E-Malt.com News article: USA, OR: Craft Brew Alliance reports preliminary 2014 results

Craft Brew Alliance, Inc. (“CBA”), a leading craft brewing company, on February 5 announced its preliminary financial results for the fourth quarter and year ended December 31, 2014.

Net sales increased 12% over the prior year, exceeding the $200 million milestone, which reflects continued momentum across the brewer’s core brand families, Kona Brewing, Widmer Brothers Brewing, Redhook Ale Brewery, and Omission Beer.

Shipments grew 10%, compared to 4% in 2013, due primarily to increasing consumer demand in key markets and ongoing efforts to normalize wholesaler inventory levels.

Despite an approximate 25% reduction in SKUs, depletions grew 7%, compared to 11% in 2013, further underscoring the strength of CBA’s Kona Brewing, Widmer Brothers, Redhook, and Omission brands.

Gross margin expanded by 130 basis points to 29.4% in 2014, compared to 28.1% in 2013, which highlights the company’s continued achievement in driving core business health as its steers towards its long-term gross margin target of 35% in 2017.

Contract brewing and beer related sales increased by 33% over the prior year.

Selling, general and administrative expense (“SG&A”) grew by $6.5 million to $53.0 million, which is 26% of net sales and level with SG&A percentage of net sales in 2013.

Diluted earnings per share (“EPS”) increased to $0.16 compared to 2013 EPS of $0.10.

Capital expenditures were approximately $15.8 million, compared to $9.9 million in 2013, and primarily represent capacity and efficiency improvements, quality initiatives, and restaurant and retail enhancements.


Anticipated financial highlights for 2015:

Owned beer shipment growth between 6% and 8%. [Note: The company is adjusting its guidance in response to analyst feedback and to align with industry practices. It will not provide annual depletion guidance in financial press releases but will share actuals on analyst calls and in 10-K and 10-Q filings.]

Average price increase of 1% to 2%.

A growth of 10% to a decline of 10% in contract brewing revenue as we continue to manage the most efficient use of the company’s owned capacity.

Gross margin rate of 30.5% to 31.5%. Through ongoing efforts to optimize its brewing locations and improve its capacity utilization and efficiency, the company continues to expect gross margin expansion to 35% in 2017.

SG&A expense ranging from $58 million to $62 million, primarily reflecting reinvestment into the brewer’s sales and marketing infrastructure, as well as expanded consumer and trade programming.

Capital expenditures of approximately $17 million to $21 million, as CBA continues to make investments in capacity and efficiency improvements; quality, safety and sustainability initiatives; and restaurant and retail.


06 February, 2015