,000.
</FN>
</TABLE>
