FOR IMMEDIATE RELEASE
CRAFT BREW ALLIANCE ANNOUNCES STRONG PRELIMINARY 2017 FINANCIAL RESULTS AND GUIDANCE FOR 2018
10% depletion growth for Kona, continued gross margin expansion, and robust EPS performance underscore record operational and financial results in 2017
New contract brewing agreement with AB to leverage capacity and capability in CBA-owned breweries in 2018
Portland, Ore. (February 1, 2018) - Craft Brew Alliance, Inc. (“CBA”) (Nasdaq: BREW), a leading craft brewing company, today announced strong preliminary financial results for the fourth quarter and year ended December 31, 2017. CBA’s preliminary full-year results include continued double-digit depletion growth for Kona amidst unprecedented market competition, record gross margin expansion driven by net revenue per barrel growth and ongoing operational improvements, and robust GAAP earnings per diluted share (“EPS”) performance of $0.49, including a favorable one-time, non-cash tax benefit of $0.35 per share. Excluding the effect of the tax benefit results in adjusted EPS of $0.14 per share.
Delivering continued double-digit growth for Kona in 2017
Kona’s relevance as a global lifestyle brand, anchored by its award-winning, island-inspired craft beers and distinctive brand message, drove a 10% increase in depletions globally for the full year 2017. Kona flagship Big Wave Golden Ale posted a 23% increase in depletions in 2017, which includes 60% depletions growth internationally. Hanalei Island IPA, which Kona debuted nationally in 2017, ended the year in the top five of all new craft brands in the U.S. as measured in grocery sales by Nielsen.
Expanding our AB partnership with new brewing arrangement
We continued to work closely with Anheuser-Busch (“AB”) in 2017 and accomplished multiple strategic growth objectives, including aligning our brands in AB’s wholesaler planning processes, starting up brewing operations in AB’s Fort Collins brewery to drive incremental cost savings, and continuing to expand Kona distribution in select global beer markets.
In 2018, we are building on this success with a new contract brewing arrangement, announced today in a Form 8-K filed with the Securities and Exchange Commission. Through the new agreement, AB will leverage CBA’s craft production capacity and capability in our owned breweries, resulting in improved operational efficiencies and capacity utilization for CBA.
Achieving milestone improvements in core business fundamentals
Our focus on strengthening CBA’s business fundamentals yielded significant tangible value in 2017. We delivered net sales growth of 2%, gross profit improvement of 9%, and record gross margin of 31.5% which includes beer gross margin of 35.3%. We achieved these improvements while simultaneously accelerating our brewery footprint evolution with the closure and sale of our Woodinville brewery, balancing production between Portland and Portsmouth, ramping up brewing operations in AB’s Fort
The following information was filed by Craft Brew Alliance, Inc. (BREW) on Thursday, February 1, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.