US: Pyramid Q3 profit slips from black to red
Pyramid Breweries has reversed its operating profit for the third quarter last year into an operating loss in Q3 2007.
The Seattle-based brewer, which also runs a handful of alehouse restaurants in the north-west US, said today (14 November) that operating loss for the three months to the end of September came in at US$60,000, against a profit of $103,000 in the corresponding quarter a year earlier.
The reverse came on the back of a dip in net sales for the period, down to $14.6m from $15.8m in the quarter last year.
Net loss hit $101,000 from a net profit on $130,000.
The sales fall was blamed on the fact that Pyramid now contract manufactures the Thomas Kemper Soda brand, and subsequently records revenues as a net amount in gross sales. The brewer also recorded a one-time net impact of $321,000 relating to a final arbitration settlement in favour of a former distributor. This led to a rise in expenses for the quarter.
For the first nine months of 2007, operating profit was in the black, at $1.4m compared to a loss in the corresponding period a year earlier of $228,000. Sales slipped, however, to $39.5m from $41.9m, although net income followed operating profit, up to $1.3m from a net loss of $228,000.
"We continued to make progress behind our core beer brand volume and strong Alehouse revenue growth," said company CEO Scott Barnum. "Sales in our home north-west region, which had been relatively soft in previous quarters, rebounded in the third quarter behind the introduction of a new fall seasonal brand and was up versus 2006 for the first time this year.
"Craft beer consumers throughout the west, and particularly in our core north-western markets, are seeking seasonal and new more adventurous styles as they further explore the breadth of the craft beer category," Barnum added. "This should bode well for us in the fourth quarter where seasonal beer interest is highest during the year and we have one of the most sought after winter season beer brands called Snow Cap."
Pyramid warned that the costs of raw materials are expected to rise significantly next year. "The company is aware of this impending cost impact and is taking measures to address the situation in the coming year," the brewer concluded.
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