Pyramid Breweries Inc. Reports an Increase in Fourth Quarter Sales; Former Pete's Brewing Co. President Joins Board of Directors
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SEATTLE --(Business Wire)-- February 10, 1999--Pyramid Breweries Inc. (Nasdaq:PMID), brewer of Pyramid Ales and Thomas Kemper Beers and Sodas, today reported results for the fourth quarter of 1998.
Net sales were $6,024,000 for the quarter ended December 31, 1998, up from $5,957,000 for the same quarter of the prior year. Net beer sales increased to $3,871,000 as compared to $3,748,000 in the fourth quarter of 1997. Wholesale beer shipments increased 2% to 26,000 barrels, up from 25,400 barrels in 1997. Fourth quarter shipments were boosted by a 13% increase in Pyramid Hefeweizen sales and a 14% increase in sales of the winter seasonal favorite, Pyramid Snowcap Ale, over the prior year. In the Company's core Seattle market, fourth quarter Neilson Reports indicate an 8.9% increase in Pyramid Ale retail sales and 31.4% increase in Thomas Kemper beer retail sales over the same quarter of the prior year. Pyramid Chairman and CEO, George Hancock commented "We are encouraged by the improvement in beer sales trends experienced in the fourth quarter. Although one quarter's results are not conclusive, it appears that the rebranding of Pyramid and Thomas Kemper is producing results in a market that is increasingly competitive and flat at best."
Alehouse sales also increased slightly to $1,541,000 in the fourth quarter 1998 from $1,465,000 in the same quarter of 1997. Thomas Kemper Sodas sales decreased to $612,000 in the fourth quarter from $744,000 for the same quarter of the prior year. As measured by volume, soda shipments decreased to 4,800 barrels in the fourth quarter of 1998 compared to 5,800 barrels shipped in last year's fourth quarter. "The 1997 fourth quarter sales included significant pipeline-filling shipments into California, so we expected a lower level of shipments in 1998. However, the results are also a reminder that this also is a tough segment which includes lower-priced competitors copying our product innovations." said Hancock.
The Company reported a net loss of $339,000, or $0.04 per share for the fourth quarter ended December 31, 1998, a decrease from the $1,628,000 net loss and $0.20 loss per share reported for the prior years quarter. The fourth quarter of 1997 included a pre-tax restructuring charge of $1,600,000 related to a loss on the disposal of fixed assets, severance payments and closure costs of the Company's Kalama, Washington brewery.
Pyramid Breweries Inc. also announced that Mr. Scott Barnum has joined its Board of Directors. Mr. Barnum was recently appointed Vice President -- International for eBay Inc., the leading Internet based person-to-person trading community. Prior to joining eBay, Mr. Barnum was President and Chief Operating Officer of Pete's Brewing Company, the nation's second largest brewer of craft beers. His background includes four years with Miller Brewing Company where he held several senior level appointments in the marketing department and where he ultimately became General Manager of the American Specialty and Craft Beer Co., a wholly owned subsidiary formed to establish a national presence in the craft beer segment. His previous experience included nine years with PepsiCo Inc. in its soft drink and snack divisions, both domestically and internationally, in marketing management. "I have known and admired Scott as a competitor for several years and I am absolutely delighted to have the benefit of his extensive industry and brand management experience on our Board," said Board Chairman George Hancock.
In addition, Pyramid Breweries announced that Mr. John Stoddard has decided to step down from his position as President and Chief Operating Officer of the Company. He will remain on the Board of Directors. The Company intends to announce a replacement in due course.
For the full year ending December 31,1998 Pyramid Breweries reported that net sales decreased to $25,654,000 compared to $27,476,000 in 1997. Net beer sales were $15,932,000 for the 12 month period compared to $18,225,000 for the prior year. Wholesale beer shipments decreased from 121,200 barrels in 1997 to 105,900 barrels in 1998. Draft beer accounted for 38% of total beer sales in 1998 compared to 37% in 1997.
Alehouse sales for the year decreased slightly to $6,285,000 from $6,350,00 in 1997. Soda sales revenues increased 19% to $3,438,000 from $2,901,000 in the year ago period while sales volume rose to 26,700 barrels in 1998 from 22,200 in the prior year. Pyramid purchased Thomas Kemper Soda during 1997's first quarter.
The Company posted a net loss for the year ended December 31, 1998 of $1,136,000 or $0.14 per share compared to a net loss of $2,143,000 or $0.26 per share in the prior year. During 1997, the Company recorded a restructuring charge of $1,600,000 which was primarily related to plant closure costs in the fourth quarter.
Cash provided by operating activities totaled $728,000 for the year ended December 31, 1998, compared to $655,000 in 1997. "The Company's financial position remains strong with over $5 million in cash and no long-term debt at the end of fiscal year 1998," noted Richard M. Denmark, Chief Financial Officer. "The Company's financial strength and diversified business relative to many other craft brewers means we are well positioned in the consolidation phase of the industry's development," Denmark added, "and we continue to look for additional opportunities to expand."
Gross profit decreased in 1998 as percentage of net sales to 22% from 24% in 1997. The decrease was due mainly to wholesale beer volume declines and the corresponding underutilization of plant capacity.
Pyramid Breweries Inc. is one of the leading craft brewers in the market for fresh, full flavored beers and sodas. Pyramid brews more than 20 different styles of ales and lagers under its Pyramid Ales and Thomas Kemper Lager brands and four styles of soda under the Thomas Kemper Soda label. Visit the Company's internet website at www.pyramidbrew.com to learn about Pyramid and Thomas Kemper products.
Statements concerning future performance, developments or events, concerning potential wholesale sales of beer, sodas sales and restaurant sales, production capacity, craft beer and soda market penetration, and any other guidance on future periods, constitute forward-looking statements which are subject to a number of risks and uncertainties which are described in the company's filings with the Securities & Exchange Commission, press releases and other communications. Actual events and results may differ materially from stated expectations.
These are unaudited but were posted on their website
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