10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 1-14092

THE BOSTON BEER COMPANY, INC.

(Exact name of registrant as specified in its charter)

MASSACHUSETTS	04-3284048
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Design Center Place, Suite 850, Boston, Massachusetts

(Address of principal executive offices)

02210

(Zip Code)

(617) 368-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, small reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Small reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)    Yes  ☐    No  ☒

Number of shares outstanding of each of the issuer’s classes of common stock, as of July 21, 2017:

Class A Common Stock, $.01 par value	8,918,875
Class B Common Stock, $.01 par value	3,097,355
(Title of each class)	(Number of shares	)

THE BOSTON BEER COMPANY, INC.

FORM 10-Q

July  1, 2017

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			PAGE
	Item 1.	Consolidated Financial Statements		3
		Consolidated Balance Sheets as of July 1, 2017 and December 31, 2016		3
		Consolidated Statements of Comprehensive Income for the thirteen and twenty-six weeks ended July 1, 2017 and June 25, 2016		4
		Consolidated Statements of Cash Flows for the thirteen and twenty-six weeks ended July 1, 2017 and June 25, 2016		5
		Notes to Consolidated Financial Statements		6-15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16-21
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		21
	Item 4.	Controls and Procedures		21
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings		21
	Item 1A.	Risk Factors		21
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		22
	Item 3.	Defaults Upon Senior Securities		22
	Item 4.	Mine Safety Disclosures		22
	Item 5.	Other Information		22
	Item 6.	Exhibits		22
SIGNATURES				24
EX-31.1 Section 302 CEO Certification
EX-31.2 Section 302 CFO Certification
EX-32.1 Section 906 CEO Certification
EX-32.2 Section 906 CFO Certification

2

PART I. FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	July 1, 2017			December 31, 2016
Assets
Current Assets:
Cash and cash equivalents	$	71,651		$	91,035
Accounts receivable, net of allowance for doubtful accounts of $17 and $0 as of July 1, 2017 and December 31, 2016, respectively		51,678			36,694
Inventories		56,331			52,499
Prepaid expenses and other current assets		8,627			8,731
Income tax receivable		2,427			4,928
Total current assets		190,714			193,887
Property, plant and equipment, net		394,525			408,411
Other assets		12,585			9,965
Goodwill		3,683			3,683
Total assets	$	601,507		$	615,946
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	45,615		$	40,585
Accrued expenses and other current liabilities		67,190			60,934
Total current liabilities		112,805			101,519
Deferred income taxes, net		57,286			57,261
Other liabilities		9,752			10,584
Total liabilities		179,843			169,364
Commitments and Contingencies (See Note E)
Stockholders’ Equity:
Class A Common Stock, $.01 par value; 22,700,000 shares authorized; 8,929,757 and 9,170,956 issued and outstanding as of July 1, 2017 and December 31, 2016, respectively		89			92
Class B Common Stock, $.01 par value; 4,200,000 shares authorized; 3,097,355 and 3,197,355 issued and outstanding as of July 1, 2017 and December 31, 2016, respectively		31			32
Additional paid-in capital		368,328			349,913
Accumulated other comprehensive loss, net of tax		(1,093	)		(1,103	)
Retained earnings		54,309			97,648
Total stockholders’ equity		421,664			446,582
Total liabilities and stockholders’ equity	$	601,507		$	615,946

The accompanying notes are an integral part of these consolidated financial statements.

3

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share data)

(unaudited)

	Thirteen weeks ended						Twenty-six weeks ended
	July 1, 2017			June 25, 2016			July 1, 2017			June 25, 2016
Revenue	$	264,664		$	261,225		$	437,101		$	463,233
Less excise taxes		16,734			16,409			27,476			29,590
Net revenue		247,930			244,816			409,625			433,643
Cost of goods sold		113,911			117,940			199,262			215,236
Gross profit		134,019			126,876			210,363			218,407
Operating expenses:
Advertising, promotional and selling expenses		67,831			63,252			121,585			122,501
General and administrative expenses		19,395			21,799			37,957			42,844
Impairment of assets		1,505			37			1,505			37
Total operating expenses		88,731			85,088			161,047			165,382
Operating income		45,288			41,788			49,316			53,025
Other income (expense), net:
Interest income, net		86			20			170			43
Other income (expense), net		129			(206	)		57			(425	)
Total other income (expense), net		215			(186	)		227			(382	)
Income before income tax provision		45,503			41,602			49,543			52,643
Income tax provision		16,378			14,981			14,707			18,990
Net income	$	29,125		$	26,621		$	34,836		$	33,653
Net income per common share — basic	$	2.38		$	2.11		$	2.82		$	2.65
Net income per common share — diluted	$	2.35		$	2.06		$	2.79		$	2.58
Weighted-average number of common shares — Class A basic		9,092			9,181			9,161			9,278
Weighted-average number of common shares — Class B basic		3,097			3,367			3,134			3,367
Weighted-average number of common shares — diluted		12,344			12,830			12,430			12,959
Net income	$	29,125		$	26,621		$	34,836		$	33,653
Other comprehensive income:
Foreign currency translation adjustment		(10	)		(88	)		(10	)		(92	)
Comprehensive income	$	29,115		$	26,533		$	34,826		$	33,561

The accompanying notes are an integral part of these consolidated financial statements.

4

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASHFLOWS

(in thousands)

(unaudited)

	Twenty-six weeks ended
	July 1, 2017			June 25, 2016
Cash flows provided by operating activities:
Net income	$	34,836		$	33,653
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25,616			24,473
Impairment of assets		1,505			37
Loss on disposal of property, plant and equipment		22			511
Bad debt expense (recovery)		17			(55	)
Stock-based compensation expense		3,413			5,741
Excess tax benefit from stock-based compensation arrangements		—			(5,840	)
Deferred income taxes		25			1,375
Changes in operating assets and liabilities:
Accounts receivable		(15,001	)		(17,655	)
Inventories		(6,549	)		(4,783	)
Prepaid expenses, income tax receivable and other assets		2,605			12,394
Accounts payable		8,580			1,005
Accrued expenses and other current liabilities		6,227			6,967
Other liabilities		(254	)		(6,504	)
Net cash provided by operating activities		61,042			51,319
Cash flows used in investing activities:
Purchases of property, plant and equipment		(16,721	)		(25,954	)
Proceeds from disposal of property, plant and equipment		16			—
Change in restricted cash		(5	)		56
Net cash used in investing activities		(16,710	)		(25,898	)
Cash flows used in financing activities:
Repurchase of Class A Common Stock		(78,180	)		(127,675	)
Proceeds from exercise of stock options		14,062			29,521
Cash paid on note payable		(60	)		(58	)
Excess tax benefit from stock-based compensation arrangements		—			5,840
Net proceeds from sale of investment shares		462			338
Net cash used in financing activities		(63,716	)		(92,034	)
Change in cash and cash equivalents		(19,384	)		(66,613	)
Cash and cash equivalents at beginning of year		91,035			94,193
Cash and cash equivalents at end of period	$	71,651		$	27,580
Supplemental disclosure of cash flow information:
Income taxes paid	$	4,812		$	8,655
Income taxes refunded	$	2		$	12,000
(Decrease) Increase in accounts payable for purchase of property, plant and equipment	$	(3,550	)	$	870
Decrease in accounts payable for repurchase of Class A Common Stock	$	—		$	(3,000	)

The accompanying notes are an integral part of these consolidated financial statements.

5

THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A. Organization and Basis of Presentation

The Boston Beer Company, Inc. and certain subsidiaries (the “Company”) are engaged in the business of brewing and selling alcohol beverages throughout the United States and in selected international markets, under the trade names, “The Boston Beer Company,” “Twisted Tea Brewing Company,” “Angry Orchard Cider Company” and “Hard Seltzer Beverage Company”. The Company’s Samuel Adams^® beers are produced and sold under the trade name “The Boston Beer Company”. A&S Brewing Collaborative LLC, d/b/a A&S Brewing (“A&S”), a wholly-owned subsidiary of the Company, sells beer under various trade names including “The Traveler Beer Company” and “Coney Island Brewing Company”.

The accompanying unaudited consolidated balance sheet as of July 1, 2017, and the consolidated statements of comprehensive income and consolidated statements of cash flows for the interim periods ended July 1, 2017 and June 25, 2016 have been prepared by the Company in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnotes normally included in financial statements prepared in accordance with U.S generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of the Company’s management, the Company’s unaudited consolidated balance sheet as of July 1, 2017 and the results of its consolidated operations and consolidated cash flows for the interim periods ended July 1, 2017 and June 25, 2016, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.

B. Inventories

Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of hops, apple juice, other brewing materials and packaging, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. The Company’s goal is to maintain on hand a supply of at least one year for essential hop varieties, in order to limit the risk of an unexpected reduction in supply. Inventories are generally classified as current assets. The Company classifies hops inventory in excess of two years of forecasted usage in other long term assets. The cost elements of work in process and finished goods inventory consist of raw materials, direct labor and manufacturing overhead. Inventories consist of the following:

	July 1, 2017		December 31, 2016
	(in thousands)
Current inventory:
Raw materials	$	34,974	$	35,314
Work in process		8,705		8,131
Finished goods		12,652		9,054
Total current inventory		56,331		52,499
Long term inventory		9,033		6,316
Total inventory	$	65,364	$	58,815

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C. Net Income per Share

The Company calculates net income per share using the two-class method, which requires the Company to allocate net income to its Class A Common Shares, Class B Common Shares and unvested share-based payment awards that participate in dividends with common stock, in the calculation of net income per share.

The Class A Common Stock has no voting rights, except (1) as required by law, (2) for the election of Class A Directors, and (3) that the approval of the holders of the Class A Common Stock is required for (a) certain future authorizations or issuances of additional securities which have rights senior to Class A Common Stock, (b) certain alterations of rights or terms of the Class A or Class B Common Stock as set forth in the Articles of Organization of the Company, (c) other amendments of the Articles of Organization of the Company, (d) certain mergers or consolidations with, or acquisitions of, other entities, and (e) sales or dispositions of any significant portion of the Company’s assets.

The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the members of the Company’s Board of Directors and (2) approve all (a) amendments to the Company’s Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant portion of the Company’s assets, and (d) equity-based and other executive compensation and other significant corporate matters. The Company’s Class B Common Stock is not listed for trading. Each share of the Class B Common Stock is freely convertible into one share of Class A Common Stock, upon request of any Class B holder, and participates equally in dividends.

The Company’s unvested share-based payment awards include unvested shares (1) issued under the Company’s investment share program, which permits employees who have been with the Company for at least one year to purchase shares of Class A Common Stock and to purchase those shares at a discount ranging from 20% to 40% below market value based on years of employment starting after two years of employment, and (2) awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The investment shares and restricted stock awards generally vest over five years in equal number of shares. The unvested shares participate equally in dividends. See Note I for a discussion of the current year unvested stock awards and issuances.

Included in the computation of net income per diluted common share are dilutive outstanding stock options that are vested or expected to vest. At its discretion, the Board of Directors grants stock options to senior management and certain key employees. The terms of the employee stock options are determined by the Board of Directors at the time of grant. To date, stock options granted to employees vest over various service periods and/or based on the attainment of certain performance criteria and generally expire after ten years. The Company also grants stock options to its non-employee directors upon election or re-election to the Board of Directors. The number of option shares granted to non-employee directors is calculated based on a defined formula and these stock options vest immediately upon grant and expire after ten years.

7

Net Income per Common Share — Basic

The following table sets forth the computation of basic net income per share using the two-class method:

	Thirteen weeks ended				Twenty-six weeks ended
	July 1, 2017		June 25, 2016		July 1, 2017		June 25, 2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	29,125	$	26,621	$	34,836	$	33,653
Allocation of net income for basic:
Class A Common Stock	$	21,603	$	19,375	$	25,812	$	24,567
Class B Common Stock		7,360		7,107		8,829		8,916
Unvested participating shares		162		139		195		170
	$	29,125	$	26,621	$	34,836	$	33,653
Weighted average number of shares for basic:
Class A Common Stock		9,092		9,181		9,161		9,278
Class B Common Stock*		3,097		3,367		3,134		3,367
Unvested participating shares		68		66		69		64
		12,257		12,614		12,364		12,709
Net income per share for basic:
Class A Common Stock	$	2.38	$	2.11	$	2.82	$	2.65
Class B Common Stock	$	2.38	$	2.11	$	2.82	$	2.65

* Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

8

Net Income per Common Share — Diluted

The Company calculates diluted net income per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method, which assumes the participating securities are not exercised.

The following table sets forth the computation of diluted net income per share, assuming the conversion of all Class B Common Stock into Class A Common Stock and using the two-class method for unvested participating shares:

	Thirteen weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	21,603		9,092	$	2.38	$	19,375		9,181	$	2.11
Add: effect of dilutive potential common shares
Share-based awards		—		155				—		282
Class B Common Stock		7,360		3,097				7,107		3,367
Net effect of unvested participating shares		2		—				3		—
Net income per common share — diluted	$	28,965		12,344	$	2.35	$	26,485		12,830	$	2.06

	Twenty-six weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	25,812		9,161	$	2.82	$	24,567		9,278	$	2.65
Add: effect of dilutive potential common shares
Share-based awards		—		135				—		314
Class B Common Stock		8,829		3,134				8,916		3,367
Net effect of unvested participating shares		2		—				4		—
Net income per common share — diluted	$	34,643		12,430	$	2.79	$	33,487		12,959	$	2.58

During the thirteen and twenty-six weeks ended July 1, 2017, weighted-average stock options to purchase approximately 801,000 and 800,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. During the thirteen and twenty-six weeks ended June 25, 2016, weighted-average stock options to purchase approximately 737,000 and 695,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase approximately 36,000 and 36,000 shares of Class A Common Stock were outstanding as of July 1, 2017 and June 25, 2016, respectively, but not included in computing diluted income per common share because the performance criteria of these stock options was not met as of the end of the reporting period.

Of the performance-based stock options to purchase approximately 36,000 shares of Class A Common Stock that were excluded from computing diluted net income per common share as of July 1, 2017, 31,000 shares were granted in 2016 to two key employees. The vesting of these shares requires annual depletions, or sales by distributors to retailers, of certain of the Company’s brands to attain various thresholds during the period from 2017 to 2023. The remaining 5,000 shares were granted in 2017 to executive officers and the vesting of these shares requires annual depletions to attain certain thresholds in 2019.

Furthermore, performance-based stock options to purchase approximately 5,000 shares of Class A Common Stock were not included in computing diluted income per share because the performance criteria of these stock options were not met and the options were cancelled during the twenty-six weeks ended July 1, 2017.

9

D. Comprehensive Income or Loss

Comprehensive income or loss represents net income or loss, plus defined benefit plans liability adjustment, net of tax effect and foreign currency translation adjustment. The defined benefit plans liability and foreign currency translation adjustments for the interim periods ended July 1, 2017 and June 25, 2016 were not material.

E. Commitments and Contingencies

Contract Obligations

The Company had outstanding total non-cancelable contract obligations of $127.3 million at July 1, 2017. These obligations are made up of hops, barley and wheat totaling $58.7 million, advertising contracts of $16.8 million, operating leases of $14.3 million, apples and other ingredients of $14.0 million, glass bottles of $7.7 million, equipment and machinery of $6.9 million and other commitments of $8.9 million.

The Company has entered into contracts for the supply of a portion of its hops requirements. These purchase contracts extend through crop year 2022 and specify both the quantities and prices, denominated in U.S. Dollars, Euros and New Zealand Dollars, to which the Company is committed. Hops purchase commitments outstanding at July 1, 2017 totaled $42.4 million, based on the exchange rates on that date. The Company does not use forward currency exchange contracts and intends to purchase future hops using the exchange rate at the time of purchase.

Currently, the Company has entered into contracts for barley and wheat with two major suppliers. The contracts include crop year 2016 and 2017 and cover the Company’s barley, wheat, and malt requirements for 2017 and part of 2018. These purchase commitments outstanding at July 1, 2017 totaled $16.3 million.

The Company sources some of its glass bottles needs pursuant to a Glass Bottle Supply Agreement with Anchor Glass Container Corporation (“Anchor”), under which Anchor is the supplier of certain glass bottles for the Company’s Cincinnati Brewery and its Pennsylvania Brewery. This agreement also establishes the terms on which Anchor may supply glass bottles to other breweries where the Company brews its beers. Under the agreement with Anchor, the Company has minimum purchase commitments that are based on Company-provided production estimates which, under normal business conditions, are expected to be fulfilled. Minimum purchase commitments under the agreement, assuming the supplier is unable to replace lost production capacity cancelled by the Company, as of July 1, 2017 totaled $7.7 million.

The Company has various operating lease agreements for facilities and equipment as of July 1, 2017. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. These lease obligations expire at various dates through 2022. The contractual obligation on these lease agreements as of July 1, 2017 totaled $14.3 million.

Currently, the Company brews and packages more than 90% of its volume at Company-owned breweries. In the normal course of its business, the Company has historically entered into various production arrangements with other brewing companies. Pursuant to these arrangements, the Company purchases the liquid produced by those brewing companies, including the raw materials that are used in the liquid, at the time such liquid goes into fermentation. The Company is required to repurchase all unused raw materials purchased by the brewing company specifically for the Company’s beers at the brewing company’s cost upon termination of the production arrangement. The Company is also obligated to meet annual volume requirements in conjunction with certain production arrangements. These requirements are not material to the Company’s operations.

Litigation

The Company is not a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect upon its financial condition or the results of its operations. In general, while the Company believes it conducts its business appropriately in accordance with laws, regulations and industry guidelines, claims, whether or not meritorious, could be asserted against the Company that might adversely impact the Company’s results.

F. Income Taxes

As of July 1, 2017 and December 31, 2016, the Company had approximately $0.4 million and $0.5 million, respectively, of unrecognized income tax benefits.

10

The Company’s practice is to classify interest and penalties related to income tax matters in income tax expense. As of July 1, 2017 and December 31, 2016, the Company had $0.3 million and $0.3 million, respectively, accrued for interest and penalties.

The Company’s federal and state income tax returns remain subject to examination for three or four years depending on the state’s statute of limitations. The Company is being audited by one state as of July 1, 2017. In addition, the Company is generally obligated to report changes in taxable income arising from federal income tax audits.

The following table provides a summary of the income tax provision for the thirteen and twenty-six weeks ended July 1, 2017 and June 25, 2016:

	Thirteen weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	16,546		$	14,981
Impact of adoption of ASU 2016-09		(168	)		—
Total income tax provision	$	16,378		$	14,981

	Twenty-six weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	18,437		$	18,990
Impact of adoption of ASU 2016-09		(3,730	)		—
Total income tax provision	$	14,707		$	18,990

The Company’s effective tax rate for the thirteen weeks ended July 1, 2017 remained flat at 36.0% compared to the thirteen weeks ended June 25, 2016. The Company’s effective tax rate for the twenty-six weeks ended July 1, 2017 decreased to 29.7% from 36.1% for the twenty-six weeks ended June 25, 2016. This decrease was primarily due to the tax benefit resulting from the adoption of ASU 2016-09, which was effective for the Company on January 1, 2017.

G. Revolving Line of Credit

The Company has a credit facility in place that provides for a $150.0 million revolving line of credit which expires on March 31, 2019. As of July 1, 2017, the Company was not in violation of any of its financial covenants to the lender under the credit facility and there were no borrowings outstanding, so that the line of credit was fully available to the Company for borrowing.

H. Fair Value Measures

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

• Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

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• Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

All financial assets or liabilities that are measured at fair value on a recurring basis (at least annually) have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The assets or liabilities measured at fair value on a recurring basis are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	70,762	$	—	$	—	$	70,762

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	89,966	$	—	$	—	$	89,966

The Company’s cash equivalents listed above represent money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The money market funds were invested substantially in United States Treasury and government securities. The Company does not adjust the quoted market price for such financial instruments.

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents held in money market funds. At July 1, 2017 and December 31, 2016, the Company had money market funds which have been deemed “Triple A” rated. The Company considers the “Triple A” rated money market funds to be a large, highly-rated investment-grade institution. As of July 1, 2017 and December 31, 2016, the Company’s cash and cash equivalents balance was $71.7 million and $91.0 million, respectively, including money market funds amounting to $70.8 million and $90.0 million, respectively.

Cash, certificates of deposit, receivables and payables are carried at their cost, which approximates fair value, because of their short-term nature. Financial instruments not recorded at fair value in the consolidated financial statements are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	340	$	—	$	340

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	400	$	—	$	400

I. Common Stock and Stock-Based Compensation

Option Activity

Information related to stock options under the Employee Equity Incentive Plan and the Stock Option Plan for Non-Employee Directors is summarized as follows:

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	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2016		1,348,233		$	141.98
Granted		15,373			150.10
Forfeited		(4,708	)		201.91
Expired		—			—
Exercised		(171,773	)		81.86
Outstanding at July 1, 2017		1,187,125		$	173.74		6.71	$	20,259
Exercisable at July 1, 2017		204,870		$	94.94		4.03	$	9,806
Vested and expected to vest at July 1, 2017		592,231		$	121.89		4.90	$	19,736

Of the total options outstanding at July 1, 2017, 35,885 shares were performance-based options for which performance had yet to be achieved.

On January 1, 2017, the Company granted options to purchase an aggregate of 5,185 shares of the Company’s Class A Common Stock to senior management with a weighted average fair value of $81.95 per share, of which all shares relate to performance-based stock options.

On May 18, 2017, the Company granted options to purchase an aggregate of 10,188 shares of the Company’s Class A Common Stock to the Company’s nonemployee Directors. These options have a weighted average fair value of $67.72 per share. All of the options vested immediately on the date of the grant.

On January 1, 2008, the Company granted the Chief Executive Officer a stock option to purchase 753,864 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2014, at the rate of 20% per year. The exercise price is determined by multiplying $42.00 by the aggregate change in the DJ Wilshire 5000 Index from and after January 1, 2008 through the close of business on the trading date next preceding each date on which the option is exercised. The exercise price will not be less than $37.65 per share and the excess of the fair value of the Company’s Class A Common Stock over the exercise price cannot exceed $70.00 per share over the exercise price. At July 1, 2017 and June 25, 2016, the stock option remained unexercised as to 150,773 shares and 301,546 shares, respectively. If the stock option had been exercised on July 1, 2017, the exercise price would have been $71.40 per share. If the stock option had been exercised on June 25, 2016, the exercise price would have been $91.02 per share. The Company is accounting for this award as a market-based award which was valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. Under the Monte Carlo Simulation pricing model, the Company calculated the weighted average fair value per share to be $8.41.

On January 1, 2016, the Company granted the Chief Executive Officer an option to purchase 574,507 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2019, at the rate of 20% per year. The exercise price is determined by multiplying $201.91 by the aggregate percentage change in the DJ Wilshire 5000 Index from and after January 1, 2016 through the close of business on the trading date next preceding each date on which the option is exercised, plus an additional 1.5 percentage points per annum, prorated for partial years. The exercise price will not be less than $201.91 per share and the excess of the fair value of the Company’s Class A Common Stock cannot exceed $150 per share over the exercise price. At July 1, 2017 and June 25, 2016, the stock option remained unexercised as to 574,507 shares. If the stock option had been exercised on July 1, 2017, the exercise price would have been $228.52 per share. If the stock option had been exercised on June 25, 2016, the exercise price would have been $202.75 per share. The Company is accounting for this award as a market-based award which was valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. Under the Monte Carlo Simulation pricing model, the Company calculated the weighted average fair value per share to be $39.16. As a result of the Chief Executive Officer’s planned retirement in 2018, the Company estimated a 100% forfeiture rate related to this grant.

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Non-Vested Shares Activity

The following table summarizes vesting activities of shares issued under the investment share program and restricted stock awards:

	Number of Shares			Weighted Average Fair Value
Non-vested at December 31, 2016		64,968		$	166.29
Granted		24,671			131.64
Vested		(20,061	)		146.83
Forfeited		(4,967	)		192.84
Non-vested at July 1, 2017		64,611		$	157.07

On January 1, 2017, the Company granted 12,358 shares of restricted stock awards to certain senior managers and key employees, of which all shares vest ratably over service periods of five years. On January 1, 2017, employees elected to purchase 10,146 shares under the investment share program. The weighted average fair value of the restricted stock awards and investment shares, which are sold to employees at discount under its investment share program, was $169.85 and $78.74 per share, respectively.

On March 3, 2017, the Company granted 2,167 shares of restricted stock awards to a newly hired member of senior management, of which all shares vest ratably over a service period of five years. The weighted average fair value of the restricted stock award was $161.45.

Stock-Based Compensation

Stock-based compensation expense related to share-based awards recognized in the thirteen and twenty-six weeks ended July 1, 2017 was $1.8 million and $3.4 million, respectively, and was calculated based on awards expected to vest. Stock-based compensation expense related to share-based awards recognized in the thirteen and twenty-six weeks ended June 25, 2016 was $3.1 million and $5.7 million, respectively, and was calculated based on awards expected to vest.

J. Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 is part of the FASB’s initiative to simplify accounting standards. The guidance impacted several aspects of the accounting for employee share-based payment transactions, including accounting for income taxes and forfeitures, as well as classification in the consolidated statements of cash flows. Under ASU 2016-09, excess tax benefits and deficiencies as a result of stock option exercises and restricted stock vesting are to be recognized as discrete items within income tax expense or benefit in the consolidated statements of comprehensive income in the reporting period in which they occur. Additionally, under ASU 2016-09, excess tax benefits and deficiencies should be classified along with other income tax cash flows as an operating activity in the consolidated statements of cash flows. The Company adopted this new accounting standard prospectively in the first quarter of 2017. Prior periods have not been adjusted. Under this new accounting standard, for the thirteen and twenty-six weeks ended July 1, 2017, $0.2 million and $3.7 million respectively, in excess tax benefit from stock-based compensation arrangements was recognized within income tax provision in the consolidated statements of comprehensive income and classified as an operating activity in the consolidated statement of cash flow. The Company will maintain the current forfeiture policy to estimate forfeitures expected to occur to determine stock-based compensation expense.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 as part of the FASB’s initiative to simplify accounting standards. The guidance required an entity to present deferred tax assets and deferred tax liabilities as noncurrent in the consolidated balance sheet. The Company adopted this new accounting standard retrospectively in the first quarter of 2017. As of July 1, 2017 and December 31, 2016, the Company had $5.8 million and $7.4 million, respectively, of current deferred tax assets that are now classified as noncurrent on the consolidated balance sheets under this new accounting standard.

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In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory. ASU 2015-11 is part of the FASB’s initiative to simplify accounting standards. The guidance required an entity to recognize inventory within scope of the standard at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The Company adopted this new accounting standard prospectively in the first quarter of 2017. This new accounting standard did not have a significant impact on the consolidated financial statements.

Accounting Pronouncements Not Yet Effective

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 will supersede virtually all existing revenue guidance. Under this update, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. As such, an entity will need to use more judgment and make more estimates than under the current guidance. ASU 2014-09 is to be applied retrospectively either to each prior reporting period presented in the financial statements, or only to the most current reporting period presented in the financial statements with a cumulative effect adjustment to retained earnings. The Company will elect to apply the impact (if any) of applying ASU 2014-09 to the most current reporting period presented in the financial statements with a cumulative effect adjustment to retained earnings. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU 2015-14 defers the effective date of ASU 2014-09 for one year, making it effective for the Company’s fiscal year beginning December 31, 2017, with early adoption permitted as of January 1, 2017. The Company currently expects to adopt ASU 2014-09 in the first quarter of 2018. The Company does not expect adoption of ASU 2014-09 to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 will be effective retrospectively for the year beginning December 30, 2018, with early adoption permitted. The Company currently expects to adopt ASU 2016-02 in the first quarter of 2018. As of July 1, 2017 and December 31, 2016, the Company had $14.3 million and $15.9 million, respectively, of contractual obligation on lease agreements, the present value of which, would be included on the consolidated balance sheets under the new guidance.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplfying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for all impairment tests performed beginning December 29, 2019. The Company does not expect adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

K. Immaterial Restatement of Previously Issued Financial Statements and Reclassification

In the third quarter of fiscal 2016, the Company identified a reporting error in the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016, which the Company corrected in the consolidated statement of cash flows for the thirty-nine weeks ended September 24, 2016. For the twenty-six weeks ended June 25, 2016, the Company previously classified a $3 million decrease in accounts payable for repurchase of Class A Common Stock as a decrease in cash flows provided by operating activities rather than classifying it as an increase in cash flows used in financing activities. The Company has adjusted the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016 to properly classify this $3 million decrease in accounts payable for repurchase of Class A Common Stock. This reporting error had no effect on the Company’s results of operation or financial position as of and for the twenty-six weeks ended June 25, 2016. The Company concluded that the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016 is not materially misstated.

L. Subsequent Events

The Company evaluated subsequent events occurring after the balance sheet date, July 1, 2017, and concluded that there were no other events of which management was aware that occurred after the balance sheet date that would require any adjustment to or disclosure in the accompanying consolidated financial statements.

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Item 2.    MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of the Company for the thirteen and twenty-six week period ended July 1, 2017, as compared to the thirteen and twenty-six week period ended June 25, 2016. This discussion should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements of the Company and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

RESULTS OF OPERATIONS

Thirteen Weeks Ended July 1, 2017 compared to Thirteen Weeks Ended June 25, 2016

	Thirteen Weeks Ended (in thousands, except per barrel)
	July 1, 2017							June 25, 2016									Amount change			% change			Per barrel change
Barrels sold		1,079							1,080									(1	)		-0.1	%
			Per barrel		% of net revenue						Per barrel			% of net revenue
Net revenue	$	247,930	$	229.73		100.0	%	$	244,816		$	226.68			100.0	%	$	3,114			1.3	%	$	3.05
Cost of goods		113,911		105.55		45.9	%		117,940			109.20			48.2	%		(4,029	)		-3.4	%		(3.65	)
Gross profit		134,019		124.18		54.1	%		126,876			117.48			51.8	%		7,143			5.6	%		6.70
Advertising, promotional and selling expenses		67,831		62.85		27.4	%		63,252			58.57			25.8	%		4,579			7.2	%		4.28
General and administrative expenses		19,395		17.97		7.8	%		21,799			20.18			8.9	%		(2,404	)		-11.0	%		(2.21	)
Impairment of assets		1,505		1.39		0.6	%		37			0.03			0.0	%		1,468			3967.6	%		1.36
Total operating expenses		88,731		82.22		35.8	%		85,088			78.79			34.8	%		3,643			4.3	%		3.43
Operating income		45,288		41.96		18.3	%		41,788			38.69			17.1	%		3,500			8.4	%		3.27
Other expense, net		215		0.20		0.1	%		(186	)		(0.17	)		-0.1	%		401			-215.6	%		0.37
Income before income tax provision		45,503		42.16		18.4	%		41,602			38.52			17.0	%		3,901			9.4	%		3.64
Income tax provision		16,378		15.18		6.6	%		14,981			13.87			6.1	%		1,397			9.3	%		1.31
Net income	$	29,125	$	26.99		11.7	%	$	26,621		$	24.65			10.9	%	$	2,504			9.4	%	$	2.34

Net revenue. Net revenue increased by $3.1 million, or 1.3%, to $247.9 million for the thirteen weeks ended July 1, 2017, as compared to $244.8 million for the thirteen weeks ended June 25, 2016, primarily as a result of increases in revenue per barrel due to pricing and package mix.

Volume. Total shipment volume decreased slightly to 1,079,000 barrels for the thirteen weeks ended July 1, 2017, as compared to 1,080,000 barrels for the thirteen weeks ended June 25, 2016, due primarily to decreases in shipments of Samuel Adams, Coney Island and Angry Orchard brand products, partially offset by increases in Twisted Tea and Truly Spiked & Sparkling brand products.

Depletions, or sales by distributors to retailers, of the Company’s products for the thirteen weeks ended July 1, 2017 decreased by approximately 3% compared to the thirteen weeks ended June 25, 2016, primarily due to decreases in depletions of Samuel Adams, Coney Island and Angry Orchard brand products, partially offset by increases in Twisted Tea and Truly Spiked & Sparkling brand products.

The Company believes distributor inventory levels at July 1, 2017 were appropriate. Inventory at distributors participating in the Freshest Beer Program at July 1, 2017 decreased slightly in terms of days of inventory on hand when compared to June 25, 2016. The Company has approximately 78% of its volume on the Freshest Beer Program.

Net revenue per barrel. Net revenue per barrel increased by 1.3% to $229.73 per barrel for the thirteen weeks ended July 1, 2017, as compared to $226.68 per barrel for the comparable period in 2016, due primarily to changes in pricing and package mix.

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Cost of goods sold. Cost of goods sold was $105.55 per barrel for the thirteen weeks ended July 1, 2017, as compared to $109.20 per barrel for the thirteen weeks ended June 25, 2016. The 2017 decrease in cost of goods sold of $3.65 per barrel was primarily the result of lower brewery processing costs due to cost savings initiatives.

Gross profit. Gross profit was $124.18 per barrel for the thirteen weeks ended July 1, 2017, as compared to $117.48 per barrel for the thirteen weeks ended June 25, 2016. Gross margin was 54.1% for the thirteen weeks ended July 1, 2017, as compared to 51.8% for the thirteen weeks ended June 25, 2016. The increase in gross profit per barrel of $6.70 was primarily due to the decrease in cost of goods sold per barrel and the increase in net revenue per barrel.

The Company includes freight charges related to the movement of finished goods from its manufacturing locations to distributor locations in its advertising, promotional and selling expense line item. As such, the Company’s gross margins may not be comparable to those of other entities that classify costs related to distribution differently.

Advertising, promotional and selling. Advertising, promotional and selling expenses increased by $4.6 million, or 7.2%, to $67.8 million for the thirteen weeks ended July 1, 2017, as compared to $63.3 million for the thirteen weeks ended June 25,

2016. The increase was primarily the result of higher media spending and salaries and benefits costs, which were partially offset by efficiency driven decreases in point of sale spending and freight to distributors due to lower freight rates.

Advertising, promotional and selling expenses were 27% of net revenue, or $62.85 per barrel, for the thirteen weeks ended July 1, 2017, as compared to 26% of net revenue, or $58.57 per barrel, for the thirteen weeks ended June 25, 2016. The Company invests in advertising and promotional campaigns that it believes will be effective, but there is no guarantee that such investments will generate sales growth.

The Company conducts certain advertising and promotional activities in its distributors’ markets, and the distributors make contributions to the Company for such efforts. These amounts are included in the Company’s statements of comprehensive income as reductions to advertising, promotional and selling expenses. Historically, contributions from distributors for advertising and promotional activities have amounted to between 2% and 3% of net sales. The Company may adjust its promotional efforts in the distributors’ markets if changes occur in these promotional contribution arrangements, depending on industry and market conditions.

General and administrative. General and administrative expenses decreased by $2.4 million, or 11.0%, to $19.4 million for the thirteen weeks ended July 1, 2017, as compared to $21.8 million for the thirteen weeks ended June 25, 2016. The decrease was primarily due to decreases in stock compensation, consulting and legal costs.

Impairment of assets. Impairment of assets increased by $1.5 million for the thirteen weeks ended July 1, 2017, as compared to the thirteen weeks ended June 25, 2016. This increase was primarily due to the write-down of brewery equipment at the Company’s Pennsylvania and Cincinnati breweries.

Provision for income taxes. The Company’s effective tax rate for the thirteen weeks ended July 1, 2017 remained flat at 36.0% compared to the thirteen weeks ended June 25, 2016.

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Twenty-six Weeks Ended July 1, 2017 compared to Twenty-six Weeks Ended June 25, 2016

	Twenty-six Weeks Ended
	July 1, 2017							June 25, 2016									Amount change			% change			Per barrel change
Barrels sold		1,786							1,914									(128	)		-6.7	%
			Per barrel		% of net revenue						Per barrel			% of net revenue
Net revenue	$	409,625	$	229.38		100.0	%	$	433,643		$	226.56			100.0	%	$	(24,018	)		-5.5	%	$	2.82
Cost of goods		199,262		111.58		48.6	%		215,236			112.45			49.6	%		(15,974	)		-7.4	%		(0.87	)
Gross profit		210,363		117.80		51.4	%		218,407			114.11			50.4	%		(8,044	)		-3.7	%		3.69
Advertising, promotional and selling expenses		121,585		68.08		29.7	%		122,501			64.00			28.2	%		(916	)		-0.7	%		4.08
General and administrative expenses		37,957		21.25		9.3	%		42,844			22.38			9.9	%		(4,887	)		-11.4	%		(1.13	)
Impairment of assets		1,505		0.84		0.4	%		37			0.02			0.0	%		1,468			3967.6	%		0.82
Total operating expenses		161,047		90.18		39.3	%		165,382			86.41			38.1	%		(4,335	)		-2.6	%		3.77
Operating income		49,316		27.62		12.0	%		53,025			27.70			12.2	%		(3,709	)		-7.0	%		(0.08	)
Other expense, net		227		0.13		0.1	%		(382	)		(0.20	)		-0.1	%		609			-159.4	%		0.33
Income before income tax provision		49,543		27.74		12.1	%		52,643			27.50			12.1	%		(3,100	)		-5.9	%		0.24
Income tax provision		14,707		8.24		3.6	%		18,990			9.92			4.4	%		(4,283	)		-22.6	%		(1.68	)
Net income	$	34,836	$	19.51		8.5	%	$	33,653		$	17.58			7.8	%	$	1,183			3.5	%	$	1.93

Net revenue. Net revenue decreased by $24.0 million, or 5.5%, to $409.6 million for the twenty-six weeks ended July 1, 2017, as compared to $433.6 million for the twenty-six weeks ended June 25, 2016, due primarily to decreased shipments, partially offset by pricing and package mix.

Volume. Total shipment volume decreased by 6.7% to 1,786,000 barrels for the twenty-six weeks ended July 1, 2017, as compared to 1,914,000 barrels for the twenty-six weeks ended June 25, 2016, due primarily to decreases in depletions of Samuel Adams, Coney Island and Angry Orchard brand products, partially offset by increases in Twisted Tea and Truly Spiked & Sparkling brand products.

Depletions, or sales by distributors to retailers, of the Company’s products for the twenty-six weeks ended July 1, 2017 decreased by approximately 7% compared to the comparable twenty-six week period in 2016, due primarily to decreases in depletions of Samuel Adams, Coney Island and Angry Orchard brand products, partially offset by increases in Twisted Tea and Truly Spiked & Sparkling brand products.

Net Revenue per barrel. Net revenue per barrel increased by 1.2% to $229.38 per barrel for the twenty-six weeks ended July 1, 2017, as compared to $226.56 per barrel for the comparable period in 2016, due primarily to changes in pricing and package mix.

Cost of goods sold. Cost of goods sold was $111.58 per barrel for the twenty-six weeks ended July 1, 2017, as compared to $112.45 per barrel for the twenty-six weeks ended June 25, 2016. The 2017 decrease in cost of goods sold of $0.87 per barrel was primarily the result of lower brewery processing costs due to cost savings initiatives.

Gross profit. Gross profit was $117.80 per barrel for the twenty-six weeks ended July 1, 2017, as compared to $114.11 per barrel for the twenty-six weeks ended June 25, 2016. Gross margin was 51.4% for the twenty-six weeks ended July 1, 2017, as compared to 50.4% for the twenty-six weeks ended June 25, 2016. The increase in gross profit per barrel of $3.69 was primarily due to the increase in net revenue per barrel and the decrease in cost of goods sold per barrel.

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Advertising, promotional and selling. Advertising, promotional and selling expenses decreased $0.9 million, or 0.7%, to $121.6 million for the twenty-six weeks ended July 1, 2017, as compared to $122.5 million for the twenty-six weeks ended June 25, 2016. The decrease was primarily the result of efficiency driven decreases in point of sale spending and decreases in freight to distributors, as a result of lower volume and lower freight rates, which were partially offset by higher salaries and benefits costs and media spending.

Advertising, promotional and selling expenses were 30% of net revenue, or $68.08 per barrel, for the twenty-six weeks ended July 1, 2017, as compared to 28% of net revenue, or $64.00 per barrel, for the twenty-six weeks ended June 25, 2016.

General and administrative. General and administrative expenses decreased by $4.9 million, or 11.4%, to $37.9 million for the twenty-six weeks ended July 1, 2017, as compared to $42.8 million for the comparable period in 2016. The decrease was primarily due to decreases in stock compensation, consulting and legal costs.

Impairment of assets. Impairment of assets increased by $1.5 million for the twenty-six weeks ended July 1, 2017, as compared to the twenty-six weeks ended June 25, 2016. This increase was primarily due to the write-down of brewery equipment at the Company’s Pennsylvania and Cincinnati breweries.

Provision for income taxes. The Company’s effective tax rate for the twenty-six weeks ended July 1, 2017 decreased to 29.7% from 36.1% for the twenty-six weeks ended June 25, 2016. This decrease was primarily due to a $3.7 million tax benefit resulting from the adoption of ASU 2016-09, which was effective for the Company on January 1, 2017.

LIQUIDITY AND CAPITAL RESOURCES

Cash decreased to $71.7 million as of July 1, 2017 from $91.0 million as of December 31, 2016, reflecting cash used in financing activities and for purchases of property, plant and equipment that was only partially offset by cash provided by operating activities.

Cash provided by operating activities consists of net income, adjusted for certain non-cash items, such as depreciation and amortization, stock-based compensation expense, other non-cash items included in operating results, and changes in operating assets and liabilities, such as accounts receivable, inventory, accounts payable and accrued expenses.

Cash provided by operating activities for the twenty-six weeks ended July 1, 2017 was $61.0 million and primarily consisted of net income of $34.8 million and non-cash items of $30.6 million, partially offset by a net increase in operating assets and liabilities of $4.4 million. Cash provided by operating activities for the twenty-six weeks ended June 25, 2016 was $51.3 million and primarily consisted of net income of $33.7 million and non-cash items of $26.2 million, partially offset by a net increase in operating assets and liabilities of $8.6 million which includes a $12 million tax refund in the first quarter of 2016.    For the twenty-six weeks ended June 25, 2016, the Company previously classified a $3 million decrease in accounts payable for repurchase of Class A Common Stock as a decrease in cash flows provided by operating activities rather than classifying it as increase in cash flows used in financing activities. The Company has adjusted the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016 to properly classify this $3 million decrease in accounts payable for repurchase of Class A Common Stock. Refer to Note K for further details.

The Company used $16.7 million in investing activities during the twenty-six weeks ended July 1, 2017, as compared to $25.9 million during the twenty-six weeks ended June 25, 2016. Investing activities primarily consisted of capital investments made mostly in the Company’s breweries to drive efficiencies and cost reductions, support product innovation and future growth.

Cash used in financing activities was $63.7 million during the twenty-six weeks ended July 1, 2017, as compared to $92.0 million used in financing activities during the twenty-six weeks ended June 25, 2016. The $28.3 million decrease in cash used in financing activities in 2017 from 2016 is primarily due to a decrease in stock repurchases under the Company’s Stock Repurchase Program, partially offset by a decrease in proceeds from the exercise of stock options.

During the twenty-six weeks ended July 1, 2017 and the period from July 2, 2017 through July 21, 2017, the Company repurchased approximately 608,000 shares of its Class A Common Stock for an aggregate purchase price of approximately $88.2 million. As of July 21, 2017, the Company had repurchased a cumulative total of approximately 13.1 million shares of its Class A Common Stock for an aggregate purchase price of $695.9 million and had approximately $85.1 million remaining on the $781.0 million stock repurchase expenditure limit set by the Board of Directors.

19

The Company expects that its cash balance as of July 1, 2017 of $71.7 million, along with future operating cash flow and the Company’s unused line of credit of $150.0 million, will be sufficient to fund future cash requirements. The Company’s $150.0 million credit facility has a term not scheduled to expire until March 31, 2019. As of the date of this filing, the Company was not in violation of any of its covenants to the lender under the credit facility and there were no amounts outstanding under the credit facility.

2017 Outlook

Year-to-date depletions through the 29 weeks ended July 22, 2017 are estimated by the Company to have decreased approximately 7% from the comparable period in 2016.

The Company is currently estimating that 2017 depletions and shipments percentage change will be between minus 7% and plus 1%. The Company is targeting increases in revenue per barrel of between 1% and 2%. Full-year 2017 gross margins are currently expected to be between 51% and 52%. The Company intends to increase advertising, promotional and selling expenses by between $20 million and $30 million for the full year 2017, which does not include any increases in freight costs for the shipment of products to its distributors. The Company intends to increase its investment in its brands in 2017, commensurate with the opportunities for growth that it sees, but there is no guarantee that such increased investments will result in increased volumes.

The Company currently projects Non-GAAP earnings per diluted share for 2017 of between $5.00 and $6.20, excluding the impact of ASU 2016-09, a narrowing of the range from the previously communicated estimate of $4.20 to $6.20, but actual results could vary significantly from this target. The 2017 fiscal year includes only 52 weeks compared to the 2016 fiscal year which included 53 weeks. The Company estimates a full-year 2017 Non-GAAP effective tax rate of approximately 37%, which excludes the impact of ASU 2016-09 that took effect for the Company on January 1, 2017. Non-GAAP earnings per diluted share and Non-GAAP effective tax rate are not defined terms under U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP measures should not be considered in isolation or as a substitute for diluted earnings per share and effective tax rate data prepared in accordance with GAAP, and may not be comparable to calculations of similarly titled measures by other companies. Management believes these Non-GAAP measures provide meaningful and useful information to investors and analysts regarding our outlook and facilitate period to period comparisons of our forecasted financial performance. Non-GAAP earnings per diluted share and Non-GAAP effective tax rate exclude the potential impact of ASU 2016-09, which could be significant and will depend largely upon unpredictable future events outside the Company’s control, including the timing and value realized upon exercise of stock options versus the fair value of those options when granted. Therefore, because of the uncertainty and variability of the impact of ASU 2016-09, the Company is unable to provide, without unreasonable effort, a reconciliation of these Non-GAAP measures on a forward-looking basis.

The Company is continuing to evaluate 2017 capital expenditures. Its current estimates are between $35 million and $45 million, a narrowing of the range from the previously communicated estimates of between $30 million and $50 million. The capital will mostly be spent in the Company’s breweries. The actual total amount spent on 2017 capital expenditures may differ materially from these estimates.

THE POTENTIAL IMPACT OF KNOWN FACTS, COMMITMENTS, EVENTS AND UNCERTAINTIES

Off-balance Sheet Arrangements

At July 1, 2017, the Company did not have off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Contractual Obligations

There were no material changes outside of the ordinary course of the Company’s business to contractual obligations during the three-month period ended July 1, 2017.

Critical Accounting Policies

There were no material changes to the Company’s critical accounting policies during the three month period ended July 1, 2017.

20

FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q and in other documents incorporated herein, as well as in oral statements made by the Company, statements that are prefaced with the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” “designed” and similar expressions, are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, results of operations and financial position. These statements are based on the Company’s current expectations and estimates as to prospective events and circumstances about which the Company can give no firm assurance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement to reflect subsequent events or circumstances. Forward-looking statements should not be relied upon as a prediction of actual future financial condition or results. These forward-looking statements, like any forward-looking statements, involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include the factors set forth below in addition to the other information set forth in this Quarterly Report on Form 10-Q and in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Since December 31, 2016, there have been no significant changes in the Company’s exposures to interest rate or foreign currency rate fluctuations. The Company currently does not enter into derivatives or other market risk sensitive instruments for the purpose of hedging or for trading purposes.

Item 4. CONTROLS AND PROCEDURES

As of July 1, 2017, the Company conducted an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) regarding the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods and that such disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended July 1, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.    OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

During the thirteen weeks ended July 1, 2017, there were no material changes to the disclosure made in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which could materially affect the Company’s business, financial condition or future results. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that it currently deems to be immaterial also may materially adversely affect its business, financial condition and/or operating results.

21

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As of July 21, 2017, the Company had repurchased a cumulative total of approximately 13.1 million shares of its Class A Common Stock for an aggregate purchase price of $695.9 million and had $85.1 million remaining on the $781.0 million share buyback expenditure limit set by the Board of Directors.

During the twenty-six weeks ended July 1, 2017, the Company repurchased 534,381 shares of its Class A Common Stock as illustrated in the table below:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2017 to February 4, 2017		81,294	$	158.87		81,240	$	160,355,154
February 5, 2017 to March 4, 2017		66,205		161.69		65,968		149,659,234
March 5, 2017 to April 1, 2017		64,789		149.51		64,700		139,979,876
April 2, 2017 to May 6, 2017		121,182		141.44		121,087		122,845,427
May 7, 2017 to June 3, 2017		94,583		143.45		94,505		109,283,288
June 4, 2017 to July 1, 2017		106,328		134.39		105,533		95,067,397
Total		534,381	$	146.53		533,033	$	95,067,397

Of the shares that were repurchased during the period, 1,348 shares represent repurchases of unvested investment shares issued under the Investment Share Program of the Company’s Employee Equity Incentive Plan.

As of July 21, 2017, the Company had 8.9 million shares of Class A Common Stock outstanding and 3.1 million shares of Class B Common Stock outstanding.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4. MINE SAFETY DISCLOSURES

Not Applicable

Item 5. OTHER INFORMATION

Not Applicable

Item 6. EXHIBITS

Exhibit No.	Title
11.1	The information required by Exhibit 11 has been included in Note C of the notes to the consolidated financial statements.
*31.1	Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

22

*32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*101.INS	XBRL Instance Document
*101.SCH	XBRL Taxonomy Extension Schema Document
*101.CAL	XBRL Taxonomy Calculation Linkbase Document
*101.LAB	XBRL Taxonomy Label Linkbase Document
*101.PRE	XBRL Taxonomy Presentation Linkbase Document
*101.DEF	XBRL Definition Linkbase Document

* Filed with this report

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	THE BOSTON BEER COMPANY, INC. (Registrant)
Date: July 27, 2017	/s/ Martin F. Roper
	Martin F. Roper
	President and Chief Executive Officer (principal executive officer)

Date: July 27, 2017	/s/ Frank H. Smalla
	Frank H. Smalla
	Chief Financial Officer (principal financial officer)

24

EX-31.1

Exhibit 31.1

I, Martin F. Roper, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Boston Beer Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2017

/s/ Martin F. Roper

Martin F. Roper

President and Chief Executive Officer

[Principal Executive Officer]

EX-31.2

Exhibit 31.2

I, Frank H. Smalla, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Boston Beer Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2017

/s/ Frank H. Smalla

Frank H. Smalla

Chief Financial Officer

[Principal Financial Officer]

EX-32.1

Exhibit 32.1

The Boston Beer Company, Inc.

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Boston Beer Company, Inc. (the “Company”) on Form 10-Q for the period ended July 1, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Martin F. Roper, President and Chief Executive Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 27, 2017

/s/ Martin F. Roper

Martin F. Roper

President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Boston Beer Company, Inc. and will be retained by The Boston Beer Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

The Boston Beer Company, Inc.

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Boston Beer Company, Inc. (the “Company”) on Form 10-Q for the period ended July 1, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Frank H. Smalla, Chief Financial Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 27, 2017

/s/ Frank H. Smalla

Frank H. Smalla

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Boston Beer Company, Inc. and will be retained by The Boston Beer Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 01, 2017	Jul. 21, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 01, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	SAM
Entity Registrant Name	BOSTON BEER CO INC
Entity Central Index Key	0000949870
Current Fiscal Year End Date	--12-30
Entity Filer Category	Large Accelerated Filer
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		8,918,875
Common Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,097,355

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Current Assets:
Cash and cash equivalents	$ 71,651	$ 91,035
Accounts receivable, net of allowance for doubtful accounts of $17 and $0 as of July 1, 2017 and December 31, 2016, respectively	51,678	36,694
Inventories	56,331	52,499
Prepaid expenses and other current assets	8,627	8,731
Income tax receivable	2,427	4,928
Total current assets	190,714	193,887
Property, plant and equipment, net	394,525	408,411
Other assets	12,585	9,965
Goodwill	3,683	3,683
Total assets	601,507	615,946
Current Liabilities:
Accounts payable	45,615	40,585
Accrued expenses and other current liabilities	67,190	60,934
Total current liabilities	112,805	101,519
Deferred income taxes, net	57,286	57,261
Other liabilities	9,752	10,584
Total liabilities	179,843	169,364
Commitments and Contingencies (See Note E)
Stockholders' Equity:
Additional paid-in capital	368,328	349,913
Accumulated other comprehensive loss, net of tax	(1,093)	(1,103)
Retained earnings	54,309	97,648
Total stockholders' equity	421,664	446,582
Total liabilities and stockholders' equity	601,507	615,946
Common Class A
Stockholders' Equity:
Common Stock	89	92
Common Class B
Stockholders' Equity:
Common Stock	$ 31	$ 32

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Allowance for doubtful accounts on accounts receivable	$ 17	$ 0
Common Class A
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	22,700,000	22,700,000
Common Stock, shares issued	8,929,757	9,170,956
Common Stock, shares outstanding	8,929,757	9,170,956
Common Class B
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	4,200,000	4,200,000
Common Stock, shares issued	3,097,355	3,197,355
Common Stock, shares outstanding	3,097,355	3,197,355

XML

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016
Revenue		$ 264,664	$ 261,225	$ 437,101	$ 463,233
Less excise taxes		16,734	16,409	27,476	29,590
Net revenue		247,930	244,816	409,625	433,643
Cost of goods sold		113,911	117,940	199,262	215,236
Gross profit		134,019	126,876	210,363	218,407
Advertising, promotional and selling expenses		67,831	63,252	121,585	122,501
General and administrative expenses		19,395	21,799	37,957	42,844
Impairment of assets		1,505	37	1,505	37
Total operating expenses		88,731	85,088	161,047	165,382
Operating income		45,288	41,788	49,316	53,025
Interest income, net		86	20	170	43
Other income (expense), net		129	(206)	57	(425)
Total other income (expense), net		215	(186)	227	(382)
Income before income tax provision		45,503	41,602	49,543	52,643
Income tax provision		16,378	14,981	14,707	18,990
Net income		$ 29,125	$ 26,621	$ 34,836	$ 33,653
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Net income per common share - diluted		$ 2.35	$ 2.06	$ 2.79	$ 2.58
Weighted-average number of common shares - diluted		12,344	12,830	12,430	12,959
Net income		$ 29,125	$ 26,621	$ 34,836	$ 33,653
Other comprehensive income:
Foreign currency translation adjustment		(10)	(88)	(10)	(92)
Comprehensive income		$ 29,115	$ 26,533	$ 34,826	$ 33,561
Common Class A
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Weighted-average number of common shares - basic		9,092	9,181	9,161	9,278
Common Class B
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Weighted-average number of common shares - basic	[1]	3,097	3,367	3,134	3,367

[1] Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2017	Jun. 25, 2016
Cash flows provided by operating activities:
Net income	$ 34,836	$ 33,653
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	25,616	24,473
Impairment of assets	1,505	37
Loss on disposal of property, plant and equipment	22	511
Bad debt expense (recovery)	17	(55)
Stock-based compensation expense	3,413	5,741
Excess tax benefit from stock-based compensation arrangements		(5,840)
Deferred income taxes	25	1,375
Changes in operating assets and liabilities:
Accounts receivable	(15,001)	(17,655)
Inventories	(6,549)	(4,783)
Prepaid expenses, income tax receivable and other assets	2,605	12,394
Accounts payable	8,580	1,005
Accrued expenses and other current liabilities	6,227	6,967
Other liabilities	(254)	(6,504)
Net cash provided by operating activities	61,042	51,319
Cash flows used in investing activities:
Purchases of property, plant and equipment	(16,721)	(25,954)
Proceeds from disposal of property, plant and equipment	16
Change in restricted cash	(5)	56
Net cash used in investing activities	(16,710)	(25,898)
Cash flows used in financing activities:
Repurchase of Class A Common Stock	(78,180)	(127,675)
Proceeds from exercise of stock options	14,062	29,521
Cash paid on note payable	(60)	(58)
Excess tax benefit from stock-based compensation arrangements		5,840
Net proceeds from sale of investment shares	462	338
Net cash used in financing activities	(63,716)	(92,034)
Change in cash and cash equivalents	(19,384)	(66,613)
Cash and cash equivalents at beginning of year	91,035	94,193
Cash and cash equivalents at end of period	71,651	27,580
Supplemental disclosure of cash flow information:
Income taxes paid	4,812	8,655
Income taxes refunded	2	12,000
(Decrease) Increase in accounts payable for purchase of property, plant and equipment	$ (3,550)	870
Decrease in accounts payable for repurchase of Class A Common Stock		$ (3,000)

XML

Organization and Basis of Presentation

6 Months Ended

Jul. 01, 2017

Organization and Basis of Presentation

A. Organization and Basis of Presentation

The Boston Beer Company, Inc. and certain subsidiaries (the “Company”) are engaged in the business of brewing and selling alcohol beverages throughout the United States and in selected international markets, under the trade names, “The Boston Beer Company,” “Twisted Tea Brewing Company,” “Angry Orchard Cider Company” and “Hard Seltzer Beverage Company”. The Company’s Samuel Adams^® beers are produced and sold under the trade name “The Boston Beer Company”. A&S Brewing Collaborative LLC, d/b/a A&S Brewing (“A&S”), a wholly-owned subsidiary of the Company, sells beer under various trade names including “The Traveler Beer Company” and “Coney Island Brewing Company”.

The accompanying unaudited consolidated balance sheet as of July 1, 2017, and the consolidated statements of comprehensive income and consolidated statements of cash flows for the interim periods ended July 1, 2017 and June 25, 2016 have been prepared by the Company in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnotes normally included in financial statements prepared in accordance with U.S generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of the Company’s management, the Company’s unaudited consolidated balance sheet as of July 1, 2017 and the results of its consolidated operations and consolidated cash flows for the interim periods ended July 1, 2017 and June 25, 2016, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.

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Inventories

6 Months Ended

Jul. 01, 2017

Inventories

B. Inventories

Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of hops, apple juice, other brewing materials and packaging, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. The Company’s goal is to maintain on hand a supply of at least one year for essential hop varieties, in order to limit the risk of an unexpected reduction in supply. Inventories are generally classified as current assets. The Company classifies hops inventory in excess of two years of forecasted usage in other long term assets. The cost elements of work in process and finished goods inventory consist of raw materials, direct labor and manufacturing overhead. Inventories consist of the following:

	July 1, 2017		December 31, 2016
	(in thousands)
Current inventory:
Raw materials	$	34,974	$	35,314
Work in process		8,705		8,131
Finished goods		12,652		9,054
Total current inventory		56,331		52,499
Long term inventory		9,033		6,316
Total inventory	$	65,364	$	58,815

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Net Income per Share

6 Months Ended

Jul. 01, 2017

Net Income per Share

C. Net Income per Share

The Company calculates net income per share using the two-class method, which requires the Company to allocate net income to its Class A Common Shares, Class B Common Shares and unvested share-based payment awards that participate in dividends with common stock, in the calculation of net income per share.

The Class A Common Stock has no voting rights, except (1) as required by law, (2) for the election of Class A Directors, and (3) that the approval of the holders of the Class A Common Stock is required for (a) certain future authorizations or issuances of additional securities which have rights senior to Class A Common Stock, (b) certain alterations of rights or terms of the Class A or Class B Common Stock as set forth in the Articles of Organization of the Company, (c) other amendments of the Articles of Organization of the Company, (d) certain mergers or consolidations with, or acquisitions of, other entities, and (e) sales or dispositions of any significant portion of the Company’s assets.

The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the members of the Company’s Board of Directors and (2) approve all (a) amendments to the Company’s Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant portion of the Company’s assets, and (d) equity-based and other executive compensation and other significant corporate matters. The Company’s Class B Common Stock is not listed for trading. Each share of the Class B Common Stock is freely convertible into one share of Class A Common Stock, upon request of any Class B holder, and participates equally in dividends.

The Company’s unvested share-based payment awards include unvested shares (1) issued under the Company’s investment share program, which permits employees who have been with the Company for at least one year to purchase shares of Class A Common Stock and to purchase those shares at a discount ranging from 20% to 40% below market value based on years of employment starting after two years of employment, and (2) awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The investment shares and restricted stock awards generally vest over five years in equal number of shares. The unvested shares participate equally in dividends. See Note I for a discussion of the current year unvested stock awards and issuances.

Included in the computation of net income per diluted common share are dilutive outstanding stock options that are vested or expected to vest. At its discretion, the Board of Directors grants stock options to senior management and certain key employees. The terms of the employee stock options are determined by the Board of Directors at the time of grant. To date, stock options granted to employees vest over various service periods and/or based on the attainment of certain performance criteria and generally expire after ten years. The Company also grants stock options to its non-employee directors upon election or re-election to the Board of Directors. The number of option shares granted to non-employee directors is calculated based on a defined formula and these stock options vest immediately upon grant and expire after ten years.

Net Income per Common Share — Basic

The following table sets forth the computation of basic net income per share using the two-class method:

	Thirteen weeks ended				Twenty-six weeks ended
	July 1, 2017		June 25, 2016		July 1, 2017		June 25, 2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	29,125	$	26,621	$	34,836	$	33,653
Allocation of net income for basic:
Class A Common Stock	$	21,603	$	19,375	$	25,812	$	24,567
Class B Common Stock		7,360		7,107		8,829		8,916
Unvested participating shares		162		139		195		170
	$	29,125	$	26,621	$	34,836	$	33,653
Weighted average number of shares for basic:
Class A Common Stock		9,092		9,181		9,161		9,278
Class B Common Stock*		3,097		3,367		3,134		3,367
Unvested participating shares		68		66		69		64
		12,257		12,614		12,364		12,709
Net income per share for basic:
Class A Common Stock	$	2.38	$	2.11	$	2.82	$	2.65
Class B Common Stock	$	2.38	$	2.11	$	2.82	$	2.65

* Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

Net Income per Common Share — Diluted

The Company calculates diluted net income per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method, which assumes the participating securities are not exercised.

The following table sets forth the computation of diluted net income per share, assuming the conversion of all Class B Common Stock into Class A Common Stock and using the two-class method for unvested participating shares:

	Thirteen weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	21,603		9,092	$	2.38	$	19,375		9,181	$	2.11
Add: effect of dilutive potential common shares
Share-based awards		—		155				—		282
Class B Common Stock		7,360		3,097				7,107		3,367
Net effect of unvested participating shares		2		—				3		—
Net income per common share — diluted	$	28,965		12,344	$	2.35	$	26,485		12,830	$	2.06

	Twenty-six weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	25,812		9,161	$	2.82	$	24,567		9,278	$	2.65
Add: effect of dilutive potential common shares
Share-based awards		—		135				—		314
Class B Common Stock		8,829		3,134				8,916		3,367
Net effect of unvested participating shares		2		—				4		—
Net income per common share — diluted	$	34,643		12,430	$	2.79	$	33,487		12,959	$	2.58

During the thirteen and twenty-six weeks ended July 1, 2017, weighted-average stock options to purchase approximately 801,000 and 800,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. During the thirteen and twenty-six weeks ended June 25, 2016, weighted-average stock options to purchase approximately 737,000 and 695,000 shares, respectively, of Class A Common Stock were outstanding but not included in computing diluted income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase approximately 36,000 and 36,000 shares of Class A Common Stock were outstanding as of July 1, 2017 and June 25, 2016, respectively, but not included in computing diluted income per common share because the performance criteria of these stock options was not met as of the end of the reporting period.

Of the performance-based stock options to purchase approximately 36,000 shares of Class A Common Stock that were excluded from computing diluted net income per common share as of July 1, 2017, 31,000 shares were granted in 2016 to two key employees. The vesting of these shares requires annual depletions, or sales by distributors to retailers, of certain of the Company’s brands to attain various thresholds during the period from 2017 to 2023. The remaining 5,000 shares were granted in 2017 to executive officers and the vesting of these shares requires annual depletions to attain certain thresholds in 2019.

Furthermore, performance-based stock options to purchase approximately 5,000 shares of Class A Common Stock were not included in computing diluted income per share because the performance criteria of these stock options were not met and the options were cancelled during the twenty-six weeks ended July 1, 2017.

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Comprehensive Income or Loss

6 Months Ended

Jul. 01, 2017

Comprehensive Income or Loss

D. Comprehensive Income or Loss

Comprehensive income or loss represents net income or loss, plus defined benefit plans liability adjustment, net of tax effect and foreign currency translation adjustment. The defined benefit plans liability and foreign currency translation adjustments for the interim periods ended July 1, 2017 and June 25, 2016 were not material.

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Commitments and Contingencies

6 Months Ended

Jul. 01, 2017

Commitments and Contingencies

E. Commitments and Contingencies

Contract Obligations

The Company had outstanding total non-cancelable contract obligations of $127.3 million at July 1, 2017. These obligations are made up of hops, barley and wheat totaling $58.7 million, advertising contracts of $16.8 million, operating leases of $14.3 million, apples and other ingredients of $14.0 million, glass bottles of $7.7 million, equipment and machinery of $6.9 million and other commitments of $8.9 million.

The Company has entered into contracts for the supply of a portion of its hops requirements. These purchase contracts extend through crop year 2022 and specify both the quantities and prices, denominated in U.S. Dollars, Euros and New Zealand Dollars, to which the Company is committed. Hops purchase commitments outstanding at July 1, 2017 totaled $42.4 million, based on the exchange rates on that date. The Company does not use forward currency exchange contracts and intends to purchase future hops using the exchange rate at the time of purchase.

Currently, the Company has entered into contracts for barley and wheat with two major suppliers. The contracts include crop year 2016 and 2017 and cover the Company’s barley, wheat, and malt requirements for 2017 and part of 2018. These purchase commitments outstanding at July 1, 2017 totaled $16.3 million.

The Company sources some of its glass bottles needs pursuant to a Glass Bottle Supply Agreement with Anchor Glass Container Corporation (“Anchor”), under which Anchor is the supplier of certain glass bottles for the Company’s Cincinnati Brewery and its Pennsylvania Brewery. This agreement also establishes the terms on which Anchor may supply glass bottles to other breweries where the Company brews its beers. Under the agreement with Anchor, the Company has minimum purchase commitments that are based on Company-provided production estimates which, under normal business conditions, are expected to be fulfilled. Minimum purchase commitments under the agreement, assuming the supplier is unable to replace lost production capacity cancelled by the Company, as of July 1, 2017 totaled $7.7 million.

The Company has various operating lease agreements for facilities and equipment as of July 1, 2017. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. These lease obligations expire at various dates through 2022. The contractual obligation on these lease agreements as of July 1, 2017 totaled $14.3 million.

Currently, the Company brews and packages more than 90% of its volume at Company-owned breweries. In the normal course of its business, the Company has historically entered into various production arrangements with other brewing companies. Pursuant to these arrangements, the Company purchases the liquid produced by those brewing companies, including the raw materials that are used in the liquid, at the time such liquid goes into fermentation. The Company is required to repurchase all unused raw materials purchased by the brewing company specifically for the Company’s beers at the brewing company’s cost upon termination of the production arrangement. The Company is also obligated to meet annual volume requirements in conjunction with certain production arrangements. These requirements are not material to the Company’s operations.

Litigation

The Company is not a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect upon its financial condition or the results of its operations. In general, while the Company believes it conducts its business appropriately in accordance with laws, regulations and industry guidelines, claims, whether or not meritorious, could be asserted against the Company that might adversely impact the Company’s results.

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Income Taxes

6 Months Ended

Jul. 01, 2017

Income Taxes

F. Income Taxes

As of July 1, 2017 and December 31, 2016, the Company had approximately $0.4 million and $0.5 million, respectively, of unrecognized income tax benefits.

The Company’s practice is to classify interest and penalties related to income tax matters in income tax expense. As of July 1, 2017 and December 31, 2016, the Company had $0.3 million and $0.3 million, respectively, accrued for interest and penalties.

The Company’s federal and state income tax returns remain subject to examination for three or four years depending on the state’s statute of limitations. The Company is being audited by one state as of July 1, 2017. In addition, the Company is generally obligated to report changes in taxable income arising from federal income tax audits.

The following table provides a summary of the income tax provision for the thirteen and twenty-six weeks ended July 1, 2017 and June 25, 2016:

	Thirteen weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	16,546		$	14,981
Impact of adoption of ASU 2016-09		(168	)		—
Total income tax provision	$	16,378		$	14,981

	Twenty-six weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	18,437		$	18,990
Impact of adoption of ASU 2016-09		(3,730	)		—
Total income tax provision	$	14,707		$	18,990

The Company’s effective tax rate for the thirteen weeks ended July 1, 2017 remained flat at 36.0% compared to the thirteen weeks ended June 25, 2016. The Company’s effective tax rate for the twenty-six weeks ended July 1, 2017 decreased to 29.7% from 36.1% for the twenty-six weeks ended June 25, 2016. This decrease was primarily due to the tax benefit resulting from the adoption of ASU 2016-09, which was effective for the Company on January 1, 2017.

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Revolving Line of Credit

6 Months Ended

Jul. 01, 2017

Revolving Line of Credit

G. Revolving Line of Credit

The Company has a credit facility in place that provides for a $150.0 million revolving line of credit which expires on March 31, 2019. As of July 1, 2017, the Company was not in violation of any of its financial covenants to the lender under the credit facility and there were no borrowings outstanding, so that the line of credit was fully available to the Company for borrowing.

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Fair Value Measures

6 Months Ended

Jul. 01, 2017

Fair Value Measures

H. Fair Value Measures

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

• Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

• Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

All financial assets or liabilities that are measured at fair value on a recurring basis (at least annually) have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The assets or liabilities measured at fair value on a recurring basis are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	70,762	$	—	$	—	$	70,762

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	89,966	$	—	$	—	$	89,966

The Company’s cash equivalents listed above represent money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The money market funds were invested substantially in United States Treasury and government securities. The Company does not adjust the quoted market price for such financial instruments.

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents held in money market funds. At July 1, 2017 and December 31, 2016, the Company had money market funds which have been deemed “Triple A” rated. The Company considers the “Triple A” rated money market funds to be a large, highly-rated investment-grade institution. As of July 1, 2017 and December 31, 2016, the Company’s cash and cash equivalents balance was $71.7 million and $91.0 million, respectively, including money market funds amounting to $70.8 million and $90.0 million, respectively.

Cash, certificates of deposit, receivables and payables are carried at their cost, which approximates fair value, because of their short-term nature. Financial instruments not recorded at fair value in the consolidated financial statements are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	340	$	—	$	340

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	400	$	—	$	400

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Common Stock and Stock-Based Compensation

6 Months Ended

Jul. 01, 2017

Common Stock and Stock-Based Compensation

I. Common Stock and Stock-Based Compensation

Option Activity

Information related to stock options under the Employee Equity Incentive Plan and the Stock Option Plan for Non-Employee Directors is summarized as follows:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2016		1,348,233		$	141.98
Granted		15,373			150.10
Forfeited		(4,708	)		201.91
Expired		—			—
Exercised		(171,773	)		81.86
Outstanding at July 1, 2017		1,187,125		$	173.74		6.71	$	20,259
Exercisable at July 1, 2017		204,870		$	94.94		4.03	$	9,806
Vested and expected to vest at July 1, 2017		592,231		$	121.89		4.90	$	19,736

Of the total options outstanding at July 1, 2017, 35,885 shares were performance-based options for which performance had yet to be achieved.

On January 1, 2017, the Company granted options to purchase an aggregate of 5,185 shares of the Company’s Class A Common Stock to senior management with a weighted average fair value of $81.95 per share, of which all shares relate to performance-based stock options.

On May 18, 2017, the Company granted options to purchase an aggregate of 10,188 shares of the Company’s Class A Common Stock to the Company’s nonemployee Directors. These options have a weighted average fair value of $67.72 per share. All of the options vested immediately on the date of the grant.

On January 1, 2008, the Company granted the Chief Executive Officer a stock option to purchase 753,864 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2014, at the rate of 20% per year. The exercise price is determined by multiplying $42.00 by the aggregate change in the DJ Wilshire 5000 Index from and after January 1, 2008 through the close of business on the trading date next preceding each date on which the option is exercised. The exercise price will not be less than $37.65 per share and the excess of the fair value of the Company’s Class A Common Stock over the exercise price cannot exceed $70.00 per share over the exercise price. At July 1, 2017 and June 25, 2016, the stock option remained unexercised as to 150,773 shares and 301,546 shares, respectively. If the stock option had been exercised on July 1, 2017, the exercise price would have been $71.40 per share. If the stock option had been exercised on June 25, 2016, the exercise price would have been $91.02 per share. The Company is accounting for this award as a market-based award which was valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. Under the Monte Carlo Simulation pricing model, the Company calculated the weighted average fair value per share to be $8.41.

On January 1, 2016, the Company granted the Chief Executive Officer an option to purchase 574,507 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2019, at the rate of 20% per year. The exercise price is determined by multiplying $201.91 by the aggregate percentage change in the DJ Wilshire 5000 Index from and after January 1, 2016 through the close of business on the trading date next preceding each date on which the option is exercised, plus an additional 1.5 percentage points per annum, prorated for partial years. The exercise price will not be less than $201.91 per share and the excess of the fair value of the Company’s Class A Common Stock cannot exceed $150 per share over the exercise price. At July 1, 2017 and June 25, 2016, the stock option remained unexercised as to 574,507 shares. If the stock option had been exercised on July 1, 2017, the exercise price would have been $228.52 per share. If the stock option had been exercised on June 25, 2016, the exercise price would have been $202.75 per share. The Company is accounting for this award as a market-based award which was valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. Under the Monte Carlo Simulation pricing model, the Company calculated the weighted average fair value per share to be $39.16. As a result of the Chief Executive Officer’s planned retirement in 2018, the Company estimated a 100% forfeiture rate related to this grant.

Non-Vested Shares Activity

The following table summarizes vesting activities of shares issued under the investment share program and restricted stock awards:

	Number of Shares			Weighted Average Fair Value
Non-vested at December 31, 2016		64,968		$	166.29
Granted		24,671			131.64
Vested		(20,061	)		146.83
Forfeited		(4,967	)		192.84
Non-vested at July 1, 2017		64,611		$	157.07

On January 1, 2017, the Company granted 12,358 shares of restricted stock awards to certain senior managers and key employees, of which all shares vest ratably over service periods of five years. On January 1, 2017, employees elected to purchase 10,146 shares under the investment share program. The weighted average fair value of the restricted stock awards and investment shares, which are sold to employees at discount under its investment share program, was $169.85 and $78.74 per share, respectively.

On March 3, 2017, the Company granted 2,167 shares of restricted stock awards to a newly hired member of senior management, of which all shares vest ratably over a service period of five years. The weighted average fair value of the restricted stock award was $161.45.

Stock-Based Compensation

Stock-based compensation expense related to share-based awards recognized in the thirteen and twenty-six weeks ended July 1, 2017 was $1.8 million and $3.4 million, respectively, and was calculated based on awards expected to vest. Stock-based compensation expense related to share-based awards recognized in the thirteen and twenty-six weeks ended June 25, 2016 was $3.1 million and $5.7 million, respectively, and was calculated based on awards expected to vest.

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Recent Accounting Pronouncements

6 Months Ended

Jul. 01, 2017

Recent Accounting Pronouncements

J. Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 is part of the FASB’s initiative to simplify accounting standards. The guidance impacted several aspects of the accounting for employee share-based payment transactions, including accounting for income taxes and forfeitures, as well as classification in the consolidated statements of cash flows. Under ASU 2016-09, excess tax benefits and deficiencies as a result of stock option exercises and restricted stock vesting are to be recognized as discrete items within income tax expense or benefit in the consolidated statements of comprehensive income in the reporting period in which they occur. Additionally, under ASU 2016-09, excess tax benefits and deficiencies should be classified along with other income tax cash flows as an operating activity in the consolidated statements of cash flows. The Company adopted this new accounting standard prospectively in the first quarter of 2017. Prior periods have not been adjusted. Under this new accounting standard, for the thirteen and twenty-six weeks ended July 1, 2017, $0.2 million and $3.7 million respectively, in excess tax benefit from stock-based compensation arrangements was recognized within income tax provision in the consolidated statements of comprehensive income and classified as an operating activity in the consolidated statement of cash flow. The Company will maintain the current forfeiture policy to estimate forfeitures expected to occur to determine stock-based compensation expense.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 as part of the FASB’s initiative to simplify accounting standards. The guidance required an entity to present deferred tax assets and deferred tax liabilities as noncurrent in the consolidated balance sheet. The Company adopted this new accounting standard retrospectively in the first quarter of 2017. As of July 1, 2017 and December 31, 2016, the Company had $5.8 million and $7.4 million, respectively, of current deferred tax assets that are now classified as noncurrent on the consolidated balance sheets under this new accounting standard.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory. ASU 2015-11 is part of the FASB’s initiative to simplify accounting standards. The guidance required an entity to recognize inventory within scope of the standard at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The Company adopted this new accounting standard prospectively in the first quarter of 2017. This new accounting standard did not have a significant impact on the consolidated financial statements.

Accounting Pronouncements Not Yet Effective

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 will supersede virtually all existing revenue guidance. Under this update, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. As such, an entity will need to use more judgment and make more estimates than under the current guidance. ASU 2014-09 is to be applied retrospectively either to each prior reporting period presented in the financial statements, or only to the most current reporting period presented in the financial statements with a cumulative effect adjustment to retained earnings. The Company will elect to apply the impact (if any) of applying ASU 2014-09 to the most current reporting period presented in the financial statements with a cumulative effect adjustment to retained earnings. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU 2015-14 defers the effective date of ASU 2014-09 for one year, making it effective for the Company’s fiscal year beginning December 31, 2017, with early adoption permitted as of January 1, 2017. The Company currently expects to adopt ASU 2014-09 in the first quarter of 2018. The Company does not expect adoption of ASU 2014-09 to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 will be effective retrospectively for the year beginning December 30, 2018, with early adoption permitted. The Company currently expects to adopt ASU 2016-02 in the first quarter of 2018. As of July 1, 2017 and December 31, 2016, the Company had $14.3 million and $15.9 million, respectively, of contractual obligation on lease agreements, the present value of which, would be included on the consolidated balance sheets under the new guidance.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplfying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for all impairment tests performed beginning December 29, 2019. The Company does not expect adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

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Immaterial Restatement of Previously Issued Financial Statements and Reclassification

6 Months Ended

Jul. 01, 2017

Immaterial Restatement of Previously Issued Financial Statements and Reclassification

K. Immaterial Restatement of Previously Issued Financial Statements and Reclassification

In the third quarter of fiscal 2016, the Company identified a reporting error in the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016, which the Company corrected in the consolidated statement of cash flows for the thirty-nine weeks ended September 24, 2016. For the twenty-six weeks ended June 25, 2016, the Company previously classified a $3 million decrease in accounts payable for repurchase of Class A Common Stock as a decrease in cash flows provided by operating activities rather than classifying it as an increase in cash flows used in financing activities. The Company has adjusted the consolidated statement of cash flows for the twenty-six weeks ended June 25, 2016 to properly classify this $3 million decrease in accounts payable for repurchase of Class A Common Stock. This reporting error had no effect on the Company’s results of operation or financial position as of and for the twenty-six weeks ended June 25, 2016. The Company concluded that the consolidated statement of cash flows for the twenty-sixweeks ended June 25, 2016 is  not materially misstated.

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Subsequent Events

6 Months Ended

Jul. 01, 2017

Subsequent Events

L. Subsequent Events

The Company evaluated subsequent events occurring after the balance sheet date, July 1, 2017, and concluded that there were no other events of which management was aware that occurred after the balance sheet date that would require any adjustment to or disclosure in the accompanying consolidated financial statements.

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Inventories (Tables)

6 Months Ended

Jul. 01, 2017

Components of Inventories

 Inventories consist of the following:

	July 1, 2017		December 31, 2016
	(in thousands)
Current inventory:
Raw materials	$	34,974	$	35,314
Work in process		8,705		8,131
Finished goods		12,652		9,054
Total current inventory		56,331		52,499
Long term inventory		9,033		6,316
Total inventory	$	65,364	$	58,815

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Net Income per Share (Tables)

6 Months Ended

Jul. 01, 2017

Computation of Earnings Per Share, Basic

The following table sets forth the computation of basic net income per share using the two-class method:

	Thirteen weeks ended				Twenty-six weeks ended
	July 1, 2017		June 25, 2016		July 1, 2017		June 25, 2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income	$	29,125	$	26,621	$	34,836	$	33,653
Allocation of net income for basic:
Class A Common Stock	$	21,603	$	19,375	$	25,812	$	24,567
Class B Common Stock		7,360		7,107		8,829		8,916
Unvested participating shares		162		139		195		170
	$	29,125	$	26,621	$	34,836	$	33,653
Weighted average number of shares for basic:
Class A Common Stock		9,092		9,181		9,161		9,278
Class B Common Stock*		3,097		3,367		3,134		3,367
Unvested participating shares		68		66		69		64
		12,257		12,614		12,364		12,709
Net income per share for basic:
Class A Common Stock	$	2.38	$	2.11	$	2.82	$	2.65
Class B Common Stock	$	2.38	$	2.11	$	2.82	$	2.65

* Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

Computation of Earnings Per Share, Diluted

The following table sets forth the computation of diluted net income per share, assuming the conversion of all Class B Common Stock into Class A Common Stock and using the two-class method for unvested participating shares:

	Thirteen weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	21,603		9,092	$	2.38	$	19,375		9,181	$	2.11
Add: effect of dilutive potential common shares
Share-based awards		—		155				—		282
Class B Common Stock		7,360		3,097				7,107		3,367
Net effect of unvested participating shares		2		—				3		—
Net income per common share — diluted	$	28,965		12,344	$	2.35	$	26,485		12,830	$	2.06

	Twenty-six weeks ended
	July 1, 2017						June 25, 2016
	Earnings to Common Shareholders		Common Shares		EPS		Earnings to Common Shareholders		Common Shares		EPS
	(in thousands, except per share data)
As reported — basic	$	25,812		9,161	$	2.82	$	24,567		9,278	$	2.65
Add: effect of dilutive potential common shares
Share-based awards		—		135				—		314
Class B Common Stock		8,829		3,134				8,916		3,367
Net effect of unvested participating shares		2		—				4		—
Net income per common share — diluted	$	34,643		12,430	$	2.79	$	33,487		12,959	$	2.58

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Income Taxes (Tables)

6 Months Ended

Jul. 01, 2017

Summary of Income Tax Provision

The following table provides a summary of the income tax provision for the thirteen and twenty-six weeks ended July 1, 2017 and June 25, 2016:

	Thirteen weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	16,546		$	14,981
Impact of adoption of ASU 2016-09		(168	)		—
Total income tax provision	$	16,378		$	14,981

	Twenty-six weeks ended
	July 1, 2017			June 25, 2016
	(in thousands)
Summary of income tax provision
Tax provision based on net income	$	18,437		$	18,990
Impact of adoption of ASU 2016-09		(3,730	)		—
Total income tax provision	$	14,707		$	18,990

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Fair Value Measures (Tables)

6 Months Ended

Jul. 01, 2017

Fair Value Measurement of Assets and Liabilities on Recurring Basis

The assets or liabilities measured at fair value on a recurring basis are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	70,762	$	—	$	—	$	70,762

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Cash equivalents	$	89,966	$	—	$	—	$	89,966

Financial Instruments Not Recorded at Fair Value

Financial instruments not recorded at fair value in the consolidated financial statements are summarized in the table below (in thousands):

	As of July 1, 2017
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	340	$	—	$	340

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Note payable	$	—	$	400	$	—	$	400

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Common Stock and Stock-Based Compensation (Tables)

6 Months Ended

Jul. 01, 2017

Summary of Stock Options under Equity Plan and Non-Employee Director Plan

Information related to stock options under the Employee Equity Incentive Plan and the Stock Option Plan for Non-Employee Directors is summarized as follows:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2016		1,348,233		$	141.98
Granted		15,373			150.10
Forfeited		(4,708	)		201.91
Expired		—			—
Exercised		(171,773	)		81.86
Outstanding at July 1, 2017		1,187,125		$	173.74		6.71	$	20,259
Exercisable at July 1, 2017		204,870		$	94.94		4.03	$	9,806
Vested and expected to vest at July 1, 2017		592,231		$	121.89		4.90	$	19,736

Summary of Vesting Activities of Shares Issued Under Investment Share Program and Restricted Stock Awards

The following table summarizes vesting activities of shares issued under the investment share program and restricted stock awards:

	Number of Shares			Weighted Average Fair Value
Non-vested at December 31, 2016		64,968		$	166.29
Granted		24,671			131.64
Vested		(20,061	)		146.83
Forfeited		(4,967	)		192.84
Non-vested at July 1, 2017		64,611		$	157.07

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Components of Inventories (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Current inventory:
Raw materials	$ 34,974	$ 35,314
Work in process	8,705	8,131
Finished goods	12,652	9,054
Total current inventory	56,331	52,499
Long term inventory	9,033	6,316
Total inventory	$ 65,364	$ 58,815

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Net Income per Share - Additional Information (Detail)		3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 01, 2017	Jul. 01, 2017 shares	Jun. 25, 2016 shares	Jul. 01, 2017 shares	Jun. 25, 2016 shares	Dec. 31, 2016 Employee shares
Earnings Per Share Note [Line Items]
Stock options cancelled during the period				4,708
Investment Share Program
Earnings Per Share Note [Line Items]
Requirement tenure of employee for investment share program, purchase shares at discount				2 years
Vesting period	5 years
Investment Share Program | Minimum
Earnings Per Share Note [Line Items]
Requirement tenure of employee for investment share program				1 year
Discount from current market value				20.00%
Investment Share Program | Maximum
Earnings Per Share Note [Line Items]
Discount from current market value				40.00%
Restricted Stock Awards
Earnings Per Share Note [Line Items]
Vesting period	5 years
Common Class A
Earnings Per Share Note [Line Items]
Antidilutive securities excluded from computation of earnings per share		801,000	737,000	800,000	695,000
Common Class A | Performance-Based Awards
Earnings Per Share Note [Line Items]
Number of shares not included because the performance criteria was not met as of the end of the reporting period				36,000	36,000
Stock options cancelled during the period				5,000
Common Class A | Performance-Based Awards | Key Employee
Earnings Per Share Note [Line Items]
Options granted in period						31,000
Number of employees | Employee						2
Common Class A | Performance-Based Awards | Executive Officers
Earnings Per Share Note [Line Items]
Options granted in period				5,000

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Computation of Earnings Per Share, Basic (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income		$ 29,125	$ 26,621	$ 34,836	$ 33,653
Allocation of net income for basic:
Allocation of net income for basic common stock		29,125	26,621	34,836	33,653
Allocation of net income for basic unvested participating shares		$ 162	$ 139	$ 195	$ 170
Weighted average number of shares for basic:
Weighted average number of shares for basic unvested participating shares		68	66	69	64
Shares used in net income per common share - basic		12,257	12,614	12,364	12,709
Net income per share for basic:
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Common Class A
Allocation of net income for basic:
Allocation of net income for basic common stock		$ 21,603	$ 19,375	$ 25,812	$ 24,567
Weighted average number of shares for basic:
Weighted-average number of common shares - basic		9,092	9,181	9,161	9,278
Net income per share for basic:
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Common Class B
Allocation of net income for basic:
Allocation of net income for basic common stock		$ 7,360	$ 7,107	$ 8,829	$ 8,916
Weighted average number of shares for basic:
Weighted-average number of common shares - basic	[1]	3,097	3,367	3,134	3,367
Net income per share for basic:
Net income per common share - basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65

[1] Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

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Computation of Earnings Per Share, Basic (Parenthetical) (Detail) - shares	Mar. 07, 2017	Nov. 30, 2016	Nov. 04, 2016
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Conversion of Class B Common Stock into Class A Common Stock	100,000	45,000	125,000

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Computation of Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Allocation of net income for basic common stock		$ 29,125	$ 26,621	$ 34,836	$ 33,653
Earnings to Common Shareholders, Net effect of unvested participating shares		2	3	2	4
Earnings to Common Shareholders, Net income per common share - diluted		$ 28,965	$ 26,485	$ 34,643	$ 33,487
Add: effect of dilutive potential common, Share-based awards		155	282	135	314
Weighted-average number of common shares - diluted		12,344	12,830	12,430	12,959
Net income per common share-basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Net income per common share-diluted		$ 2.35	$ 2.06	$ 2.79	$ 2.58
Common Class A
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Allocation of net income for basic common stock		$ 21,603	$ 19,375	$ 25,812	$ 24,567
Weighted-average number of common shares - basic		9,092	9,181	9,161	9,278
Net income per common share-basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65
Common Class B
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Allocation of net income for basic common stock		$ 7,360	$ 7,107	$ 8,829	$ 8,916
Earnings to Common Shareholders, Class B Common Stock		$ 7,360	$ 7,107	$ 8,829	$ 8,916
Weighted-average number of common shares - basic	[1]	3,097	3,367	3,134	3,367
Add: effect of dilutive potential common, Class B Common Stock		3,097	3,367	3,134	3,367
Net income per common share-basic		$ 2.38	$ 2.11	$ 2.82	$ 2.65

[1] Change in Class B Common Stock resulted from the conversion of 100,000 shares to Class A Common Stock on March 7, 2017, 45,000 shares to Class A Common Stock on November 30, 2016 and 125,000 shares to Class A Common Stock on November 4, 2016, with the ending number of shares reflecting the weighted average for the periods

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended
	Jul. 01, 2017 USD ($) Vendor	Dec. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	$ 127.3
Operating Leases
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	$ 14.3	$ 15.9
Lease expiration dates	2022
Equipment and machinery
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	$ 6.9
Minimum
Commitments and Contingencies Disclosure [Line Items]
Company's current brewing and packaging percentage	90.00%
Barley and Wheat
Commitments and Contingencies Disclosure [Line Items]
Purchase commitments	$ 16.3
Number of suppliers | Vendor	2
Hops
Commitments and Contingencies Disclosure [Line Items]
Purchase commitments	$ 42.4
Hops, Barley and Wheat
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	58.7
Apples and other ingredients
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	14.0
Glass Bottles
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	7.7
Purchase commitments	7.7
Advertising Contracts
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	16.8
Other Commitments
Commitments and Contingencies Disclosure [Line Items]
Contractual obligations	$ 8.9

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Income Taxes - Additional Information (Detail) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 01, 2017 USD ($)	Jun. 25, 2016	Jul. 01, 2017 USD ($) State	Jun. 25, 2016	Dec. 31, 2016 USD ($)
Income Taxes [Line Items]
Unrecognized tax benefits	$ 0.4		$ 0.4		$ 0.5
Accrued interest and penalties	$ 0.3		$ 0.3		$ 0.3
Effective income tax rate	36.00%	36.00%	29.70%	36.10%
State and Local Jurisdiction
Income Taxes [Line Items]
Income tax return examination			The Company's federal and state income tax returns remain subject to examination for three or four years depending on the state's statute of limitations.
Number of states being audited | State			1
State and Local Jurisdiction | Minimum
Income Taxes [Line Items]
Income tax return examination period			3 years
State and Local Jurisdiction | Maximum
Income Taxes [Line Items]
Income tax return examination period			4 years

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Summary of Income Tax Provision (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016
Summary of income tax (benefit) provision
Tax provision based on net income	$ 16,546	$ 14,981	$ 18,437	$ 18,990
Impact of adoption of ASU 2016-09	(168)	0	(3,730)	0
Total income tax (benefit) provision	$ 16,378	$ 14,981	$ 14,707	$ 18,990

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Revolving Line of Credit - Additional Information (Detail)	6 Months Ended
	Jul. 01, 2017 USD ($)
Debt Instrument [Line Items]
Credit facility, borrowing outstanding	$ 0
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, current borrowing capacity	$ 150,000,000
Line of credit, expiration date	Mar. 31, 2019

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Fair Value Measurement of Assets and Liabilities on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 70,762	$ 89,966
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 70,762	$ 89,966

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Fair Value Measures - Additional Information (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016	Jun. 25, 2016	Dec. 26, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 71,651	$ 91,035	$ 27,580	$ 94,193
Money market fund	$ 70,800	$ 90,000

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Financial Instruments Not Recorded at Fair Value (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note payable	$ 340	$ 400
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note payable	$ 340	$ 400

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Summary of Stock Options under Employee Equity Incentive Plan and Stock Option Plan for Non-Employee Directors (Detail) $ / shares in Units, $ in Thousands	6 Months Ended
	Jul. 01, 2017 USD ($) $ / shares shares
Shares
Outstanding at beginning of period | shares	1,348,233
Granted | shares	15,373
Forfeited | shares	(4,708)
Expired | shares	0
Exercised | shares	(171,773)
Outstanding at end of period | shares	1,187,125
Exercisable at end of period | shares	204,870
Vested and expected to vest at end of period | shares	592,231
Weighted-Average Exercise Price
Outstanding at beginning of period | $ / shares	$ 141.98
Granted | $ / shares	150.10
Forfeited | $ / shares	201.91
Expired | $ / shares	0
Exercised | $ / shares	81.86
Outstanding at end of period | $ / shares	173.74
Exercisable at end of period | $ / shares	94.94
Vested and expected to vest at end of period | $ / shares	$ 121.89
Weighted-Average Remaining Contractual Term
Outstanding at end of period	6 years 8 months 16 days
Exercisable at end of period	4 years 11 days
Vested and expected to vest at end of period	4 years 10 months 25 days
Aggregate Intrinsic Value
Outstanding at end of period | $	$ 20,259
Exercisable at end of period | $	9,806
Vested and expected to vest at end of period | $	$ 19,736

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Common Stock and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended		6 Months Ended
	May 18, 2017	Mar. 03, 2017	Jan. 01, 2017	Jan. 01, 2016	Jan. 01, 2008	Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option unexercised						1,187,125		1,187,125		1,348,233
Exercise Price Per Share								$ 150.10
Other than options granted in period								24,671
Weighted average fair value of stock awards								$ 131.64
Stock-based compensation expense						$ 1,800	$ 3,100	$ 3,413	$ 5,741
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			5 years
Other than options granted in period			12,358
Weighted average fair value of stock awards			$ 169.85
Investment Share Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			5 years
Shares employees elected to purchase			10,146
Weighted average fair value of stock awards			$ 78.74
Performance-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option unexercised						35,885		35,885
Senior Management | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		5 years
Other than options granted in period		2,167
Weighted average fair value of stock awards		$ 161.45
Chief Executive Officer | January 1, 2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option unexercised						150,773	301,546	150,773	301,546
Options granted in period					753,864
Vesting period					5 years
Vesting percentage per year					20.00%
Stock price					$ 42.00
Exercise Price Per Share								$ 71.40	$ 91.02
Options granted in period, weighted average fair value					8.41
Chief Executive Officer | January 1, 2008 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share					37.65
Chief Executive Officer | January 1, 2008 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share					$ 70.00
Chief Executive Officer | January 1, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option unexercised						574,507	574,507	574,507	574,507
Options granted in period				574,507
Options granted in period, weighted average fair value				$ 39.16
Vesting period				5 years
Vesting percentage per year				20.00%
Stock price				$ 201.91
Exercise Price Per Share								$ 228.52	$ 202.75
Option exercised, additional percentage				1.50%
Estimated forfeiture rate for equity awards that do not vest on January 1st								100.00%
Chief Executive Officer | January 1, 2016 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share				$ 201.91
Chief Executive Officer | January 1, 2016 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period, weighted average fair value of stock over exercise price				$ 150
Employee Stock Compensation Plan | Senior Management
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period			5,185
Options granted in period, weighted average fair value			$ 81.95
Non Employee Director Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period	10,188
Options granted in period, weighted average fair value	$ 67.72

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Summary of Vesting Activities for Investment Share Program and Restricted Stock Awards (Detail)	6 Months Ended
	Jul. 01, 2017 $ / shares shares
Number of shares
Non-vested at beginning of period | shares	64,968
Granted | shares	24,671
Vested | shares	(20,061)
Forfeited | shares	(4,967)
Non-vested at end of period | shares	64,611
Weighted Average Fair Value
Non-vested at beginning of period | $ / shares	$ 166.29
Granted | $ / shares	131.64
Vested | $ / shares	146.83
Forfeited | $ / shares	192.84
Non-vested at end of period | $ / shares	$ 157.07

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Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jun. 25, 2016	Jul. 01, 2017	Jun. 25, 2016	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess tax benefit from stock-based compensation arrangements recognized within income tax provision	$ (168)	$ 0	$ (3,730)	$ 0
Deferred income taxes	5,800		5,800		$ 7,400
Contractual obligations	127,300		127,300
Operating Leases
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contractual obligations	$ 14,300		$ 14,300		$ 15,900

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Immaterial Restatement of Previously Issued Financial Statements and Reclassification - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 25, 2016 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Decrease in accounts payable for repurchase of Class A Common Stock	$ (3,000)