BOSTON BEER UPDATES 2024 FINANCIAL GUIDANCE TO REFLECT SUPPLIER CONTRACT AMENDMENT

BOSTON, Dec. 20, 2024 (GLOBE NEWSWIRE) — As part of its ongoing initiatives to optimize its supply chain, The Boston Beer Company, Inc. (NYSE: SAM), today announced a modification and restatement in its entirety of an existing agreement. production agreement with a third-party supplier, Rauch North America Inc (“Rauch”). This amendment adjusts the existing production agreement to better meet the Company’s future capacity needs and results in increased production flexibility and more favorable termination rights for the Company in exchange for a $26 million cash payment in Rauch no later than December 23, 2024.

As a result of this payment, the Company expects to record a pre-tax contract settlement charge of $26 million, or $1.70 after-tax per diluted share, in the fourth quarter of 2024. The anticipated total impact of the payment on the Company’s previous forecasts is shown in the table below under Updated Projections for the year 2024.

Updates to Future Third-Party Filing Obligations

For the full year 2024, the Company continues to estimate that deficit charges will negatively impact gross margin by 65 to 75 basis points and that non-cash expenses related to production advance payments by third parties will have a negative impact on gross margins of 95 to 105 basis points.

The Company continues to work to finalize its 2025 financial plan. The Company does not expect this agreement to have a material impact on its previously provided estimate of $14 million in lost revenue charges in 2025, disclosed in its Third Quarter 10-Q Report filed October 24, 2024. The Company will provide additional guidance on lost revenue charges and non-cash items. third party production costs

advance payments as well as its full-year 2025 financial guidance in its fourth quarter earnings report in February 2025.

The Company has regular discussions with its third-party production suppliers regarding its future capacity needs and the terms of its contracts. Changes to volume estimates, future modifications or cancellations of existing contracts could accelerate or change the total amount of deficit charges expected to be incurred.

Updated projections for the year 2024

The Company has updated its full year guidance to reflect the estimated contract settlement costs discussed above. The Company’s actual results for 2024 could differ from current projections and are very sensitive to changes in volume projections and supply chain performance.

The non-GAAP earnings per share (non-GAAP EPS) projection excludes the contract settlement of $26 million or $1.70 per diluted share and the impact of non-cash brand writedowns of $42.6 million. dollars or $2.49 per diluted share, recorded in the third quarter of 2017. of fiscal 2024 relating primarily to the Dogfish Head brand.

The increase in the estimated effective tax rate for the whole year is due to the impact of the contract settlement which reduced the estimated pre-tax profit for the whole year, but did not significantly changed the estimated non-deductible expenses for the entire financial year.

Use of non-GAAP measures

Non-GAAP EPS is not a term defined under generally accepted accounting principles (“GAAP”) in the United States. Non-GAAP EPS, or non-GAAP earnings per diluted share, excludes from the projected GAAP EPS the estimated impact of the $26 million contract settlement. or $1.70 per diluted share to be recognized in the fourth quarter of fiscal 2024 and the impact of the non-cash asset impairment charge of $42.6 million, or $2.49 per diluted share, recognized in the third quarter of fiscal 2024. 2024 primarily relating to the Dogfish Head brand. This non-GAAP measure should not be considered in isolation or as a substitute for diluted earnings per share prepared in accordance with GAAP, and may not be comparable to calculations of similarly named measures by other companies. Management uses this non-GAAP financial measure to make operational and strategic decisions and to evaluate the Company’s underlying business performance. Management believes that this non-GAAP forward-looking measure provides meaningful and useful information to investors and analysts regarding the Company’s financial outlook. and business performance or trends and facilitates period-over-period comparisons of its expected financial performance.

Forward-looking statements

Statements made in this press release that indicate the Company’s or management’s intentions, hopes, beliefs, expectations or predictions regarding the future are forward-looking statements. It is

It is important to note that the Company’s actual results could differ materially from those projected in these forward-looking statements. Additional information regarding factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s filings with the SEC, including, but not limited to, the company’s report on Form 10-K for the year. ended December 30, 2023 and subsequent reports filed by the Company with the SEC on Forms 10-Q and 8-K. Copies of these documents are available from the SEC and can be viewed on the Company’s website, www.bostonbeer.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

About the company

Boston Beer Company, Inc. (NYSE: SAM) began brewing Samuel Adams beer in 1984 and has since become one of the largest and most respected craft breweries in the United States. We consistently deliver the highest quality products to our drinkers and apply what

we learned from making flavorful craft beers to making flavorful and innovative beers

Products “beyond beer”. Boston Beer Company pioneered not only craft beer, but also hard cider, hard seltzer, and hard tea. Our leading brands include household names like Angry Orchard Hard Cider, Dogfish Head, Sun Cruiser, Truly Hard Seltzer, Twisted Tea. Hard Iced Tea and Samuel Adams. We have taprooms and hospitality locations in California, Delaware, Massachusetts, New York and Ohio. For more information, please visit our website at www.bostonbeer.com. includes links to our respective brand websites.

CONTACT: Jennifer Larson

Boston Beer Company

(617) 368-5152

(email protected)