Craft Brew Alliance Issues 2013 Financial Outlook and 2012 Preliminary Results

  Craft Brew Alliance Issues 2013 Financial Outlook and 2012 Preliminary
  Results

Business Wire

PORTLAND, Ore. -- January 31, 2013

Craft Brew Alliance, Inc. (“CB^A”) (Nasdaq: BREW), an independent craft
brewing company, announced plans for strong 2013 growth and shared preliminary
2012 financial results. CB^A’s successful strategic focus on building a
national portfolio strategy over the last three years has positioned the
Company to expect strong sales and profit growth in 2013 and take advantage of
the dynamic craft segment to achieve long-term value for its shareholders.

Highlights of preliminary 2012 results include:

  *A strong close to 2012 highlighted by 10% growth in depletions for the
    fourth quarter
  *Full year preliminary top- and bottom-line results in line with guidance
    provided during the last quarterly update:

       *Sales growth of 13%, reflecting the continued strength of the Kona,
         Redhook and Omission brands as well as continued repositioning of the
         Widmer Brothers brand
       *Depletion growth of 6%
       *Shipment growth of nearly 8% reflecting start up of new initiatives
         such as the launch of the Omission brand and international export
       *Gross margin rate of 29.6%, a reduction of 70 basis points from 2011,
         reflecting pressure from distribution costs and grain prices,
         partially offset by brewery productivity and positive product mix
       *Selling, general and administrative expense (“SG&A”) of $44.9
         million, an increase of $5.1 million from 2011, reflecting continued
         investments in brand development and sales capabilities
       *Diluted earnings per share (“EPS”) of $0.13 versus 2011 EPS of $0.51;
         2011 EPS included the one-time gain on sale of equity interest in
         Fulton Street Brewery of $0.34 per share
       *Capital expenditures of approximately $8.8 million, reflecting
         continued investments in capacity, efficiency and quality initiatives

“In 2013, we expect meaningful growth in both revenue and earnings resulting
from the overall strength of our portfolio strategy, operating expense
leverage and SG&A leverage,” said Terry Michaelson, CB^A’s CEO. “We are
energized to enter the next phase of our portfolio strategy focused on
leveraging our recent investments, brand momentum and breadth, and geographic
expansion to deliver improved sales and profit growth, consistent with our
phased approach to strengthening our model which ultimately will deliver
long-term value growth.”

Components of anticipated 2013 results and developments are:

We believe our brand strategy is the most promising it has been in CB^A’s
history. We expect strong growth tempered by unprecedented competition.
Expectations for 2013 include (i) confidence in the continued growth in sales
of Kona and Redhook, and clear positioning of Widmer Brothers offerings; (ii)
expansion into new geographic markets for Kona and international expansion for
all brand families; (iii) updates to packaging across all brand families, as
well as introduction of unique can and bottle offerings; (iv) refined
messaging on Omission beers, promoting the beer as specially crafted to remove
gluten; and (v) continued development of cross brand packages bringing the
power of our portfolio to consumers in real and compelling ways.

As in 2012, we are providing full-year guidance for 2013. We anticipate
significant differences in 2013 quarterly performance as compared to 2012
because of both normal changes to program and new product timing, as well as
uneven 2012 quarterly performance as a result of the implementation of new
supply chain processes and systems that will drive improved supply chain
control during 2013.

  *Depletion growth estimate of 7% to 11%, reflecting the continued strength
    of the Kona, Redhook and Omission brands and further stabilization of the
    Widmer Brothers brand

  *Average price increases of approximately 1% to 2%
  *Contract brewing revenue expectations for 2013 are approximately half of
    2012 as a result of the termination of the Goose Island contract brewing
    arrangement
  *Gross margin rate of 28.5% to 30.5%, reflecting pressure from distribution
    and packaging component costs, partially offset by improved brewery
    productivity
  *SG&A expense ranging from $47 million to $49 million, reflecting leverage
    from the foundation built by more aggressive spending in prior years
  *Capital expenditures of approximately $11 million to $13 million,
    continuing our investments in capacity and efficiency improvements,
    quality initiatives and restaurant and retail

Forward-Looking Statements

Statements made in this press release that state the Company's or management's
intentions, hopes, beliefs, expectations or predictions of the future,
including depletions and sales growth, the level or effect of SG&A expense,
the amount of capital spending, and the benefits or improvements to be
realized from strategic initiatives and capital projects, are forward-looking
statements. It is important to note that the Company's actual results could
differ materially from those projected in such forward-looking
statements.Additional information concerning 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 SEC filings, including, but not
limited to, the Company's report on Form 10-K for the year ended December 31,
2011. Copies of these documents may be found on the Company's website,
www.craftbrew.com, or obtained by contacting the Company or the SEC.

About Craft Brew Alliance

CB^A is an independent, publicly traded craft brewing company that was formed
through the merger of leading Pacific Northwest craft brewers – Widmer
Brothers Brewing and Redhook Ale Brewery – in 2008. With an eye toward
preserving and growing one-of-a-kind craft beers and brands, CB^A was joined
by Kona Brewing Company in 2010. Craft Brew Alliance launched Omission beer in
2012.

When Kurt & Rob Widmer founded Widmer Brothers Brewing in 1984, they didn’t
confine their brewing exploration to strict style guidelines. To this day,
Widmer Brothers continues to create craft beers with a unique and
unconventional twist on traditional styles that are award winning and please a
wide range of craft beer lovers. Redhook began in a Seattle transmission shop
in 1981 and those colorful roots are reflected in the brand’s personality to
this day. The eminently drinkable beers consistently win awards and please
crowds across the United States. Kona Brewing was founded in 1994 by the
father and son team of Cameron Healy and Spoon Khalsa, who dreamed of crafting
fresh, local-island brews with spirit, passion and quality. As the largest
craft brewery in Hawaii, Kona personifies the laid-back, passionate lifestyle
and environmental respect of the Hawaiian people and culture. Omission beer is
the first craft beer brand in the United States focused exclusively on brewing
great tasting craft beers with traditional beer ingredients, including malted
barley, that are specially crafted to remove gluten.

For more information, visit: www.craftbrew.com.

Contact:

Media Contact:
LANE PR
Ted Lane, 212-302-5948
Ted@lanepr.com
or
Investor Contact:
Craft Brew Alliance, Inc.
Edwin Smith, 503-972-7884
ed.smith@craftbrew.com
 
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