|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-1141254
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
929 North Russell Street
|
|
|
Portland, Oregon
|
|
97227-1733
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Securities Registered pursuant to Section 12(b) of the Act:
|
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, $0.005 par value
|
BREW
|
The NASDAQ Stock Market LLC
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
PART I - FINANCIAL INFORMATION
|
Page
|
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|
|
Item 1.
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Financial Statements
|
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Item 2.
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Item 3.
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Item 4.
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PART II ‑ OTHER INFORMATION
|
|
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Item 1.
|
||
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Item 1A.
|
||
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Item 6.
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||
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash, cash equivalents and restricted cash
|
$
|
11,782
|
|
|
$
|
1,200
|
|
Accounts receivable, net
|
18,357
|
|
|
29,998
|
|
||
Inventory, net
|
21,500
|
|
|
17,216
|
|
||
Other current assets
|
4,025
|
|
|
3,121
|
|
||
Total current assets
|
55,664
|
|
|
51,535
|
|
||
Property, equipment and leasehold improvements, net
|
110,924
|
|
|
113,189
|
|
||
Operating lease right-of-use assets
|
23,841
|
|
|
—
|
|
||
Goodwill
|
21,935
|
|
|
21,986
|
|
||
Trademarks
|
44,211
|
|
|
44,289
|
|
||
Intangible and other assets, net
|
5,473
|
|
|
5,048
|
|
||
Total assets
|
$
|
262,048
|
|
|
$
|
236,047
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
19,475
|
|
|
$
|
17,552
|
|
Accrued salaries, wages and payroll taxes
|
5,881
|
|
|
5,635
|
|
||
Refundable deposits
|
3,467
|
|
|
4,123
|
|
||
Deferred revenue
|
3,251
|
|
|
6,015
|
|
||
Other accrued expenses
|
8,142
|
|
|
3,618
|
|
||
Current portion of long-term debt and finance lease obligations
|
1,498
|
|
|
919
|
|
||
Total current liabilities
|
41,714
|
|
|
37,862
|
|
||
Deferred revenue, non-current
|
20,300
|
|
|
—
|
|
||
Long-term debt and finance lease obligations, net of current portion
|
33,124
|
|
|
46,573
|
|
||
Fair value of derivative financial instruments
|
332
|
|
|
116
|
|
||
Deferred income tax liability, net
|
9,562
|
|
|
12,381
|
|
||
Long-term operating lease liabilities
|
24,269
|
|
|
—
|
|
||
Other liabilities
|
1,188
|
|
|
2,680
|
|
||
Total liabilities
|
130,489
|
|
|
99,612
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
Common shareholders' equity:
|
|
|
|
|
|
||
Common stock, $0.005 par value. Authorized 50,000,000 shares; issued and outstanding 19,466,244 and 19,382,641
|
97
|
|
|
97
|
|
||
Additional paid-in capital
|
145,276
|
|
|
144,013
|
|
||
Accumulated other comprehensive loss
|
(247
|
)
|
|
(86
|
)
|
||
Accumulated deficit
|
(13,567
|
)
|
|
(7,589
|
)
|
||
Total common shareholders' equity
|
131,559
|
|
|
136,435
|
|
||
Total liabilities and common shareholders' equity
|
$
|
262,048
|
|
|
$
|
236,047
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales
|
$
|
50,349
|
|
|
$
|
55,639
|
|
|
$
|
163,932
|
|
|
$
|
170,977
|
|
Less excise taxes
|
3,188
|
|
|
2,750
|
|
|
9,220
|
|
|
8,778
|
|
||||
Net sales
|
47,161
|
|
|
52,889
|
|
|
154,712
|
|
|
162,199
|
|
||||
Cost of sales
|
33,857
|
|
|
36,190
|
|
|
101,938
|
|
|
108,302
|
|
||||
Gross profit
|
13,304
|
|
|
16,699
|
|
|
52,774
|
|
|
53,897
|
|
||||
Selling, general and administrative expenses
|
16,465
|
|
|
16,712
|
|
|
61,411
|
|
|
47,317
|
|
||||
Operating income (loss)
|
(3,161
|
)
|
|
(13
|
)
|
|
(8,637
|
)
|
|
6,580
|
|
||||
Interest expense
|
(616
|
)
|
|
(107
|
)
|
|
(1,428
|
)
|
|
(348
|
)
|
||||
Other income (expense), net
|
24
|
|
|
(13
|
)
|
|
57
|
|
|
42
|
|
||||
Income (loss) before income taxes
|
(3,753
|
)
|
|
(133
|
)
|
|
(10,008
|
)
|
|
6,274
|
|
||||
Income tax provision (benefit)
|
(2,529
|
)
|
|
(194
|
)
|
|
(4,030
|
)
|
|
1,600
|
|
||||
Net income (loss)
|
$
|
(1,224
|
)
|
|
$
|
61
|
|
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
Basic and diluted net income (loss) per share
|
$
|
(0.06
|
)
|
|
$
|
—
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.24
|
|
Shares used in basic per share calculations
|
19,466
|
|
|
19,370
|
|
|
19,435
|
|
|
19,338
|
|
||||
Shares used in diluted per share calculations
|
19,466
|
|
|
19,545
|
|
|
19,435
|
|
|
19,525
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
(1,224
|
)
|
|
$
|
61
|
|
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
Unrealized gain (loss) on derivative hedge transactions, net of tax
|
(25
|
)
|
|
38
|
|
|
(161
|
)
|
|
167
|
|
||||
Comprehensive income (loss)
|
$
|
(1,249
|
)
|
|
$
|
99
|
|
|
$
|
(6,139
|
)
|
|
$
|
4,841
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other Comprehensive Loss |
|
|
|
Total
Common Shareholders' Equity |
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
|
|
Accumulated Deficit
|
|
||||||||||||||
Balance at December 31, 2017
|
|
19,310
|
|
|
$
|
96
|
|
|
$
|
142,196
|
|
|
$
|
(164
|
)
|
|
$
|
(11,337
|
)
|
|
$
|
130,791
|
|
Adoption of accounting standard ASC 606
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(394
|
)
|
|
(394
|
)
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
485
|
|
|
—
|
|
|
—
|
|
|
485
|
|
|||||
Unrealized gain on derivative financial instruments, net of tax of $29
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
161
|
|
|||||
Balance at March 31, 2018
|
|
19,310
|
|
|
96
|
|
|
142,681
|
|
|
(81
|
)
|
|
(11,570
|
)
|
|
131,126
|
|
|||||
Issuance of shares under stock plans, net of shares withheld for tax payments
|
|
23
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|||||
Stock-based compensation
|
|
29
|
|
|
1
|
|
|
201
|
|
|
|
|
|
|
202
|
|
|||||||
Unrealized gain on derivative financial instruments, net of tax of $15
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,452
|
|
|
4,452
|
|
|||||
Balance at June 30, 2018
|
|
19,362
|
|
|
97
|
|
|
143,004
|
|
|
(35
|
)
|
|
(7,118
|
)
|
|
135,948
|
|
|||||
Issuance of shares under stock plans, net of shares withheld for tax payments
|
|
20
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|||||
Unrealized gain on derivative financial instruments, net of tax of $13
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
61
|
|
|||||
Balance at September 30, 2018
|
|
19,382
|
|
|
$
|
97
|
|
|
$
|
143,589
|
|
|
$
|
3
|
|
|
$
|
(7,057
|
)
|
|
$
|
136,632
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other Comprehensive Loss |
|
|
|
Total
Common Shareholders' Equity |
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
|
|
Accumulated Deficit
|
|
||||||||||||||
Balance at December 31, 2018
|
|
19,383
|
|
|
$
|
97
|
|
|
$
|
144,013
|
|
|
$
|
(86
|
)
|
|
$
|
(7,589
|
)
|
|
$
|
136,435
|
|
Stock-based compensation, net of shares withheld for tax payments
|
|
29
|
|
|
—
|
|
|
418
|
|
|
—
|
|
|
—
|
|
|
418
|
|
|||||
Unrealized loss on derivative financial instruments, net of tax of $16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(157
|
)
|
|
—
|
|
|
—
|
|
|
(157
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,364
|
)
|
|
(7,364
|
)
|
|||||
Balance at March 31, 2019
|
|
19,412
|
|
|
97
|
|
|
144,274
|
|
|
(133
|
)
|
|
(14,953
|
)
|
|
129,285
|
|
|||||
Stock-based compensation, net of shares withheld for tax payments
|
|
53
|
|
|
—
|
|
|
835
|
|
|
—
|
|
|
—
|
|
|
835
|
|
|||||
Unrealized loss on derivative financial instruments, net of tax of $31
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
|
—
|
|
|
(89
|
)
|
|||||
Tax payments related to stock-based awards
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,610
|
|
|
2,610
|
|
|||||
Balance at June 30, 2019
|
|
19,465
|
|
|
97
|
|
|
144,941
|
|
|
(222
|
)
|
|
(12,343
|
)
|
|
132,473
|
|
|||||
Stock-based compensation, net of shares withheld for tax payments
|
|
1
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|
336
|
|
|||||
Unrealized loss on derivative financial instruments, net of tax of $9
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,224
|
)
|
|
(1,224
|
)
|
|||||
Balance at September 30, 2019
|
|
19,466
|
|
|
$
|
97
|
|
|
$
|
145,276
|
|
|
$
|
(247
|
)
|
|
$
|
(13,567
|
)
|
|
$
|
131,559
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
7,993
|
|
|
7,985
|
|
||
Gain on sale or disposal of Property, equipment and leasehold improvements
|
(8
|
)
|
|
(549
|
)
|
||
Deferred income taxes
|
(2,764
|
)
|
|
(673
|
)
|
||
Stock-based compensation
|
1,589
|
|
|
1,058
|
|
||
Lease expense
|
171
|
|
|
—
|
|
||
Other
|
(189
|
)
|
|
206
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable, net
|
11,975
|
|
|
(676
|
)
|
||
Inventories
|
(3,851
|
)
|
|
(2,905
|
)
|
||
Other current assets
|
(1,120
|
)
|
|
2,360
|
|
||
Accounts payable and other accrued expenses
|
8,986
|
|
|
4,922
|
|
||
Deferred revenue
|
17,537
|
|
|
1,950
|
|
||
Accrued salaries, wages and payroll taxes
|
247
|
|
|
(1,128
|
)
|
||
Refundable deposits
|
(114
|
)
|
|
(560
|
)
|
||
Net cash provided by operating activities
|
34,474
|
|
|
16,664
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Expenditures for Property, equipment and leasehold improvements
|
(10,478
|
)
|
|
(6,216
|
)
|
||
Proceeds from sale of Property, equipment and leasehold improvements
|
55
|
|
|
22,998
|
|
||
Restricted cash from sale of Property, equipment and leasehold improvements
|
—
|
|
|
515
|
|
||
Business combinations and asset acquisitions
|
(274
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
(10,697
|
)
|
|
17,297
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
5,192
|
|
|
—
|
|
||
Principal payments on debt and finance lease obligations
|
(798
|
)
|
|
(520
|
)
|
||
Net repayments under revolving line of credit
|
(17,264
|
)
|
|
(22,199
|
)
|
||
Proceeds from issuances of common stock
|
—
|
|
|
427
|
|
||
Tax payments related to stock-based awards
|
(325
|
)
|
|
(92
|
)
|
||
Net cash used in financing activities
|
(13,195
|
)
|
|
(22,384
|
)
|
||
Increase in Cash, cash equivalents and restricted cash
|
10,582
|
|
|
11,577
|
|
||
|
|
|
|
||||
Cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||
Beginning of period
|
1,200
|
|
|
579
|
|
||
End of period
|
$
|
11,782
|
|
|
$
|
12,156
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
1,414
|
|
|
$
|
396
|
|
Cash paid for income taxes, net
|
559
|
|
|
450
|
|
||
Cash paid for amounts included in measurement of lease liabilities
|
2,369
|
|
|
—
|
|
||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease obligations
|
$
|
24,898
|
|
|
$
|
—
|
|
Right-of-use assets obtained in exchange for finance lease obligations
|
2,538
|
|
|
—
|
|
||
Purchases of Property, equipment and leasehold improvements included in Accounts payable at end of period
|
937
|
|
|
205
|
|
•
|
elected the package of three practical expedients available under the transition provisions which allowed us to: (i) not reassess whether expired or existing contracts were or contained leases, (ii) not reassess the lease classification for expired or existing leases, and (iii) not reassess initial direct costs for existing leases.
|
•
|
determined the land easement practical expedient was not applicable.
|
•
|
as applicable, used hindsight for specified determinations and assessments in applying the new leases guidance.
|
•
|
did not separate lease and associated non-lease components for transitioned leases, but instead are accounting for them together as a single lease component.
|
•
|
elected to utilize the recognition exemption for short-term leases of one year or less at inception
|
|
|
Balance at
December 31, 2018 |
|
Adjustments due to
ASC 842 |
|
Balance at
January 1, 2019 |
||||||
Assets
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
$
|
29,998
|
|
|
$
|
300
|
|
|
$
|
30,298
|
|
Other current assets
|
|
3,121
|
|
|
(216
|
)
|
|
2,905
|
|
|||
Property, equipment and leasehold improvements, net
|
|
113,189
|
|
|
(2,538
|
)
|
|
110,651
|
|
|||
Operating lease right-of-use assets
|
|
—
|
|
|
19,726
|
|
|
19,726
|
|
|||
Intangible and other assets, net
|
|
5,048
|
|
|
1,140
|
|
|
6,188
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Other accrued expenses
|
|
3,618
|
|
|
269
|
|
|
3,887
|
|
|||
Long-term lease liabilities
|
|
—
|
|
|
18,143
|
|
|
18,143
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Raw materials
|
$
|
8,741
|
|
|
$
|
7,146
|
|
Work in process
|
3,370
|
|
|
3,219
|
|
||
Finished goods
|
5,740
|
|
|
4,319
|
|
||
Packaging materials
|
2,486
|
|
|
891
|
|
||
Promotional merchandise
|
600
|
|
|
1,139
|
|
||
Brewpub food, beverages and supplies
|
563
|
|
|
502
|
|
||
|
$
|
21,500
|
|
|
$
|
17,216
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Operating lease liabilities:
|
|
|
|
||||
Current lease liabilities included in Other accrued expenses
|
$
|
863
|
|
|
$
|
—
|
|
Long-term lease liabilities
|
24,269
|
|
|
—
|
|
||
Total operating lease liabilities
|
25,132
|
|
|
—
|
|
||
Financing lease liabilities:
|
|
|
|
||||
Current portion included in Current portion of long-term debt and finance lease obligations
|
391
|
|
|
477
|
|
||
Long-term portion of lease liabilities included in Long-term debt and finance lease obligations, net of current portion
|
879
|
|
|
1,101
|
|
||
Total financing lease liabilities
|
1,270
|
|
|
1,578
|
|
||
Total lease liabilities
|
$
|
26,402
|
|
|
$
|
1,578
|
|
Weighted-average remaining lease term:
|
|
|
|
||||
Operating leases
|
25 years
|
|
|
|
|||
Finance leases
|
4 years
|
|
|
|
|||
Weighted-average discount rate:
|
|
|
|
||||
Operating leases
|
4.72
|
%
|
|
|
|||
Finance leases
|
3.56
|
%
|
|
|
|
Operating Leases
|
||
Remainder of 2019
|
$
|
518
|
|
2020
|
2,002
|
|
|
2021
|
2,028
|
|
|
2022
|
2,091
|
|
|
2023
|
1,958
|
|
|
Thereafter
|
34,234
|
|
|
Total minimum lease payments
|
42,831
|
|
|
Less: present value adjustment
|
(17,699
|
)
|
|
Operating lease liabilities
|
$
|
25,132
|
|
|
Finance Leases
|
||
Remainder of 2019
|
$
|
180
|
|
2020
|
333
|
|
|
2021
|
266
|
|
|
2022
|
199
|
|
|
2023
|
199
|
|
|
Thereafter
|
199
|
|
|
Total minimum lease payments
|
1,376
|
|
|
Less: present value adjustment
|
(106
|
)
|
|
Finance lease liabilities
|
$
|
1,270
|
|
|
Three Months Ended
September 30, 2019 |
|
Nine Months Ended
September 30, 2019 |
||||
Operating lease cost(1)
|
$
|
904
|
|
|
$
|
2,642
|
|
Finance lease cost:
|
|
|
|
||||
Amortization of right-of-use asset
|
42
|
|
|
127
|
|
||
Interest on lease liabilities
|
15
|
|
|
37
|
|
||
Sublease income
|
(69
|
)
|
|
(138
|
)
|
||
Total lease cost
|
$
|
892
|
|
|
$
|
2,668
|
|
|
Operating Lease Obligations
|
|
Capital Lease Obligations
|
||||
2019
|
$
|
11,208
|
|
|
$
|
529
|
|
2020
|
1,937
|
|
|
333
|
|
||
2021
|
1,863
|
|
|
266
|
|
||
2022
|
1,793
|
|
|
199
|
|
||
2023
|
1,465
|
|
|
199
|
|
||
Thereafter
|
25,446
|
|
|
199
|
|
||
|
$
|
43,712
|
|
|
1,725
|
|
|
Amount representing interest
|
|
|
(148
|
)
|
|||
|
|
|
$
|
1,577
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross sales to A-B and Ambev
|
$
|
38,740
|
|
|
$
|
41,737
|
|
|
$
|
129,779
|
|
|
$
|
129,588
|
|
International distribution fee earned from ABWI
|
812
|
|
|
850
|
|
|
2,436
|
|
|
2,550
|
|
||||
International distribution fee from ABWI, recorded in Deferred revenue, net
|
19,188
|
|
|
650
|
|
|
17,564
|
|
|
1,950
|
|
||||
Contract brewing fee earned from ABC
|
139
|
|
|
821
|
|
|
781
|
|
|
1,679
|
|
||||
Margin fee paid to A-B, classified as a reduction of Sales
|
574
|
|
|
601
|
|
|
1,839
|
|
|
1,806
|
|
||||
Inventory management and other fees paid to A-B, classified in Cost of sales
|
98
|
|
|
97
|
|
|
295
|
|
|
287
|
|
||||
Media and other reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses
|
—
|
|
|
192
|
|
|
—
|
|
|
192
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Amounts due from A-B related to beer sales pursuant to the A-B distributor agreement
|
$
|
12,631
|
|
|
$
|
17,946
|
|
Amounts due from ABWI and A-B related to international distribution fee and media reimbursement
|
—
|
|
|
6,000
|
|
||
Refundable deposits due to A-B
|
(3,712
|
)
|
|
(2,840
|
)
|
||
Amounts due to A-B for services rendered
|
(6,725
|
)
|
|
(5,140
|
)
|
||
Net amount due from A-B and ABWI
|
$
|
2,194
|
|
|
$
|
15,966
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Master distributor fee earned
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
22
|
|
Share of loss, classified as a component of Other income (expense), net
|
—
|
|
|
22
|
|
|
—
|
|
|
44
|
|
||||
Refund of investment, classified as a reduction in the carrying value of the equity method investment
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
$
|
41
|
|
|
$
|
41
|
|
|
$
|
123
|
|
|
$
|
123
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Term loan, due September 30, 2023
|
$
|
8,494
|
|
|
$
|
8,823
|
|
Line of credit, due September 30, 2023
|
19,828
|
|
|
37,092
|
|
||
Secured borrowing, due June 21, 2026
|
5,030
|
|
|
—
|
|
||
|
33,352
|
|
|
45,915
|
|
||
Less current portion, term loan and secured borrowing
|
(1,107
|
)
|
|
(442
|
)
|
||
|
$
|
32,245
|
|
|
$
|
45,473
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Fair value of interest rate swap liability
|
$
|
(332
|
)
|
|
$
|
(116
|
)
|
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)
|
||||
Three Months Ended
September 30, |
|
|
|
|
|
|
||||
2019
|
|
$
|
(34
|
)
|
|
Interest expense
|
|
$
|
10
|
|
2018
|
|
$
|
52
|
|
|
Interest expense
|
|
$
|
13
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended
September 30, |
|
|
|
|
|
|
||||
2019
|
|
$
|
(216
|
)
|
|
Interest expense
|
|
$
|
22
|
|
2018
|
|
$
|
225
|
|
|
Interest expense
|
|
$
|
52
|
|
•
|
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 September 30, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Interest rate swap
|
|
$
|
—
|
|
|
$
|
(332
|
)
|
|
$
|
—
|
|
|
$
|
(332
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
(116
|
)
|
|
$
|
—
|
|
|
$
|
(116
|
)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Fixed-rate debt on Consolidated Balance Sheets
|
$
|
6,300
|
|
|
$
|
1,577
|
|
Estimated fair value of fixed-rate debt
|
6,576
|
|
|
1,591
|
|
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||||||||||||||||||
|
|
Beer Related(1)
|
|
Brewpubs
|
|
Total
|
|
Beer Related(1)
|
|
Brewpubs
|
|
Total
|
||||||||||||
Product sold through distributor agreements(2)
|
|
$
|
42,667
|
|
|
$
|
—
|
|
|
$
|
42,667
|
|
|
$
|
139,700
|
|
|
$
|
—
|
|
|
$
|
139,700
|
|
Alternating proprietorship and contract brewing fees(3)
|
|
381
|
|
|
—
|
|
|
381
|
|
|
1,581
|
|
|
—
|
|
|
1,581
|
|
||||||
International distribution fees
|
|
812
|
|
|
—
|
|
|
812
|
|
|
2,436
|
|
|
—
|
|
|
2,436
|
|
||||||
Brewpubs(4)
|
|
—
|
|
|
5,991
|
|
|
5,991
|
|
|
—
|
|
|
18,260
|
|
|
18,260
|
|
||||||
Other(5)
|
|
498
|
|
|
—
|
|
|
498
|
|
|
1,955
|
|
|
—
|
|
|
1,955
|
|
||||||
|
|
$
|
44,358
|
|
|
$
|
5,991
|
|
|
$
|
50,349
|
|
|
$
|
145,672
|
|
|
$
|
18,260
|
|
|
$
|
163,932
|
|
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
|
|
Beer Related(1)
|
|
Brewpubs
|
|
Total
|
|
Beer Related(1)
|
|
Brewpubs
|
|
Total
|
||||||||||||
Product sold through distributor agreements(2)
|
|
$
|
45,326
|
|
|
$
|
—
|
|
|
$
|
45,326
|
|
|
$
|
139,141
|
|
|
$
|
—
|
|
|
$
|
139,141
|
|
Alternating proprietorship and contract brewing fees(3)
|
|
2,863
|
|
|
—
|
|
|
2,863
|
|
|
8,748
|
|
|
—
|
|
|
8,748
|
|
||||||
International distribution fees
|
|
850
|
|
|
—
|
|
|
850
|
|
|
2,550
|
|
|
—
|
|
|
2,550
|
|
||||||
Brewpubs(4)
|
|
—
|
|
|
6,166
|
|
|
6,166
|
|
|
—
|
|
|
18,278
|
|
|
18,278
|
|
||||||
Other(5)
|
|
434
|
|
|
—
|
|
|
434
|
|
|
2,260
|
|
|
—
|
|
|
2,260
|
|
||||||
|
|
$
|
49,473
|
|
|
$
|
6,166
|
|
|
$
|
55,639
|
|
|
$
|
152,699
|
|
|
$
|
18,278
|
|
|
$
|
170,977
|
|
(1)
|
Beer Related sales include sales to A-B subsidiaries including Ambev, ABWI and ABC. Sales to wholesalers through the A-B distributor agreement in the three-month period ended September 30, 2019 and 2018 represented 77.7% and 76.9% of our Sales, respectively. Sales to wholesalers through the A-B distributor agreement in the nine-month period ended September 30, 2019 and 2018 represented 80.0% and 77.2% of our Sales, respectively.
|
(2)
|
Product sold through distributor agreements included domestic and international sales of owned and non-owned brands pursuant to terms in our distributor agreements.
|
(3)
|
Alternating proprietorship fees ceased in the fourth quarter of 2018.
|
(4)
|
Brewpub sales include sales of promotional merchandise and sales of beer directly to customers.
|
(5)
|
Other sales include sales of beer related merchandise, hops and spent grain.
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
77.7
|
%
|
|
76.9
|
%
|
|
80.0
|
%
|
|
77.2
|
%
|
September 30,
2019 |
|
December 31,
2018 |
||
68.8
|
%
|
|
79.8
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of sales
|
$
|
(3
|
)
|
|
$
|
42
|
|
|
$
|
79
|
|
|
$
|
108
|
|
Selling, general and administrative expense
|
339
|
|
|
329
|
|
|
1,510
|
|
|
950
|
|
||||
Total stock-based compensation expense
|
$
|
336
|
|
|
$
|
371
|
|
|
$
|
1,589
|
|
|
$
|
1,058
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted average common shares used for basic EPS
|
19,466
|
|
|
19,370
|
|
|
19,435
|
|
|
19,338
|
|
Dilutive effect of stock-based awards
|
—
|
|
|
175
|
|
|
—
|
|
|
187
|
|
Shares used for diluted EPS
|
19,466
|
|
|
19,545
|
|
|
19,435
|
|
|
19,525
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock-based awards not included in diluted per share calculations as they would be antidilutive
|
71
|
|
|
—
|
|
|
65
|
|
|
—
|
|
Nine Months Ended September 30,
|
|
Net sales
|
|
Net income (loss)
|
|
Number of
barrels sold |
2019
|
|
$154.7 million
|
|
$(6.0) million
|
|
585,400
|
2018
|
|
$162.2 million
|
|
$4.7 million
|
|
587,400
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Sales
|
106.8
|
%
|
|
105.2
|
%
|
|
106.0
|
%
|
|
105.4
|
%
|
Less excise taxes
|
(6.8
|
)
|
|
(5.2
|
)
|
|
(6.0
|
)
|
|
(5.4
|
)
|
Net sales
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Cost of sales
|
71.8
|
|
|
68.4
|
|
|
65.9
|
|
|
66.8
|
|
Gross profit
|
28.2
|
|
|
31.6
|
|
|
34.1
|
|
|
33.2
|
|
Selling, general and administrative expenses
|
34.9
|
|
|
31.6
|
|
|
39.7
|
|
|
29.2
|
|
Operating income (loss)
|
(6.7
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
4.1
|
|
Interest expense
|
(1.3
|
)
|
|
(0.2
|
)
|
|
(0.9
|
)
|
|
(0.2
|
)
|
Other income (expense), net
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income (loss) before income taxes
|
(8.0
|
)
|
|
(0.3
|
)
|
|
(6.5
|
)
|
|
3.9
|
|
Income tax provision (benefit)
|
(5.4
|
)
|
|
(0.4
|
)
|
|
(2.6
|
)
|
|
1.0
|
|
Net income (loss)
|
(2.6
|
)%
|
|
0.1
|
%
|
|
(3.9
|
)%
|
|
2.9
|
%
|
(1)
|
Percentages may not add due to rounding.
|
|
|
Three Months Ended September 30,
|
||||||||||
2019
|
|
Beer
Related |
|
Brewpubs
|
|
Total
|
||||||
Net sales
|
|
$
|
41,170
|
|
|
$
|
5,991
|
|
|
$
|
47,161
|
|
Gross profit
|
|
$
|
12,692
|
|
|
$
|
612
|
|
|
$
|
13,304
|
|
Gross margin
|
|
30.8
|
%
|
|
10.2
|
%
|
|
28.2
|
%
|
|||
|
|
|
|
|
|
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
|||
Net sales
|
|
$
|
46,723
|
|
|
$
|
6,166
|
|
|
$
|
52,889
|
|
Gross profit
|
|
$
|
16,261
|
|
|
$
|
438
|
|
|
$
|
16,699
|
|
Gross margin
|
|
34.8
|
%
|
|
7.1
|
%
|
|
31.6
|
%
|
|||
|
|
|
|
|
|
|
||||||
|
|
Nine Months Ended September 30,
|
||||||||||
2019
|
|
Beer
Related |
|
Brewpubs
|
|
Total
|
||||||
Net sales
|
|
$
|
136,452
|
|
|
$
|
18,260
|
|
|
$
|
154,712
|
|
Gross profit
|
|
$
|
50,876
|
|
|
$
|
1,898
|
|
|
$
|
52,774
|
|
Gross margin
|
|
37.3
|
%
|
|
10.4
|
%
|
|
34.1
|
%
|
|||
|
|
|
|
|
|
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
|||
Net sales
|
|
$
|
143,921
|
|
|
$
|
18,278
|
|
|
$
|
162,199
|
|
Gross profit
|
|
$
|
52,913
|
|
|
$
|
984
|
|
|
$
|
53,897
|
|
Gross margin
|
|
36.8
|
%
|
|
5.4
|
%
|
|
33.2
|
%
|
|
|
Three Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
Sales by Category
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
A-B and A-B related(1)
|
|
$
|
39,117
|
|
|
$
|
42,807
|
|
|
$
|
(3,690
|
)
|
|
(8.6
|
)%
|
Contract brewing and beer related(2)
|
|
5,241
|
|
|
6,666
|
|
|
(1,425
|
)
|
|
(21.4
|
)%
|
|||
Excise taxes
|
|
(3,188
|
)
|
|
(2,750
|
)
|
|
(438
|
)
|
|
15.9
|
%
|
|||
Net beer related sales
|
|
41,170
|
|
|
46,723
|
|
|
(5,553
|
)
|
|
(11.9
|
)%
|
|||
Brewpubs(3)
|
|
5,991
|
|
|
6,166
|
|
|
(175
|
)
|
|
(2.8
|
)%
|
|||
Net sales
|
|
$
|
47,161
|
|
|
$
|
52,889
|
|
|
$
|
(5,728
|
)
|
|
(10.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Nine Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
Sales by Category
|
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
A-B and A-B related(1)
|
|
$
|
131,157
|
|
|
$
|
132,011
|
|
|
$
|
(854
|
)
|
|
(0.6
|
)%
|
Contract brewing and beer related(2)
|
|
14,515
|
|
|
20,688
|
|
|
(6,173
|
)
|
|
(29.8
|
)%
|
|||
Excise taxes
|
|
(9,220
|
)
|
|
(8,778
|
)
|
|
(442
|
)
|
|
5.0
|
%
|
|||
Net beer related sales
|
|
136,452
|
|
|
143,921
|
|
|
(7,469
|
)
|
|
(5.2
|
)%
|
|||
Brewpubs(3)
|
|
18,260
|
|
|
18,278
|
|
|
(18
|
)
|
|
(0.1
|
)%
|
|||
Net sales
|
|
$
|
154,712
|
|
|
$
|
162,199
|
|
|
$
|
(7,487
|
)
|
|
(4.6
|
)%
|
(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 in 2018, fees earned pursuant to the Brewing Agreement with Anheuser-Busch Companies, LLC ("ABC"), and the international distribution fees earned from ABWI.
|
(2)
|
Beer related includes international sales of our beers, and brands, not sold through A-B or Ambev, as well as fees earned through alternating proprietorship agreements during 2018.
|
(3)
|
Brewpubs sales include sales of promotional merchandise and sales of beer directly to customers.
|
Three Months Ended September 30,
|
|
2019 Shipments
|
|
2018 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions(1) |
|||||
A-B and A-B related(2)
|
|
159,200
|
|
|
170,000
|
|
|
(10,800
|
)
|
|
(6.4
|
)%
|
|
2
|
%
|
Contract brewing and beer related(3)
|
|
24,100
|
|
|
24,000
|
|
|
100
|
|
|
0.4
|
%
|
|
|
|
Brewpubs
|
|
2,100
|
|
|
1,800
|
|
|
300
|
|
|
16.7
|
%
|
|
|
|
Total
|
|
185,400
|
|
|
195,800
|
|
|
(10,400
|
)
|
|
(5.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30,
|
|
2019 Shipments
|
|
2018 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions(1) |
|||||
A-B and A-B related(2)
|
|
515,300
|
|
|
514,800
|
|
|
500
|
|
|
0.1
|
%
|
|
0
|
%
|
Contract brewing and beer related(3)
|
|
64,200
|
|
|
67,000
|
|
|
(2,800
|
)
|
|
(4.2
|
)%
|
|
|
|
Brewpubs
|
|
5,900
|
|
|
5,600
|
|
|
300
|
|
|
5.4
|
%
|
|
|
|
Total
|
|
585,400
|
|
|
587,400
|
|
|
(2,000
|
)
|
|
(0.3
|
)%
|
|
|
|
(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 in 2018 and shipments pursuant to the Brewing Agreement with ABC.
|
(3)
|
Beer related includes international shipments of our beers, and shipments of our newly acquired brands, in each case not distributed through A-B or Ambev.
|
Three Months Ended September 30,
|
|
2019 Shipments
|
|
2018 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions |
|||||
Kona
|
|
119,400
|
|
|
120,100
|
|
|
(700
|
)
|
|
(0.6
|
)%
|
|
7
|
%
|
Widmer Brothers
|
|
21,300
|
|
|
24,600
|
|
|
(3,300
|
)
|
|
(13.4
|
)%
|
|
(9
|
)%
|
Redhook
|
|
15,300
|
|
|
16,200
|
|
|
(900
|
)
|
|
(5.6
|
)%
|
|
(10
|
)%
|
Omission
|
|
10,900
|
|
|
11,400
|
|
|
(500
|
)
|
|
(4.4
|
)%
|
|
(8
|
)%
|
All other(1)
|
|
16,400
|
|
|
14,500
|
|
|
1,900
|
|
|
13.1
|
%
|
|
5
|
%
|
Total(2)
|
|
183,300
|
|
|
186,800
|
|
|
(3,500
|
)
|
|
(1.9
|
)%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30,
|
|
2019 Shipments
|
|
2018 Shipments
|
|
Increase
(Decrease) |
|
%
Change |
|
Change in
Depletions |
|||||
Kona
|
|
384,900
|
|
|
360,100
|
|
|
24,800
|
|
|
6.9
|
%
|
|
6
|
%
|
Widmer Brothers
|
|
70,300
|
|
|
76,800
|
|
|
(6,500
|
)
|
|
(8.5
|
)%
|
|
(12
|
)%
|
Redhook
|
|
47,100
|
|
|
55,200
|
|
|
(8,100
|
)
|
|
(14.7
|
)%
|
|
(17
|
)%
|
Omission
|
|
31,100
|
|
|
34,500
|
|
|
(3,400
|
)
|
|
(9.9
|
)%
|
|
(9
|
)%
|
All other(1)
|
|
42,600
|
|
|
39,500
|
|
|
3,100
|
|
|
7.8
|
%
|
|
3
|
%
|
Total(2)
|
|
576,000
|
|
|
566,100
|
|
|
9,900
|
|
|
1.7
|
%
|
|
0
|
%
|
(1)
|
All other includes the shipments and depletions from our Square Mile brand family, as well as the previously non-owned AMB, Cisco Brewers, and Wynwood 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.
|
|
|
Three Months Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
||||||||
|
|
Shipments
|
|
% of Total
|
|
Shipments
|
|
% of Total
|
||||
Draft
|
|
41,400
|
|
|
22.6
|
%
|
|
43,500
|
|
|
23.3
|
%
|
Packaged
|
|
141,900
|
|
|
77.4
|
%
|
|
143,300
|
|
|
76.7
|
%
|
Total
|
|
183,300
|
|
|
100.0
|
%
|
|
186,800
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine Months Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
||||||||
|
|
Shipments
|
|
% of Total
|
|
Shipments
|
|
% of Total
|
||||
Draft
|
|
130,000
|
|
|
22.6
|
%
|
|
132,500
|
|
|
23.4
|
%
|
Packaged
|
|
446,000
|
|
|
77.4
|
%
|
|
433,600
|
|
|
76.6
|
%
|
Total
|
|
576,000
|
|
|
100.0
|
%
|
|
566,100
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
$
|
28,478
|
|
|
$
|
30,462
|
|
|
$
|
(1,984
|
)
|
|
(6.5
|
)%
|
Brewpubs
|
5,379
|
|
|
5,728
|
|
|
(349
|
)
|
|
(6.1
|
)%
|
|||
Total
|
$
|
33,857
|
|
|
$
|
36,190
|
|
|
$
|
(2,333
|
)
|
|
(6.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Nine Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
$
|
85,576
|
|
|
$
|
91,008
|
|
|
$
|
(5,432
|
)
|
|
(6.0
|
)%
|
Brewpubs
|
16,362
|
|
|
17,294
|
|
|
(932
|
)
|
|
(5.4
|
)%
|
|||
Total
|
$
|
101,938
|
|
|
$
|
108,302
|
|
|
$
|
(6,364
|
)
|
|
(5.9
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Capacity Utilization
|
54
|
%
|
|
59
|
%
|
|
55
|
%
|
|
59
|
%
|
|
Three Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
$
|
12,692
|
|
|
$
|
16,261
|
|
|
$
|
(3,569
|
)
|
|
(21.9
|
)%
|
Brewpubs
|
612
|
|
|
438
|
|
|
174
|
|
|
39.7
|
%
|
|||
Total
|
$
|
13,304
|
|
|
$
|
16,699
|
|
|
$
|
(3,395
|
)
|
|
(20.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Nine Months Ended September 30,
|
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Beer Related
|
$
|
50,876
|
|
|
$
|
52,913
|
|
|
$
|
(2,037
|
)
|
|
(3.8
|
)%
|
Brewpubs
|
1,898
|
|
|
984
|
|
|
914
|
|
|
92.9
|
%
|
|||
Total
|
$
|
52,774
|
|
|
$
|
53,897
|
|
|
$
|
(1,123
|
)
|
|
(2.1
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Beer Related
|
30.8
|
%
|
|
34.8
|
%
|
|
37.3
|
%
|
|
36.8
|
%
|
Brewpubs
|
10.2
|
%
|
|
7.1
|
%
|
|
10.4
|
%
|
|
5.4
|
%
|
Overall
|
28.2
|
%
|
|
31.6
|
%
|
|
34.1
|
%
|
|
33.2
|
%
|
|
Three Months Ended
September 30, |
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Selling, general and administrative expenses
|
$
|
16,465
|
|
|
$
|
16,712
|
|
|
$
|
(247
|
)
|
|
(1.5
|
)%
|
As a % of Net sales
|
34.9
|
%
|
|
31.6
|
%
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||
|
Nine Months Ended
September 30, |
|
Dollar
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Selling, general and administrative expenses
|
$
|
61,411
|
|
|
$
|
47,317
|
|
|
$
|
14,094
|
|
|
29.8
|
%
|
As a % of Net sales
|
39.7
|
%
|
|
29.2
|
%
|
|
|
|
|
Three Months Ended
September 30, |
|
Dollar
|
|
|
|||||||||
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
$
|
616
|
|
|
$
|
107
|
|
|
$
|
509
|
|
|
475.7
|
%
|
|
|
|
|
|
|
|
|||||||
Nine Months Ended
September 30, |
|
Dollar
|
|
|
|||||||||
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
$
|
1,428
|
|
|
$
|
348
|
|
|
$
|
1,080
|
|
|
310.3
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Average debt outstanding
|
$44,629
|
|
$10,665
|
|
$45,743
|
|
$13,056
|
||||
Average interest rate
|
5.43
|
%
|
|
3.52
|
%
|
|
4.10
|
%
|
|
3.02
|
%
|
|
Nine Months Ended
September 30, |
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
34,474
|
|
|
$
|
16,664
|
|
Net cash provided by (used in) investing activities
|
(10,697
|
)
|
|
17,297
|
|
||
Net cash used in financing activities
|
(13,195
|
)
|
|
(22,384
|
)
|
||
Increase in Cash, cash equivalents and restricted cash
|
$
|
10,582
|
|
|
$
|
11,577
|
|
Third Amendment to Amended and Restated Credit Agreement dated September 25, 2019 between Craft Brew Alliance, Inc. and Bank of America, N.A.
|
|
Certification of Chief Executive Officer of Craft Brew Alliance, Inc. pursuant to Exchange Act Rule 13a-14(a)
|
|
Certification of Chief Financial Officer of Craft Brew Alliance, Inc. pursuant to Exchange Act Rule 13a-14(a)
|
|
32.1*
|
Certification pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350
|
99.1*
|
Press Release dated November 12, 2019
|
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
|
|
CRAFT BREW ALLIANCE, INC.
|
|
|
|
|
|
|
November 12, 2019
|
By:
|
/s/ Edwin A. Smith
|
|
|
|
Edwin A. Smith
|
|
|
|
Corporate Controller and
Principal Accounting Officer
|
|
BORROWER:
|
|
|
CRAFT BREW ALLIANCE, INC., as the Borrower
By: /s/ Andrew J. Thomas
Name:Andrew J. Thomas
Title:Chief Executive Officer
|
GUARANTORS:
|
|
|
KONA BREWERY LLC, as a Guarantor
By:/s/ Andrew J. Thomas
Name:Andrew J. Thomas
Title:Manager
|
|
CRAFT VENTURES, LLC, as a Guarantor
By: Craft Brew Alliance, Inc., its Manager
By:/s/ Andrew J. Thomas
Name:Andrew J. Thomas
Title:Chief Executive Officer
WYNWOOD BREWING COMPANY LLC, as a Guarantor
By:/s/ Andrew J. Thomas
Name:Andrew J. Thomas
Title:Manager
|
LENDER:
|
BANK OF AMERICA, N.A., as Lender
By: /s/ Michael Snook
Name: Michael Snook
Title: Senior Vice President
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
November 12, 2019
|
|
|
|
|
By:
|
/s/ Andrew J. Thomas
|
|
|
Andrew J. Thomas
|
|
|
Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
November 12, 2019
|
|
|
|
|
By:
|
/s/ Christine N. Perich
|
|
|
Christine N. Perich
|
|
|
Chief Financial and Strategy 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:
|
November 12, 2019
|
|
|
|
|
BY:
|
/s/ Andrew J. Thomas
|
|
|
Andrew J. Thomas
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
BY:
|
/s/ Christine N. Perich
|
|
|
Christine N. Perich
|
|
|
Chief Financial and Strategy Officer
|
|
|
•
|
Kona depletions grew 7% in the third quarter and 6% year to date from the comparable periods in 2018.
|
◦
|
Total CBA depletions increased by 2% in the third quarter, improving the year-to-date trend to flat compared to the same period a year ago. CBA’s positive depletion trend reflects strong growth for Kona, as well as the larger role that our newly acquired brands now play in our overall portfolio mix. As a reminder, CBA’s year-to-date depletions were impacted by significant retailer out-of-stock issues that dampened Kona’s growth in key markets during critical selling periods. During the third quarter, we implemented several merchandiser pilot programs to improve retailer execution, and early indications point to positive benefits that will support continued execution improvement in 2020.
|
•
|
Kona shipments were flat for the third quarter, primarily reflecting efforts to rebalance inventory levels as a result of the out-of-stock issues mentioned above. For the nine-month period, Kona shipments were up 7%, compared to the same period a year ago.
|
◦
|
CBA owned beer shipments decreased by 2% in the third quarter and increased by 2% year to date compared to the same period a year ago.
|
•
|
Owned beer sales were $39.5 million for the third quarter and $130.6 million year to date, a decrease of 7.4% and flat respectively from the same periods a year ago. Our third quarter owned beer sales decrease is attributed to promotional pricing and lower shipment volume, partially offset by improvements in brand family mix.
|
◦
|
Total net sales were $47.2 million for the third quarter and $154.7 million year to date, a decrease of 10.8% and 4.6% respectively from the same periods a year ago. In 2018, we received alternating proprietorship fees from Appalachian Mountain Brewery, Cisco Brewers, and Wynwood Brewing, which represented $1.6 million in the third quarter and $5.7 million year to date. With those brands now fully owned and excluding the impact of the alternating proprietorship fees, our 2019 net sales comparison would be a decrease of 8.0% for the third quarter and a decrease of 1.2% year to date.
|
•
|
Total company gross margin in the third quarter was 28.2%, compared to 31.6% in the third quarter of 2018, while year-to-date gross margin was 34.1%, a 90-basis point improvement over the same period last year.
|
◦
|
Beer gross margin was 30.8% in the third quarter versus 34.8% in the third quarter of 2018, primarily attributed to volume deleveraging and promotional pricing. Year-to-date beer gross margin was 37.3%, a 50-basis-point improvement over the same period in 2018.
|
◦
|
Brewpub gross margin continued to improve, expanding 310 basis points to 10.2% in the third quarter, primarily reflecting improvements as a result of our reshaped pub footprint. Our year-to-date brewpub gross margin expanded 500 basis points over the same period last year, to 10.4%.
|
•
|
Selling, general and administrative expense (“SG&A”) was $16.5 million in the third quarter, slightly lower than the third quarter last year.
|
◦
|
Year-to-date SG&A increased by $14.1 million, to $61.4 million, primarily attributed to the national marketing investment to fuel Kona’s growth and a $4.7 million pre-tax expense related to the Kona class action lawsuit settlement accrued as a one-time expense in the first quarter. The claim period ended October 7, 2019, and the total cost of litigation is not expected to materially exceed the $4.7 million accrual.
|
•
|
Net loss for the quarter was $1.2 million compared to net income of $0.1 million in the third quarter in 2018. Our net loss for the quarter includes the benefit of federal research and development (“R&D”) tax credits, worth approximately $1.6M, or $0.08 per share, that were realized on recent operational investments.
|
◦
|
On a year-to-date basis, we recorded a net loss of $6.0 million primarily attributed to the Kona class action accrual. On an adjusted non-GAAP basis excluding the $3.6 million after-tax impact of the accrual, and adding back the $1.6 million R&D tax credit, our year-to-date net loss was $4.0 million.
|
•
|
We recorded a net loss per share of $0.06 in the third quarter, which included the $0.08 benefit from R&D tax credits.
|
◦
|
Year to date, we recorded a net loss per share of $0.31. On an adjusted non-GAAP basis excluding the $3.6 million after-tax expense accrual, and adding back the $0.08 R&D tax credit, our net loss per share was $0.20.
|
•
|
Depletions and shipments range of flat to an increase of 3%.
|
•
|
Average price increases of 1% to 2%.
|
•
|
Gross margin rate of 34.5% to 36.5%.
|
•
|
SG&A range between $75 million and $79 million, which reflects a $4.7 million one-time expense related to the Kona class action lawsuit settlement.
|
•
|
Capital expenditures range between $13 million and $17 million.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales
|
$
|
50,349
|
|
|
$
|
55,639
|
|
|
$
|
163,932
|
|
|
$
|
170,977
|
|
Less excise taxes
|
3,188
|
|
|
2,750
|
|
|
9,220
|
|
|
8,778
|
|
||||
Net sales
|
47,161
|
|
|
52,889
|
|
|
154,712
|
|
|
162,199
|
|
||||
Cost of sales
|
33,857
|
|
|
36,190
|
|
|
101,938
|
|
|
108,302
|
|
||||
Gross profit
|
13,304
|
|
|
16,699
|
|
|
52,774
|
|
|
53,897
|
|
||||
As percentage of net sales
|
28.2
|
%
|
|
31.6
|
%
|
|
34.1
|
%
|
|
33.2
|
%
|
||||
Selling, general and administrative expenses
|
16,465
|
|
|
16,712
|
|
|
61,411
|
|
|
47,317
|
|
||||
Operating income (loss)
|
(3,161
|
)
|
|
(13
|
)
|
|
(8,637
|
)
|
|
6,580
|
|
||||
Interest expense
|
(616
|
)
|
|
(107
|
)
|
|
(1,428
|
)
|
|
(348
|
)
|
||||
Other income (expense), net
|
24
|
|
|
(13
|
)
|
|
57
|
|
|
42
|
|
||||
Income (loss) before income taxes
|
(3,753
|
)
|
|
(133
|
)
|
|
(10,008
|
)
|
|
6,274
|
|
||||
Income tax provision (benefit)
|
(2,529
|
)
|
|
(194
|
)
|
|
(4,030
|
)
|
|
1,600
|
|
||||
Net income (loss)
|
$
|
(1,224
|
)
|
|
$
|
61
|
|
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic and diluted net income (loss) per share
|
$
|
(0.06
|
)
|
|
$
|
—
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.24
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
19,466
|
|
|
19,370
|
|
|
19,435
|
|
|
19,338
|
|
||||
Diluted
|
19,466
|
|
|
19,545
|
|
|
19,435
|
|
|
19,525
|
|
||||
Total shipments (in barrels):
|
|
|
|
|
|
|
|
|
|
||||||
Core Brands
|
183,300
|
|
|
186,800
|
|
|
576,000
|
|
|
566,100
|
|
||||
Contract Brewing
|
2,100
|
|
|
9,000
|
|
|
9,400
|
|
|
21,300
|
|
||||
Total shipments
|
185,400
|
|
|
195,800
|
|
|
585,400
|
|
|
587,400
|
|
||||
Change in depletions (1)
|
2
|
%
|
|
1
|
%
|
|
0
|
%
|
|
2
|
%
|
(1)
|
Change in depletions reflects the period-over-period change in barrel volume sales of beer by wholesalers to retailers.
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Current assets:
|
|
|
|
||||
Cash, cash equivalents and restricted cash
|
$
|
11,782
|
|
|
$
|
12,156
|
|
Accounts receivable, net
|
18,357
|
|
|
28,460
|
|
||
Inventory, net
|
21,500
|
|
|
17,271
|
|
||
Other current assets
|
4,025
|
|
|
1,275
|
|
||
Total current assets
|
55,664
|
|
|
59,162
|
|
||
Property, equipment and leasehold improvements, net
|
110,924
|
|
|
104,225
|
|
||
Operating lease right-of-use assets
|
23,841
|
|
|
—
|
|
||
Goodwill
|
21,935
|
|
|
12,917
|
|
||
Trademarks
|
44,211
|
|
|
14,415
|
|
||
Intangible and other assets, net
|
5,473
|
|
|
5,829
|
|
||
Total assets
|
$
|
262,048
|
|
|
$
|
196,548
|
|
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
19,475
|
|
|
$
|
18,899
|
|
Accrued salaries, wages and payroll taxes
|
5,881
|
|
|
4,749
|
|
||
Refundable deposits
|
3,467
|
|
|
4,029
|
|
||
Deferred revenue
|
3,251
|
|
|
5,335
|
|
||
Other accrued expenses
|
8,142
|
|
|
2,415
|
|
||
Current portion of long-term debt and finance lease obligations
|
1,498
|
|
|
816
|
|
||
Total current liabilities
|
41,714
|
|
|
36,243
|
|
||
Deferred revenue, non-current
|
20,300
|
|
|
—
|
|
||
Long-term debt and finance lease obligations, net of current portion
|
33,124
|
|
|
9,763
|
|
||
Other long-term liabilities
|
35,351
|
|
|
13,910
|
|
||
Total common shareholders' equity
|
131,559
|
|
|
136,632
|
|
||
Total liabilities and common shareholders' equity
|
$
|
262,048
|
|
|
$
|
196,548
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
7,993
|
|
|
7,985
|
|
||
Gain on sale or disposal of Property, equipment and leasehold improvements
|
(8
|
)
|
|
(549
|
)
|
||
Deferred income taxes
|
(2,764
|
)
|
|
(673
|
)
|
||
Other, including stock-based compensation
|
1,571
|
|
|
1,264
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable, net
|
11,975
|
|
|
(676
|
)
|
||
Inventories
|
(3,851
|
)
|
|
(2,905
|
)
|
||
Other current assets
|
(1,120
|
)
|
|
2,360
|
|
||
Accounts payable and other accrued expenses
|
8,986
|
|
|
4,922
|
|
||
Deferred revenue
|
17,537
|
|
|
1,950
|
|
||
Accrued salaries, wages and payroll taxes
|
247
|
|
|
(1,128
|
)
|
||
Refundable deposits
|
(114
|
)
|
|
(560
|
)
|
||
Net cash provided by operating activities
|
34,474
|
|
|
16,664
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Expenditures for Property, equipment and leasehold improvements
|
(10,478
|
)
|
|
(6,216
|
)
|
||
Proceeds from sale of Property, equipment and leasehold improvements
|
55
|
|
|
22,998
|
|
||
Restricted cash from sale of Property, equipment and leasehold improvements
|
—
|
|
|
515
|
|
||
Business combinations and asset acquisitions
|
(274
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
(10,697
|
)
|
|
17,297
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
5,192
|
|
|
—
|
|
||
Principal payments on debt and finance lease obligations
|
(798
|
)
|
|
(520
|
)
|
||
Net repayments under revolving line of credit
|
(17,264
|
)
|
|
(22,199
|
)
|
||
Proceeds from issuances of common stock
|
—
|
|
|
427
|
|
||
Tax payments related to stock-based awards
|
(325
|
)
|
|
(92
|
)
|
||
Net cash used in financing activities
|
(13,195
|
)
|
|
(22,384
|
)
|
||
Increase in Cash, cash equivalents and restricted cash
|
10,582
|
|
|
11,577
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
1,200
|
|
|
579
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
11,782
|
|
|
$
|
12,156
|
|
|
Twelve Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Net sales
|
$
|
198,699
|
|
|
$
|
208,165
|
|
|
$
|
(9,466
|
)
|
|
(4.5
|
)%
|
Gross profit
|
$
|
67,200
|
|
|
$
|
68,773
|
|
|
$
|
(1,573
|
)
|
|
(2.3
|
)%
|
As percentage of net sales
|
33.8
|
%
|
|
33.0
|
%
|
|
80
|
|
bps
|
|
|
|||
Selling, general and administrative expenses
|
76,666
|
|
|
60,423
|
|
|
16,243
|
|
|
26.9
|
%
|
|||
Operating income (loss)
|
$
|
(9,466
|
)
|
|
$
|
8,350
|
|
|
$
|
(17,816
|
)
|
|
(213.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss)
|
$
|
(6,510
|
)
|
|
$
|
12,509
|
|
|
$
|
(19,019
|
)
|
|
(152.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Income per share:
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(0.34
|
)
|
|
$
|
0.65
|
|
|
$
|
(0.99
|
)
|
|
(152.3
|
)%
|
Diluted
|
$
|
(0.34
|
)
|
|
$
|
0.64
|
|
|
$
|
(0.98
|
)
|
|
(153.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total shipments (in barrels):
|
|
|
|
|
|
|
|
|
|
|
|
|||
Core Brands
|
729,300
|
|
|
724,100
|
|
|
5,200
|
|
|
0.7
|
%
|
|||
Contract Brewing
|
16,200
|
|
|
25,300
|
|
|
(9,100
|
)
|
|
(36.0
|
)%
|
|||
Total shipments
|
745,500
|
|
|
749,400
|
|
|
(3,900
|
)
|
|
(0.5
|
)%
|
|||
Change in depletions (1)
|
0
|
%
|
|
(2
|
)%
|
|
|
|
|
|
|
(1)
|
Change in depletions reflects the period-over-period change in barrel volume sales of beer by wholesalers to retailers.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
(1,224
|
)
|
|
$
|
61
|
|
|
$
|
(5,978
|
)
|
|
$
|
4,674
|
|
Interest expense
|
616
|
|
|
107
|
|
|
1,428
|
|
|
348
|
|
||||
Income tax provision (benefit)
|
(2,529
|
)
|
|
(194
|
)
|
|
(4,030
|
)
|
|
1,600
|
|
||||
Depreciation expense
|
2,483
|
|
|
2,521
|
|
|
7,624
|
|
|
7,713
|
|
||||
Amortization expense
|
124
|
|
|
77
|
|
|
369
|
|
|
272
|
|
||||
Stock-based compensation
|
336
|
|
|
371
|
|
|
1,589
|
|
|
1,058
|
|
||||
Gain on disposal of assets
|
(30
|
)
|
|
(55
|
)
|
|
(8
|
)
|
|
(549
|
)
|
||||
Kona class action expense
|
18
|
|
|
—
|
|
|
4,920
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
(206
|
)
|
|
$
|
2,888
|
|
|
$
|
5,914
|
|
|
$
|
15,116
|
|