Big Rock Brewery Inc. announces first quarter financial results

CALGARY, May 7, 2015 /CNW/ - Big Rock Brewery Inc. (TSX: BR) ("Big Rock" or the "Corporation") announced its financial results today for the three months ended March 31, 2015. 

The Corporation reported a net loss of $624 thousand for the three months ended March 31, 2015 as compared to a net loss of $310 thousand for the same period in 2014. Reported sales volumes decreased 0.4% to 33,980 hectolitres ("hl") for the first quarter of 2015 as compared to 34,100 hl for the same period in 2014.

Stronger sales volumes in Alberta for the quarter were overshadowed by results in British Columbia ("BC") where sales volumes and revenues were negatively impacted by a 742 hl one-time transitional adjustment to inventory upon the Corporation's change in status to a domestic producer in that province (as described below). Excluding items related to the transition in the Corporation's BC business, volumes for the quarter ended March 31, 2015 would have shown an increase of 622 hl (1.8%) and the reported operating loss would have been reduced by $483 thousand to $268 thousand.

With respect to the new Vancouver operations, Bob Sartor, CEO, said "We held our official launch of Big Rock Urban Brewery and Eatery on April 9^th and it was an overwhelming success. We are confident that the great food and the new BC specific beer offerings will result in positive contributions to the bottom line from both the restaurant and the brewery."  The first BC packaged product, 'Hollow Tree Pacific NW Red Ale,' hit retail shelves in April.

As for Big Rock's expansions in Ontario, Mr. Sartor commented, "Both the brewpub in Toronto's Liberty Village and the brewery in Etobicoke are progressing through the planning stages and we are excited about the opportunity to participate outside existing distribution systems to increase the number of beers we are able to offer our Ontario consumers."

Summary of Results

					Three months ended March 31
$ thousands (unless otherwise stated)					2015	2014	Change
Sales volumes (hl)					33,980	34,100	(120)
Net revenue					7,064	7,147	(83)
Operating loss					(871)	(420)	(451)
Net loss					(624)	(310)	(314)
Loss per share					(0.09)	(0.05)	(0.04)
Per hl net revenue					207.89	209.59	(1.70)
Per hl cost of sales					108.98	104.60	4.38

The following table shows the effect on Big Rock's results of pre-operating costs for the BC brewery and brewpub (which commenced commercial operations in April 2015), together with the impact of the related changeover in warehouse status.

	Three months ended March 31, 2015, as stated	Excluding effect of changes to BC business	Three months ended March 31, 2015, adjusted		Three months ended March 31, 2014	Change
Sales volumes (hl)	33,980	742	34,722		34,100	622
Net revenue	7,064	188	7,252		7,147	105
Cost of sales	3,703	—	3,703		3,567	136
Gross profit	3,361	188	3,549		3,580	(31)
Operating expenses	4,232	(295)	3,937		4,000	(63)
Operating loss	(871)	483	(388)		(420)	32
Finance expenses and other	(24)	—	(24)		(42)	18
Loss before income taxes	(847)	483	(364)		(378)	14
Net loss	(624)	356	(268)		(310)	42

Big Rock's inventory in BC, prior to March 1, 2015, had "import" status and was thus under the control of the provincial Liquor Distribution Branch. Subsequent to Big Rock's reclassification to "domestic" status, this inventory reverted to Big Rock's custody.  Net pre-operating costs associated with the new Vancouver brewery and restaurant, which commenced full commercial operations just after the end of the first quarter, negatively impacted general and administrative expenses and operating loss by $295 thousand. 

Financial and Operating Highlights

• Volume growth occurred in Alberta, Big Rock's largest market, with the launch of several new products, including Birch Bark Canadian Imperial Stout, The Great Cherry Farini cherry kristalweizen, and Rock Creek Blackcurrant Cider (together with a new Rock Creek variety pack). Additionally, certain private label products continued to see strong growth following comprehensive rebranding in 2014;
• In addition to the new products launched in the quarter, Big Rock expects to release two permanent and six limited edition Calgary-brewed products during the remainder of 2015;
• Big Rock also expects to launch from its new Vancouver brewery four permanent and a variety of seasonal beers brewed specifically for the BC market during 2015.

Additional Information

The Financial Statements and Management's Discussion and Analysis dated May 7, 2015 can be viewed on Big Rock's website at http://bigrockbeer.com/sites/default/files/2015q1.pdf and on SEDAR at sedar.com under Big Rock Brewery Inc.

Forward-Looking Information

Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events or Big Rock's future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "plans", "expects", "intends" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Big Rock believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release not be unduly relied upon by investors as actual results may vary materially from such forward-looking statements. These statements speak only as of the date of this News Release and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this News Release contains forward-looking statements pertaining to the following:

• the number of additional limited edition products to be released;
• the success of new products and initiatives in the future;
• the timing of new products and initiatives and the extent to which they will provide incremental sales volumes and improve profitability; and
• the impact of the Toronto brewpub and Etobicoke brewery.

With respect to the forward-looking statements listed above and contained in this News Release, management has made assumptions regarding, among other things:

• new products and services introduced will result in incremental sales volumes; and
• permitting and other construction activities will be able to be secured and/or completed within expected timeframes.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking information and statements contained herein include, but are not limited to:

• the inability to secure the requisite regulatory approvals to market the full production of the new facilities in Toronto within the timeframe indicated; and
• the inability to secure and complete construction services for the new facility within the timeframe indicated.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive.  The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information and statements included in this News Release are made as of the date hereof and Big Rock does not undertake any obligation to publicly update such forward-looking information and statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

About Big Rock Brewery Inc.

Big Rock Brewery Inc. produces premium, all-natural craft beers. Big Rock has a family of twelve permanent ales and lagers, the Rock Creek Cider^® series of craft ciders, an ongoing selection of seasonal beers released through the Brewmaster's Limited Edition and cutting-edge, small-batch brews released through the Alchemist Edition.

For more information on Big Rock Brewery visit bigrockbeer.com

SOURCE Big Rock Brewery Inc.

Image with caption: "Big Rock Brewery Inc. (CNW Group/Big Rock Brewery Inc.)". Image available at: http://photos.newswire.ca/images/download/20150507_C6349_PHOTO_EN_16385.jpg

Robert Sartor, President and Chief Executive Officer, or Barbara Feit, Chief Financial Officer: Phone: [phone], Fax: [phone], [email protected]