Brick Brewing EBITDA* doubles to $1.2 million in first quarter

KITCHENER, ON, June 5, 2012 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), the largest Canadian-owned brewery in Ontario, today released its financial results for the first quarter ended April 29, 2012 for its fiscal year 2013.

"Our Company is off to a fast start in fiscal 2013" declared George Croft, President and CEO. "During the first quarter, Seagram Blends volume at the LCBO increased by 43% compared to the first quarter of fiscal 2012.  We achieved a more profitable sales mix in the quarter, and improved both net revenue and gross profit by $0.5 million."

"We are focused on driving additional costs out of the business and have made the commitment to save $1 million in operating costs.  The significant leap in profitability this quarter is a testament to the determined effort and dedication of our staff", said Mr. Croft.

Brick launched its redesigned Waterloo Brewing Co. portfolio, which includes permanent additions to the family; Waterloo Amber and Waterloo IPA.  The new family of beers will be available at the LCBO and at The Beer Store in a range of pack formats.  "This launch of Waterloo Brewing Co. is only the beginning of our strategy to reaffirm our company's craft brewing leadership and heritage" noted Mr. Croft.

"Despite legislated price increases - which eliminated our compelling price advantage - and many of our competitors replicating our "can in case" program, our position in the value beer segment is strong.  Ontario beer drinkers can rely on the Laker family of beers to provide great value in beer. The significant investments we've made in brewing quality over the last few years have only made our beers more competitive in the crowded value segment." continued Mr. Croft. "We look forward to continued profitable growth throughout fiscal 2013."

Financial highlights are as follows:

• Net revenues for the first quarter of fiscal 2013 were $8.6 million compared to $8.1 million in the first quarter of fiscal 2012.
  
  
• Gross profit percentage for the quarter increased to 25.8% from 20.7% in the prior year comparable quarter.
  
  
• EBITDA* for the first quarter of fiscal 2013 doubled to $1.2 million compared to EBITDA* in the first quarter of fiscal 2012 of $0.6 million.

The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2012.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)*
		Quarter ended
(in thousands of dollars)		April 29, 2012	May 1, 2011
Net income/(loss)		$ 342	$ (134)
Add:
	Income tax expense/(recovery)	125	(57)
	Depreciation and amortization	623	618
	Finance costs	113	163
Subtotal		861	724
EBITDA*		1,203	590

 

STATEMENT OF COMPREHENSIVE INCOME
For the quarters ended April 29, 2012 and May 1, 2011
(Not audited or reviewed by the Company's external auditor)

		Quarter ended April 29, 2012			Quarter ended May 1, 2011
Revenue	$	8,625,963		$	8,132,603
Cost of sales		6,402,739			6,450,465
Gross profit		2,223,224			1,682,138
Selling, marketing and administration expenses		1,547,985			1,564,725
Other expenses		95,570			145,695
Finance costs		112,645			162,997
Income/(loss) before tax		467,024			(191,279)
Income tax expense/(recovery)		125,500			(57,000)
Net income/(loss) and comprehensive income/(loss) for the period	$	341,524		$	(134,279)
Basic earnings per share	$	0.01		$	-
Diluted earnings per share	$	0.01		$	-

 

STATEMENT OF FINANCIAL POSITION
As at April 29, 2012 and January 31, 2012
(Not audited or reviewed by the Company's external auditor)

				April 29, 2012			January 31, 2012
ASSETS
	Non-current assets
		Property, plant and equipment	$	17,953,775		$	17,753,175
		Intangible assets		13,904,905			13,829,158
		Other assets		70,000			35,000
		Deferred income tax assets		2,731,500			2,857,000
				34,660,180			34,474,333
	Current assets
		Accounts receivable		5,951,003			4,585,333
		Inventories		4,736,559			3,961,542
		Prepaid expenses		281,455			299,919
				10,969,017			8,846,794
TOTAL ASSETS				45,629,197			43,321,127
LIABILITIES AND EQUITY
	Equity
		Share capital		34,655,402			34,653,027
		Share-based payments reserves		975,280			969,893
		Deficit		(7,783,252)			(8,124,776)
	TOTAL EQUITY			27,847,430			27,498,144
	Non-current liabilities
		Provisions		184,822			181,898
		Long-term debt and promissory note		5,685,580			5,890,379
				5,870,402			6,072,277
	Current liabilities
		Bank indebtedness		2,973,833			1,999,482
		Accounts payable and accrued liabilities		7,471,628			6,245,305
		Current portion of long-term debt and promissory note		1,445,340			1,481,269
		Obligations under finance leases		20,564			24,650
				11,911,365			9,750,706
TOTAL LIABILITIES				17,781,767			15,822,983
COMMITMENTS
TOTAL LIABILITIES AND EQUITY			$	45,629,197		$	43,321,127

 

STATEMENT OF CASH FLOWS
For the quarters ended April 29, 2012 and May 1, 2011
(Not audited or reviewed by the Company's external auditor)

				Quarter ended April 29, 2012			Quarter ended May 1, 2011
Operating activities
	Net income/(loss)		$	341,524		$	(134,279)
	Adjustments for:
		Income tax expense/(recovery)		125,500			(57,000)
		Finance costs		112,645			162,997
		Depreciation and amortization of property, plant and equipment and intangibles		622,618			617,613
		Share-based payments		5,387			12,696
		Change in non-cash working capital related to operations		(960,376)			255,599
	Less:
		Interest paid		(113,085)			(45,256)
Cash provided by operating activities				134,213			812,370
Investing activities
	Purchase of property, plant and equipment			(813,801)			(524,421)
	Purchase of intangible assets			(85,164)			(5,225,613)
Cash used in investing activities				(898,965)			(5,750,034)
Financing activities
	Increase in bank indebtedness			974,351			3,125,501
	Decrease in obligations under finance leases			(4,086)			(144,160)
	Issuance of long-term debt			-			5,800,000
	Repayment of mortgage payable - Roynat Inc.			-			(3,680,037)
	Payment of financing costs			-			(184,640)
	Repayment of long-term debt			(207,888)			-
	Change in share capital			2,375			-
	Stock options exercised			-			21,000
Cash provided by financing activities				764,752			4,937,664
Net increase/(decrease) in cash				-			-
Cash, beginning of period				-			-
Cash, end of period			$	-		$	-
Non-cash investing and financing activities:
	Acquisition of intangible assets satisfied by the issuance of a promissory note payable		$	-		$	2,400,000

 

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended April 29, 2012 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. This and 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 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 and is officially certified under British Retail Consortium (BRC) Global Standards for Food Safety, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Brick Brewing Co. was the first craft brewery to start up in Ontario, and is credited with pioneering the present day craft brewing renaissance in Canada. Brick has complemented its Waterloo brand premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft.  In March 2011, Brick purchased the Canadian rights to the Seagram Coolers brand which it has now relaunched as Seagram Blends. 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 4, 2012 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, 2013 ("fiscal 2013") will increase; no material changes in consumer preferences; brewing, blending, and packaging efficiencies will improve; the cost of input materials for brewing and blending will increase; the cost of packaging materials will decrease; competitive activity from other manufacturers will continue; no material change to the regulatory environment in which the Company operates and no material supply, cost or quality control issues with vendors.   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 remainder of the discussion in this press release, the Company's annual information form and various other public filings as and when released by the Company.  The forward-looking statements included in this press release are made only as of June 4, 2012 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-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards  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.

 

Image with caption: "Waterloo Brewing Co. (CNW Group/Brick Brewing Co. Limited)". Image available at: http://photos.newswire.ca/images/download/20120605_C5863_PHOTO_EN_14605.jpg

George Croft, President and CEO, Tel: [phone] Ext.147; E-mail: [email protected]