May 13th, 2008
Boston Beer Company . Sam Adams
First Quarter Losses for Boston Beer Company
Boston Beer swings to 1st-quarter loss on recall costs
BOSTON – Boston Beer Co. Inc., which brews Sam Adams-brand beers, said Tuesday it swung to a loss in the first quarter, due to costs and lost sales stemming from a recall of some of its glass bottles last month.
For the quarter ended March 29, the company reported a loss of $3.7 million, or 27 cents per share, compared with a profit of $5.8 million, or 40 cents per share in the corresponding quarter last year.
Boston Beer (nyse: SAM – news – people ) said it was hurt by $5.9 million in costs associated with a recall of certain glass bottles. The voluntary recall was announced early last month after brewers found grains of glass in bottles. The company said then that the grains or bits of glass could break off and possibly fall into the bottle.
The company said excluding the recall costs, it earned 35 cents per share.
Analysts polled by Thomson Financial, on average, expected profit of 38 cents per share. Analyst estimates typically exclude one-time items.
Operating expenses rose 23 percent to $39 million, with advertising costs and administrative expenses both rising in the period.
Revenue rose 5 percent to $76.1 million, from $72.4 million in the first quarter of 2007. Excluding the impact of the recall, first quarter 2008 net revenue was $85.2 million.
Analysts predicted revenue of $83.7 million.
Boston Beer said its number of barrels sold rose 2 percent. When the effect of the recall is excluded, the company said it sold 12 percent more barrels during the quarter.
The company credited its revenue rise with more customer interest in craft beers and its investments in its brands. The craft beer category has been one of the fastest growing in the beer industry.
Shares fell 40 cents to close at $43.70.
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