New Dogfish owner Boston Beer reports higher earnings

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Boston Beer Co. is riding the seltzer train as Dogfish Head comes on board.

The company, while still struggling with its flagship Sam Adams brands, reported revenue and earnings rose in the first half, thanks to the fizzy water with alcohol and flavors that include grapefruit.

Dogfish Head results will be included in earnings results on July 3, the effective date of the merger.

Boston Beer was purchased of$173 millionin cash and 429,292 shares of restricted Class A Stock.

In the second half of 2019, the company expects Dogfish Head to add between 3 and four precent in annual shipments and depletions growth and between$50 million and $60 millionin net revenues.

Excluding merger transaction related costs and other non-recurring costs, Boston Beer estimates that the merger impact will be neutral or will slightly add to full-year 2019 earnings per diluted share.

Jim Koch, chairman and founder of Boston Beer stated, “We are still seeing challenges across the industry, including a general softening of the part of the craft beer category that goes through the three-tier distribution system and retail shelves that offer an overwhelming number of options to drinkers. We remain positive about the future of craft beer and are happy that our diversified brand portfolio continues to fuel double-digit growth. We are disappointed with our Samuel Adams brand trends and continue to evolve our brand messaging.”

Koch continued, “We are excited about our recent merger withDogfish Head Brewerythat we completed onJuly 3, 2019. Dogfish Head has a proud history as a craft beer pioneer with a brand that is beloved by American consumers and highly respected by the industry. This combination is the right fit as bothBoston Beerand Dogfish Head have a passion for brewing and innovation. We share the same values and we will learn a lot from each other as we continue to invest in the high-end beer category. I am very happy thatSam Calagioneof Dogfish Head will be joining our management team at Boston Beer. He is a tremendous friend, innovator and brewer, and we have a bright future together with Sam and his off-centered Dogfish team.”

Dave Burwick, the company’s President and CEO stated, “Our depletions growth in the second quarter was a result of increases in our Truly Hard Seltzer and Twisted Tea brands that were only partially offset by decreases in our Samuel Adams and Angry Orchard brands. Truly continues to grow beyond our expectations. We are launching Truly draft nationally this quarter while we continue to expand distribution across all channels. In addition, we are launching a new, high-profile ad campaign for Truly featuring noted comedianKeegan-Michael Keyas we believe we can further improve our position as a leader in hard seltzer by building a meaningful and relevant brand. Twisted Tea continues to generate consistent double-digit volume growth.”

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