Beer volumes up 39%, Net income increases to record $4.8 million for the
year ended January 31, 2006
WATERLOO, ON, April 25 /CNW/ - Brick Brewing Co. Limited (TSX:BRB) today
released its record annual results for the year ended January 31, 2006.
"We are very pleased with the progress of our business and the resulting
record annual financial performance for the Company," said Jim Brickman,
Executive Chairman and Founder. "The continued shift in the industry
towards value continues to provide Brick with the opportunity for further
sustained growth and profitability," Brickman added.
Doug Berchtold, President and CEO said: "While the fourth quarter was a
challenge financially due to the myriad of operational improvements
underway we expect that the changes being made to reshape our operations
will reduce structural operating costs and allow us to better execute in
both the manufacturing and distribution of our products. We will continue
to sustain our aggressive focus on reducing structural operating costs
while improving the availability of our products."
Fourth Quarter Financial Highlights
Quarterly Comparison
- Net revenue for the fourth quarter ended January 31, 2006 increased
to $6.4 million compared to $4.9 million for the same period last
year, an increase of 31%. Beer volumes increased by 12% over the
fourth quarter last year.
- Net income for the quarter was a record $1.7 million, after a
$2.1 million income tax recovery, compared to $220 thousand in the
fourth quarter last year.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) in the fourth quarter was $217 thousand before adjusting
$369 thousand for one-time write-down of bottle inventory compared to
a loss of $21 thousand before adjusting $379 thousand for a one-time
production tax decrease for the same quarter last year.
- Cost of goods on a per unit basis for beer increased 2% in the fourth
quarter compared to last year. These cost increases in the quarter
are attributable to increased costs associated with the new Kitchener
facility and an increased investment in customer service activities
in order to better execute delivery of products directly to The Beer
Store and LCBO stores.
Annual Financial Highlights
- Net revenue for the year ended January 31, 2006 increased by 33% to
$30.2 million compared to $20.8 million for the same period last year
before a one-time reduction last year of $929 thousand in production
taxes. Beer volumes increased by 39% over last year.
- Net income for the year was a record $2.7 million before a
$2.2 million recovery for income taxes, compared to $1.9 million last
year.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased by 15% to $3.9 million in the year, compared to
$3.4 million last year.
- Cost of goods on a per unit basis for beer decreased 13% in the year
compared to last year.
Fourth Quarter Operational Highlights
- In the fourth quarter of this year due to increased industry pricing
net revenues increased by $934 thousand over the fourth quarter last
year. Effective October 2005 the Government of Ontario increased the
social reference price for beer to $26.40 per case of 24 bottles
including deposit. This is the minimum price at which brewers can
sell beer to consumers.
- In the fourth quarter the Company's per unit cost of goods sold
increased by 2% over the same period last year. During the quarter
the Company consolidated and increased its customer service
activities in an effort to better execute delivery of its products
directly to The Beer Store and LCBO stores as opposed to central
warehouses. The Company successfully reduced transfer fees paid to
LCBO and The Beer Store by 15% or $386 thousand over the fourth
quarter last year.
- During the fourth quarter the Company continued the installation of
its new Kitchener packaging line, which is now in the final stages of
its commissioning.
- In the fourth quarter the Company's EBITDA performance was adversely
affected by transitional costs pertaining to the new Kitchener
packaging facility, a one-time write-down of bottle inventories and
increased investment spending in marketing, selling and customer
service activities.
<<
Brick Brewing Co. Limited
Statements of Earnings and Deficit
(unaudited)
($ 000's)
Three Months Ended Year Ended
-------------------------------------------------------------------------
January 31, January 31, January 31, January 31,
2006 2005 2006 2005
Gross Revenue $ 13,627 $ 11,130 $ 62,277 $ 42,129
Less: Production
taxes &
distribution fees (7,234) (6,244)(2) (32,058) (20,393)(2)
-------------------------------------------------------------------------
Net Revenue 6,393 4,886 30,219 21,736
Cost of goods sold 4,553(1) 3,970 19,356(1) 14,878
-------------------------------------------------------------------------
Gross margin 1,840 915 10,863 6,859
Expenses:
Selling, marketing
and administration 1,594 927 6,485 4,286
-------------------------------------------------------------------------
Earnings before the
undernoted 246 (11) 4,378 2,573
Other expenses:
Bottle dispute (29) (10) (83) (88)
Amortization (284) (130) (1,153) (1,363)
Interest on long-term
debt (59) (43) (222) (174)
Other interest income
(expense) 42 35 107 9
Equity earnings of
affiliate 13 - 38 -
-------------------------------------------------------------------------
(317) (148) (1,314) (1,617)
-------------------------------------------------------------------------
Earnings/(loss) before
provision for income
taxes and one-time
items (71) (160) 3,065 956
One-time write-down
to bottle inventory (369)(1) - (369)(1) -
One-time reduction to
production taxes - 379(2) - 929(2)
Recovery for income
taxes 2,104 - 2,104 -
-------------------------------------------------------------------------
Net earnings 1,664 220 4,799 1,885
Deficit, beginning
of the period (5,949) (9,304) (9,085) (10,969)
-------------------------------------------------------------------------
Deficit, end
of period $ (4,285) $ (9,085) $ (4,285) $ (9,085)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per
share:
Basic $ 0.08 $ 0.01 $ 0.24 $ 0.12
Diluted 0.08 0.01 $ 0.24 0.11
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings/(loss)
per share before
tax adjustment:
Basic $ (0.02) $ 0.01 $ 0.14 $ 0.12
Diluted (0.02) 0.01 $ 0.13 0.11
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) & (2) reclassified for comparison purposes
Brick Brewing Co. Limited
Balance Sheets
(unaudited)
($ 000's)
-------------------------------------------------------------------------
January 31, January 31,
2006 2005
-------------------------------------------------------------------------
Assets
Current assets:
Cash $ 507 $ 3,108
Accounts receivable 3,248 1,981
Inventories 5,111 4,207
Prepaid expenses 434 163
-----------------------------------------------------------------------
Total current assets 9,300 9,460
Property, plant and equipment 15,518 9,511
Deposits on equipment - 128
Investment in affiliate 103 -
Trademarks and listing fees 5,254 5,109
Deferred costs 374 183
Other assets 273 -
Future income taxes 2,104
-------------------------------------------------------------------------
$ 32,926 $ 24,391
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable and
accrued liabilities $ 5,411 $ 3,275
Current portion of long-term debt 476 300
Current portion of obligations
under capital lease 100 31
-----------------------------------------------------------------------
Total current liabilities 5,987 3,605
Long-term debt 2,989 2,550
Obligations under capital lease 104 38
Shareholders' equity:
Share capital 27,717 27,060
Contributed surplus 414 222
Deficit (4,285) (9,085)
-----------------------------------------------------------------------
Total shareholders' equity 23,846 18,198
-------------------------------------------------------------------------
$ 32,926 $ 24,391
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Brick Brewing Co. Limited
Statements of Cash Flows
(unaudited)
($ 000's)
Three Months Ended Year Ended
-------------------------------------------------------------------------
January 31, January 31, January 31, January 31,
2006 2005 2006 2005
-------------------------------------------------------------------------
Cash provided by
(used in):
Operations:
Earnings for
the period $ 1,664 $ 220 $ 4,799 $ 1,885
Items not
involving cash:
Amortization 284 130 1,153 1,363
Stock based
compensation 29 73 192 160
Equity earnings
of affiliate (13) - (38) -
Recovery of
future income
taxes (2,104) - (2,104) -
Change in non-cash
operating working
capital 359 (3,288) (498) (4,975)
-----------------------------------------------------------------------
219 (2,865) 3,505 (1,566)
Financing:
Increase/(decrease)
in bank indebtedness - - - (807)
Repayment of long
term debt (35) (62) (385) (3,265)
Repayment of obligation
under capital lease (12) 38 (87) (7)
Repayment of long
term sales taxes - - - (648)
Issuance of long
term debt - - 1,000 3,000
Issuance of long-term-
obligations under
capital lease 163 - - -
Financing costs - - (5) (185)
Proceeds from sale of
bottle inventory 224 - 224 -
Issue of capital stock,
net of costs 227 5,326 657 7,505
-----------------------------------------------------------------------
567 5,302 1,404 5,592
Investments:
Decrease/(increase)
in equipment deposits - (128) - (128)
Acquisition of
property, plant and
equipment and listing
fees (2,544) (335) (6,908) (790)
Deferred pre-operating
costs (236) - (236) -
Other assets - - (300) -
Investment in affiliate - - (66) -
-----------------------------------------------------------------------
(2,779) (463) (7,510) (918)
- -
-------------------------------------------------------------------------
Net increase in cash (1,993) 1,974 (2,601) 3,108
-------------------------------------------------------------------------
Cash, beginning of
period 2,500 1,134 3,108 -
-------------------------------------------------------------------------
Cash, end of period $ 507 $ 3,108 $ 507 $ 3,108
-------------------------------------------------------------------------
-------------------------------------------------------------------------
These 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.
Additional Information
For further details the Company's complete MD&A and financial statements
for the year ended January 31, 2006 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.
Quarterly Conference Call Notification
Please note that the Company's quarterly conference call with analysts,
media and interested participants will take place at 11:00am ET,
April 25, 2006. The number to call to participate in the teleconference is
416-642-5212 or 866-321-6651. To ensure your participation, please call in
about five minutes before the start of the call. For those unable to
participate, a taped rebroadcast will be available on the investor section of
the Brick website at www.brickbeer.com.
Brick Brewing Co. Limited is a regional brewer of award winning premium
quality 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
successful line of 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. These forward-looking statements include the
statements concerning plant, packaging and other capacity improvements product
demand, job creation and reduced variable costs and margin improvements. These
forward-looking statements are not guarantees and are based on management's
expectations that improved operating efficiencies will be realized from the
additional capacity and that product demand will continue to grow. Although
the Company believes these forward-looking statements are based on information
and assumptions which are reasonable there are a number of factors which could
cause actual results to vary from current expectations, including construction
or other production delays, additional construction or start-up costs, or
operational issues or reduced product demand. The forward-looking statements
included in this press release are made only at the date of this press release
and the Company does not undertake to publicly update these forward-looking
statements to reflect new information, future events or otherwise.
>>
%SEDAR: 00003334E
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Brick Brewing reports record annual performance
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