Brick Brewing reports improved EBITDA(x) by $1.1 million in the first
quarter compared to last year
WATERLOO, ON, June 10 /CNW/ - Brick Brewing Co. Limited (TSX: BRB), Ontario's largest Canadian-owned and Canadian-based publicly held brewery, today released its financial results for the first quarter ended April 30, 2008.
"We are encouraged by our first quarter results, which represent a $1.1 million EBITDA(x) improvement over the first quarter last year" said Jim Brickman, Executive Chairman and Founder. "In this traditionally slower period, we have managed to reduce the decline of our beer volumes and in addition, supplement our core business with profitable co-pack volumes," added Mr. Brickman.
"We are also seeing the positive effects from our aggressive initiatives to reduce costs and improve efficiencies. To be successful and prosper on a sustainable basis, we must seek to become the most cost efficient, high quality producer possible," he added.
First Quarter Financial Highlights
During the first quarter ended April 30, 2008, net revenues increased 7% to $7.3 million, compared to $6.9 million in the same period last year. In the first quarter, a seasonally slower quarter, EBITDA(x) was $363 thousand, compared to a loss of $771 thousand in the first quarter of last year, an improvement of over $1.1 million. In the quarter, there was a net loss of $108 thousand compared with a net loss of $898 thousand for the same period last year.
Also in the first quarter:
- In January 2008 the Company began production of the Mott's Caesar
brand and in the quarter revenues from co-packing activities were
$703 thousand compared to $128 thousand in the first quarter last
year.
- Beer volumes decreased by 4% in the quarter compared to the same
period last year, largely due to reduced can volumes. This decrease
is less than the 14% decrease in beer volumes that occurred in the
previous quarter.
- In the first quarter the Company's cost of producing and distributing
beer decreased by $379 thousand due to improved efficiencies compared
to the first quarter last year. Brewing material input costs
increased by $333 thousand in the quarter compared to last year. The
combined effect of these was that the per unit cost of producing and
distributing beer decreased by 1% or $46 thousand in the quarter
compared to the first quarter last year.
- Selling, marketing and administration costs decreased by
$667 thousand in the first quarter over the first quarter last year,
due primarily to reductions in ongoing overhead expenditures and
reduced public relations spending this year compared to the first
quarter last year.
- Subsequent to the end of the quarter, on May 12, 2008 the Company
announced the appointment of George H. Croft as President & CEO.
Brick Brewing Co. Limited
Statements of Earnings and Deficit
(unaudited)
($ 000's)
Three Months Ended
April 30, 2008 April 30, 2007
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Gross Revenue $ 15,596 $ 15,635
Less: Production taxes &
distribution fees (8,261) (8,763)
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Net Revenue 7,335 6,872
Cost of goods sold 5,943 5,951
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Gross margin 1,392 921
Expenses:
Selling, marketing and administration 1,028 1,693
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Earnings/(loss) before the undernoted 363 (771)
Other income/(expenses):
Amortization (421) (450)
Interest on long-term debt (102) (101)
Other interest income 17 10
Equity loss of long term investment (5) (32)
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(512) (573)
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Loss before provision for income taxes (148) (1,344)
Future income tax expense/(recovery) (41) (446)
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Net loss (108) (898)
Deficit, beginning of the period (6,852) (4,158)
Impact of change in accounting policy
for deferred financing charges - (103)
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Deficit, end of period $ (6,960) $ (5,056)
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Net earnings/(loss) per share:
Basic $ (0.00) $ (0.04)
Diluted (0.00) (0.04)
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Brick Brewing Co. Limited
Balance Sheets
(unaudited)
($ 000's)
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April 30, 2008 January 31, 2008
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Assets
Current assets:
Accounts receivable $ 3,089 $ 2,571
Inventories 7,868 7,277
Future income taxes 64 55
Prepaid expenses 619 510
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Total current assets 11,639 10,413
Property, plant and equipment 16,671 16,989
Long term investment 101 106
Trademarks and listing fees 5,437 5,430
Deferred costs 355 384
Other assets 205 213
Future income taxes 2,094 2,063
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$ 36,504 $ 35,596
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Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 1,927 $ 2,791
Trade accounts payable and
accrued liabilities 4,735 3,038
Current portion of long-term debt 911 907
Current portion of obligations
under capital lease 127 138
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Total current liabilities 7,699 6,874
Long-term debt 2,938 2,992
Obligations under capital lease 387 419
Shareholders' equity:
Share capital 31,888 31,539
Contributed surplus 553 624
Deficit (6,960) (6,852)
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Total shareholders' equity 25,481 25,311
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$ 36,504 $ 35,596
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Brick Brewing Co. Limited
Statements of Cash Flows
(unaudited)
($ 000's)
Three Months Ended
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April 30, 2008 April 30, 2007
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Cash provided by (used in):
Operations:
Earnings/(loss) for the period $ (108) $ (898)
Items not involving cash:
Amortization 419 450
Amortization of other assets 8 -
Stock based compensation (72) 23
Equity (earnings)/loss of
long term investment 5 32
Future income taxes/(recovery) (32) (482)
Change in non-cash operating
working capital 469 1,709
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690 834
Financing:
Repayment of long term debt (50) -
Repayment of obligation
under capital lease (44) (81)
Issue of capital stock,
net of costs 349 -
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255 (81)
Investments:
Acquisition of property, plant and
equipment and listing fees (81) (419)
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(81) (419)
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Net increase in cash 864 335
Cash, beginning of period (2,791) 54
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Cash/(bank indebtedness), end of period $ (1,927) $ 388
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These statements should be read in conjunction with the audited annual financial statements of the Company.
Additional Information
For further details the Company's MD&A and financial statements for the quarter ended April 30, 2008 will be available on the investor section of the Brick website at www.brickbeer.com. Additional information relating to the Company, including its Annual Information Form is available there 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 by Jim Brickman 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. Brick has complemented its J. R. Brickman Founder's Series and Waterloo Dark premium craft beers with other popular brands such as Laker, Red Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.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, including the statements regarding expected volumes, operating efficiencies and costs are based on, among other things, the following material factors and assumptions: volumes in the current fiscal year ending January 31, 2009 ("fiscal 2009") will continue to decline, no material changes in consumer preferences, operating efficiencies at the packaging and warehousing facility in Kitchener, Ontario will continue to be realized, input costs for brewing and packaging materials will continue to increase, competitive activity from other brewers 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 Company's MD&A, annual information form and various other public filings. 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.
(x) 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
