Washington
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91-1141254
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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929 North Russell Street
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Portland, Oregon
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97227-1733
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(Address of principal executive offices)
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(Zip Code)
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Securities Registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.005 par value
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The NASDAQ Stock Market LLC
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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•
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An innovative complementary portfolio of beers and ciders,
which includes national lifestyle brands such as Kona and Omission, as well as storied regional craft brands that reflect changing consumer trends around variety, flavor and locale.
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•
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Distinct, authentic craft beer brands
with rich stories that are rooted in their local communities, including Widmer Brothers, Redhook Brewery, and Kona Brewing Company, and bold new trailblazers Omission Beer and Square Mile Cider Company, as well as strong regional craft partners such as Appalachian Mountain Brewery and Cisco Brewers.
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•
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A national brewing footprint
that allows us to get our beers to market faster, fresher and more efficiently. We have significant flexibility to fully leverage the specific strengths of our distinct breweries and operations. Additionally, we guarantee the quality and consistency of all of our products through fine-tuned processes designed to ensure that everything, from brewing to quality-assurance to warehousing and distribution, meets our high standards. We believe that maximizing production under our direct supervision and through accomplished and expert partners is critical to our success. Further, we believe that our ability to engage in ongoing product innovation and to control product quality provides critical competitive advantages. Each of our breweries is modern, has flexible production capabilities, and is designed to produce beer in smaller batches compared to the national domestic brewers, thereby allowing us to brew a wide variety of brand offerings. We believe that our investment in brewing and logistics technologies enables us to minimize brewery operating costs and consistently produce innovative beer styles.
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•
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Nationwide sales activation
through robust partnerships with leading retailers. We leverage our national sales and marketing capabilities and complementary brand families to create a unique identity in the distribution channel and with the consumer. Our sales force calls on all retail channels nationally, including grocery, drug and convenience stores, something most other craft brewers are not positioned to do.
|
•
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National seamless distribution
through the Anheuser-Busch wholesaler network alliance. This distribution footprint provides efficiencies in logistics and product delivery, state reporting and licensing, billing and collections. We have realized these efficiencies while maintaining full autonomy over the production, sale and marketing of our products as an independent craft beer company.
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•
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A diverse leadership team
with extensive experience in the beer and beverage industries. The team has a proven ability to manage brand lifecycles, from development to turnaround, in both large and growth-company settings.
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•
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Oregon Brewery
. Our Oregon Brewery is our largest capacity production brewery and we expect to complete construction on our expansion of the brewery’s annual capacity in 2017.
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•
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Washington Brewery
. Our Washington Brewery utilizes a 100-barrel brewing system.
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•
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New Hampshire Brewery
. Our New Hampshire Brewery utilizes a 100-barrel brewing system and uses an anaerobic waste-water treatment facility that completes the process cycle.
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•
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Hawaiian Brewery
. Our Hawaiian Brewery utilizes a 25-barrel brewing system and utilizes a 229-kilowatt photovoltaic solar energy generating system to supply approximately 50 percent of its energy requirements through renewable energy. In 2016, we held a ground breaking ceremony for a new brewery near our existing brewery and pub in Kona. The new brewery, which is being built with sustainability in mind, is scheduled to go online in the first quarter of 2019.
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•
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Innovation Breweries
. In 2016, we built a new 10-barrel innovation brewery adjacent to our main Portland production brewery. The brewery is focused on releasing innovative small-batch and limited release beers in the local market. Our New Hampshire innovation brewery system maintains a 3-barrel pilot brewing system and is located on the same site as our New Hampshire production brewery.
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•
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we engage in incompatible conduct that damages the reputation or image of A‑B or the brewing industry;
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•
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any A-B competitor or affiliate thereof acquires 10% or more of our outstanding equity securities, and that entity designates one or more persons to our board of directors;
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•
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our current chief executive officer ceases to function in that role or is terminated, and a satisfactory successor, in A‑B’s opinion, is not appointed within six months;
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•
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we are merged or consolidated into or with any other entity or any other entity merges or consolidates into or with us without A-B’s prior approval; or
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•
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A-B, its subsidiaries, affiliates, or parent, incur any obligation or expense as a result of a claim asserted against them by or in our name, or by our affiliates or shareholders, and we do not reimburse and indemnify A-B and its corporate affiliates on demand for the entire amount of the obligation or expense.
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Production Breweries
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Square
Footage
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Current
Annual Capacity
|
||
Oregon Brewery
|
|
185,000
|
|
|
630
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|
Washington Brewery
|
|
128,000
|
|
|
220
|
|
New Hampshire Brewery
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125,000
|
|
|
215
|
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Hawaiian Brewery
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11,000
|
|
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10
|
|
|
|
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1,075
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|
2015
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|
High
|
|
Low
|
||||
Quarter 1
|
|
$
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13.65
|
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$
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10.89
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Quarter 2
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14.17
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10.15
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Quarter 3
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11.17
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|
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7.11
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Quarter 4
|
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9.72
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6.83
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|
||
2016
|
|
High
|
|
Low
|
||||
Quarter 1
|
|
$
|
9.02
|
|
|
$
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7.02
|
|
Quarter 2
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11.52
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|
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7.56
|
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||
Quarter 3
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21.38
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10.69
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Quarter 4
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18.52
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13.60
|
|
|
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Base
Period
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|
Indexed Returns
Year Ended
|
||||||||||||||||||||
Company/Index
|
|
12/31/2011
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|
12/31/2012
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|
12/31/2013
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12/31/2014
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|
12/31/2015
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|
12/31/2016
|
||||||||||||
Craft Brew Alliance, Inc.
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$
|
100.00
|
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|
$
|
107.64
|
|
|
$
|
272.76
|
|
|
$
|
221.59
|
|
|
$
|
139.04
|
|
|
$
|
280.73
|
|
NASDAQ Composite
|
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100.00
|
|
|
115.91
|
|
|
160.32
|
|
|
181.80
|
|
|
192.21
|
|
|
192.21
|
|
||||||
S&P 500 Beverages Index
|
|
100.00
|
|
|
105.15
|
|
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125.59
|
|
|
141.32
|
|
|
153.99
|
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|
154.01
|
|
In thousands,
except per share amounts
|
|
Year Ended December 31,
|
||||||||||||||||||
Statement of Operations Data
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2016
|
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2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Net sales
|
|
$
|
202,507
|
|
|
$
|
204,168
|
|
|
$
|
200,022
|
|
|
$
|
179,180
|
|
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$
|
169,287
|
|
Cost of sales
|
|
142,908
|
|
|
141,972
|
|
|
141,312
|
|
|
128,919
|
|
|
119,261
|
|
|||||
Gross profit
|
|
59,599
|
|
|
62,196
|
|
|
58,710
|
|
|
50,261
|
|
|
50,026
|
|
|||||
Selling, general and administrative expenses
|
|
59,224
|
|
|
57,932
|
|
|
53,000
|
|
|
46,461
|
|
|
44,890
|
|
|||||
Operating income
|
|
375
|
|
|
4,264
|
|
|
5,710
|
|
|
3,800
|
|
|
5,136
|
|
|||||
Interest expense and other income (expense), net
|
|
(681
|
)
|
|
(546
|
)
|
|
(611
|
)
|
|
(537
|
)
|
|
(659
|
)
|
|||||
Income (loss) before provision for income taxes
|
|
(306
|
)
|
|
3,718
|
|
|
5,099
|
|
|
3,263
|
|
|
4,477
|
|
|||||
Provision for income taxes
|
|
14
|
|
|
1,500
|
|
|
2,022
|
|
|
1,304
|
|
|
1,951
|
|
|||||
Net income (loss)
|
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
|
$
|
3,077
|
|
|
$
|
1,959
|
|
|
$
|
2,526
|
|
Basic and diluted net income (loss) per share
|
|
$
|
(0.02
|
)
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
|
$
|
0.10
|
|
|
$
|
0.13
|
|
Shares used in basic per share calculations
|
|
19,225
|
|
|
19,152
|
|
|
19,038
|
|
|
18,923
|
|
|
18,862
|
|
|||||
Shares used in diluted per share calculations
|
|
19,225
|
|
|
19,175
|
|
|
19,126
|
|
|
19,042
|
|
|
18,934
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
442
|
|
|
$
|
911
|
|
|
$
|
981
|
|
|
$
|
2,726
|
|
|
$
|
5,013
|
|
Working capital
|
|
15,226
|
|
|
10,838
|
|
|
8,050
|
|
|
5,782
|
|
|
5,207
|
|
|||||
Total assets
|
|
202,549
|
|
|
190,334
|
|
|
178,601
|
|
|
170,286
|
|
|
165,664
|
|
|||||
Current portion of long-term debt and capital leases
|
|
1,317
|
|
|
507
|
|
|
1,157
|
|
|
710
|
|
|
642
|
|
|||||
Long-term debt and capital leases, net of current portion
|
|
27,946
|
|
|
18,991
|
|
|
13,720
|
|
|
11,050
|
|
|
12,440
|
|
|||||
Other long-term obligations
|
|
21,988
|
|
|
20,962
|
|
|
19,738
|
|
|
18,303
|
|
|
17,903
|
|
|||||
Shareholders’ equity
|
|
119,661
|
|
|
118,738
|
|
|
115,417
|
|
|
111,232
|
|
|
108,195
|
|
|
|
Net Sales
|
|
Net Income
|
|
Number of
Barrels Sold |
2016
|
|
$202.5 million
|
|
$(0.3) million
|
|
775,600
|
2015
|
|
$204.2 million
|
|
$2.2 million
|
|
824,400
|
2014
|
|
$200.0 million
|
|
$3.1 million
|
|
830,200
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Sales
|
|
106.5
|
%
|
|
107.1
|
%
|
|
107.3
|
%
|
Less excise tax
|
|
6.5
|
|
|
7.1
|
|
|
7.3
|
|
Net sales
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost of sales
|
|
70.6
|
|
|
69.5
|
|
|
70.6
|
|
Gross profit
|
|
29.4
|
|
|
30.5
|
|
|
29.4
|
|
Selling, general and administrative expenses
|
|
29.2
|
|
|
28.4
|
|
|
26.5
|
|
Operating income
|
|
0.2
|
|
|
2.1
|
|
|
2.9
|
|
Interest expense
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
Other expense, net
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
Income (loss) before income taxes
|
|
(0.2
|
)
|
|
1.8
|
|
|
2.5
|
|
Income tax provision
|
|
—
|
|
|
0.7
|
|
|
1.0
|
|
Net income (loss)
|
|
(0.2
|
)%
|
|
1.1
|
%
|
|
1.5
|
%
|
(1)
|
Percentages may not sum due to rounding.
|
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
Beer Related
|
|
Brewpubs
|
|
Total
|
||||||
Net sales
|
|
$
|
173,657
|
|
|
$
|
28,850
|
|
|
$
|
202,507
|
|
Gross profit
|
|
$
|
55,667
|
|
|
$
|
3,932
|
|
|
$
|
59,599
|
|
Gross margin
|
|
32.1
|
%
|
|
13.6
|
%
|
|
29.4
|
%
|
2015
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
176,343
|
|
|
$
|
27,825
|
|
|
$
|
204,168
|
|
Gross profit
|
|
$
|
58,610
|
|
|
$
|
3,586
|
|
|
$
|
62,196
|
|
Gross margin
|
|
33.2
|
%
|
|
12.9
|
%
|
|
30.5
|
%
|
2014
|
|
|
|
|
|
|
||||||
Net sales
|
|
$
|
173,687
|
|
|
$
|
26,335
|
|
|
$
|
200,022
|
|
Gross profit
|
|
$
|
55,174
|
|
|
$
|
3,536
|
|
|
$
|
58,710
|
|
Gross margin
|
|
31.8
|
%
|
|
13.4
|
%
|
|
29.4
|
%
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
% Change
|
|||||||||
Sales by Category
|
|
2016
|
|
2015
|
|
||||||||||
A-B and A-B related
(1)
|
|
$
|
167,725
|
|
|
$
|
177,380
|
|
|
$
|
(9,655
|
)
|
|
(5.4
|
)%
|
Contract brewing and beer related
(2)
|
|
19,052
|
|
|
13,376
|
|
|
5,676
|
|
|
42.4
|
%
|
|||
Excise taxes
|
|
(13,120
|
)
|
|
(14,413
|
)
|
|
1,293
|
|
|
(9.0
|
)%
|
|||
Net beer related sales
|
|
173,657
|
|
|
176,343
|
|
|
(2,686
|
)
|
|
(1.5
|
)%
|
|||
Brewpubs
(3)
|
|
28,850
|
|
|
27,825
|
|
|
1,025
|
|
|
3.7
|
%
|
|||
Net sales
|
|
$
|
202,507
|
|
|
$
|
204,168
|
|
|
$
|
(1,661
|
)
|
|
(0.8
|
)%
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
% Change
|
|||||||||
Sales by Category
|
|
2015
|
|
2014
|
|
||||||||||
A-B and A-B related
(1)
|
|
$
|
177,380
|
|
|
$
|
176,161
|
|
|
$
|
1,219
|
|
|
0.7
|
%
|
Contract brewing and beer related
(2)
|
|
13,376
|
|
|
12,113
|
|
|
1,263
|
|
|
10.4
|
%
|
|||
Excise taxes
|
|
(14,413
|
)
|
|
(14,587
|
)
|
|
174
|
|
|
(1.2
|
)%
|
|||
Net beer related sales
|
|
176,343
|
|
|
173,687
|
|
|
2,656
|
|
|
1.5
|
%
|
|||
Brewpubs
(3)
|
|
27,825
|
|
|
26,335
|
|
|
1,490
|
|
|
5.7
|
%
|
|||
Net sales
|
|
$
|
204,168
|
|
|
$
|
200,022
|
|
|
$
|
4,146
|
|
|
2.1
|
%
|
(1)
|
A-B and A-B related includes domestic and international sales of our owned brands sold through A-B and Ambev, as well as non-owned brands sold pursuant to master distribution agreements, and the international distribution fees earned from ABWI.
|
(2)
|
Beer related includes international beer sales not sold through A-B or Ambev, as well as fees earned through an alternating proprietorship agreement.
|
(3)
|
Brewpubs sales include sales of promotional merchandise and sales of beer directly to customers.
|
Year Ended December 31,
|
|
2016 Shipments
|
|
2015 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions
(1)
|
|||||
A-B and A-B related
(2)
|
|
693,300
|
|
|
753,400
|
|
|
(60,100
|
)
|
|
(8.0
|
)%
|
|
—
|
%
|
Contract brewing and beer related
(3)
|
|
72,600
|
|
|
60,600
|
|
|
12,000
|
|
|
19.8
|
%
|
|
|
|
Brewpubs
|
|
9,700
|
|
|
10,400
|
|
|
(700
|
)
|
|
(6.7
|
)%
|
|
|
|
Total
|
|
775,600
|
|
|
824,400
|
|
|
(48,800
|
)
|
|
(5.9
|
)%
|
|
|
|
Year Ended December 31,
|
|
2015 Shipments
|
|
2014 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions
(1)
|
|||||
A-B and A-B related
(2)
|
|
753,400
|
|
|
766,600
|
|
|
(13,200
|
)
|
|
(1.7
|
)%
|
|
—
|
%
|
Contract brewing and beer related
(3)
|
|
60,600
|
|
|
52,700
|
|
|
7,900
|
|
|
15.0
|
%
|
|
|
|
Brewpubs
|
|
10,400
|
|
|
10,900
|
|
|
(500
|
)
|
|
(4.6
|
)%
|
|
|
|
Total
|
|
824,400
|
|
|
830,200
|
|
|
(5,800
|
)
|
|
(0.7
|
)%
|
|
|
|
(1)
|
Change in depletions reflects the year-over-year change in barrel volume sales of beer by wholesalers to retailers.
|
(2)
|
A-B and A-B related includes domestic and international shipments of our owned brands distributed through A-B and Ambev, as well as non-owned brands distributed pursuant to master distribution agreements.
|
(3)
|
Beer related includes international shipments of our beers not distributed through A-B or Ambev.
|
Year Ended December 31,
|
|
2016 Shipments
|
|
2015 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions |
|||||
Kona
|
|
397,400
|
|
|
352,100
|
|
|
45,300
|
|
|
12.9
|
%
|
|
17
|
%
|
Widmer Brothers
|
|
148,100
|
|
|
175,700
|
|
|
(27,600
|
)
|
|
(15.7
|
)%
|
|
(17
|
)%
|
Redhook
|
|
127,200
|
|
|
185,900
|
|
|
(58,700
|
)
|
|
(31.6
|
)%
|
|
(23
|
)%
|
Omission
|
|
42,900
|
|
|
51,500
|
|
|
(8,600
|
)
|
|
(16.7
|
)%
|
|
(11
|
)%
|
All other
(1)
|
|
33,300
|
|
|
22,400
|
|
|
10,900
|
|
|
48.7
|
%
|
|
70
|
%
|
Total
(2)
|
|
748,900
|
|
|
787,600
|
|
|
(38,700
|
)
|
|
(4.9
|
)%
|
|
—
|
%
|
Year Ended December 31,
|
|
2015 Shipments
|
|
2014 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions |
|||||
Kona
|
|
352,100
|
|
|
300,600
|
|
|
51,500
|
|
|
17.1
|
%
|
|
15
|
%
|
Widmer Brothers
|
|
175,700
|
|
|
209,100
|
|
|
(33,400
|
)
|
|
(16.0
|
)%
|
|
(9
|
)%
|
Redhook
|
|
185,900
|
|
|
202,200
|
|
|
(16,300
|
)
|
|
(8.1
|
)%
|
|
(12
|
)%
|
Omission
|
|
51,500
|
|
|
49,800
|
|
|
1,700
|
|
|
3.4
|
%
|
|
10
|
%
|
All other
(1)
|
|
22,400
|
|
|
28,800
|
|
|
(6,400
|
)
|
|
(22.2
|
)%
|
|
(14
|
)%
|
Total
(2)
|
|
787,600
|
|
|
790,500
|
|
|
(2,900
|
)
|
|
(0.4
|
)%
|
|
—
|
%
|
(1)
|
All other includes the shipments and depletions from our Square Mile and Resignation brand families, as well as the non-owned Cisco Brewers and Appalachian Mountain Brewing brand families, shipped by us pursuant to distribution agreements.
|
(2)
|
Total shipments by brand include international shipments and exclude shipments produced under our contract brewing arrangements.
|
Year Ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
Shipments
|
|
% of Total
|
|
Shipments
|
|
% of Total
|
|
Shipments
|
|
% of Total
|
|||||||
Draft
|
|
171,100
|
|
|
22.8
|
%
|
|
180,700
|
|
|
22.9
|
%
|
|
198,500
|
|
|
25.1
|
%
|
Packaged
|
|
577,800
|
|
|
77.2
|
%
|
|
606,900
|
|
|
77.1
|
%
|
|
592,000
|
|
|
74.9
|
%
|
Total
|
|
748,900
|
|
|
100.0
|
%
|
|
787,600
|
|
|
100.0
|
%
|
|
790,500
|
|
|
100.0
|
%
|
|
|
Year Ended December 31,
|
|
Dollar
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
|
$
|
117,990
|
|
|
$
|
117,733
|
|
|
$
|
257
|
|
|
0.2
|
%
|
Brewpubs
|
|
24,918
|
|
|
24,239
|
|
|
679
|
|
|
2.8
|
%
|
|||
Total
|
|
$
|
142,908
|
|
|
$
|
141,972
|
|
|
$
|
936
|
|
|
0.7
|
%
|
|
|
Year Ended December 31,
|
|
Dollar
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
|
$
|
117,733
|
|
|
$
|
118,513
|
|
|
$
|
(780
|
)
|
|
(0.7
|
)%
|
Brewpubs
|
|
24,239
|
|
|
22,799
|
|
|
1,440
|
|
|
6.3
|
%
|
|||
Total
|
|
$
|
141,972
|
|
|
$
|
141,312
|
|
|
$
|
660
|
|
|
0.5
|
%
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Capacity utilization
|
|
67
|
%
|
|
71
|
%
|
|
75
|
%
|
|
|
Year Ended December 31,
|
|
Dollar
|
|
|
|||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
|
$
|
55,667
|
|
|
$
|
58,610
|
|
|
$
|
(2,943
|
)
|
|
(5.0
|
)%
|
Brewpubs
|
|
3,932
|
|
|
3,586
|
|
|
346
|
|
|
9.6
|
%
|
|||
Total
|
|
$
|
59,599
|
|
|
$
|
62,196
|
|
|
$
|
(2,597
|
)
|
|
(4.2
|
)%
|
|
|
Year Ended December 31,
|
|
Dollar
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
|
$
|
58,610
|
|
|
$
|
55,174
|
|
|
$
|
3,436
|
|
|
6.2
|
%
|
Brewpubs
|
|
3,586
|
|
|
3,536
|
|
|
50
|
|
|
1.4
|
%
|
|||
Total
|
|
$
|
62,196
|
|
|
$
|
58,710
|
|
|
$
|
3,486
|
|
|
5.9
|
%
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
% Change
|
|||||||||
|
|
2016
|
|
2015
|
|
||||||||||
|
|
$
|
59,224
|
|
|
$
|
57,932
|
|
|
$
|
1,292
|
|
|
2.2
|
%
|
As a % of Net sales
|
|
29.2
|
%
|
|
28.4
|
%
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
% Change
|
|||||||||
|
|
2015
|
|
2014
|
|
||||||||||
|
|
$
|
57,932
|
|
|
$
|
53,000
|
|
|
$
|
4,932
|
|
|
9.3
|
%
|
As a % of Net sales
|
|
28.4
|
%
|
|
26.5
|
%
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Dollar
Change |
|
% Change
|
|||||||||
|
|
2016
|
|
2015
|
|
||||||||||
Interest expense
|
|
$
|
709
|
|
|
$
|
572
|
|
|
$
|
137
|
|
|
24.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Year Ended December 31,
|
|
Dollar
Change |
|
% Change
|
|||||||||
|
|
2015
|
|
2014
|
|
||||||||||
Interest expense
|
|
$
|
572
|
|
|
$
|
431
|
|
|
$
|
141
|
|
|
32.7
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Average debt outstanding
|
|
$
|
27,548
|
|
|
$
|
18,530
|
|
|
$
|
12,311
|
|
Average interest rate
|
|
1.51
|
%
|
|
1.96
|
%
|
|
1.83
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
|
$
|
7,444
|
|
|
$
|
11,562
|
|
|
$
|
9,911
|
|
Net cash used in investing activities
|
|
(16,572
|
)
|
|
(16,174
|
)
|
|
(15,529
|
)
|
|||
Net cash provided by financing activities
|
|
8,659
|
|
|
4,542
|
|
|
3,873
|
|
|||
Decrease in cash and cash equivalents
|
|
$
|
(469
|
)
|
|
$
|
(70
|
)
|
|
$
|
(1,745
|
)
|
•
|
state NOLs of
$32,000
, tax-effected;
|
•
|
federal alternative minimum tax (“AMT”) credit carry forwards of
$0.3 million
; and
|
•
|
federal employer FICA tips credit of
$0.1 million
.
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
2017
|
|
2018 and 2019
|
|
2020 and 2021
|
|
2022 and beyond
|
||||||||||
Term loan
|
|
$
|
9,653
|
|
|
$
|
408
|
|
|
$
|
864
|
|
|
$
|
936
|
|
|
$
|
7,445
|
|
Interest on term loan
(1)
|
|
629
|
|
|
107
|
|
|
199
|
|
|
179
|
|
|
144
|
|
|||||
Line of credit
|
|
17,975
|
|
|
—
|
|
|
—
|
|
|
17,975
|
|
|
—
|
|
|||||
Interest on line of credit
(1)
|
|
382
|
|
|
98
|
|
|
195
|
|
|
89
|
|
|
—
|
|
|||||
Operating leases
|
|
38,112
|
|
|
8,836
|
|
|
3,886
|
|
|
2,859
|
|
|
22,531
|
|
|||||
Capital leases
|
|
1,693
|
|
|
932
|
|
|
462
|
|
|
299
|
|
|
—
|
|
|||||
Purchase commitments
|
|
35,017
|
|
|
25,479
|
|
|
7,238
|
|
|
2,300
|
|
|
—
|
|
|||||
Sponsorship obligations
|
|
2,836
|
|
|
1,402
|
|
|
792
|
|
|
428
|
|
|
214
|
|
|||||
Interest rate swap
(2)
|
|
1,470
|
|
|
275
|
|
|
524
|
|
|
403
|
|
|
268
|
|
|||||
|
|
$
|
107,767
|
|
|
$
|
37,537
|
|
|
$
|
14,160
|
|
|
$
|
25,468
|
|
|
$
|
30,602
|
|
(1)
|
The variable interest rate on our term loan and line of credit was 1.75% at
December 31, 2016
.
|
(2)
|
The fixed rates on our interest rate swaps are
2.86%
and
1.28%
. We pay that fixed rate less the Benchmark Rate, which was
0.72%
at
December 31, 2016
.
|
2016 (In thousands, except per share data)
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
(2)
|
||||||||
Net sales
|
|
$
|
39,222
|
|
|
$
|
62,278
|
|
|
$
|
55,203
|
|
|
$
|
45,804
|
|
Cost of sales
|
|
30,505
|
|
|
41,780
|
|
|
38,229
|
|
|
32,394
|
|
||||
Gross profit
|
|
8,717
|
|
|
20,498
|
|
|
16,974
|
|
|
13,410
|
|
||||
Selling, general and administrative expenses
|
|
13,924
|
|
|
16,548
|
|
|
15,876
|
|
|
12,876
|
|
||||
Operating income (loss)
|
|
(5,207
|
)
|
|
3,950
|
|
|
1,098
|
|
|
534
|
|
||||
Interest expense and Other expense, net
|
|
(141
|
)
|
|
(181
|
)
|
|
(179
|
)
|
|
(180
|
)
|
||||
Income (loss) before income taxes
|
|
(5,348
|
)
|
|
3,769
|
|
|
919
|
|
|
354
|
|
||||
Income tax provision (benefit)
|
|
(2,139
|
)
|
|
1,508
|
|
|
367
|
|
|
278
|
|
||||
Net income (loss)
|
|
$
|
(3,209
|
)
|
|
$
|
2,261
|
|
|
$
|
552
|
|
|
$
|
76
|
|
Basic and diluted net income (loss) per share
(1)
|
|
$
|
(0.17
|
)
|
|
$
|
0.12
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
Shares used in basic per share calculation
|
|
19,179
|
|
|
19,216
|
|
|
19,244
|
|
|
19,259
|
|
||||
Shares used in diluted per share calculation
|
|
19,179
|
|
|
19,232
|
|
|
19,343
|
|
|
19,361
|
|
2015 (In thousands, except per share data)
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
Net sales
|
|
$
|
41,709
|
|
|
$
|
58,531
|
|
|
$
|
54,689
|
|
|
$
|
49,239
|
|
Cost of sales
|
|
30,547
|
|
|
39,841
|
|
|
37,830
|
|
|
33,754
|
|
||||
Gross profit
|
|
11,162
|
|
|
18,690
|
|
|
16,859
|
|
|
15,485
|
|
||||
Selling, general and administrative expenses
|
|
12,953
|
|
|
16,263
|
|
|
15,497
|
|
|
13,219
|
|
||||
Operating income (loss)
|
|
(1,791
|
)
|
|
2,427
|
|
|
1,362
|
|
|
2,266
|
|
||||
Interest expense and Other expense, net
|
|
(115
|
)
|
|
(143
|
)
|
|
(141
|
)
|
|
(147
|
)
|
||||
Income (loss) before income taxes
|
|
(1,906
|
)
|
|
2,284
|
|
|
1,221
|
|
|
2,119
|
|
||||
Income tax provision (benefit)
|
|
(743
|
)
|
|
894
|
|
|
489
|
|
|
860
|
|
||||
Net income (loss)
|
|
$
|
(1,163
|
)
|
|
$
|
1,390
|
|
|
$
|
732
|
|
|
$
|
1,259
|
|
Basic and diluted net income (loss) per share
(1)
|
|
$
|
(0.06
|
)
|
|
$
|
0.07
|
|
|
$
|
0.04
|
|
|
$
|
0.07
|
|
Shares used in basic per share calculation
|
|
19,115
|
|
|
19,145
|
|
|
19,171
|
|
|
19,174
|
|
||||
Shares used in diluted per share calculation
|
|
19,115
|
|
|
19,177
|
|
|
19,180
|
|
|
19,186
|
|
(1)
|
Basic and diluted net income (loss) per share may not sum to the full year as presented on the Consolidated Statements of Operations due to rounding.
|
(2)
|
During the preparation of our financial statements for the year ended December 31, 2016, we determined that we had incorrectly (i) accounted for certain fees payable to us by A-B in connection with the International Distribution Agreement, (ii) classified reimbursements for Selling, general and administrative costs as revenue, and (iii) accounted for a severance benefit that had no future obligation on the part of the former employee. Based on our analysis of quantitative and qualitative factors, we believe the errors are immaterial to prior periods. Accordingly, the following adjustments were made to our fourth quarter results: a reduction to Net sales and gross profit of $1.3 million and a reduction to Selling, general and administrative expenses of $0.6 million, for a net reduction to our Income (loss) before income taxes of $0.7 million.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
442
|
|
|
$
|
911
|
|
Accounts receivable, net
|
24,008
|
|
|
18,926
|
|
||
Inventory, net
|
19,091
|
|
|
18,300
|
|
||
Deferred income tax asset, net
|
2,144
|
|
|
1,905
|
|
||
Other current assets
|
2,495
|
|
|
2,439
|
|
||
Total current assets
|
48,180
|
|
|
42,481
|
|
||
Property, equipment and leasehold improvements, net
|
121,970
|
|
|
116,867
|
|
||
Goodwill
|
12,917
|
|
|
12,917
|
|
||
Intangible and other assets, net
|
19,482
|
|
|
18,069
|
|
||
Total assets
|
$
|
202,549
|
|
|
$
|
190,334
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
16,076
|
|
|
$
|
17,100
|
|
Accrued salaries, wages and payroll taxes
|
4,967
|
|
|
5,468
|
|
||
Refundable deposits
|
6,486
|
|
|
6,559
|
|
||
Other accrued expenses
|
4,108
|
|
|
2,009
|
|
||
Current portion of long-term debt and capital lease obligations
|
1,317
|
|
|
507
|
|
||
Total current liabilities
|
32,954
|
|
|
31,643
|
|
||
Long-term debt and capital lease obligations, net of current portion
|
27,946
|
|
|
18,991
|
|
||
Fair value of derivative financial instruments
|
424
|
|
|
569
|
|
||
Deferred income tax liability, net
|
20,325
|
|
|
19,669
|
|
||
Other liabilities
|
1,239
|
|
|
724
|
|
||
Total liabilities
|
82,888
|
|
|
71,596
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Common shareholders' equity:
|
|
|
|
|
|
||
Common stock, $0.005 par value. Authorized 50,000,000 shares; issued and outstanding 19,261,245 and 19,179,006
|
96
|
|
|
96
|
|
||
Additional paid-in capital
|
140,687
|
|
|
139,534
|
|
||
Accumulated other comprehensive loss
|
(262
|
)
|
|
(352
|
)
|
||
Accumulated deficit
|
(20,860
|
)
|
|
(20,540
|
)
|
||
Total common shareholders' equity
|
119,661
|
|
|
118,738
|
|
||
Total liabilities and common shareholders' equity
|
$
|
202,549
|
|
|
$
|
190,334
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
$
|
215,627
|
|
|
$
|
218,581
|
|
|
$
|
214,609
|
|
Less excise taxes
|
13,120
|
|
|
14,413
|
|
|
14,587
|
|
|||
Net sales
|
202,507
|
|
|
204,168
|
|
|
200,022
|
|
|||
Cost of sales
|
142,908
|
|
|
141,972
|
|
|
141,312
|
|
|||
Gross profit
|
59,599
|
|
|
62,196
|
|
|
58,710
|
|
|||
Selling, general and administrative expenses
|
59,224
|
|
|
57,932
|
|
|
53,000
|
|
|||
Operating income
|
375
|
|
|
4,264
|
|
|
5,710
|
|
|||
Interest expense
|
(709
|
)
|
|
(572
|
)
|
|
(431
|
)
|
|||
Other income (expense), net
|
28
|
|
|
26
|
|
|
(180
|
)
|
|||
Income (loss) before income taxes
|
(306
|
)
|
|
3,718
|
|
|
5,099
|
|
|||
Income tax expense
|
14
|
|
|
1,500
|
|
|
2,022
|
|
|||
Net income (loss)
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
|
$
|
3,077
|
|
Basic and diluted net income (loss) per share
|
$
|
(0.02
|
)
|
|
$
|
0.12
|
|
|
$
|
0.16
|
|
Shares used in basic per share calculations
|
19,225
|
|
|
19,152
|
|
|
19,038
|
|
|||
Shares used in diluted per share calculations
|
19,225
|
|
|
19,175
|
|
|
19,126
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
|
$
|
3,077
|
|
Unrealized gain (loss) on derivative hedge transactions, net of tax
|
|
90
|
|
|
(40
|
)
|
|
(312
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
(230
|
)
|
|
$
|
2,178
|
|
|
$
|
2,765
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other Comprehensive Loss |
|
|
|
Total
Common Shareholders' Equity |
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
|
|
Accumulated Deficit
|
|
||||||||||||||
Balance at December 31, 2013
|
|
18,972
|
|
|
$
|
95
|
|
|
$
|
136,972
|
|
|
$
|
—
|
|
|
$
|
(25,835
|
)
|
|
$
|
111,232
|
|
Issuance of shares under stock plans
|
|
105
|
|
|
1
|
|
|
487
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|||||
Stock-based compensation, net of shares withheld for tax payments
|
|
38
|
|
|
—
|
|
|
784
|
|
|
—
|
|
|
—
|
|
|
784
|
|
|||||
Tax benefit related to stock options
|
|
—
|
|
|
—
|
|
|
298
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|||||
Unrealized losses on derivative financial instruments, net of tax benefit of $191
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
(312
|
)
|
|||||
Tax payments related to performance shares issued
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,077
|
|
|
3,077
|
|
|||||
Balance at December 31, 2014
|
|
19,115
|
|
|
96
|
|
|
138,391
|
|
|
(312
|
)
|
|
(22,758
|
)
|
|
115,417
|
|
|||||
Issuance of shares under stock plans, net of shares withheld for tax payments
|
|
18
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|||||
Stock-based compensation, net of shares withheld for tax payments
|
|
46
|
|
|
—
|
|
|
1,157
|
|
|
—
|
|
|
—
|
|
|
1,157
|
|
|||||
Tax benefit related to stock options
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|||||
Unrealized losses on derivative financial instruments, net of tax benefit of $26
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,218
|
|
|
2,218
|
|
|||||
Balance at December 31, 2015
|
|
19,179
|
|
|
96
|
|
|
139,534
|
|
|
(352
|
)
|
|
(20,540
|
)
|
|
118,738
|
|
|||||
Issuance of shares under stock plans, net of shares withheld for tax payments
|
|
20
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
Stock-based compensation, net of shares withheld for tax payments
|
|
62
|
|
|
—
|
|
|
1,087
|
|
|
—
|
|
|
—
|
|
|
1,087
|
|
|||||
Unrealized gains on derivative financial instruments, net of tax of $55
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(320
|
)
|
|
(320
|
)
|
|||||
Balance at December 31, 2016
|
|
19,261
|
|
|
$
|
96
|
|
|
$
|
140,687
|
|
|
$
|
(262
|
)
|
|
$
|
(20,860
|
)
|
|
$
|
119,661
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
|
$
|
3,077
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
10,862
|
|
|
9,722
|
|
|
8,648
|
|
|||
Loss on sale or disposal of Property, equipment and leasehold improvements
|
96
|
|
|
343
|
|
|
213
|
|
|||
Deferred income taxes
|
360
|
|
|
876
|
|
|
709
|
|
|||
Stock-based compensation
|
1,087
|
|
|
1,157
|
|
|
784
|
|
|||
Excess tax benefit from employee stock plans
|
—
|
|
|
(44
|
)
|
|
(298
|
)
|
|||
Other
|
654
|
|
|
(283
|
)
|
|
(286
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
(5,082
|
)
|
|
(7,185
|
)
|
|
(371
|
)
|
|||
Inventories
|
(1,614
|
)
|
|
1,295
|
|
|
(2,185
|
)
|
|||
Other current assets
|
(55
|
)
|
|
1,973
|
|
|
(1,011
|
)
|
|||
Accounts payable and other accrued expenses
|
1,515
|
|
|
3,151
|
|
|
(825
|
)
|
|||
Accrued salaries, wages and payroll taxes
|
(501
|
)
|
|
354
|
|
|
498
|
|
|||
Refundable deposits
|
442
|
|
|
(2,015
|
)
|
|
958
|
|
|||
Net cash provided by operating activities
|
7,444
|
|
|
11,562
|
|
|
9,911
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Expenditures for Property, equipment and leasehold improvements
|
(15,722
|
)
|
|
(15,653
|
)
|
|
(15,783
|
)
|
|||
Proceeds from sale of Property, equipment and leasehold improvements
|
75
|
|
|
412
|
|
|
254
|
|
|||
Expenditures for long-term deposits
|
(925
|
)
|
|
(933
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(16,572
|
)
|
|
(16,174
|
)
|
|
(15,529
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Principal payments on debt and capital lease obligations
|
(605
|
)
|
|
(1,094
|
)
|
|
(604
|
)
|
|||
Proceeds from capital lease financing
|
—
|
|
|
—
|
|
|
841
|
|
|||
Net borrowings under revolving line of credit
|
9,198
|
|
|
5,737
|
|
|
3,000
|
|
|||
Proceeds from issuances of common stock
|
172
|
|
|
93
|
|
|
488
|
|
|||
Debt issuance costs
|
—
|
|
|
(87
|
)
|
|
—
|
|
|||
Tax payments related to stock-based awards
|
(106
|
)
|
|
(151
|
)
|
|
(150
|
)
|
|||
Excess tax benefit from employee stock plans
|
—
|
|
|
44
|
|
|
298
|
|
|||
Net cash provided by financing activities
|
8,659
|
|
|
4,542
|
|
|
3,873
|
|
|||
Decrease in Cash and cash equivalents
|
(469
|
)
|
|
(70
|
)
|
|
(1,745
|
)
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|||
Beginning of period
|
911
|
|
|
981
|
|
|
2,726
|
|
|||
End of period
|
$
|
442
|
|
|
$
|
911
|
|
|
$
|
981
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
$
|
667
|
|
|
$
|
629
|
|
|
$
|
540
|
|
Cash paid for income taxes, net
|
587
|
|
|
398
|
|
|
1,187
|
|
|||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
|
|
|
|||
Purchases of Property, equipment and leasehold improvements with capital leases
|
$
|
1,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchases of Property, equipment and leasehold improvements included in Accounts payable at end of period
|
889
|
|
|
1,334
|
|
|
636
|
|
Buildings
|
30 – 50 years
|
Brewery equipment
|
10 – 25 years
|
Furniture, fixtures and other equipment
|
2 – 10 years
|
Vehicles
|
5 years
|
Leasehold improvements
|
The lesser of useful life or term of the lease
|
Distributor agreements
|
15 years
|
Non-compete agreements
|
5 years
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Raw materials
|
$
|
6,947
|
|
|
$
|
5,468
|
|
Work in process
|
2,996
|
|
|
3,822
|
|
||
Finished goods
|
6,601
|
|
|
6,109
|
|
||
Packaging materials
|
567
|
|
|
727
|
|
||
Promotional merchandise
|
1,353
|
|
|
1,477
|
|
||
Pub food, beverages and supplies
|
627
|
|
|
697
|
|
||
|
$
|
19,091
|
|
|
$
|
18,300
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Prepaid property taxes
|
|
$
|
421
|
|
|
$
|
393
|
|
Prepaid insurance
|
|
448
|
|
|
411
|
|
||
Income tax receivable
|
|
68
|
|
|
82
|
|
||
Other
|
|
1,558
|
|
|
1,553
|
|
||
|
|
$
|
2,495
|
|
|
$
|
2,439
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Brewery equipment
|
|
$
|
113,460
|
|
|
$
|
104,284
|
|
Buildings
|
|
56,477
|
|
|
56,414
|
|
||
Land and improvements
|
|
7,606
|
|
|
7,606
|
|
||
Furniture, fixtures and other equipment
|
|
19,192
|
|
|
16,688
|
|
||
Leasehold improvements
|
|
9,786
|
|
|
8,477
|
|
||
Vehicles
|
|
125
|
|
|
125
|
|
||
Construction in progress
|
|
11,760
|
|
|
9,457
|
|
||
|
|
218,406
|
|
|
203,051
|
|
||
Less accumulated depreciation and amortization
|
|
(96,436
|
)
|
|
(86,184
|
)
|
||
|
|
$
|
121,970
|
|
|
$
|
116,867
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Trademarks and domain name
|
|
$
|
14,429
|
|
|
$
|
14,429
|
|
Recipes
|
|
700
|
|
|
700
|
|
||
|
|
|
|
|
||||
Distributor agreements
|
|
2,200
|
|
|
2,200
|
|
||
Accumulated amortization
|
|
(1,247
|
)
|
|
(1,100
|
)
|
||
|
|
953
|
|
|
1,100
|
|
||
|
|
|
|
|
||||
Non-compete agreements
|
|
440
|
|
|
440
|
|
||
Accumulated amortization
|
|
(440
|
)
|
|
(440
|
)
|
||
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Other
|
|
348
|
|
|
348
|
|
||
Accumulated amortization
|
|
(228
|
)
|
|
(202
|
)
|
||
|
|
120
|
|
|
146
|
|
||
Intangible assets, net
|
|
16,202
|
|
|
16,375
|
|
||
|
|
|
|
|
||||
Promotional merchandise
|
|
1,106
|
|
|
761
|
|
||
Deposits
|
|
2,174
|
|
|
933
|
|
||
Intangible and other assets, net
|
|
$
|
19,482
|
|
|
$
|
18,069
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Amortization expense
|
|
$
|
199
|
|
|
$
|
222
|
|
|
$
|
241
|
|
2017
|
$
|
191
|
|
2018
|
172
|
|
|
2019
|
172
|
|
|
2020
|
170
|
|
|
2021
|
148
|
|
|
Thereafter
|
220
|
|
|
|
$
|
1,073
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Term loan, due September 30, 2023
|
|
$
|
9,653
|
|
|
$
|
10,044
|
|
Line of credit, due November 30, 2020
|
|
17,975
|
|
|
8,777
|
|
||
Capital lease obligations for equipment
|
|
1,635
|
|
|
677
|
|
||
|
|
29,263
|
|
|
19,498
|
|
||
Less current portion
|
|
(1,317
|
)
|
|
(507
|
)
|
||
|
|
$
|
27,946
|
|
|
$
|
18,991
|
|
|
|
Term
Loan
|
|
Line of
Credit
|
|
Capital
Lease
Obligations
|
||||||
2017
|
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
932
|
|
2018
|
|
422
|
|
|
—
|
|
|
231
|
|
|||
2019
|
|
442
|
|
|
—
|
|
|
231
|
|
|||
2020
|
|
459
|
|
|
17,975
|
|
|
231
|
|
|||
2021
|
|
477
|
|
|
—
|
|
|
68
|
|
|||
Thereafter
|
|
7,445
|
|
|
—
|
|
|
—
|
|
|||
|
|
$
|
9,653
|
|
|
$
|
17,975
|
|
|
1,693
|
|
|
Amount representing interest
|
|
|
|
|
|
(58
|
)
|
|||||
|
|
|
|
|
|
$
|
1,635
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Loan Agreement fee
|
|
$
|
36
|
|
|
$
|
24
|
|
|
$
|
33
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Fair value of interest rate swaps
|
$
|
(424
|
)
|
|
$
|
(569
|
)
|
Derivatives in Cash Flow Hedging Relationships
|
|
Amount of Gain (Loss)
Recognized in Accumulated OCI (Effective Portion)
|
|
Location of Loss Reclassified
from Accumulated OCI into
Income (Effective Portion)
|
|
Amount of Loss Reclassified from Accumulated OCI into
Income (Effective Portion)
|
||||
Year Ended
December 31, |
|
|
|
|
|
|
||||
2016
|
|
$
|
(145
|
)
|
|
Interest expense
|
|
$
|
292
|
|
2015
|
|
$
|
(66
|
)
|
|
Interest expense
|
|
$
|
209
|
|
2014
|
|
$
|
(503
|
)
|
|
Interest expense
|
|
$
|
205
|
|
•
|
Level 1 – quoted prices in active markets for identical securities as of the reporting date;
|
•
|
Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and
|
•
|
Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value.
|
Fair Value at December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Interest rate swap
|
|
$
|
—
|
|
|
$
|
(424
|
)
|
|
$
|
—
|
|
|
$
|
(424
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap
|
|
$
|
—
|
|
|
$
|
(569
|
)
|
|
$
|
—
|
|
|
$
|
(569
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Fixed-rate debt on balance sheet
|
$
|
935
|
|
|
$
|
676
|
|
Estimated fair value of fixed-rate debt
|
$
|
993
|
|
|
$
|
706
|
|
2016
|
Beer
Related |
|
Brewpubs
|
|
Total
|
||||||
Net sales
|
$
|
173,657
|
|
|
$
|
28,850
|
|
|
$
|
202,507
|
|
Gross profit
|
$
|
55,667
|
|
|
$
|
3,932
|
|
|
$
|
59,599
|
|
Gross margin
|
32.1
|
%
|
|
13.6
|
%
|
|
29.4
|
%
|
|||
|
|
|
|
|
|
||||||
2015
|
|
|
|
|
|
|
|
|
|||
Net sales
|
$
|
176,343
|
|
|
$
|
27,825
|
|
|
$
|
204,168
|
|
Gross profit
|
$
|
58,610
|
|
|
$
|
3,586
|
|
|
$
|
62,196
|
|
Gross margin
|
33.2
|
%
|
|
12.9
|
%
|
|
30.5
|
%
|
|||
|
|
|
|
|
|
||||||
2014
|
|
|
|
|
|
||||||
Net sales
|
$
|
173,687
|
|
|
$
|
26,335
|
|
|
$
|
200,022
|
|
Gross profit
|
$
|
55,174
|
|
|
$
|
3,536
|
|
|
$
|
58,710
|
|
Gross margin
|
31.8
|
%
|
|
13.4
|
%
|
|
29.4
|
%
|
Year Ended December 31,
|
|||||||
2016
|
|
2015
|
|
2014
|
|||
77.8
|
%
|
|
81.2
|
%
|
|
82.1
|
%
|
December 31,
|
||||
2016
|
|
2015
|
||
66.6
|
%
|
|
66.4
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted average per share fair value of stock options granted
|
|
$
|
4.06
|
|
|
$
|
7.68
|
|
|
$
|
6.89
|
|
Intrinsic value of stock options exercised
|
|
223
|
|
|
92
|
|
|
932
|
|
|||
Intrinsic value of fully-vested stock awards granted
|
|
944
|
|
|
42
|
|
|
288
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Selling, general and administrative expense
|
$
|
1,005
|
|
|
$
|
1,074
|
|
|
$
|
666
|
|
Cost of sales
|
82
|
|
|
83
|
|
|
118
|
|
|||
Total stock-based compensation expense
|
$
|
1,087
|
|
|
$
|
1,157
|
|
|
$
|
784
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
|
1.66
|
%
|
|
1.87
|
%
|
|
2.11
|
%
|
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected life
|
|
6.81 years
|
|
|
6.72 years
|
|
|
7.34 years
|
|
Volatility
|
|
51.70
|
%
|
|
61.50
|
%
|
|
60.20
|
%
|
|
|
Options Outstanding
|
|
Weighted Average Exercise Price
|
|||
Outstanding at December 31, 2015
|
|
370,640
|
|
|
$
|
10.68
|
|
Granted
|
|
141,000
|
|
|
7.69
|
|
|
Exercised
|
|
(21,888
|
)
|
|
8.62
|
|
|
Canceled
|
|
(49,505
|
)
|
|
10.50
|
|
|
Outstanding at December 31, 2016
|
|
440,247
|
|
|
9.83
|
|
|
|
Options
Outstanding
|
|
Options
Exercisable
|
||||
Number
|
|
440,247
|
|
|
136,710
|
|
||
Weighted average exercise price
|
|
$
|
9.83
|
|
|
$
|
10.00
|
|
Aggregate intrinsic value
|
|
$
|
3,113,000
|
|
|
$
|
944,000
|
|
Weighted average remaining contractual term
|
|
7.8 years
|
|
|
6.7 years
|
|
|
|
Awards Expected to Vest
|
|
Weighted Average Grant Date Fair Value Per Share
|
|||
Awards expected to vest as of January 1, 2016
|
|
143,782
|
|
|
$
|
11.56
|
|
Granted
|
|
122,503
|
|
|
7.69
|
|
|
Canceled due to termination of employee
|
|
(12,561
|
)
|
|
10.70
|
|
|
Not expected to vest due to failure to meet performance goals
|
|
(64,021
|
)
|
|
10.12
|
|
|
Awards expected to vest as of December 31, 2016
|
|
189,703
|
|
|
9.61
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted average common shares used for basic EPS
|
19,225
|
|
|
19,152
|
|
|
19,038
|
|
Dilutive effect of stock-based awards
|
—
|
|
|
23
|
|
|
88
|
|
Shares used for diluted EPS
|
19,225
|
|
|
19,175
|
|
|
19,126
|
|
|
|
|
|
|
|
|
||
Stock-based awards not included in diluted per share calculations as they would be antidilutive (in thousands)
|
221
|
|
|
241
|
|
|
85
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current federal
|
|
$
|
(378
|
)
|
|
$
|
491
|
|
|
$
|
1,079
|
|
Current state
|
|
32
|
|
|
133
|
|
|
234
|
|
|||
|
|
(346
|
)
|
|
624
|
|
|
1,313
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Deferred federal
|
|
285
|
|
|
728
|
|
|
595
|
|
|||
Deferred state
|
|
75
|
|
|
148
|
|
|
114
|
|
|||
|
|
360
|
|
|
876
|
|
|
709
|
|
|||
|
|
$
|
14
|
|
|
$
|
1,500
|
|
|
$
|
2,022
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Provision at U.S. statutory rate
|
|
$
|
(104
|
)
|
|
$
|
1,264
|
|
|
$
|
1,734
|
|
State taxes, net of federal benefit
|
|
49
|
|
|
182
|
|
|
217
|
|
|||
Permanent differences, primarily meals and entertainment
|
|
264
|
|
|
250
|
|
|
304
|
|
|||
Stock-based compensation
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|||
Domestic production activities deduction
|
|
(20
|
)
|
|
(63
|
)
|
|
(113
|
)
|
|||
Tax credits
|
|
(134
|
)
|
|
(133
|
)
|
|
(120
|
)
|
|||
|
|
$
|
14
|
|
|
$
|
1,500
|
|
|
$
|
2,022
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Deferred tax assets
|
|
|
|
|
||||
Net operating losses and alternative minimum tax credit carryforwards
|
|
$
|
496
|
|
|
$
|
372
|
|
Accrued salaries and severance
|
|
1,207
|
|
|
1,396
|
|
||
Other
|
|
1,615
|
|
|
1,208
|
|
||
|
|
3,318
|
|
|
2,976
|
|
||
Deferred tax liabilities
|
|
|
|
|
||||
Property, equipment and leasehold improvements
|
|
(15,194
|
)
|
|
(14,351
|
)
|
||
Intangible assets
|
|
(6,112
|
)
|
|
(6,153
|
)
|
||
Other
|
|
(193
|
)
|
|
(236
|
)
|
||
|
|
(21,499
|
)
|
|
(20,740
|
)
|
||
|
|
$
|
(18,181
|
)
|
|
$
|
(17,764
|
)
|
State NOLs, tax-effected
|
$
|
32
|
|
Federal alternative minimum tax credit carryforwards
|
$
|
348
|
|
Federal employer FICA tip credit carryforward
|
$
|
116
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
401(k) expense
|
|
$
|
882
|
|
|
$
|
817
|
|
|
$
|
632
|
|
2017
|
$
|
8,836
|
|
2018
|
1,965
|
|
|
2019
|
1,921
|
|
|
2020
|
1,587
|
|
|
2021
|
1,272
|
|
|
Thereafter
|
22,531
|
|
|
|
$
|
38,112
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Rent expense
|
|
$
|
2,613
|
|
|
$
|
2,042
|
|
|
$
|
2,323
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Rental income
|
|
$
|
369
|
|
|
$
|
369
|
|
|
$
|
269
|
|
2017
|
$
|
369
|
|
2018
|
369
|
|
|
2019
|
369
|
|
|
2020
|
369
|
|
|
2021
|
369
|
|
|
Thereafter
|
1,480
|
|
|
|
$
|
3,325
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
||||||
$
|
120
|
|
|
$
|
120
|
|
|
$
|
125
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
||||||
$
|
554
|
|
|
$
|
524
|
|
|
$
|
499
|
|
|
|
Purchase
Obligations
|
|
Sponsorship
Obligations
|
|
Total
|
||||||
2017
|
|
$
|
25,479
|
|
|
$
|
1,402
|
|
|
$
|
26,881
|
|
2018
|
|
5,061
|
|
|
578
|
|
|
5,639
|
|
|||
2019
|
|
2,177
|
|
|
214
|
|
|
2,391
|
|
|||
2020
|
|
1,726
|
|
|
214
|
|
|
1,940
|
|
|||
2021
|
|
574
|
|
|
214
|
|
|
788
|
|
|||
Thereafter
|
|
—
|
|
|
214
|
|
|
214
|
|
|||
|
|
$
|
35,017
|
|
|
$
|
2,836
|
|
|
$
|
37,853
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Gross sales to A-B and Ambev
|
|
$
|
168,929
|
|
|
$
|
179,974
|
|
|
$
|
178,805
|
|
International distribution fee earned from ABWI
|
|
1,216
|
|
|
—
|
|
|
—
|
|
|||
Margin fee paid to A-B, classified as a reduction of Sales
|
|
2,420
|
|
|
2,594
|
|
|
2,644
|
|
|||
Inventory management and other fees paid to A-B, classified in Cost of sales
|
|
377
|
|
|
396
|
|
|
393
|
|
|||
Media reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses
|
|
750
|
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement
|
$
|
12,246
|
|
|
$
|
12,576
|
|
Amounts due from ABWI and A-B related to international distribution fee and media reimbursement
|
3,750
|
|
|
—
|
|
||
Refundable deposits due to A-B
|
(2,162
|
)
|
|
(2,291
|
)
|
||
Amounts due to A-B for services rendered
|
(1,782
|
)
|
|
(1,645
|
)
|
||
Net amount due from A-B and ABWI
|
$
|
12,052
|
|
|
$
|
8,640
|
|
•
|
revising the design of existing controls, and designing and implementing additional key controls related to identifying and accounting for non-routine transactions, which include protocols for engaging third-party accounting experts, where necessary;
|
•
|
establishing protocols to ensure key controls operate on a timely basis to prevent and detect misstatement; and
|
•
|
providing additional GAAP technical accounting and internal control related training to both accounting and non-accounting departments.
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (a)
|
|
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights (b)
|
|
Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities reflected
in column (a)) (c)
|
||||
Equity compensation plans approved by shareholders
|
|
682,453
|
|
(1)
|
|
|
$
|
9.83
|
|
|
420,939
|
|
Equity compensation plans not approved by shareholders
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
682,453
|
|
|
|
|
$
|
9.83
|
|
|
420,939
|
|
(1)
|
Includes a total of
189,703
performance shares that may vest between April 1,
2017
and March 31,
2019
, based on the expected levels of achievement of financial targets over two separate performance periods, and
52,503
RSUs. These shares are excluded from the calculation of weighted average price in column (b) because they have no exercise price.
|
|
Page
|
Report of Moss Adams LLP, Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Common Shareholders’ Equity for the Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
|
By:
|
/s/ Edwin A. Smith
|
|
|
Edwin A. Smith
|
|
|
Corporate Controller and
|
|
|
Principal Accounting Officer
|
Signature
|
|
Title
|
|
|
|
/s/ Andrew J. Thomas
|
|
Chief Executive Officer
|
Andrew J. Thomas
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Joseph K. Vanderstelt
|
|
Chief Financial Officer and Treasurer
|
Joseph K. Vanderstelt
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Edwin A. Smith
|
|
Corporate Controller
|
Edwin A. Smith
|
|
(Principal Accounting Officer)
|
|
|
|
*
|
|
Chairman of the Board and Director
|
David R. Lord
|
|
|
|
|
|
*
|
|
Director
|
Timothy P. Boyle
|
|
|
|
|
|
*
|
|
Director
|
Marc J. Cramer
|
|
|
|
|
|
*
|
|
Director
|
Paul D. Davis
|
|
|
|
|
|
*
|
|
Director
|
Kevin R. Kelly
|
|
|
|
|
|
*
|
|
Director
|
Nickolas A. Mills
|
|
|
|
|
|
*
|
|
Director
|
John D. Rogers, Jr.
|
|
|
|
|
|
*
|
|
Director
|
Michael R. Taylor
|
|
|
*By:
|
/s/ Andrew J. Thomas
|
|
|
Andrew J. Thomas,
|
|
|
as attorney in fact
|
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Restated Articles of Incorporation of the Registrant, dated January 2, 2012 (incorporated by reference from Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2011)
|
3.2
|
|
Amended and Restated Bylaws of the Registrant, dated December 1, 2010 (incorporated by reference from Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2010 filed on April 1, 2011)
|
10.1*
|
|
2010 Stock Incentive Plan (incorporated by reference from Appendix B to the Registrant’s Proxy Statement for its 2010 Annual Meeting of Shareholders)
|
10.2*
|
|
Form of Nonqualified Stock Option Agreement (Executive Officer Grants) for the 2010 Stock Incentive Plan (incorporated by reference from Exhibit 10.11 to the Registrant’s Form 10-K for the year ended December 31, 2010)
|
10.3*
|
|
Form of Performance Share Award Agreement for Executive Officers for the 2010 Stock Incentive Plan (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2014)
|
10.4*
|
|
2014 Stock Incentive Plan (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 27, 2014)
|
10.5*
|
|
Form of Nonqualified Option Agreement for the 2014 Stock Incentive Plan (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2015)
|
10.6*
|
|
Form of Performance Share Award Agreement for Executive Officers for the 2014 Stock Incentive Plan (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2015)
|
10.7*
|
|
Form of Restricted Stock Unit Award Agreement for the 2014 Stock Incentive Plan.
|
10.8*
|
|
Transition and Separation Agreement between the Registrant and Mark D. Moreland, dated October 31, 2014 (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2014)
|
10.9*
|
|
Letter of Agreement between the Registrant and Robert Widmer dated May 26, 2010 (incorporated by reference from Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended June 30, 2010)
|
10.10*
|
|
Employment Agreement between the Registrant and Andrew J. Thomas, dated July 1, 2016 (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016)
|
10.11*
|
|
Employment Agreement between the Registrant and J. Scott Mennen, dated July 5, 2016 (incorporated by reference from Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016)
|
10.12*
|
|
Employment Agreement between the Registrant and John W. Glick, dated July 5, 2016 (incorporated by reference from Exhibit 10.5 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016)
|
10.13*
|
|
Employment Agreement between the Registrant and Kenneth C. Kunze, dated July 1. 2016 (incorporated by reference from Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016)
|
10.14*
|
|
Employment Agreement between the Registrant and Joseph K. Vanderstelt, dated June 29, 2016 (incorporated by reference from Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended June 30, 2016)
|
10.15*
|
|
Separation Agreement between Kurt D. Widmer and the Registrant dated as of February 24, 2016 (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2016)
|
10.16*
|
|
Letter of Confidentiality/Proprietary Information and Noncompetition Agreement between the Registrant and Joseph K. Vanderstelt dated April 27, 2015 (incorporated by reference from Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2015)
|
10.17*
|
|
Summary of Compensation Arrangements for Non-Employee Directors as of January 1, 2017
|
10.18*
|
|
Annual Cash Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 22, 2015)
|
10.19
|
|
Sublease between Pease Development Authority as Sublessor and the Registrant as Sublessee, dated May 30, 1995 (incorporated by reference from Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1, No. 33-94166)
|
10.20
|
|
Amended and Restated Credit Agreement, dated November 30, 2015, among the Registrant, its subsidiaries, and Bank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 3, 2015)
|
Exhibit
Number
|
|
Description
|
10.21
|
|
Amended and Restated Security Agreement, dated November 30, 2015, among the Registrant, its subsidiaries, and Bank of America, N.A. (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on December 3, 2015)
|
10.22
|
|
Amended and Restated Continuing and Unconditional Guaranty, dated November 30, 2015, among the Registrant, its subsidiaries, and Bank of America, N.A. (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on December 3, 2015)
|
10.23
|
|
Amended and Restated Exchange and Recapitalization Agreement dated as of May 1, 2011 between the Registrant and Anheuser-Busch, LLC (“A-B”)
as successor in interest to Anheuser-Busch, Incorporated (incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 4, 2011)
|
10.24
|
|
Amendment No. 1 to Amended and Restated Exchange and Recapitalization Agreement, dated August 23, 2016, by and between the Registrant and A-B (incorporated by reference from Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed on August 24, 2016)
|
10.25
|
|
Amended and Restated Master Distributor Agreement dated as of May 1, 2011 between the Registrant and A-B (the “A-B Master Distributor Agreement”) (incorporated by reference from Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 4, 2011)
|
10.26
|
|
Amendment to A-B Master Distributor Agreement dated May 11, 2012 (incorporated by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 9, 2012)
|
10.27
|
|
Amendment to A-B Master Distributor Agreement dated November 20, 2013 (incorporated by reference from Exhibit 10.35 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013)
|
10.28
|
|
Amendment No. 3 to the A-B Master Distributor Agreement, dated August 23, 2016 (incorporated by reference from Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed on August 24, 2016)
|
10.29†
|
|
Contract Brewing Agreement, dated August 23, 2016, by and between the Registrant and A-B Commercial Strategies, LLC (incorporated by reference from Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on August 24, 2016)
|
10.30†
|
|
International Distribution Agreement, dated August 23, 2016, by and between the Registrant and Anheuser-Busch Worldwide Investments, LLC (incorporated by reference from Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on August 24, 2016)
|
10.31
|
|
Registration Rights Agreement dated as of July 1, 2004 between the Registrant and A‑B (incorporated by reference from Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on July 2, 2004) (File No. 0-26542)
|
10.32
|
|
Master Lease Agreement dated as of June 6, 2007 between Banc of America Leasing & Capital, LLC and Widmer Brothers Brewing Company (incorporated by reference from Exhibit 10.2 to the Registrant’s Amendment No. 1 to the Registration Statement on Form S-4, No. 333-149908 filed on May 2, 2008 (“S-4 Amendment No. 1”))
|
10.33
|
|
Amended and Restated License Agreement dated as of February 28, 1997 between Widmer Brothers Brewing Company and Widmer’s Wine Cellars, Inc. and Canandaigua Wine Company, Inc. (incorporated by reference to Exhibit 10.3 from the S-4 Amendment No. 1)
|
10.34
|
|
Restated Lease dated as of January 1, 1994 between Smithson & McKay Limited Liability Company and Widmer Brothers Brewing Company (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010)
|
10.35
|
|
Commercial Lease (Restated) dated as of December 18, 2007 between Widmer Brothers LLC and Widmer Brothers Brewing Company (incorporated by reference to Exhibit 10.5 from the S-4 Amendment No. 1)
|
10.36
|
|
Sublease dated as of September 1, 2010 between Manini Holdings, LLC and Kona Brewing Co., LLC. (incorporated by reference from Exhibit 10.41 to the Registrant’s Form 10-K for the year ended December 31, 2010)
|
10.37†
|
|
Amended and Restated Continental Distribution and Licensing Agreement between the Registrant and Kona Brewery LLC dated March 26, 2009 (incorporated by reference from Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended September 30, 2010)
|
10.38
|
|
Sublease dated as of March 31, 2011 between Manini Holdings, LLC and Kona Brewing Co., LLC (incorporated by reference from Exhibit 10.43 to the Registrant’s Amendment No. 1 to Form 10-K for the year ended December 31, 2010 filed on April 22, 2011)
|
10.39†
|
|
Option and Agreement of Purchase and Sale dated as of January 8, 2016, by and between the Registrant and Pabst Northwest Brewing Company, LLC (incorporated by reference from Exhibit 10.2 to Amendment No. 1 to the Registrant's Form 10-Q for the quarter ended March 31, 2016)
|
21.1
|
|
Subsidiaries of the Registrant (incorporated by reference from Exhibit 21.1 to the Registrant’s Form 10-K for the year ended December 31, 2010 filed on April 1, 2011)
|
Exhibit
Number
|
|
Description
|
23.1
|
|
Consent of Moss Adams LLP, Independent Registered Public Accounting Firm
|
24.1
|
|
Power of Attorney – Directors of Craft Brew Alliance, Inc.
|
31.1
|
|
Certification of Chief Executive Officer of Craft Brew Alliance, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
Certification of Principal Financial Officer of Craft Brew Alliance, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
Certification of Form 10-K for the year ended December 31, 2016 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
99.1
|
|
Press Release dated March 16, 2017
|
99.2
|
|
Description of Common Stock (incorporated by reference from Exhibit 99.2 to the Registrant’s Form 10-K for the year ended December 31, 2012 filed on March 12, 2013)
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Denotes a management contract or a compensatory plan or arrangement.
|
†
|
Confidential treatment has been requested with respect to portions of this exhibit. A complete copy of the agreement, including the redacted terms, has been separately filed with the Securities and Exchange Commission.
|
"Company"
|
CRAFT BREW ALLIANCE, INC.
|
|
By:
[Name]
[Title]
|
"Participant"
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
|
/s/ David R. Lord
|
|
Chairman of the Board and Director
|
|
David R. Lord
|
|
|
|
|
|
|
|
/s/ Timothy P. Boyle
|
|
Director
|
|
Timothy P. Boyle
|
|
|
|
|
|
|
|
/s/ Marc J. Cramer
|
|
Director
|
|
Marc J. Cramer
|
|
|
|
|
|
|
|
/s/ Paul D. Davis
|
|
Director
|
|
Paul D. Davis
|
|
|
|
|
|
|
|
/s/ Kevin R. Kelly
|
|
Director
|
|
Kevin R. Kelly
|
|
|
|
|
|
|
|
/s/ Nickolas A. Mills
|
|
Director
|
|
Nickolas A. Mills
|
|
|
|
|
|
|
|
/s/ John D. Rogers, Jr.
|
|
Director
|
|
John D. Rogers, Jr.
|
|
|
|
|
|
|
|
/s/ Michael R. Taylor
|
|
Director
|
|
Michael R. Taylor
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a−15(f) and 15d−15(f)) for the Registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
March 16, 2017
|
|
|
|
|
By:
|
/s/ Andrew J. Thomas
|
|
|
Andrew J. Thomas
|
|
|
Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this annual report on Form 10−K of Craft Brew Alliance, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a−15(f) and 15d−15(f)) for the Registrant and we have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date:
|
March 16, 2017
|
|
|
|
|
By:
|
/s/ Joseph K. Vanderstelt
|
|
|
Joseph K. Vanderstelt
|
|
|
Chief Financial Officer
|
|
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date:
|
March 16, 2017
|
|
|
|
|
BY:
|
/s/ Andrew J. Thomas
|
|
|
Andrew J. Thomas
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
BY:
|
/s/ Joseph K. Vanderstelt
|
|
|
Joseph K. Vanderstelt
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
•
|
While overall CBA depletions declined 3% from the fourth quarter of 2015, Kona depletions increased by 12% and continued to outpace the growth of the overall craft market.
|
◦
|
Positive contributions from our international business and partnerships also offset the overall decline in the fourth quarter.
|
•
|
CBA’s 13% shipment decline in the fourth quarter primarily reflects the reduction in wholesaler inventories described above, as well as the lapping of a fourth quarter 2015 increase in wholesaler inventories as we prepared for the first quarter 2016 temporary shutdown of our Portland brewery.
|
•
|
Net sales decreased by $3.4 million, or 7%, in the fourth quarter.
|
◦
|
The decrease was primarily due to the 13% beer shipments decline, partially offset by an increase in net revenue per barrel, which reflects a $1.6 million contract brewing shortfall fee and international incentive revenue of $315,000 from AB recorded in Q4 of 2016.
|
•
|
Gross profit decreased by 13%, to $13.4 million, and gross margin decreased by 210 basis points to 29.3% in the fourth quarter.
|
◦
|
The decrease reflects the reduction in shipment volumes, lower brewery utilization and higher cost of goods, compared to the fourth quarter in 2015.
|
•
|
Selling, general and administrative expense (“SG&A”) for the fourth quarter was $12.9 million, a 3% decrease over the fourth quarter of 2015.
|
◦
|
The decrease primarily reflects a Kona media expense reimbursement from AB and lower employee benefit costs; partially offset by employee severance costs and fees related to our emerging business strategy and AB agreements.
|
•
|
Diluted net income per share decreased to $0.00 for the fourth quarter, compared to $0.07 for the fourth quarter of 2015.
|
◦
|
During the quarter, we recorded charges for severance and emerging business costs of approximately $0.6 million before tax, or $0.02 per diluted share after tax, that we do not expect to occur on a regular basis.
|
◦
|
The estimated fourth quarter gross profit impact of wholesaler inventory reductions is $0.9 million before tax, or $0.03 per diluted share after tax.
|
•
|
Across CBA’s portfolio, depletions were flat for the year, similar to 2015, and in line with guidance reported in the third quarter.
|
◦
|
The results reflect 17% growth in our Kona brand family and increasing contributions from international and partnerships, compared to last year.
|
•
|
Shipments declined 6% in 2016 from 2015, compared to our updated 2016 guidance range of a decline between 3% and 5%.
|
◦
|
Despite the overall shipment decline, we grew shipments for Kona, which increased by 13% for the full year, and our international business in 2016.
|
◦
|
The shipment decline reflects the first quarter temporary Portland brewery closure, the fourth quarter reduction in wholesaler shipments to address contracting wholesaler inventories, and a 25% decrease in contract brewing volume.
|
•
|
Net sales decreased 1% from the prior year.
|
◦
|
The negative impact of the shipment decline on net sales was primarily offset by improved pricing, as well as a contract brewing shortfall fee of $1.6 million and $1.2 million recognized under our international distribution agreement with AB.
|
•
|
Gross margin declined by 110 basis points to 29.4% in 2016, compared to 30.5% in 2015, which is 160 basis points lower than our guidance range.
|
◦
|
Declines in gross margin were attributed to the decrease in shipments and lower brewery utilization, which resulted in a gross profit decrease of $2.6 million, or 4%, compared to 2015.
|
•
|
In line with updated guidance, SG&A increased $1.3 million to $59.2 million, which is 29% of net sales and represents an increase of 80 basis points over 2015.
|
◦
|
SG&A expenses reflect increased labor-related costs, brand marketing, and professional fees, partially offset by favorable in-market spend, employee benefit costs and lower incentive compensation.
|
•
|
Net loss per share of $0.02 represents a decrease of $0.14 from diluted net income per share of $0.12 in 2015.
|
◦
|
During 2016, we recorded charges for severance and emerging business costs of approximately $1.3 million before tax, or $0.04 per diluted share after tax, that we do not expect to occur on a regular basis.
|
◦
|
The estimated full-year gross profit impact of wholesaler inventory reductions is $0.9 million before tax, or $0.03 per diluted share after tax.
|
•
|
Capital expenditures were approximately $15.7 million in 2016, which is below our refined 2016 guidance range for capital expenditures of $17 million to $19 million, and reflects the timing of major projects.
|
•
|
Total CBA depletion change of flat to growth of 6%.
|
◦
|
Through the first two months of 2017, total depletions are up 1% compared to the same period last year and include 17% growth for Kona for the same period of 2017.
|
•
|
Shipments ranging between a decrease of 1% and increase of 4%, which reflects ongoing efforts to further reduce wholesaler inventories by nearly a third in 2017.
|
•
|
Average price increases of 1% to 2%, which excludes the $3.4 million we expect to recognize annually, on a straight-line basis over the 10-year term, as part of our international agreement with AB.
|
•
|
Total gross margin rate of 30.5% to 32.5%.
|
◦
|
Gross margin on our owned business, which includes beer related and pubs, is expected to be higher on a rate basis despite the negative influence of alternating proprietorship volume and contract brewing.
|
◦
|
Over the course of 2017, CBA management will reconcile the 2017 gross margin range with the previously disclosed target of 35%, which was projected without the AB agreements and with the completed sale of our Woodinville brewery.
|
•
|
SG&A ranging from $61 million to $63 million including increase in marketing spend and SG&A cost optimization, as we leverage investments made in prior years and seek to improve efficiencies.
|
•
|
Capital expenditures of approximately $16 million to $20 million, reflecting continued work on previously disclosed projects including the new Kona brewery and Redhook brewpub in Seattle.
|
Media Contact:
Jenny McLean
Craft Brew Alliance, Inc.
(503) 331-7248
jenny.mclean@craftbrew.com
|
Investor Contact:
Edwin Smith
Craft Brew Alliance, Inc.
(503) 972-7884
ed.smith@craftbrew.com
|
|
Three Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Sales
|
$
|
48,880
|
|
|
$
|
52,864
|
|
|
$
|
215,627
|
|
|
$
|
218,581
|
|
Less excise taxes
|
3,076
|
|
|
3,625
|
|
|
13,120
|
|
|
14,413
|
|
||||
Net sales
|
45,804
|
|
|
49,239
|
|
|
202,507
|
|
|
204,168
|
|
||||
Cost of sales
|
32,394
|
|
|
33,754
|
|
|
142,908
|
|
|
141,972
|
|
||||
Gross profit
|
13,410
|
|
|
15,485
|
|
|
59,599
|
|
|
62,196
|
|
||||
As percentage of net sales
|
29.3
|
%
|
|
31.4
|
%
|
|
29.4
|
%
|
|
30.5
|
%
|
||||
Selling, general and administrative expenses
|
12,876
|
|
|
13,219
|
|
|
59,224
|
|
|
57,932
|
|
||||
Operating income
|
534
|
|
|
2,266
|
|
|
375
|
|
|
4,264
|
|
||||
Interest expense
|
(189
|
)
|
|
(153
|
)
|
|
(709
|
)
|
|
(572
|
)
|
||||
Other income, net
|
9
|
|
|
6
|
|
|
28
|
|
|
26
|
|
||||
Income (loss) before income taxes
|
354
|
|
|
2,119
|
|
|
(306
|
)
|
|
3,718
|
|
||||
Income tax expense
|
278
|
|
|
860
|
|
|
14
|
|
|
1,500
|
|
||||
Net income (loss)
|
$
|
76
|
|
|
$
|
1,259
|
|
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
Income per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic and diluted net income (loss) per share
|
$
|
—
|
|
|
$
|
0.07
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.12
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
19,259
|
|
|
19,174
|
|
|
19,225
|
|
|
19,152
|
|
||||
Diluted
|
19,361
|
|
|
19,186
|
|
|
19,225
|
|
|
19,175
|
|
||||
Total shipments (in barrels):
|
|
|
|
|
|
|
|
|
|
||||||
Core Brands
|
165,400
|
|
|
189,100
|
|
|
748,900
|
|
|
787,600
|
|
||||
Contract Brewing
|
6,200
|
|
|
8,700
|
|
|
26,700
|
|
|
36,800
|
|
||||
Total shipments
|
171,600
|
|
|
197,800
|
|
|
775,600
|
|
|
824,400
|
|
||||
Change in depletions
(1)
|
(3
|
)%
|
|
(1
|
)%
|
|
—
|
%
|
|
—
|
%
|
(1)
|
Change in depletions reflects the period-over-period change in barrel volume sales of beer by wholesalers to retailers.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
442
|
|
|
$
|
911
|
|
Accounts receivable, net
|
24,008
|
|
|
18,926
|
|
||
Inventory, net
|
19,091
|
|
|
18,300
|
|
||
Deferred income tax asset, net
|
2,144
|
|
|
1,905
|
|
||
Other current assets
|
2,495
|
|
|
2,439
|
|
||
Total current assets
|
48,180
|
|
|
42,481
|
|
||
Property, equipment and leasehold improvements, net
|
121,970
|
|
|
116,867
|
|
||
Goodwill
|
12,917
|
|
|
12,917
|
|
||
Intangible and other assets, net
|
19,482
|
|
|
18,069
|
|
||
Total assets
|
$
|
202,549
|
|
|
$
|
190,334
|
|
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
16,076
|
|
|
$
|
17,100
|
|
Accrued salaries, wages and payroll taxes
|
4,967
|
|
|
5,468
|
|
||
Refundable deposits
|
6,486
|
|
|
6,559
|
|
||
Other accrued expenses
|
4,108
|
|
|
2,009
|
|
||
Current portion of long-term debt and capital lease obligations
|
1,317
|
|
|
507
|
|
||
Total current liabilities
|
32,954
|
|
|
31,643
|
|
||
Long-term debt and capital lease obligations, net of current portion
|
27,946
|
|
|
18,991
|
|
||
Other long-term liabilities
|
21,988
|
|
|
20,962
|
|
||
Total common shareholders' equity
|
119,661
|
|
|
118,738
|
|
||
Total liabilities and common shareholders' equity
|
$
|
202,549
|
|
|
$
|
190,334
|
|
|
Twelve Months Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
10,862
|
|
|
9,722
|
|
||
Loss on sale or disposal of Property, equipment and leasehold improvements
|
96
|
|
|
343
|
|
||
Deferred income taxes
|
360
|
|
|
876
|
|
||
Other, including stock-based compensation and excess tax benefit from employee stock plans
|
1,741
|
|
|
830
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable, net
|
(5,082
|
)
|
|
(7,185
|
)
|
||
Inventories
|
(1,614
|
)
|
|
1,295
|
|
||
Other current assets
|
(55
|
)
|
|
1,973
|
|
||
Accounts payable and other accrued expenses
|
1,515
|
|
|
3,151
|
|
||
Accrued salaries, wages and payroll taxes
|
(501
|
)
|
|
354
|
|
||
Refundable deposits
|
442
|
|
|
(2,015
|
)
|
||
Net cash provided by operating activities
|
7,444
|
|
|
11,562
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Expenditures for Property, equipment and leasehold improvements
|
(15,722
|
)
|
|
(15,653
|
)
|
||
Proceeds from sale of Property, equipment and leasehold improvements
|
75
|
|
|
412
|
|
||
Expenditures for long-term deposits
|
(925
|
)
|
|
(933
|
)
|
||
Net cash used in investing activities
|
(16,572
|
)
|
|
(16,174
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||
Principal payments on debt and capital lease obligations
|
(605
|
)
|
|
(1,094
|
)
|
||
Net borrowings under revolving line of credit
|
9,198
|
|
|
5,737
|
|
||
Proceeds from issuances of common stock
|
172
|
|
|
93
|
|
||
Debt issuance costs
|
—
|
|
|
(87
|
)
|
||
Tax payments related to stock-based awards
|
(106
|
)
|
|
(151
|
)
|
||
Excess tax benefit from employee stock plans
|
—
|
|
|
44
|
|
||
Net cash provided by financing activities
|
8,659
|
|
|
4,542
|
|
||
Decrease in Cash and cash equivalents
|
(469
|
)
|
|
(70
|
)
|
||
Cash and cash equivalents, beginning of period
|
911
|
|
|
981
|
|
||
Cash and cash equivalents, end of period
|
$
|
442
|
|
|
$
|
911
|
|
|
Three Months Ended
December 31, |
|
Twelve Months Ended
December 31, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
76
|
|
|
$
|
1,259
|
|
|
$
|
(320
|
)
|
|
$
|
2,218
|
|
Interest expense
|
189
|
|
|
153
|
|
|
709
|
|
|
572
|
|
||||
Income tax expense
|
278
|
|
|
860
|
|
|
14
|
|
|
1,500
|
|
||||
Depreciation expense
|
2,737
|
|
|
2,460
|
|
|
10,663
|
|
|
9,500
|
|
||||
Amortization expense
|
69
|
|
|
41
|
|
|
199
|
|
|
222
|
|
||||
Stock-based compensation
|
446
|
|
|
278
|
|
|
1,087
|
|
|
1,176
|
|
||||
Loss on disposal of assets
|
80
|
|
|
25
|
|
|
96
|
|
|
343
|
|
||||
Adjusted EBITDA
|
$
|
3,875
|
|
|
$
|
5,076
|
|
|
$
|
12,448
|
|
|
$
|
15,531
|
|