BRICK BREWING ANNOUNCES Q3 RESULTS WITH EBITDA OF $984 THOUSAND
WATERLOO, ON, Dec. 9 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), Ontario's largest Canadian-owned and Canadian-based publicly held brewery, today released its financial results for the third quarter.
Brick Brewing delivered EBITDA for the quarter ended October 31st, 2010 of $984 thousand, with net earnings of $213 thousand. The momentum on Brick brands continued in the third quarter with growth of 6%, compared to an industry volume decline of 2%.
"Brick Brewing continues to make significant strides in operating effectiveness. We have built a solid foundation for the business through a combination of strict cost management and targeted capital expenditures," said George Croft, President & CEO. "We now have the confidence in our operation that is required to aggressively pursue business development opportunities. Moving forward, volume growth is Brick Brewing's top priority."
In the third quarter, the Company signed agreements with two new co-pack customers and has also signed agreements for distribution of Brick Brands in the North-eastern United States and British Columbia, Canada. "We look forward to the first quarter of next year when we begin ramping up operations to meet production requirements created by our new customers," said Russell Tabata, Brick Brewing's Chief Technical Officer.
"The Laker family of brands grew by 22% in the period, building on the success in our previous quarter," said Mr. Croft. "The Company has landed on a winning consumer position which centres on 'Buy Local. Support Local'. Our award winning taste, appearance and price is converting drinkers to the Laker portfolio on a daily basis," added Mr. Croft.
The Company's volume of canned beer continues to grow rapidly with a 159% lift in the quarter and 87% on a year-to-date basis.
Some financial highlights of the quarter are as follows:
- Net revenue was $7.1 million compared to $7.3 million in the
comparable period last year;
- Gross profit percentage has increased to 30.0% versus 24.6%; and
- EBITDA for the period ended October 31, 2010 was $984 thousand, an
increase of 37.2% over the comparable period.
- Net income of $0.2 million.
The following financial statements should be read in conjunction with the audited annual financial statements of the Company.
BRICK BREWING CO. LIMITED
Consolidated Balance Sheet
(unaudited)
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Third quarter ended Year ended
October 31, January 31,
2010 2010
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Assets
Current assets:
Accounts receivable 6,716,140 2,357,069
Inventories 5,492,059 5,251,714
Prepaid expenses 446,208 412,351
Future income taxes 566,000 566,000
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13,220,407 8,587,134
Property, plant and equipment 15,266,798 14,101,122
Intangible assets 5,899,532 5,731,954
Other assets - 188,871
Future income taxes 434,000 1,034,000
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$ 34,820,737 $ 29,643,081
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Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 1,243,959 $ 1,792,406
Accounts payable and accrued liabilities 6,374,822 3,187,915
Current portion of long-term debt 624,000 816,100
Current portion of obligations under
capital lease 200,112 146,418
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8,442,893 5,942,839
Long-term debt 2,800,834 1,251,800
Obligations under capital lease 30,763 138,106
Shareholders' equity:
Share capital 34,578,264 34,678,264
Contributed surplus 861,484 772,455
Deficit (11,893,501) (13,140,383)
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23,546,247 22,310,336
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$ 34,820,737 $ 29,643,081
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BRICK BREWING CO. LIMITED
Consolidated Statement of Income, Comprehensive Income and Deficit
(unaudited)
Third quarter ended Fiscal year-to-date ended
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October 31, October 31, October 31, October 31,
2010 2009 2010 2009
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Gross revenue $ 16,200,106 $ 15,717,895 $ 50,393,971 $ 51,141,174
Less production
taxes and
distribution
fees (9,088,043) (8,437,835) (27,199,594) (26,903,965)
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Net revenue 7,112,063 7,280,060 23,194,377 24,237,209
Cost of sales 4,975,708 5,491,103 16,073,451 17,914,082
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Gross profit 2,136,355 1,788,957 7,120,926 6,323,127
Selling,
marketing and
administration 1,124,734 1,067,183 3,699,876 3,122,059
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Earnings before
the undernoted 1,011,621 721,774 3,421,050 3,201,068
Other expense:
Depreciation and
amortization (579,577) (328,187) (1,393,559) (1,382,990)
Interest on
long-term debt (39,412) (34,610) (102,074) (111,511)
Other expense (52,069) (4,771) (78,535) (19,414)
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(671,058) (367,568) (1,574,168) (1,513,915)
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Net income before
provision for
income taxes 340,563 354,206 1,846,882 1,687,153
Future income
tax provision 128,000 112,690 600,000 553,463
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Net income and
comprehensive
income 212,563 241,516 1,246,882 1,133,690
Deficit,
beginning of
period (12,106,064) (13,613,924) (13,140,383) (14,506,098)
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Deficit, end
of period $(11,893,501) $(13,372,408) $(11,893,501) $(13,372,408)
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Net earnings
per share:
Basic $ 0.01 $ 0.01 $ 0.04 $ 0.04
Diluted $ 0.01 $ 0.01 $ 0.04 $ 0.04
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BRICK BREWING CO. LIMITED
Consolidated Statements of Cash Flows
(unaudited)
Third quarter ended Fiscal year-to-date ended
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October 31, October 31, October 31, October 31,
2010 2009 2010 2009
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Cash provided by
(used in):
Operations:
Income for
the period $ 212,563 $ 241,516 $ 1,246,882 $ 1,133,690
Items not
involving cash:
Amortization
of property,
plant and
equipment,
and other
assets 579,577 335,688 1,393,702 1,405,491
Stock based
compensation 29,676 38,721 89,029 87,657
Future income
tax provision 128,000 112,690 600,000 553,463
Change in non-cash
operating working
capital 208,821 (35,951) (1,446,367) (1,424,599)
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1,158,637 692,664 1,883,246 1,755,702
Financing:
Increase
(decrease)
in bank
indebtedness (202,990) 211,668 (548,447) 1,291,915
Proceeds from
new term
debt, net 227,793 - 1,715,284 -
Repayment of
long-term debt (150,000) (408,150) (358,350) (865,650)
Repayment of
obligation under
capital lease (42,993) (34,032) (126,970) (100,013)
Change in share
capital, net
of fees (100,000) - (100,000) 3,200
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(268,190) (230,514) 581,517 329,452
Investing:
Purchase of
property, plant
and equipment,
and other assets (728,737) (261,825) (2,220,186) (1,825,480)
Purchase of
intangible
assets (161,710) (200,325) (244,577) (468,965)
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(890,447) (462,150) (2,464,763) (2,294,445)
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Net decrease
in cash - - - (209,291)
Cash, beginning
of period - - - 209,291
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Cash, end of
period $ - $ - $ - $ -
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Supplemental cash
flow information:
Cash paid for
interest 47,004 35,254 $ 132,159 $ 114,582
Non-cash investing
and financing
activities:
Obligation under
capital lease $ - $ - $ 73,321 $ -
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Additional Information
For further details the Company's management discussion and analysis (MD&A) and unaudited consolidated financial statements for the quarter ended October 31, 2010 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. Additional information relating to the Company, including its Annual Information Form, is or will be available on the Company's website and on SEDAR at www.sedar.com.
About Brick Brewing
Brick Brewing Co. Limited is Ontario's largest Canadian-owned and Canadian-based publicly held brewery. The Company is a regional brewer of award winning premium quality and value beers. The Company, founded in 1984, was the first craft brewery to start up in Ontario, and is credited with pioneering the present day craft brewing renaissance in Canada. The Company has complemented its Waterloo family of premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com
Forward-Looking Statements
Except for the historical information contained herein, the discussion in this press release contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, strategies, expectations and intentions and include, for example, the statements concerning expected volumes, operating efficiencies and costs. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements. These forward-looking statements are not guarantees and reflect the Company's views as of December 9, 2010 with respect to future events. Future events are subject to certain risks, uncertainties and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements, including the statements regarding expected volumes, operating efficiencies and costs are based on, among other things, the following material factors and assumptions: sales volumes in the fiscal year ending January 31, 2011 ("fiscal 2011") will decrease, no material changes in consumer preferences, brewing and packaging efficiencies will improve, input costs for brewing materials will decrease, the cost of packaging materials will decrease, competitive activity from other brewers will continue, no material change to the regulatory environment in which the Company operates, no material supply, cost or quality control issues with vendors, owner brand growth, market expansion and additional co-pack contracts. Readers are urged to consider the foregoing factors and assumptions when reading the forward-looking statements and, for more information regarding the risks, uncertainties and assumptions that could cause the Company's actual financial results to differ from the forward-looking statements, to also refer to the Company's MD&A, the Company's annual information form and various other public filings. The forward-looking statements included in the press release are made only as of December 9, 2010 and, except as required by applicable securities laws, the Company does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.
* EBITDA is a non-GAAP earnings measure, therefore it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company's lenders to evaluate the ongoing cash generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company's operating performance.
For further information: George Croft, President and CEO, Tel: (519) 576-9519 Ext. 247, E-mail: [email protected]
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