Dogfish Head owner Boston Beer reported a loss in the fourth quarter and a change at the top.
The company put an optimistic spin on the year-end results that included a “write-down” impairment charge for Milton-based Dogfish Head..
The impairment of intangible assets reflects a $16.4 million non-cash charge recorded primarily for the Dogfish Head brand.
The impairment determination was primarily based on the latest forecasts of brand performance, which have been below the company’s projections made on the acquisition date. In the third quarter of 2022, Boston Beer recorded another impairment charge of $27.1 million for the Dogfish Head brand.
Boston Beer bought Dogfish Head in 2019 in a $300 million stock deal. Dogfish founders Sam and Mariah Calagione are listed as founders at Boston Beer. The sale came as signs pointed to increased competition from both large and small brewers as well as sluggish growth in overall beer consumption.
One bright spot was Dogfish Head Canned Cocktails, which along with Twisted Tea, Truly Vodka Soda, and Samuel Adams non alcoholic offerings reported growth in sales. Beer sales have been down overall, a reflection of declining consumption. Results were also affected by contract brewing charges that came as seltzer sales dropped. Boston Beer has struggled with the boom and bust in seltzers that eventually led to dumping some of the fizzy product.
Net revenue for the fourth quarter was $393.7 million, down 3.1% the net loss was $18.1 million. Sales were $2 billion for the year, down nearly 4%, with earnings at $76.3 million.
“We were pleased to deliver steady improvement in comparable weeks depletions, solid progress on gross margin expansion and strong cash flow generation for the full 2023 fiscal year,” said chairman and founder Jim Koch. “As we look forward into 2024, we believe we have the right strategies in place to steadily improve our revenue and margin performance while continuing to invest in our brands and industry-leading salesforce.”
Boston Beer also announced that Dave Burwick will retire in April as President, CEO and member of the board with Michael Spillane to taking that role effective upon Burwick’s retirement. Spillane is currently the lead director of The Boston Beer Company and has been a board member since 2016.
“I’ve known Dave for 19 years, and he’s had a tremendous impact on our company – first as a board member and for the last six years as our CEO,” said Boston Beer founder and brewer Jim Koch. “We’ve grown from $850 million in revenue when he began as CEO to more than $2 billion in revenue with a portfolio of powerful brands in attractive categories today. He’s built a strong and deep leadership team, and he’s positioned the company very well for ongoing success in 2024 and beyond.”
Koch reportedly owns 19% of Boston Beer, with the Calagiones also holding stock.
