Brick Brewing delivers another profitable quarter with EBITDA of $634
thousand
WATERLOO, ON, June 11 /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 first quarter ended May 2, 2010.
"The first quarter results are consistent with our expectations," said George Croft, President & CEO. "We entered the year with a renewed commitment to the Laker trademark. We invested heavily in the redesign of packaging and billboard advertising. It is still early in the process, but we are attracting new customers and reversing the performance trend."
The success of the Waterloo Dark and Red Baron brands continued in the first quarter. Despite a volume decline of 13% versus the comparable period, the Red Baron brand has experienced growth of more than 800% since its re-launch in the spring of 2009.
The Company has continued to improve operating margin through targeted capital spending. In the first quarter, the Company completed the installation of a new bottle packer which will allow the Company to package its 12, 15, and 18 packages for a lower cost with higher graphics quality. Additionally, a new can pasteurizer was installed during the quarter to reduce labour cost and further improve can quality.
Some financial highlights are as follows:
- Net revenue was $7.0 million compared to $7.6 million in the
comparable period
- Gross profit percentage has increased to 27.4% versus 26.5%
- EBITDA for the period ended May 2, 2010 was $634 thousand, net income
of $108 thousand
"Brick is proud to be a Canadian owned brewery in a market that is dominated by foreign owned competitors. We have made excellent progress on our cost reduction initiatives. We are now fully focused on filling the excess capacity. Winning new business will be the measure of success for the balance of fiscal 2011," remarked Mr. Croft.
The following financial statements should be read in conjunction with the audited annual financial statements of the Company. Certain prior year amounts have been reclassified to conform to the current year's presentation format.
BRICK BREWING CO. LIMITED
Consolidated Balance Sheet
(unaudited)
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First quarter ended Year ended
May 2, January 31,
2011 2010
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Assets
Current assets:
Accounts receivable 2,956,881 2,357,069
Inventories 5,799,978 5,251,714
Prepaid expenses 558,445 412,351
Future income taxes 566,000 566,000
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9,881,304 8,587,134
Property, plant and equipment 14,823,716 14,101,122
Trademarks and listing fees 5,752,308 5,731,954
Other assets 96,394 188,871
Future income taxes 954,000 1,034,000
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$ 31,507,722 $ 29,643,081
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Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 855,440 $ 1,792,406
Accounts payable and accrued liabilities 5,878,208 3,187,915
Current portion of long-term debt 757,750 816,100
Current portion of obligations under
capital lease 273,208 146,418
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7,764,606 5,942,839
Long-term debt 1,251,800 1,251,800
Obligations under capital lease 42,929 138,106
Shareholders' equity:
Share capital 34,678,264 34,678,264
Contributed surplus 802,131 772,455
Deficit (13,032,008) (13,140,383)
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22,448,387 22,310,336
Contingency
$ 31,507,722 $ 29,643,081
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BRICK BREWING CO. LIMITED
Consolidated Statement of Income, Comprehensive Income and Deficit
(unaudited)
First quarter ended
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May 2, April 30,
2010 2009
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Gross revenue $ 14,628,007 $ 15,766,795
Less production taxes and distribution
fees (7,656,863) (8,125,677)
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Net revenue 6,971,144 7,641,118
Cost of sales 5,061,658 5,619,236
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Gross profit 1,909,486 2,021,882
Selling, marketing and administration 1,272,265 866,442
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Earnings before the undernoted 637,221 1,155,440
Other income (expense):
Depreciation and amortization (415,533) (464,987)
Interest on long-term debt (24,404) (41,855)
Other income (expense) (8,909) 1,121
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(448,846) (505,721)
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Net income before provision for income taxes 188,375 649,719
Future income tax provision 80,000 218,360
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Net income and comprehensive income 108,375 431,359
Deficit, beginning of period (13,140,383) (14,506,098)
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Deficit, end of period $(13,032,008) $(14,074,739)
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Net earnings per share:
Basic $ - $ 0.02
Diluted $ - $ 0.02
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BRICK BREWING CO. LIMITED
Consolidated Statement of Cash Flows
(unaudited)
First quarter ended
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May 2, April 30,
2010 2009
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Cash provided by (used in):
Operations:
Income for the period $ 108,375 $ 431,359
Items not involving cash:
Amortization of property, plant and
equipment, and other assets 414,722 472,487
Stock based compensation 29,676 24,794
Future income tax provision 80,000 218,360
Change in non-cash operating working capital 1,396,120 (442,348)
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2,028,893 704,652
Financing:
Increase (decrease) in bank indebtedness (936,966) 176,841
Repayment of long-term debt (58,350) (53,850)
Repayment of obligation under capital lease (41,708) (32,649)
Issue of capital stock (net of fees) - 3,200
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(1,037,024) 93,542
Investing:
Purchase of property, plant and equipment,
and other assets (971,515) (731,793)
Listing fees paid (20,354) (275,692)
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(991,869) (1,007,485)
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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 $ 32,087 $ 36,355
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 May 2, 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 June 11, 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 increase, 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 June 11, 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.
%SEDAR: 00003334E
For further information: George Croft, President and CEO, Tel: (519) 576-9519 Ext. 247, E-mail: [email protected]
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