This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Craft Brew Alliance Reports Third Quarter 2013 Results

Stocks in this article: BREW

Craft Brew Alliance, Inc. (“CB A ”) (Nasdaq: BREW), an independent craft brewing company, today reported its financial results for the third quarter ended September 30, 2013. CB A ’s continued activation of its national portfolio strategy has positioned the Company to expect strong sales and profit growth in 2013 and take advantage of the dynamic craft beer segment to achieve long-term value for its shareholders. The results for the third quarter are in line with management’s expectations and the Company reconfirms previously reported 2013 guidance.

Significant third quarter and year-to-date financial highlights include:

  • Depletion volume grew 14% over the third quarter of 2012 and 11% year-to-date compared to the same period last year, which we attribute to the continued activation of our distinctive portfolio strategy.
  • Net sales and branded beer shipments increased 10.7% and 12.5%, respectively, in the third quarter due to the continued organic growth of our complementary portfolio of time-tested and new beers such as Redhook Audible Ale and Game Changer, Kona Big Wave Golden Ale, Omission Beer and cross-brand variety packs. Year-to-date net sales and branded beer shipments grew 6.0% and 8.0%, respectively, compared to the same period of 2012.
  • Our gross margin rate decreased 50 basis points to 30.1% in the third quarter compared to 30.6% for the third quarter last year, which reflects relatively flat beer margins and margin rate decline in our restaurant segment driven by the renovation of our Woodinville pub. Our year-to-date gross margin rate of 28.7% declined 170 basis points from the same period in 2012 primarily due to product mix and distribution costs in our beer business and lower restaurant business margin as a result of our Woodinville pub remodel.
  • As a percentage of net revenue, our selling, general and administrative expense (“SG&A”) decreased to 23.5% in the third quarter of 2013 from 26.7% in the third quarter of 2012. SG&A growth of 5% to $36.3 million year-to-date reflects the continued investment in our portfolio strategy.
  • Diluted earnings per share (“EPS”) for the third quarter of 2013 was $0.10 compared to $0.05 for the same period last year. 2013 year-to-date EPS was $0.06 compared to $0.12 for the same period of 2012.

“We are very pleased with our depletions growth and are especially proud to see that the strategies and prioritization we communicated earlier in the year are driving the kind of results we anticipated. The record growth and momentum we’re seeing – across brands, channels and geographies – reflects the exceptional teamwork and passion of the entire CB A family, including our wholesaler and retailer partners, and I want to congratulate all of them on these results,” said Terry Michaelson, CB A ’s CEO. “As we look ahead, we remain committed to continue driving strong sales and profit growth, while keeping a close eye on our margins. And with our 2013 performance to date as an indicator, I am confident that our focus will enable us to deliver on the power of CBA’s highly competitive, proven strategy.”

Components of anticipated 2013 results and developments

We are confirming previously issued guidance regarding our anticipated full year 2013 results, as follows:

  • Depletion growth estimate of 7% to 11%, reflecting the continued strength of the Kona, Redhook and Omission brands and ongoing stabilization of the Widmer Brothers brand.
  • Average price increases of approximately 1% to 2%.
  • Contract brewing revenue for 2013 at approximately half of the 2012 level as a result of the termination of the Goose Island contract brewing arrangement.
  • Gross margin rate of 28.5% to 30.5%, primarily due to pressure from distribution and packaging component costs, partially offset by improved brewery productivity.
  • SG&A expense of $47 million to $49 million, reflecting leverage from the foundation built by more aggressive spending in prior years.
  • Capital expenditures of approximately $11 million to $13 million, reflecting our continued investments in capacity and efficiency improvements, quality initiatives and restaurant and retail remodeling projects.

“In the third quarter, our top line growth continued to reflect strong consumer demand for our brands in both new and existing markets. The increase in volumes created a challenging operating environment for our beer business during the quarter that resulted in the slight decrease in gross margin, compounded by lower margin in our restaurant segment,” said Mark Moreland, CBA’s CFO. “However, as Terry stated, we are confident that by increasing our focus on gross margin rates and continuing our supply chain optimization efforts initiated earlier in the year, we will close out 2013 with strong fourth quarter earnings and set ourselves up for long-term success.”

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs