Boston Beer Pours a Strong One: Fool by Numbers

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On Aug. 8, Boston Beer (NYSE: SAM) released second-quarter earnings for the period ended July 1, 2006.

• Sales and earnings surpassed expectations on increases in volume and price.
• Utility, production, and packaging costs are eating into the company's gross margins, although not yet materially.
• Capital expenditures were down 61% compared to last year, but free cash flow still declined, primarily because of the large increase in accounts receivable -- something investors should keep an eye on.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	Q2 2006	Q2 2005	Change
Sales	$71,150	$79,333	$61,633	28.7%
Net Profit	--	$7,986	$5,143	55.3%
EPS	$0.38	$0.56	$0.35	60%
Diluted Shares		14,346	14,614	(1.8%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q2 2006	Q2 2005	Change*
Gross Margin	59.32%	59.92%	(0.6)
Operating Margin	15.51%	12.75%	2.76
Net Margin	10.07%	8.34%	1.73

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q2 2006	Q2 2005	Change
Cash + ST Invest.	$65,124	$64,691	0.7%
Accounts Rec.	$19,343	$12,455	55.3%
Inventory	$13,916	$12,146	14.6%

Liabilities	Q2 2006	Q2 2005	Change
Accounts Payable	$13,966	$9,533	46.5%
Long-Term Debt	$0	$0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q2 2006	Q2 2005	Change
Cash From Ops.	$9,221	$13,945	(33.9%)
Capital Expenditures	$2,725	$6,981	(61%)
Free Cash Flow	$6,496	$6,964	(6.7%)

Find out why Fools always follow the money.

Related Companies:

• Anheuser-Busch (NYSE: BUD)
• Molson Coors Brewing (NYSE: TAP)
• Mexican Economic Development (NYSE: FMX)
• Redhook Ale Brewery (Nasdaq: HOOK)
• Pyramid Breweries (Nasdaq: PMID)

Related Foolishness:

• Is Anheuser-Busch Turning the Corner?
• A Rocky Road for Molson Coors
• The Little Beverage Company That Could

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Anheuser-Busch is a Motley Fool Inside Value selection.

At the time of publication, Nathan Parmelee had no positions in any of the companies mentioned. Fool rules are here .