Company has strong shipments in fourth quarter, but depletions lag
The Boston Beer Company, Inc today announced a 14% increase in shipment volume for fourth quarter 2004 versus the same period last year. Depletions were up 6% in the same period, indicating an increase in wholesaler inventories.
The company also reported net revenue of $64.8 million, an increase of 16% over fourth quarter 2004.
Reported shipment volume for the fiscal year ended December 31, 2005, was 1.4 million barrels, a 7.2% increase over 2004.
Jim Koch, Chairman and Founder of the Company, commented, “We are pleased with the 6% depletions growth achieved in the fourth quarter, which resulted in 5% growth for the full year 2005. We estimate that the better beer category grew 7-8% in 2005 and that the craft beer category grew approximately 9%, while the domestic beer category has experienced flat trends this year. I am optimistic about these category trends and believe that the Company is well positioned to benefit from them in 2006.”
Reported shipment volume for the period was approximately 0.4 million barrels, a 14% increase from the same period in 2004. Wholesaler inventory levels at the end of the fourth quarter of 2005 are estimated to be approximately 30,000 barrels higher than the fourth quarter 2004.
The Company’s net income of $2.3 million for the three months ended December 31, 2005, decreased by $0.6 from the same period last year, primarily due to an increase in advertising, promotional and selling expenses. Net revenue increased by $8.9 million, or 16%, during the fourth quarter of 2005 as compared to the fourth quarter of 2004 due to the increase in shipment volume and a 1.8% increase in net revenue per barrel. The increase in net revenue per barrel is due to price increases and a shift in the package mix. Gross margin as a percentage of net sales decreased to 57.7% in the fourth quarter of 2005 from 59.4% in the same quarter last year. The decrease in gross margin during the fourth quarter of 2005 was primarily due to cost increases related to production and higher package material costs and a shift in product and package mix. Advertising, promotional and selling expenses increased by $4.4 million during the quarter as compared to the prior year, primarily due to higher freight fuel costs, selling costs and promotional expenditures. General and administrative costs increased by $0.8 million during the quarter as compared to the prior year, driven by increases in salary and benefit costs, legal and consulting fees and insurance costs.