Waterloo Brewing's annual EBITDA grows +31% to $15.2 million

Fourth Quarter Highlights:

• Net Revenue for the quarter grew 66.9% to $24.5 million compared to $14.7 million in the prior year.
• EBITDA* for the quarter was $3.2 million, a decline of 4%, compared to $3.4 million in the prior year.
• Gross Profit Margin for the quarter declined by 11% to 18.1% from 29.1% in the prior year.
• Selling, Marketing, and Administration for the quarter increased slightly to $3.0 million, compared to $2.6 million in the prior year.
• The Board of Directors re-affirmed the quarterly dividend, at $0.0275/share, payable May 26, 2021, to shareholders of record as of May 19, 2021. The dividend is classified as an eligible dividend.

Full Year Highlights:

• Net Revenue increased 43.7% to $86.7 million, from $60.3 million in the prior year.
• Reported EBITDA* for the year was $15.2 million, representing a 31% increase versus the prior year's $11.6 million.
• Gross Profit Margin declined to 23.9% compared to 29.6% in the prior year, due to global market supply and cost issues with aluminum cans, as well as temporary outsourcing measures taken to meet increased production demand prior to the completion of planned can capacity upgrades.
• Selling, Marketing, and Administration expenses remained flat at $11.9 million from $11.8 million in the prior year.

KITCHENER, ON, April 8, 2021 /CNW/ - Waterloo Brewing Ltd. ("Waterloo Brewing" or the "Company") (TSX: WBR), Ontario's largest Canadian-owned brewery, today released results for the fourth quarter and full-year ended January 31, 2021. Waterloo Brewing posted a record annual EBITDA of $15.2 million on net revenue of $86.7 million, which represents growth of 31% and 44% respectively.

"The clear choices we made for growth are generating considerable momentum for our business," stated George Croft, President, and Chief Executive Officer, Waterloo Brewing, "Our portfolio of award-winning beers, ciders, seltzers, and coolers are focused on The Beer Store, LCBO, and grocery channels and fared very well despite the effect that pandemic control measures continue to have on pub and restaurant operators throughout the province."

"EBITDA growth of 31%, revenue growth of 44%, Laker growth at 19%, LandShark® Lager growth at 23%, Waterloo growth at 20%, outstanding new product success within the Seagram brand delivered 36% growth, all combined with a thriving co-pack business is nothing less than phenomenal performance", continued Croft. "No other brewery or beverage alcohol producer in the country has the diverse range of value-driving assets we do and is delivering the results we are. It is a formula that is paying literal dividends. "

"The trajectory of our Company is impressive and would not be possible without one of the most dedicated and hard-working team of people in the business," declared Croft. "When I reflect on this past year, I am so proud of the whole team here at Waterloo Brewing and deeply respect the contribution that each person has made to persevere and succeed against the odds. The adversity of this past year has galvanized us and emboldened us, and it feels as though there's nothing we can't accomplish together."

As part of the financing review to support the continued expansion and capital investment and the Company's year-end audit process, the Company was required to recast prior long-term debt obligations, that are due upon demand, to be presented as a current liability, as outlined in Notes 3.6 and 14 in the annual audited financial statements.  This accounting change does not impact the Company's risk profile, terms of borrowing, total debt outstanding, or debt covenants.  Accordingly, the Company has now presented the term debt as a current liability in the amount of $25.9 million in the annual audited financial statements. 

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, 2021.

Reconciliation of Net Earnings to EBITDA*
	Fiscal year ended
(in thousands of dollars)	January 31, 2021		January 31, 2020
Net income	$	3,000	$	497
Add (deduct):
Income tax expense	1,254		538
Depreciation and amortization	7,811		6,334
Loss (gain) on disposal of property, plant & equipment and right-of-use assets	216		(15)
Share-based payments	792		892
Finance costs	2,107		1,501
Loss on misappropriated funds	-		1,870
Subtotal	12,180		11,120
EBITDA ^*	15,180		11,617

STATEMENTS OF FINANCIAL POSITION

Fiscal years ended January 31, 2021 and January 31, 2020

	January 31, 2021		January 31, 2020
ASSETS			[recast]
Current assets
Accounts receivable	9,871,061		4,976,226
Inventories	14,344,496		10,482,912
Prepaid expenses	729,260		787,448
	24,944,817		16,246,586
Non-current assets
Property, plant and equipment	46,630,107		32,808,678
Right-of-use assets	26,936,861		27,840,996
Intangible assets	15,002,826		15,184,333
Construction deposits	1,949,074		1,050,425
	90,518,868		76,884,432
TOTAL ASSETS	115,463,685		93,131,018
LIABILITIES AND EQUITY
Current liabilities
Bank indebtedness	3,366,489		783,077
Accounts payable and accrued liabilities	21,341,335		12,909,771
Current portion of lease liabilities	3,282,080		2,869,733
Non-revolving demand loans	25,896,379		13,748,967
Current portion of long-term debt	510,275		687,836
	54,396,558		30,999,384
Non-current liabilities
Provisions	1,019,962		958,025
Lease liabilities	21,522,379		23,226,137
Long-term debt	1,367,930		1,852,023
Deferred income tax liability	3,462,495		2,208,947
	27,372,766		28,245,132
TOTAL LIABILITIES	81,769,324		59,244,516
Equity
Share capital	39,546,216		39,126,283
Share-based payments reserves	2,245,415		2,108,671
Deficit	(8,097,270)		(7,348,452)
TOTAL EQUITY	33,694,361		33,886,502
COMMITMENTS
TOTAL LIABILITIES AND EQUITY	$	115,463,685	$	93,131,018

STATEMENTS OF COMPREHENSIVE INCOME

Fiscal years ended January 31, 2021 and January 31, 2020

	January 31, 2021		January 31, 2020
Revenue	$	86,699,345	$	60,333,417
Cost of sales	66,000,997		42,483,862
Gross profit	20,698,348		17,849,555
Selling, marketing and administration expenses	11,853,169		11,842,088
Other expenses	2,268,499		1,616,977
Finance costs	2,107,363		1,500,682
Loss on misappropriated funds, net	-		1,869,595
Loss (gain) on disposal of property, plant and      equipment and right-of-use assets	215,756		(15,168)
Income before tax	4,253,561		1,035,381
Income tax expense	1,253,548		537,779
Net income and comprehensive   income for the year	$	3,000,013	$	497,602
Basic earnings per share	$	0.09	$	0.01
Diluted earnings per share	$	0.08	$	0.01

STATEMENTS OF CASH FLOWS

Fiscal years ended January 31, 2021 and January 31, 2020

	January 31, 2021		January 31, 2020
			[recast]
Operating activities
Net income	$	3,000,013	$	497,602
Adjustments for:
Income tax expense	1,253,548		537,779
Finance costs	2,107,363		1,500,682
Depreciation and amortization of property, plant and      equipment, right-of-use assets and intangibles	7,810,676		6,334,179
Loss (gain) on disposal of property, plant and equipment and      right-of-use assets	215,756		(15,168)
Share-based payments	792,327		892,360
Change in non-cash working capital	(442,761)		5,036,143
Less:
Interest paid	(1,859,817)		(1,373,019)
Cash provided by operating activities	12,877,105		13,410,558
Investing activities
Purchase of property, plant and equipment	(18,407,338)		(11,013,763)
Construction deposit paid	(1,949,074)		(1,050,425)
Proceeds from sale of property, plant and equipment, net	9,555		18,656
Purchase of intangible assets	(25,659)		(134,624)
Cash used in investing activities	(20,372,516)		(12,180,156)
Financing activities
Increase (decrease) in bank indebtedness	2,583,412		(1,104,176)
Issuance of non-revolving demand loans	14,505,315		7,961,780
Repayment of non-revolving demand loans	(2,357,903)		(1,292,639)
Repayment of long-term debt	(671,169)		(672,193)
Repayment of lease liabilities	(2,579,763)		(1,563,059)
Dividends paid	(3,748,831)		(3,576,462)
Issuance of shares, net of fees	29,368		96,722
Shares repurchased and cancelled, including fees	(377,058)		(1,125,484)
Stock option costs	-		(17,169)
Proceeds from stock option exercise	112,040		62,278
Cash generated from (used in) financing activities	7,495,411		(1,230,402)
Net increase/(decrease) in cash	-		-
Cash, beginning of year	-		-
Cash, end of year	$	-	$	-
Non-cash investing activities:
Acquisition of assets under lease	$	1,311,281	$	13,822,240

About Waterloo Brewing

Waterloo Brewing is Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Waterloo Brewing Ltd. (formerly Brick Brewing Co. Limited) was the first craft brewery to start up in Ontario and is credited with pioneering the present day craft brewing renaissance in Canada. Waterloo Brewing has complemented its Waterloo premium craft beers with the popular Laker brand.  In 2011, Waterloo Brewing purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark® and Margaritaville®. In addition, Waterloo Brewing utilizes its leading-edge brewing, blending, and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers, and ciders. Waterloo Brewing trades on the TSX under the symbol WBR. Visit us at www.WaterlooBrewing.com.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. 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, which are not guarantees and 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 included in this press release are made only at the date of this press release 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, gain, or loss on disposal of property, plant, and equipment and right-of-use assets, share-based payments, and loss on misappropriated funds. 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.

SOURCE Waterloo Brewing Ltd.

David J. Birch, Chief Financial Officer, [phone], E-mail: [email protected]

Related Links

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