Please help me analyze the company's financial statements and/or pro-forma and design financial projections from the Boston Beer Co. Value Line for the years 2020 and 2021 (the 2020 projection is already there).

(1) I need to set a recommendation for setting revenue targets for 2020 an 2021 that meet or exceed 20% growth

(2) Setting Earnings per Share (EPS) targets for 2020 and 2021 that meet or exceed earnings growth.

How are points 1 and 2 done? Use a step-by-step explanation.

(3) I need to make two recommendations that make it possible for the company to achieve these ambitious revenue and EPS targets. What would you recommend?

(4) Making one recommendation that returns the core craft beer brands to positive sales growth.

For point 4 the recommendation can focus on one Boston Beer product line (e.g. Samuel Adams, Dogfish Head Brewery, etc.) or can cover multiple product lines for the company.

Q j Contents Q PART II Item 8 Financial Statements and SLpplementary Data G. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: n thousands) Employee wages. benefits and reimbursements Accrued deposits Advertising, promotional and selling expenses Deferred revenue Accrued excise taxes Accrued stale beer Accrued sales and use tax Accrued freight Other accrued liabilities December 29. 2018 December 30. 2017 $ 27.074 $ 16.275 13.171 14.224 9.079 13.605 4.587 5.472 2.335 2.015 2.146 3,023 1.914 1.873 1.668 1.518 6.433 5.612 3 73,412 3 83,817 H. Revolving Line of Credit The Company has a credit facility in place that provides for a $150.0 million revolving line of credit which has a term not scheduled to expire until March 31 , 2023. The Company may elect an interest rate for borrowings under the credit facility based on either {i} the Alternative Prime Rate (5.5% at December 29, 2018} or iii} the applicable LIBOFi rate (2.46% at December 29. 2018} plus 0.45%. The Company incurs an annual commitment fee of 0.1 5% on the unused portion of the facility and is obligated to meet certain nancial covenants, which are measured using earnings before interest. tax, depreciation and amortization ("EBITDA") based ratios. The Company's EBITDA to interest expense ratio was 14,018 as of December 29. 2018. compared to a minimum allowable ratio of 2.00 and the Company's total funded debt to EBITDA ratio was 0.0 as of December 29. 2018, compared to a maximum allowable ratio of 2.50. The Company was in compliance with all nancial covenants as of December 29. 2018 and December 30. 201?. There were no borrowings outstanding under the credit facility as of December 29. 2018 and December 29. 2017. There are also certain restrictive covenants set forth in the credit agreement. Pursuant to the negative covenants, the Company I. Income Taxes has agreed that it will not: enter into any indebtedness or guarantees other than those specified by the lender. enter into any sale and leaseback transactions. merge. consolidate, or dispose of significant assets without the lender's prior written consent. make or maintain any investments other than those permitted in the credit agreement. or enter into any transactions with affiliates outside of the ordinary course of business. in addition. the credit agreement requires the Company to obtain prior written consent from the lender on distributions on account of, or in repurchase. retirement or purchase of its capital stock or other equity interests with the exception of the following: (a) distributions of capital stock from subsidiaries to The Boston Beer Company. Inc. and Boston Beer Corporation (a subsidiary of The Boston Beer Company, |nc.], (bl repurchase from former employees of non-vested investment shares of Class A Common Stock. issued under the Employee Equity Incentive Plan. and (c) redemption of shares of Class A Common Stock as approved by the Board of Directors and payment of cash dividends to its holders of common stock. Borrowings under the credit facility may be used for working capital, capital expenditures and general corporate purposes of the Company and its subsidiaries. in the event of a default that has not been cured. the credit facility would terminate and any unpaid principal and accrued interest would become due and payable. Significant components of the provision for income taxes are as follows: (in mcueands) Oun'ent: Federal State Total current Deferred: Federal State Total deferred TOTAL PROVISION FOR INCOME TAXES 2018 2017 2016 s 4.471 $ 34,255 $ 35.390 4.304 5.225 6.106 9.385 39.480 41 .496 12.880 {22.439} 7.866 1.393 102 608 14.258 {22.387} 8.274 a 23,828 $ 17.093 3 49.772 THE BOSTON BEER COMPANY, INC. ' 2018 Form 10-K Boston Beer Co Inc (The) (NYS: SAM) Business Summary Key Executives Boston Beer Company is engaged in the business of G. Koch Age Salary selling alcohol beverages throughout the U.S. and in selected international markets, Co.'s brands include Chairman 412 692 Samuel Adams, Twisted Ten@, Angry Orchard@ Hard Cider, and Truly Hard Seltzer, as well as craft beer David Aurwick Age Salary brands brewed by its subsidiary AAS Brewing President Chief 57 562 500 Collaborative LLC and its affiliates, Co. produces alcohol beverages including malt beverages, hard cider and hard Executive Officer seltzer at Co.-owned breweries and its cidery and under contract arrangements at other brewery locations. Co. Quincy Troupe Age Salary sells its products in the U.S., Canada, Europe, Israel, Senior Vice 52 380.808 Australia, New Zealand, the Caribbean, the Pacific Rim, President Mexico, and Central and South America Tara Heath Age Pricing Summary Vice 44 President Deputy Time Period: 1 week Boston Beer Co Inc (The) Price General Counsel 376- Cheryl Fisher Age 374 Vice President 60 372- 370 Key Financials 1 360 (In USD as of 09/28/2019) Share 366 Income Statement Revenue 1,174m 304- Net Income 118m 362- 9.88 01/07/2020 01/09/2020 01/1/2020 Of/sense from Continuing Operations Time EPS - Net Income - Diluted 9.89 Revenue per Share 97.83 Balance Sheet 52 Week Range Total Assets 1,016m Total Liabilities 297m Shareholders' Equity 719m 234.56 141.26 Total Assets per Share 84.44 Net Assets per Share 59.75 Cash Flows Yesterday 5 Days 30 Days Cash from Operations 198m Close 364 01 369.48 370,00 Cash from Investing -249m Volume 109,085 00 104,88300 NIA Cash from Financing Em Capital Expenditures 83m 52 Week 441.26 - Cash Flow per Share 16.30 High/Low : 234.56Boston Beer Co Inc (The) (NYS: SAM) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/29/2018 12/30 2017 13/31/2016 12/26/2015 12/27/2014 Currency USD USD USD USD USD Audit Status Not Not Not Not Not Qualified Qualified Qualified Qualified Qualified Consolidated You its Soala Thousands Thousands Thousands Thousands Thousands Cash & cash equivalents 108 399 66 637 91,035 94. 193 76,402 Accounts receivable, gross 36.684 39.228 37 004 Less allowance for doubtful accounts M4 144 Accounts receivable 34 073 33,740 36,604 38,984 36,860 Raw materials 44 655 33,086 41,630 42. 123 39.535 Work in process 8.252 6.826 8, 131 8.876 7,301 Finished goods 17 342 10.738 9.054 8.231 10.793 Total inventories 68,815 59.260 57,719 Less portion included in other long term (6,316) (2,798) (6,412) Inventories 70 249 60,651 62,499 56,462 51,307 Prepaid equipment 3.789 Excise & other tax receivables 2 179 1,651 1,637 2.093 4,672 Prepaid mall & barley 1 629 1,819 1,644 3, 184 4.364 Prepaid advertising, promotional & selling 1.518 3.328 Prepaid insurance 1,111 1.055 1.144 1.047 1.009 Prepaid compensation 1,000 Prepaid software expense 754 Insurance caugh surrender value 1,254 Supplier & vendor rebates 285 1.484 1.158 1,928 1,641 Lease incentive receivable 113 1,804 Grant receivable . environmental remediation Other prepaid expenses & other current 1,374 1,741 2,210 790 Prepaid expenses & other current assets 13 136 10,695 8.731 12,053 12 847 Income tax receivable 6 714 7.616 4.924 14,924 21,321 Deferred income taxes 7,351 8,605 Total current assets 231 871 168 340 201,234 223,603 207,462 Machinery & plant equipment 476 174 438,925 420,4 86 387,180 358 781 Kegs 67 940 89.048 70.024 71,391 72,124 Land 22 205 22.205 22,285 25, 135 23,902Boston Beer Co Inc (The) (NYS: SAM) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/29/2018 12/30/2017 12/31/2016 12/26/2015 12/27/2014 Currency USD USD USD USD USD Audit Status Not D Not Not D Not i Not D Qualified Qualified Qualified Qualified Qualified Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands Cash & cash equivalents 108.399 65,637 91,035 94,193 76,402 Accounts receivable, gross 36,694 39,228 37,004 Less allowance for doubtful accounts 0 244 144 Accounts receivable 34,073 33,749 36,694 38,984 36,860 Raw materials 44.655 33,086 41,630 42,123 39,535 Work in process 8,252 6,826 8,131 8,876 7,391 Finished goods 17,342 10,739 9,054 8,261 10,793 Total inventories 58,815 59,260 57,719 Less portion included in other long term (6,316) (2,798) (6,412) assets Inventories 70.249 50,651 52,499 56,462 51,307 Prepaid equipment 3,789 Excise & other tax receivables 2,179 1,651 1,637 2,093 4,572 Prepaid malt & barley 1,629 1,819 1,644 3,184 4,368 Prepaid advertising, promotional & selling 1,518 3,328 Prepaid insurance 1,111 1,055 1,144 1,047 1,009 Prepaid compensation 1,000 Prepaid software expense 754 Insurance cash surrender value 1,254 Supplier & vendor rebates 265 1,464 1,158 1,929 1,641THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except per share data) (unaudited) Thirteen works ended Thirty-nine weeks anded September 29, September 21, September 29, 3019 Barrels sold 1, 104 1, 130 402, 091 $ 126,152 4 1,201, 893 5 24, 215 19 312 47,830 Net revenue ITE, 468 248, 524 170, 427 Cost of poods sold 198, 631 Gross profit 147, 127 471, 377 194, 394 Operating Advertising. promotional and selling expinion 87,785 262, 372 241, 798 General and 11, 439 32,714 81, 952 85, 941 Impairment off 3-43 Total operating 127, POP 118, 409 344, 187 Operating income 127, 210 17,230 Other (expanse) income, nut : Interest (expense) (138 ) HI Other (expanse) income, nat (51) Total other (expine) income, net (982) Income before provision 18,934 136, 844 Income tax provision 14,305 30,985 10,480 Not income 44,730 5 28, 270 Net income par common share - 3.21 1 Net income par common share diluted 3.65 4 3.21 $ number of common shares - Class A Highted -incrope number of co Chris - Class B basic Highbed -inerigg number of common shares - diluted 12,130 11, 726 11,821 11,773 Not income 44,720 $ Other comprohingis incom: Foreign currencyThirteen weeks ended Thirty-nine weeks ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Barrels sold 1, 594 1, 338 4, 845 3, 328 Revenue $ 402, 691 $ 326, 852 1,808, 893 818, 257 Less excise taxes 24, 225 19, 982 60,369 47, 830 Net revenue 378, 456 306, 879 048, 524 770, 427 Cost of goods sold 198, 631 149, 643 477,147 FET SLE Gross profit 187, 835 157,227 471, 377 395, 294 Operating expenses : Advertising, promotional and selling expenses 96,578 87.765 262,372 241, 796 General and administrative expenses 31,429 22,734 81,552 65,951 Impairment of assets 243 517 Total operating expenses 127, 929 119, 492 344, 167 308, 264 Operating income 59,836 46,728 127, 210 87,038 Other (expense) income, net: Interest (expense) income, net (138) 343 472 821 Other (expense) income, net (76) (51) (818) (539) Total other (expense) income, net (982) 202 (346) 282 Income before income tax provision 58,934 17, 920 126, 864 87, 312 Income tax provision 14,205 9,013 30,585 16,460 Net income 44, 729 $ 38,837 06, 279 $ 70, 852 Net income per common share - basic 3.79 $ 3.25 $ 8. 16 6.82 Net income per common share - diluted 3.65 # 3. 21 $ 5.96 Weighted-average number of common shares - Class A basic 9, 136 8,557 8, 797 8, 646 Weighted-average number of common shares - Class B basic 2, 852 3,018 2, 895 3,018 Weighted-average number of common shares - diluted 12, 150 11, 792 11, 823 11, 773 Net income 44, 729 $ 38, 097 $ 96, 279 $ 70, 852 Other comprehensive income : Foreign currencyContents PART II Item 8 Financial Statements and Supplementary Data THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 29, 2018 December 30, 2017 Assets Current Assets: Cash and cash equivalents $ 108,399 65,637 Accounts receivable 34,073 33,749 Inventories 70,249 50,651 Prepaid expenses and other current assets 13 ,136 10,695 Income tax receivable 5 , 714 7,616 Total current assets 231,571 168,348 Property, plant and equipment, net 389,789 384,280 Other assets 14,808 13,313 Goodwill 3,683 3,683 TOTAL ASSETS $ 639,851 $ 569,624 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 47,102 $ 38,141 Accrued expenses and other current liabilities 73,412 63,617 Total current liabilities 120,514 101,758 Deferred income taxes 49, 169 34,819 Other liabilities 9,851 9,524 TOTAL LIABILITIES 179,534 146, 101 Commitments and Contingencies (See Note J) Stockholders' Equity: Class A Common Stock, $.01 par value; 22,700,000 shares authorized; 8,580,593 and 8,603, 152 shares issued and outstanding as of December 29, 2018 and December 30, 2017, respectively 86 86 Class B Common Stock, $.01 par value; 4,200,000 shares authorized; 2,917,983 and 3,017,983 shares issued and outstanding as of December 29, 2018 and December 30, 2017, respectively 29 30 Additional paid-in capital 405,711 372,590 Accumulated other comprehensive loss, net of tax (1, 197) (1,288) Retained earnings 55,688 52,105 Total stockholders' equity 460,317 423,523 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 639,851 $ 569,624 THE BOSTON BEER COMPANY, INC. 2018 Form 10-K 31Contents PART II Item 8 Financial Statements and Supplementary Data THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (in thousands) December 29, 2018 December 30, 2017 2016 (53 weeks) Cash flows provided by operating activities: Net income $ 92,663 $ 99,049 $ 87,349 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,968 51,256 49,557 Impairment of assets 652 2,451 716 Loss on disposal of property, plant and equipment 64 764 616 Gain on sale of property, plant and equipment (951) Bad debt (recovery) expense 2 (244) Stock-based compensation expense 10,035 6,316 6,148 Excess tax benefit from stock-based compensation arrangements (12,524) Deferred income taxes 14,350 (22,442) 8,243 Changes in operating assets and liabilities: Accounts receivable (1,636) 2,945 2,534 Inventories (21,312) (1,741) 445 Prepaid expenses, income tax receivable and other assets (552) (4,511) 14,936 Accounts payable 6,352 245 (1,811) Accrued expenses and other current liabilities 10, 130 2,671 5,479 Other liabilities 731 (1,021) 6,304) Net cash provided by operating activities 163,447 135,982 154, 189 Cash flows used in investing activities: Purchases of property, plant and equipment (55,460) (32,987) (49,913) Proceeds from sale of property, plant and equipment 27 25 3,855 Cash paid for intangible assets (50) Change in restricted cash 139 33 40 Net cash used in investing activities (55,344) (32,929) (46,018) Cash flows used in financing activities: Repurchase of Class A Common Stock (88,312) (144,602) (164,658) Proceeds from exercise of stock options 22, 143 15,415 40, 127 Cash paid on note payable and capital lease (78) (60) (58 ) Excess tax benefit from stock-based compensation arrangements 12,524 Net proceeds from sale of investment shares 906 796 736 Net cash used in financing activities (65,341) 128,451) (111,329) Change in cash and cash equivalents 42,762 (25,398) 3, 158) Cash and cash equivalents at beginning of year 65,637 91,035 94, 193 Cash and cash equivalents at end of period $ 108,399 $ 65,637 $ 91,035 Supplemental disclosure of cash flow information: Income taxes paid 11,353 43,006 30,978 Income taxes refunded 5,000 12,064 (Decrease) Increase in accounts payable for repurchase of Class A Common Stock $ $ (3,000) (Decrease) Increase in accounts payable for purchase of property, plant and equipment $ 2,609 $ (2,689) $ 2,678 THE BOSTON BEER COMPANY, INC. 2018 Form 10-K 35Contents PART II Item 8 Financial Statements and Supplementary Data THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, (in thousands, except per share data) December 29, 2018 December 30, 2017 2016 (53 weeks) Revenue $ 1,057,495 $ 921,736 $ 968,994 Less excise taxes 61,846 58,744 62,548 Net revenue 995,649 862,992 906, 446 Cost of goods sold 483,406 413,091 446,776 Gross profit 512,243 449,901 459,670 Operating expenses: Advertising, promotional and selling expenses 304,853 258,649 244,213 General and administrative expenses 90,857 73, 126 78,033 Impairment (gain on sale) of assets, net 652 2,451 (235) Total operating expenses 396,362 334,226 322,011 Operating income 115,881 115,675 137,659 Other income (expense), net: Interest income 1,292 549 168 Other expense, net (887) (82) (706) Total other income (expense), net 405 467 (538) Income before provision for income tax 116,286 116,142 137,121 Provision for income taxes 23,623 17,093 49,772 NET INCOME 92,663 $ 99,049 $ 87,349 NET INCOME PER COMMON SHARE - BASIC 7.90 . 18 6.93 NET INCOME PER COMMON SHARE - DILUTED 7.82 8.09 6.79 Weighted-average number of common shares - Class A basic 8,620 8,933 9, 189 Weighted-average number of common shares - Class B basic 3,002 3, 102 3,344 Weighted-average number of common shares - diluted 11,734 12, 180 12,796 Net income $ 92,663 99,049 $ 87,349 Other comprehensive income (loss), net of tax: Currency translation adjustment 25 17 (99) Defined benefit plans liability adjustment 277 (202) (53) Impact of ASU 2018-02 (211) Total other comprehensive income (loss), net of tax: 91 (185) (152) COMPREHENSIVE INCOME $ 92,754 $ 98,864 $ 87,197 32 THE BOSTON BEER COMPANY, INC. 2018 Form 10-K www.bostonbeer.comYesterday 5 Days 30 Days % Price Change (100 Days) : -5.66 200-Day Moving Avg. : 383.79 Web Volume Aug Sep Oct Nov Dec Jan News Event Management ChangeBOSTON BEER CO. NYSE-SAM RECENT PRICE 373.88 ATO 35.7 (W. 376) BE RATIO ON D VALUE LINE TIMELINESS 2 Rated X1919 2 1314 2028 1850 1453 1534 2309 Target Price Range SAFETY LEGENDS 2022 2023 2024 TECHNICAL 2 Ralowd 11 130 18-Month Target Price Range Low High Midpoint (% to Mid) $158-1474 $308 -10% MARA PROJECTIONS Price dain Insinutional Decisions % TOL RETURN 12/19 1:2 5 2005 2004 2005 2008 2007 2008 2080 2010 2011 2012 3013 2014 2015 2018 2017 2018 2019 2020 -WEUNENELGF2-24 44.57 75.25 73.29 74.28 8650 102 10 121.25 Bulen parsh A 155.55 1.23 144 14:19 "Cash Flow" per sh 41 12 15 Earrings perch #8 MY Div'ds Decid per sh 5.43 420 938 12 15 11.81 86.44 40103 6415 510 Cap'l Spending per sh 13270 13 142 1380 1427 1430 141 1423 124 1207 1260 127 501 1276 257 1162 1180 1246 125 Common56 05 9 75.60 Book Value perch 21.5 215 27.5 148 247 BE J 35.7 1.21 1.17 21.1 1.12 183 1.51 206 1.32 123 Avg Ann'1 PIE Ballc Lvg An 1 Div'd Yield CAPITAL STRUCTURE #6 01 928714 415.1 4538 5130 5802 728.1 900.0 9589 9084 8610 9068 1 1455 Balan Grill & LT Debi None 50. 1 51.1 2 2 96.4 873 92.7 72. Depreciation family 120.0 150.0 Hot Profit and!) Losses, Urecapitalized; Annual metals $212 mill. No Defined Benefit Paralen Plan 3075 146 171.1 WWW Long Term Debt [Swill Common Stock 12,604,005 sha. 1732 921 8hr. Equity Bowl (Includes 2.917,833 shares of Class B common stock jus al October 26, 2019 MARKET CAP: $4 5 billion Mid Cap 19094 30.3%4 27.6% 243% 218% 208% 215% 196% 189% 201% 159% 15.5% Return on She Equity 140% CURRENT POSITION 2017 13.034 31:3% 27.8% 2434 2134 24.6% 21.34 126% 189% 201 15.5%6 165% Retained to Com E BUSINESS: The Beston Boor Co produces cardonal and par. the Toy Hand S:ber nama Barton Bow soils appian 43 million IVITY IFFOI company brows its core boats in breweries kiwied in MA, PA, and own 28.4% of common stock (419 Puary, Chairman: C. James Curent Assets OH. It offers a variety of beats under the Samen' Adares name, Koch Fras & CED: David Barwick Inc.! Massachusetts Add.: 1 71.0 flavored malt beverages under the Twisted Tew name, hard cider Design Center Place, Suite E:54, Boston, MA 021 14. Telephones 15.5 Punent LICE 101 8 120 5 Boston Beer is benefiting from some on a mixed note. We expect continued ANNUAL RATES momentum. The company posted strong momentum at the Truly business. Invest- results in the third quarter. Both sales of ments in Angry Orchard and Samuel "Liath Flow 105% 13.5% $376.5 million and earnings of $3.65 a Adams may well help those brands gener- share easily topped our calls as well as 2018's marks. Management attributed the ate improvement over the long haul. How- ever, the increased investment behind performance to strength in the Truly and these brands was probably a drag on prof- Cal- QUARTERLY SALES ] Twisted Tea brands. Elsewhere, a Wall its. Thus, we estimate $276.4 million on andar Mar.Per Jun.Per Sep. Par Dec.Par Street analyst upgraded his outlook for the top line and $1.52 a share on the bot- 2016 18:8 2418 251.4 SAM, which prompted some investor sup- tom line in the December quarter. 181 7 204 3 port after the rating was made public. These shares have since pulled back. We estimate share net of $12.15 for 2020. The first full year with the Dogfish 2319 BUT 3184 3745 2/6.4 The company is integrating Dogfish Head business under its umbrella ought to Head into its operations, The marriage be a good one. Indeed, sales will likely be Cal- EARNINGS PER SHARE A of the two revered beer brands is on track, bolstered by better beer trends and the endor MarlPer Juniper Sep. Par Dec. Par Going forward, there are ample cost- strength of Truly Earnings should post a 2316 2:06 saving opportunities by combining the two sizable year-over-year advance thanks to 2:36 operations. The addition of the Dogfish cost-saving efforts, synergies, and a more 1.98 2.79 1.75 321 783 lineup of ales and lagers should rejuvenate normalized marketing budget. What's 2015 the beer unit that has struggled due to soft more, the long-term picture is bright. This 17is demand for Samuel Adams products. QUARTERLY DIVIDENDS PAID The Truly brand is worth highlight- well-run company will likely continue to ing. The spiked seltzer lineup continues to find new growth avenues. ender Marl1 Jun. 10 Sep.30 Dec.31 This stock is timely, Still, this issue of- 2016 register breakneck growth. Looking ahead, fors unattractive gains potential over 18- NO CASH DIMDENDS it will probably continue to be a growth BEING PAID driver, given demand trends for this al- month and 2022-2024 time frames at the recent quotation. Therefore, this equity is coholic beverage category. best suited for near-term accounts. 2120 The company likely finished the year Richard J. Gallagher January 17. 2020 ABC LINKS TOBe MOOS. Frica pearend: the [8) Diluted carings. May not sum due is |3) In millions Last Saturday al the calendar your Company's Financial Strength 50.05: 07, 154:32: DR. 40 8RK: 17. $1.72. Growth Parshting Earrings Predictability To subscribe call 1-800-VALUELINEPRESS RELEASE Results Boston Beer Reports Third Quarter 2019 Oct. 29, 2019 4:24 pm ET BOSTON, Oct. 29, 2019/PRNewswire/ -- The Boston Beer Company, Inc. (NYSE: SAM) completed the previously reported Dogfish Head Brewery transaction and began consolidating the Dogfish Head financial results on July 3, 2019. The combined Company reported third quarter 2019 net revenue of $378.5 million, an increase of $71.6 million or 23.3% from the third quarter of 2018, mainly due to an increase in shipments of 19.1%. Net income for the third quarter was $44.7 million, or $3.65 per diluted share, an increase of $6.7 million or $0.44 per diluted share from the third quarter of 2018. This increase was primarily due to increased revenue, partially offset by lower gross margins, increases in advertising, promotional and selling expenses, and the non-recurrence of a $0.38 per diluted share favorable one-time impact related to a tax accounting method change in the third quarter of the prior year. Earnings per diluted share for the 39-week period ended September 28, 2019 were $8.07, an increase of $2.11 from the comparable 39-week period in 2018. Net revenue for the 39-week period ended September 28, 2019 was $946.5 million, an increase of $178.1 million, or 23.1%, from the comparable 39-week period in 2018. In the third quarter, Dogfish Head operating income of $6.9 million was partially offset by non- recurring Dogfish Head transaction-related expenses of $5.9 million. Excluding this $1.0 million net positive impact, operating income for the third quarter was $58.8 million, an increase of $12.1 million or 25.9% from the third quarter of 2016. Also, during the third quarter, the Company paid back all debt incurred in connection with the Dogfish Head transaction, including approximately $200k in related interest expense. In the third quarter and the 39-week period ended September 28, 2019, the earnings per diluted share benefit from Dogfish Head's operating income net of the dilutive impact of the transaction-related share issuance was more than offset by the non-recurring transaction- related expenses, resulting in a combined unfavorable impact of $0.08 per diluted share and $0.19 per diluted share, respectively.1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ 1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ In the third quarter and the 39-week period ended September 28, 2019, the Company recorded a that the strength of our diverse brand portfolio continues to fuel double-digit growth. We are tax benefit of $0.15 per diluted share and $0.33 per diluted share, respectively, resulting from confident in our ability to innovate and build strong brands and we are exploring new styles to the Accounting Standard "Employee Share-Based Payment Accounting" ("ASU 2016-0"). launch in 2020 that would complement our current portfolio and help support our mission of Highlights of this release include: long-term profitable growth." - Reported depletions increased 303 and 21% from the 13 and 39 week Dave Burwick, the Company's President and CEO stated, "Our depletions growth in the third comparable periods in the prior year; excluding the addition of the Dogfish Head brands beginning July 3, 2019, depletions increased 24% and quarter was the result of increases in our Truly Hard Seltzer and Twisted Tea brands and the 19%, respectively. addition of the Dogfish Head brands, partly offset by decreases in our Samuel Adams and Angry -- Reported shipments increased 19.1% and 21.5% from the 13 and 39 week Orchard brands. Truly continues to generate triple-digit volume growth. During the quarter, we comparable periods in the prior year; excluding the addition of the Dogfish Head brands beginning July 3, 2019, shipments increased 13.8% and launched Truly Draft nationally and continued to expand package distribution across all 19.4%, respectively. channels. We announced a multiyear U.S. partnership with the National Hockey League, which - Full year 2019 shipments and depletions growth including the addition of makes Truly Hard Seltzer the "official hard seltzer of the NHL," and enables all of our brands, the Dogfish Head brands beginning July 3, 2019 is now estimated to be between 19% and 22%, a narrowing up from the previously communicated including Samuel Adams and Dogfish Head, to benefit from the NHL partnership. We estimate of between 17% and 22%. announced the launch of new formulations for all of our Truly flavors, which we have tested -- Excluding the addition of the Dogfish Head brands beginning July 3, 2019, with drinkers of Truly and competing brands and we are confident that we will now have the full year 2019 shipments and depletions growth is now estimated to be between 15% and 18%, a narrowing up from the previously communicated best-tasting hard seltzer on the market. In early 2020, we will launch Truly Hard Seltzer estimate of between 13% and 18%. Lemonade in both a variety 12-pack and single-serve sizes. These new Truly flavors have the - Gross margin was 49.6% for the third quarter, a decrease from $1.2% in same 100 calories and I gram of sugar as other Truly flavors but have a more robust taste. the comparable 13-week period in 2018, and 49.7% for the 39-week period ending September 28, 2019, a decrease from 51.32 in the comparable Lastly, we have announced the addition of another new flavor, Watermelon Kiwi, available in 39-week period in 2018. The Company's full year gross margin target continues to be between 503 and 512. our Truly Tropical Variety Pack and 6-packs. We believe these significant new flavor -- Advertising, promotional and selling expense increased by $8.8 million, introductions, combined with the new NHL partnership and our ad campaign for Truly or 10.0%, in the third quarter over the comparable period in 2018 and featuring well known actor Keegan-Michael Key, will help further improve our position as a increased $20.6 million, or 8.53, from the comparable 39-week period in 2018. leader in hard seltzer and build Truly as a meaningful and relevant brand." - Based on current spending and investment plans, full year 2019 Non-GAAP earnings per diluted sharel, which excludes the impact of ASU 2016-09, is Mr. Burwick continued "Twisted Tea continues to generate consistent double-digit volume now estimated at between $8.70 and $9.30, a narrowing up from the previously communicated estimate of $8.30 and $9.30. growth, even as new entrants have been introduced and competition has increased. Angry Orchard's volume has declined against the 2018 national roll out of Angry Orchard Ros?. The -- Full year 2019 capital spending is now estimated to be between $109 million and $110 million, a decrease from the previously communicated cider category continues to be challenged and we are working to return Angry Orchard to estimate of $120 million to $140 million. Jim Koch, Chairman and Founder of the Company, commented, "We completed our merger with growth through continued packaging, innovation, promotion and brand communication initiatives. This fall, Angry Orchard Crisp Unfiltered, a traditional American Cider with only 10 Dogfish Head on July 3 and are making good progress on the integration. We have welcomed our Dogfish Head coworkers and we continue to learn a lot from each other, as we share our grams of sugar was launched nationally across all channels and we are encouraged by early passion for brewing, creativity and maintaining a strong culture. In our first quarter as a consumer reaction. For the remainder of 2019 and into 2020, we plan to build upon our success combined company we reported depletions growth of 30%, of which 24% is from historic Boston and work to drive our brands to their full potential, with a particular focus on our Truly brand. Beer brands and 6% is from the addition of Dogfish Head brands following the closing. I am We've adjusted our expectations for 2019 full-year depletions growth and our earnings tremendously proud of the efforts of all of our coworkers in achieving our sixth consecutive guidance to reflect our trends for the first nine months and our current view of the remainder of quarter of double-digit growth, while maintaining a focus on quality and innovation. We the year, which is primarily driven by the year-to-date performance of Truly. We are targeting believe that our depletions growth is attributable to our key innovations, quality and strong high teens to low twenties top-line growth in 2020 and a significant increase in our operating income." brands, as well as sales execution and support from our distributors. We plan to continue to invest to improve Samuel Adams trends and remain focused on the longer-term goal of Mr. Burwick went on to say, "We also continue to focus on cost savings and efficiency projects to returning the brand to growth. We remain positive about the future of craft beer and are happy fund the investments required to grow our brands, to build our organization's ability to deliver1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ 1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ against our goals, and to improve our profitability. While we are generally pleased with our General and administrative expenses increased by $8.7 million from the comparable 13-week overall performance, our accelerated depletions growth has been challenging operationally and period in 2018, primarily due to non-recurring Dogfish Head Transaction-related expenses of we have been operating at capacity for many months. To help relieve some capacity pressures $3.6 million and the addition of Dogfish Head general and administrative expenses beginning and support our projected 2020 volume growth, we are adding a can line in our Pennsylvania July 3, 2019. Brewery that we expect will begin production by the end of the year and we have significantly increased our available sleek can capacity at third-party breweries. We are also accelerating The Company's effective tax rate for the 13-week period ended September 28, 2019 increased to other capacity and efficiency improvements at our breweries, which is reflected in our capital 24.1% from 19.2% in the comparable 13-week period in 2018. This increase was primarily due to spend expectations for 2020. We will continue to invest to increase capacity as appropriate to the favorable impact of tax accounting method changes reported in the prior year period. meet the needs of our business and take full advantage of the fast-growing hard seltzer category. However, the increased usage of third-party breweries and an increasing percentage Year to Date 2019 Summary of Results of variety packs in the Company's overall product mix come at a higher incremental cost. As a Depletions increased 21% from the comparable 39-week period in 2018, reflecting increases in result, our gross margins and gross margin expectations will be negatively impacted until the Company's Truly Hard Seltzer and Twisted Tea brands and the addition of the Dogfish Head the volume growth stabilizes. While we are in a very competitive business, we are optimistic for brands partially offset by decreases in its Samuel Adams and Angry Orchard brands. continued growth of our current brand portfolio and innovations and we remain prepared to Shipment volume was approximately 4.0 million barrels, a 21.5%% increase from the comparable forsake short-term earnings as we invest to sustain long-term profitable growth, in line with 39-week period in 2018. the opportunities that we see.' Gross margin at 49.7% decreased from the 51.3% margin realized in the comparable 39-week 3rd Quarter 2019 Summary of Results period in 2018, primarily as a result of higher processing costs due to increased production at Depletions increased 30% from the comparable 13-week period in 2018, reflecting increases in third-party breweries and higher temporary labor requirements at Company-owned breweries the Company's Truly Hard Seltzer and Twisted Tea brands and the addition of the Dogfish Head to support increased variety pack volumes, partially offset by price increases and cost saving brands, partially offset by decreases in its Samuel Adams and Angry Orchard brands. initiatives at Company-owned breweries. Shipment volume was approximately 1.6 million barrels, a 19.1% increase from the comparable Advertising, promotional and selling expenses increased $20.6 million from the comparable 39- 13-week period in 2018. week period in 2018, primarily due to increased investments in local marketing, media and production, higher salaries and benefits costs, increased freight to distributors due to higher The Company believes distributor inventory as of September 28, 2019 averaged approximately volumes and the addition of Dogfish Head brand related expenses beginning July 3, 2019. 3 weeks on hand and was at an appropriate level, based on supply chain capacity constraints and inventory requirements to support the forecasted growth. The Company expects General and administrative expenses increased by $15.6 million from the comparable 39-week wholesaler inventory levels in terms of weeks on hand to remain between 2 and 4 weeks for the period in 2018, primarily due to non-recurring Dogfish Head Transaction-related expenses of remainder of the year. $5.6 million, increases in salaries and benefits costs, and the addition of Dogfish Head general and administrative expenses beginning July 3, 2019. Gross margin at 49.6% decreased from the 51.2% margin realized in the third quarter of 2018, primarily as a result of higher processing costs due to increased production at third-party The Company's effective tax rate for the 39-week period ended September 28, 2019 increased to breweries and higher temporary labor requirements at Company-owned breweries to support 24.1% from 18.9% in the comparable 39-week period in 2018. This increase was primarily due to increased variety pack volumes, partially offset by price increases and cost saving initiatives at the favorable impact of tax accounting method changes reported in the prior year period. Company-owned breweries. The Company expects that its September 28, 2019 cash balance of $27.1 million, together with Advertising, promotional and selling expenses increased $8.8 million from the comparable 13- its future operating cash flows and its $150.0 million line of credit, will be sufficient to fund week period in 2018, primarily due to increased investments in local marketing, media and future cash requirements. The company currently has no amounts outstanding on its line of production and the addition of Dogfish Head brand-related expenses beginning July 3, 2019. credit.1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ 1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ During the 39-week period ended September 28, 2019 and the period from September 29, 2019 ASU 2016-09. through October 26, 2019, the Company did not repurchase any shares of its Class A Common -- Estimated capital spending of between $95 million and $115 million, which Stock. As of October 26, 2019, the Company had approximately $90.3 million remaining on the could be significantly higher, if deemed necessary to meet future growth. $931.0 million share buyback expenditure limit set by the Board of Directors. Non-GAAP effective tax rate and Non-GAAP earnings per diluted share are not defined terms under U.S. generally accepted accounting principles ("GAAP"). These Non-GAAP measures Depletion estimates should not be considered in isolation or as a substitute for diluted earnings per share and effective tax rate data prepared in accordance with GAAP, and may not be comparable to Year-to-date depletions through the 42-week period ended October 19, 2019 are estimated by calculations of similarly titled measures by other companies. The Company's projection for its the Company to have increased approximately 21% from the comparable period in 2018. Non-GAAP effective tax rate and Non-GAAP earnings per diluted share exclude the impact of Excluding the Dogfish Head impact, depletions increased 19%%. ASU 2016-09, which could be significant and will depend largely upon unpredictable future 2019 Outlook events outside the Company's control, including the timing and value realized upon exercise of stock options versus the fair value of those options when granted. Therefore, because of the The Company currently projects full year 2019 earnings per diluted share to be between $8.70 uncertainty and variability of the impact of ASU 2016-09, the Company is unable to provide, and $9.30. This projection excludes the impact of ASU 2016-09. The Company's actual 2019 without unreasonable effort, a reconciliation of these Non-GAAP measures on a forward- earnings per share could vary significantly from the current projection. Underlying the looking basis. Company's current 2019 projection are the following full-year estimates and targets: About the Company -- Depletions and shipments increase of between 19% and 22%. The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 and today brews more than 60 -- National price increases of between 1X and 3X. styles of Samuel Adams beer. Our portfolio of brands also includes Angry Orchard Hard Cider, -- Gross margin of between 50% and 51%. Twisted Tea, Truly Hard Seltzer, Wild Leaf Hard Tea and Tura Alcoholic Kombucha as well as -- Increased investments in advertising, promotional and selling expenses of between $40 million and $50 million, a change from the previously several other craft beer brands brewed by A&S Brewing, our craft beer incubator. On July 3, communicated estimate of between $35 million and $45 million primarily 2019, the Company completed its previously reported Dogfish Head Brewery transaction. due to increased Truly brand investments. This does not include any changes in freight costs for the shipment of products to the Company's Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by distributors. American consumers and highly respected by the industry. For more information, please visit -- Non-GAAP effective tax rate of approximately 27%, excluding the impact of our investor relations website at www.bostonbeer.com, which includes links to all of our ASU 2016-09. respective brand websites. -- Estimated capital spending of between $109 million and $110 million, most taprooms. of which relates to continued investments in the Company's breweries and Forward-Looking Statements 2020 Outlook Statements made in this press release that state the Company's or management's intentions, The Company is completing its 2020 planning process and will provide further detailed hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is guidance when the Company presents its full-year 2019 results. The Company is currently using important to note that the Company's actual results could differ materially from those the following preliminary assumptions and targets for its 2020 fiscal year: projected in such forward-looking statements. Additional information concerning factors that -- Depletions and shipments percentage increase of high teens to low could cause actual results to differ materially from those in the forward-looking statements is twenties contained from time to time in the Company's SEC filings, including, but not limited to, the -- National price increases of between 1X and 3%. Company's report on Form 10-K for the year ended December 29, 2018 and subsequent filings -- Gross margin of between 49% and 51X. made prior to or after the date hereof. Copies of these documents may be found on the Company's website, www.bostonbeer.com, or obtained by contacting the Company or the SEC. -- Increased investments in advertising, promotional and selling expenses of between $65 million and $75 million. This does not include any changes in freight costs for the shipment of products to the Company's (1) See "Outlook" below for additional information regarding non-GAAP forward-looking distributors. measures used in this press release. -- Non-GAAP effective tax rate of approximately 27%, excluding the impact of1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ 1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ THE BOSTON BEER COMPANY, INC, AND SUBSIDIARIES translation CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME adjustment (13) 43 (in thousands, except per share data) Comprehensive (unaudited) income 44, 730 $ 37,994 $ 96, 322 70, 856 Thirteen weeks ended Thirty-nine weeks ended September 28, September 29, September 28, September 29, 2819 2018 2819 2018 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES Barrels sold CONSOLIDATED BALANCE SHEETS 1,594 1, 338 1, 845 3,328 (in thousands, except share data) (unaudited) Revenue 24, 225 402, 691 $ 326, 852 $ 1, 808, 893 5 818,257 Less excise taxes 19,962 60,369 47, 839 September 28, December 29, Net revenue 378, 45 306, 87 948, 524 770, 427 2019 2018 Cost of goods sold 190, 631 149,643 477,147 Gross profit 187,835 157, 227 471, 377 375, 133 395, 294 Assets Operating Current Assets: expenses Cash and cash equivalents 27,128 Advertising, 68, 687 108, 399 Accounts receivable $ 34, 073 promotional and selling expenses 262,372 Inventories Prepaid expenses and other 92, 632 70, 249 96,578 87,765 241, 796 General and current assets 14,965 13, 136 administrative Income tax receivable 1, 984 5,714 expenses 31,429 22, 734 81,552 65, 951 Total current assets 289,392 231, 571 Impairment of assets 243 517 Property, plant and equipment, net 521, 316 389, 789 Total Operating right-of-use assets 38,943 operating Goodwill 112, 52 127,909 110,495 344, 167 3,683 expenses 308, 254 Operating income Intangible assets 104, 335 2, 959 59,836 46. 728 127,210 17,838 Other assets 29, 641 12, 789 Other (expense) Total assets 1, 016,176 $ 639, 851 income, net: Interest (expense) Liabilities and Stockholders' Equity income, net (138) 343 472 821 Current Liabilities: Other (expense) Accounts payable 71, 635 $ 47, 102 income, net Total other (764) (51) (818) (539) Accrued expenses and other current liabilities 92, 858 73, 412 [expense) Current operating lease Incone, net (982) 202 (346) 282 liabilities Total current liabilities 2, 590 Income before 166, 484 120, 514 income tax provision 58,934 17, 920 126, 854 87, 312 81, 653 49, 159 Income tax Deferred income taxes, net Non-current operating lease provision 14,205 9,013 30, 585 16,460 liabilities 41, 215 Net income 44, 729 $ 38,037 5 96, 279 70, 852 Other liabilities 7, 844 9, 851 Total liabilities 297, 196 179,534 Net income per common share - 8. 16 Commitments and Contingencies basic 3.78 $ 3.25 3 6.82 Net income per Stockholders' Equity: common share - Class A Common Stock, $.01 par diluted 3.65 $ 3.21 $ 8.87 5.96 value; 22,700, eve shares authorized; Weighted-average 9,216,022 and 8, 580, 593 number of common issued and outstanding as of shares - Class A September 28, 2019 basic 9,136 8,557 3, 797 B, 646 and December 29, 2018, Weighted- average respectively 92 number of common Class B Common Stock, $.@1 par shares - Class B value; 4, 200, 080 shares basic 2, 862 3, 918 2, 899 3,018 authorized; weighted-average 2,817,983 and 2,917,983 number of common issued and outstanding as shares - diluted 12, 150 11, 792 11, 823 11, 773 of September 28, 2019 Net income 44, 729 $ 38, 097 $ 96, 279 $ and December 29, 2818, 70, 852 respectively Other Additional paid-in capital 568, 947 485, 711 comprehensive Accumulated other comprehensive income : loss, net of tax (1, 154) (1,197) Foreign currency Retained earnings 151,967 55,688 hips Wwww.waj.comarticles/PR-CO-20191029-913700 8/11 hops Wwww.waj.comarticle:#/PR-CO-20191029-9137001/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ 1/23/2020 Boston Beer Reports Third Quarter 2019 Results - WSJ Total stockholders' equity 718,980 460, 317 (used in) financing Total liabilities and activities 8, 191 (66, 191) stockholders equity $ 1, 016, 176 $ 639, 851 Change in cash and cash equivalents (81,271) 3, 250 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES Cash and cash equivalents at beginning of year 108, 399 65,637 CONSOLIDATED STATEMENTS OF CASHFLOWS (in thousands) Cash and cash equivalents at end of (unaudited) period 27, 128 $ 68, 887 Thirty-nine weeks ended September 28, September 29, Supplemental disclosure of cash flow 2019 2018 information: Non cash consideration issued in Cash flows provided by operating Dogfish Head Transaction 144, 743 activities: Income taxes paid 16, 759 11, 252 Net income 96, 279 70, 852 Cash paid for amounts included in Adjustments to reconcile net measurement of lease liabilities 3,443 income to net cash provided by Right-of-use assets obtained in operating activities: exchange for operating lease Depreciation and amortization 41, 841 38, 860 obligations 41, 678 Impairment of assets 243 $17 Right-of-use assets obtained in Loss on disposal of property, exchange for capital lease plant and equipment 449 45 obligations 2,837 Change in ROU assets 2,734 Interest paid on revolving credit Bad debt expense 53 facility 345 Stock-based compensation Decrease in accounts receivable for expense 9,043 6,995 ASU 2014-89 adoption (1,318) Deferred income taxes 14, 847 12, 818 Decrease in accounts payable for Changes in operating assets and purchase of property, plant and liabilities: equipment (2, 076) $ 3,346 Accounts receivable (26,532) (20, 412) Inventories (16, 847) (20, 836) Prepaid expenses, income tax (13,903) (8, 385) Copies of The Boston Beer Company's press releases, including quarterly receivable and other assets Accounts payable 22, 388 20, 560 financial results, are available on the Internet at www.bostonbeer.com Accrued expenses and other current liabilities 14,949 6,389 View original content:http://www.prnewswire.comews-releases/boston-beer-reports-third- change in operating lease liability (2,270) quarter-2019-results-300947550.html Other liabilities 207 Net cash provided by operating activities 142,681 188, 055 SOURCE The Boston Beer Company, Inc. Cash flows used in investing activities: /CONTACT: Investor Relations Contact: Jennifer Larson, (617) 368-5152; Media Contact: Jessica Purchases of property, plant and Paar, (617) 368-5060 equipment (65,760) (38, 752) Proceeds from disposal of property, plant and equipment 144 /Web site: http://www.bostonbeer.com Cash paid for acquisition of intangible assets Investment in Dogfish Head, net of The Wall Street Journal news department was not involved in the creation of this content. cash acquired (165,517) Other investing activities 18) 131 Net cash used in investing activities (232, 143) (38, 614) Cash flows provided by (used in) Financing activities: Repurchase of Class A Common Stock (88, 311) Copyright 0 2020 Dow Jones & Company. Inc. All Rights Reserved Proceeds from exercise of stock This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit options 7,619 21,528 http:/www.djmoprints.com. Net cash paid on note payable and capital lease (246) Cash borrowed on line of credit 97, 980 (78) Cash paid on line of credit (97,090) Net proceeds from sale of investment shares 818 679 Net C1/242020 Boston Boor Reports Third Quarter 2019 Results - WSJ Total stockholders' equity 718,980 460, 317 Total liabilities and stockholders" equity $ 1, 016, 176 $ 639, 851 THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASHFLOWS (in thousands) (unaudited) Thirty-nine weeks ended September 28, September 29, 2819 2018 Cash flows provided by operating activities: Net income $ 96, 279 70, 852 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 41, 841 38, 860 Impairment of assets 243 517 Loss on disposal of property, plant and equipment 449 45 Change in ROU assets 2,734 Bad debt expense Stock-based compensation expense 9,043 6,995 Deferred income taxes 14,847 12,818 Changes in operating assets and liabilities: Accounts receivable (26,532) (20,412) Inventories (16, 847) (20, 836) Prepaid expenses, income tax receivable and other assets (13,903) (8, 385) Accounts payable 22, 388 20,560 Accrued expenses and other current liabilities 14,949 GGE '9 Change in operating lease liability (2,270) Other liabilities 287 693 Net cash provided by operating activities 142, 681 558 BET Cash flows used in investing activities: Purchases of property, plant and equipment (66, 768) (38,752) Proceeds from disposal of property, plant and equipment 144 Cash paid for acquisition of intangible assets Investment in Dogfish Head, net of cash acquired (165, 517) Other investing activities (10) Net cash used in investing activities (232, 143) (38,614) Cash flows provided by (used in) Financing activities: Repurchase of Class A Common Stock - (88, 311) Proceeds from exercise of stock options 7,619 21,528 Net cash paid on note payable and capital lease (246) Cash borrowed on line of credit 97, 020 (78) Cash paid on line of credit (97, 809) Net proceeds from sale of investment shares 818 678 Net cash provided by1/23/2020 Boston Boor Reports Third Quarter 2019 Results - WSJ (used in) financing activities 8, 191 (66,191) Change in cash and cash equivalents (81, 271) 3, 258 Cash and cash equivalents at beginning of year 108, 399 65,637 Cash and cash equivalents at end of period 27, 128 68 887 Supplemental disclosure of cash flow information: Non cash consideration issued in Dogfish Head Transaction 144, 743 Income taxes paid 16,759 11, 252 Cash paid for amounts included in neasurement of lease liabilities 3, 143 Right-off-use assets obtained in exchange for operating lease obligations 41, 678 Right-of-use assets obtained in exchange for capital lease obligations 2, 237 Interest paid on revolving credit facility Decrease in accounts receivable for ASU 2014-09 adoption Decrease in accounts payable for (1, 310) purchase of property, plant and equipment (2, 076) $ 3,346 Copies of The Boston Beer Company's press releases, including quarterly financial results, are available on the Internet at www.bostonbeer. com View original content:http:/www.prnewswire.comews-releases/boston-beer-reports-third- quarter-2019-results-300947550.html SOURCE The Boston Beer Company, Inc. /CONTACT: Investor Relations Contact: Jennifer Larson, (617) 368-5152; Media Contact: Jessica Paar, (617) 368-5060 /Web site: http:/www.bostonbeer.com