The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
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 Companys Samuel Adams
®
beers are produced and sold under the trade name The Boston Beer Company. A&S Brewing Collaborative LLC, d/b/a Alchemy
& Science (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 March 26, 2016, and the consolidated statements of comprehensive income and consolidated
statements of cash flows for the interim periods ended March 26, 2016 and March 28, 2015 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, they do not include all of the information and footnotes required for complete financial statements by generally accepted accounting principles and should be read in conjunction
with the audited financial statements included in the Companys Annual Report on Form 10-K for the year ended December 26, 2015.
In the opinion of
the Companys management, the Companys unaudited consolidated balance sheet as of March 26, 2016 and the results of its consolidated operations and consolidated cash flows for the interim periods ended March 26, 2016 and March 28, 2015,
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.
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 market. The Companys 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:
|
|
|
|
|
|
|
|
|
|
|
March 26,
2016
|
|
|
December 26,
2015
|
|
|
|
(in thousands)
|
|
Raw materials
|
|
$
|
43,606
|
|
|
$
|
42,123
|
|
Work in process
|
|
|
10,018
|
|
|
|
8,876
|
|
Finished goods
|
|
|
12,396
|
|
|
|
8,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,020
|
|
|
|
59,260
|
|
Less portion in other long term assets
|
|
|
(4,283
|
)
|
|
|
(2,798
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
61,737
|
|
|
$
|
56,462
|
|
|
|
|
|
|
|
|
|
|
6
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 Companys assets.
The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the
members of the Companys Board of Directors and (2) approve all (a) amendments to the Companys Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant
portion of the Companys assets, and (d) equity-based and other executive compensation and other significant corporate matters. The Companys 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 Companys
unvested share-based payment awards include unvested shares (1) issued under the Companys 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 Companys 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
|
|
|
|
March 26,
2016
|
|
|
March 28,
2015
|
|
|
|
(in thousands, except per share data)
|
|
Net Income
|
|
$
|
7,032
|
|
|
$
|
13,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income for basic:
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
$
|
5,149
|
|
|
$
|
9,934
|
|
Class B Common Stock
|
|
|
1,849
|
|
|
|
3,744
|
|
Unvested participating shares
|
|
|
34
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,032
|
|
|
$
|
13,743
|
|
|
|
|
Weighted average number of shares for basic:
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
|
9,375
|
|
|
|
9,598
|
|
Class B Common Stock*
|
|
|
3,367
|
|
|
|
3,617
|
|
Unvested participating shares
|
|
|
62
|
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,804
|
|
|
|
13,278
|
|
|
|
|
Net income per share for basic:
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
$
|
0.55
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
Class B Common Stock
|
|
$
|
0.55
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
*
|
Change in Class B Common Stock resulted from the conversion of 150,000 shares to Class A Common Stock on May 6, 2015 and 100,000 shares to Class A Common Stock on October 26, 2015, with the thirteen-week 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.
8
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
|
|
|
|
March 26, 2016
|
|
|
March 28, 2015
|
|
|
|
Earnings to
Common
Shareholders
|
|
|
Common
Shares
|
|
|
EPS
|
|
|
Earnings to
Common
Shareholders
|
|
|
Common
Shares
|
|
|
EPS
|
|
|
|
(in thousands, except per share data)
|
|
As reported - basic
|
|
$
|
5,149
|
|
|
|
9,375
|
|
|
$
|
0.55
|
|
|
$
|
9,934
|
|
|
|
9,598
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
Add: effect of dilutive potential common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based awards
|
|
|
|
|
|
|
346
|
|
|
|
|
|
|
|
|
|
|
|
418
|
|
|
|
|
|
Class B Common Stock
|
|
|
1,849
|
|
|
|
3,367
|
|
|
|
|
|
|
|
3,744
|
|
|
|
3,617
|
|
|
|
|
|
|
|
|
|
|
|
|
Net effect of unvested participating shares
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share - diluted
|
|
$
|
6,999
|
|
|
|
13,088
|
|
|
$
|
0.53
|
|
|
$
|
13,680
|
|
|
|
13,633
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average stock options to purchase approximately 656,000 and 4,000 shares of Class A Common Stock were outstanding
during the thirteen weeks ended March 26, 2016 and March 28, 2015, respectively, but not included in computing diluted income per common share because their effects were anti-dilutive. Additionally, performance-based stock options to purchase 18,000
and 45,000 shares of Class A Common Stock were outstanding as of March 26, 2016 and March 28, 2015, 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 18,000 shares of Class A Common Stock that were excluded from
computing diluted net income per common share as of March 26, 2016, 10,000 shares were granted in 2016 to a key employee. The vesting of these shares requires annual depletions, or sales by distributors to retailers, of certain of the Companys
brands to attain various thresholds during the period from 2016 to 2023. The remaining 8,000 shares were granted in 2016 to executive officers and the vesting of these shares requires annual depletions to attain various thresholds during 2016.
Furthermore, performance-based stock options to purchase 14,742 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 thirteen weeks ended March 26, 2016.
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 March 26, 2016 and March 28, 2015 were not material.
E.
|
Commitments and Contingencies
|
Purchase Commitments
The Company had
outstanding total non-cancelable purchase commitments of $168.0 million at March 26, 2016. These commitments are made up of hops, barley and wheat totaling $62.7 million, apples and other ingredients of $40.3 million, equipment and machinery of
$23.0 million, advertising contracts of $20.7 million, glass bottles of $17.4 million and other commitments of $3.9 million.
9
The Company has entered into contracts for the supply of a portion of its hops requirements. These purchase
contracts extend through crop year 2020 and specify both the quantities and prices, denominated in Euros and U.S. Dollars, to which the Company is committed. Hops purchase commitments outstanding at March 26, 2016 totaled $47.5 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 2015 and cover the
Companys barley, wheat, and malt requirements for 2016. These purchase commitments outstanding at March 26, 2016 totaled $15.2 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 Companys 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 March 26, 2016 totaled $17.4 million.
Currently, the Company brews and packages more than 95% of its core brands
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 Companys beers at the brewing companys 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 Companys 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 Companys results.
As of March 26, 2016 and December 26, 2015, the Company had approximately $0.4 million and $0.5 million, respectively, of unrecognized
income tax benefits.
The Companys practice is to classify interest and penalties related to income tax matters in income tax expense. As of March
26, 2016 and December 26, 2015, the Company had $0.4 million and $0.4 million, respectively, accrued for interest and penalties.
During the
first quarter of 2016, the Company received a $12.0 million refund from the Internal Revenue Service of an overpayment of its 2015 estimated tax. The refund resulted from the
Protecting Americans from Tax Hikes Act of 2015
, which was
enacted after payment of 2015 corporate estimated tax payments that were due on December 15, 2015. These tax extenders allow the Company to claim accelerated tax depreciation on qualified property, plant, and equipment additions, and the
research & development tax credit on the 2015 federal corporate income tax return.
The Companys federal and state income tax returns remain
subject to examination for three or four years depending on the states statute of limitations. The Company is being audited by two states as of March 26, 2016. In addition, the Company is generally obligated to report changes in taxable income
arising from federal income tax audits.
10
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 March 26, 2016, the Company was not in violation of any of its 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.
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 March 26, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
32,732
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
32,732
|
|
|
|
|
|
As of December 26, 2015
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
88,108
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
88,108
|
|
The Companys 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 Company does not adjust the quoted market price for such financial instruments.
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 March 26, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Note payable
|
|
$
|
|
|
|
$
|
400
|
|
|
$
|
|
|
|
$
|
400
|
|
|
|
|
|
As of December 26, 2015
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Note payable
|
|
$
|
|
|
|
$
|
458
|
|
|
$
|
|
|
|
$
|
458
|
|
11
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash
equivalents held in money market funds. At March 26, 2016 and March 28, 2015, the Company had money market funds with a Triple A rated money market fund. The Company considers the Triple A rated money market fund to be a
large, highly-rated investment-grade institution. As of March 26, 2016 and December 26, 2015, our cash and cash equivalents balance was $51.1 million and $94.2 million, respectively, including money market funds amounting to $32.7 million and $88.1
million, respectively. The money market funds were invested substantially in United States Treasury and government securities.
I.
|
Common Stock and Stock-Based Compensation
|
Option Activity
Information related to
stock options under the Equity Plan and the Non-Employee Director Plan is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Weighted-
Average
Exercise
Price
|
|
|
Weighted-Average
Remaining
Contractual Term
in Years
|
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Outstanding at December 26, 2015
|
|
|
1,127,162
|
|
|
$
|
63.99
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
730,391
|
|
|
|
201.02
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(14,742
|
)
|
|
|
289.54
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(217,928
|
)
|
|
|
93.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 26, 2016
|
|
|
1,624,883
|
|
|
$
|
125.57
|
|
|
|
5.97
|
|
|
$
|
109,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 26, 2016
|
|
|
503,621
|
|
|
$
|
69.59
|
|
|
|
2.69
|
|
|
$
|
58,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest at March 26, 2016
|
|
|
1,568,821
|
|
|
$
|
124.68
|
|
|
|
5.92
|
|
|
$
|
106,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On January 1, 2016, the Company granted options to purchase an aggregate of 663,136 shares of the Companys Class A
Common Stock to senior management with a weighted average fair value of $46.80 per share, of which 574,507 shares relate to a special long-term service-based retention stock option issued to the Chief Executive Officer, 70,502 shares relate to other
special long-term service-based retention stock options and 18,127 shares relate to performance-based stock options.
On February 23, 2016, the Company
granted options to purchase an aggregate of 67,255 shares of the Companys Class A Common Stock with a weighted average fair value of $89.21. These shares relate to long-term service-based stock options issued to newly hired members of senior
management.
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 Companys Class A Common Stock over the exercise
price cannot exceed $70.00 per share. At March 26, 2016 and March 28, 2015, the stock option remained unexercised
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as to 301,546 shares and 452,319 shares, respectively. If the stock option had been exercised on March 26, 2016, the exercise price would have been $114.35 per share. If the stock
option had been exercised on March 28, 2015, the exercise price would have been $198.14 per share.
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 Companys Class A Common Stock over the exercise price cannot exceed $150.00 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. At March 26, 2016, the stock option remained unexercised as to 574,507 shares. If the stock option had been exercised on March 26, 2016, the
exercise price would have been $201.91 per share.
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 26, 2015
|
|
|
60,922
|
|
|
$
|
150.03
|
|
Granted
|
|
|
27,221
|
|
|
|
161.39
|
|
Vested
|
|
|
(19,232
|
)
|
|
|
111.63
|
|
Forfeited
|
|
|
(1,633
|
)
|
|
|
134.65
|
|
|
|
|
|
|
|
|
|
|
Non-vested at March 26, 2016
|
|
|
67,278
|
|
|
$
|
165.98
|
|
|
|
|
|
|
|
|
|
|
On January 1, 2016, the Company granted 8,921 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, 2016, employees elected to purchase 9,199 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 $201.91 and $91.55 per share, respectively.
On February 23, 2016
the Company granted 9,101 shares of restricted stock awards to newly hired members of senior management of which all shares vest ratably over service periods of three years. The weighted average fair value of these restricted stock awards was
$192.26.
Stock-Based Compensation
Stock-based
compensation expense related to share-based awards recognized in the thirteen weeks ended March 26, 2016 and March 28, 2015 was $2.7 million and $ 1.6 million, respectively, and was calculated based on awards expected to vest.
The Company evaluated subsequent events occurring after the balance sheet date, March 26, 2016, and concluded that there were no 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.
13