The Boston Beer Company Inc. (SAM, Financial) filed Quarterly Report for the period ended 2010-06-26.
The Boston Beer Company Inc. has a market cap of $669.3 million; its shares were traded at around $67.6 with a P/E ratio of 26.9 and P/S ratio of 1.5. The Boston Beer Company Inc. had an annual average earning growth of 18.3% over the past 10 years. GuruFocus rated The Boston Beer Company Inc. the business predictability rank of 5-star.SAM is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Advertising, promotional and selling. Advertising, promotional and selling expenses increased by $3.9 million, or 12.5%, to $35.1 million for the three months ended June 26, 2010, as compared to $31.2 million for the three months ended June 27, 2009. Such expenses for core brands were 27.2% of net revenue, or $55.97 per barrel, for the three months ended June 26, 2010, as compared to 26.8% of net revenue, or $54.48 per barrel, for the three months ended June 27, 2009. The increases in advertising, promotional and selling expenses per barrel and as a percentage of net revenue are a result of increased investments in point of sale materials, local marketing, radio advertising and the Companys sales force, partially offset by lower TV advertising costs. The Company will invest in advertising and promotional campaigns that it believes are effective, but there is no guarantee that such investment will generate sales growth.
Gross profit. Gross profit increased to $110.35 per barrel for the six months ended June 26, 2010, as compared to $87.43 for the six months ended June 27, 2009. Gross profit for core brands was $110.86 per barrel for the six months ended June 26, 2010, as compared to $105.01 for the six months ended June 27, 2009. Gross margin for core products was 53.8% for the first six months of 2010, as compared to 51.9% for the same period in 2009. The increase is primarily due to increased net selling price, combined with decreases in cost of goods sold per core barrel.
Advertising, promotional and selling. Advertising, promotional and selling expenses increased by $7.1 million, or 12.4%, to $64.2 million for the six months ended June 26, 2010, as compared to $57.1 million for the six months ended June 27, 2009. Advertising, promotional and selling expenses for core brands were 28.8% of net revenue, or $59.42 per barrel, for the six months ended June 26, 2010, as compared to 29.5% of net revenue, or $59.81 per barrel, for the same period last year. The decreases in advertising, promotional and selling expenses per barrel and as a percentage of net revenue are due to core shipment volume increasing at a higher rate than increases in advertising, promotion and selling expenses.
Cash flows provided by operating activities were $27.2 million for the six months ended June 26, 2010, compared to $31.7 million for the same period in the prior year. Operating cash flows were negatively impacted by changes in working capital, primarily due to a $9.0 million change in accounts receivable, caused by increased shipments during the second half of the month of June compared to prior periods, as well as a decrease in accounts payable of $2.7 million, due to the timing of invoices primarily related to capital projects. Partially offsetting these decreases in working capital was a $6.8 million increase in accrued income taxes due to the increase in income in the current year.
During the six months ended June 26, 2010, the Company repurchased approximately 549,800 shares of its Class A Common Stock for a total cost of $30.2 million. On July 28, 2010, the Board of Directors approved an increase of $25.0 million to the previously approved $165.0 million share buyback expenditure limit, for a new limit of $190.0 million. From June 27, 2010 through July 30, 2010, the Company repurchased an additional 128,000 shares of its Class A Common Stock for a total cost of $8.7 million. Through July 30, 2010, the Company has repurchased a cumulative total of approximately 9.3 million shares of its Class A Common Stock for an aggregate purchase price of $160.1 million. The Company has approximately $29.9 million remaining on the $190.0 million share buyback expenditure limit set by the Board of Directors.
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The Boston Beer Company Inc. has a market cap of $669.3 million; its shares were traded at around $67.6 with a P/E ratio of 26.9 and P/S ratio of 1.5. The Boston Beer Company Inc. had an annual average earning growth of 18.3% over the past 10 years. GuruFocus rated The Boston Beer Company Inc. the business predictability rank of 5-star.SAM is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Gross profit. Gross profit increased to $114.35 per barrel for the three months ended June 26, 2010, as compared to $98.37 for the three months ended June 27, 2009. Gross profit for core products was $114.96 per barrel for the three months ended June 26, 2010, as compared to $108.19 per barrel for the three months ended June 27, 2009. Gross margin for core products was 55.8% for the three months ended June 26, 2010, as compared to 53.3% for the three months ended June 27, 2009. The increase in gross profit per barrel of $6.77 and gross margin of 2.5 percentage points is primarily due to increases in the net selling price per barrel, combined with decreases in cost of goods sold per barrel.Advertising, promotional and selling. Advertising, promotional and selling expenses increased by $3.9 million, or 12.5%, to $35.1 million for the three months ended June 26, 2010, as compared to $31.2 million for the three months ended June 27, 2009. Such expenses for core brands were 27.2% of net revenue, or $55.97 per barrel, for the three months ended June 26, 2010, as compared to 26.8% of net revenue, or $54.48 per barrel, for the three months ended June 27, 2009. The increases in advertising, promotional and selling expenses per barrel and as a percentage of net revenue are a result of increased investments in point of sale materials, local marketing, radio advertising and the Companys sales force, partially offset by lower TV advertising costs. The Company will invest in advertising and promotional campaigns that it believes are effective, but there is no guarantee that such investment will generate sales growth.
Gross profit. Gross profit increased to $110.35 per barrel for the six months ended June 26, 2010, as compared to $87.43 for the six months ended June 27, 2009. Gross profit for core brands was $110.86 per barrel for the six months ended June 26, 2010, as compared to $105.01 for the six months ended June 27, 2009. Gross margin for core products was 53.8% for the first six months of 2010, as compared to 51.9% for the same period in 2009. The increase is primarily due to increased net selling price, combined with decreases in cost of goods sold per core barrel.
Advertising, promotional and selling. Advertising, promotional and selling expenses increased by $7.1 million, or 12.4%, to $64.2 million for the six months ended June 26, 2010, as compared to $57.1 million for the six months ended June 27, 2009. Advertising, promotional and selling expenses for core brands were 28.8% of net revenue, or $59.42 per barrel, for the six months ended June 26, 2010, as compared to 29.5% of net revenue, or $59.81 per barrel, for the same period last year. The decreases in advertising, promotional and selling expenses per barrel and as a percentage of net revenue are due to core shipment volume increasing at a higher rate than increases in advertising, promotion and selling expenses.
Cash flows provided by operating activities were $27.2 million for the six months ended June 26, 2010, compared to $31.7 million for the same period in the prior year. Operating cash flows were negatively impacted by changes in working capital, primarily due to a $9.0 million change in accounts receivable, caused by increased shipments during the second half of the month of June compared to prior periods, as well as a decrease in accounts payable of $2.7 million, due to the timing of invoices primarily related to capital projects. Partially offsetting these decreases in working capital was a $6.8 million increase in accrued income taxes due to the increase in income in the current year.
During the six months ended June 26, 2010, the Company repurchased approximately 549,800 shares of its Class A Common Stock for a total cost of $30.2 million. On July 28, 2010, the Board of Directors approved an increase of $25.0 million to the previously approved $165.0 million share buyback expenditure limit, for a new limit of $190.0 million. From June 27, 2010 through July 30, 2010, the Company repurchased an additional 128,000 shares of its Class A Common Stock for a total cost of $8.7 million. Through July 30, 2010, the Company has repurchased a cumulative total of approximately 9.3 million shares of its Class A Common Stock for an aggregate purchase price of $160.1 million. The Company has approximately $29.9 million remaining on the $190.0 million share buyback expenditure limit set by the Board of Directors.
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