Big Rock Brewery Income Trust

Big Rock Brewery Income Trust
BIG ROCK BREWERY LTD.

BIG ROCK BREWERY LTD.

March 17, 2005 16:43 ET

Big Rock Brewery Income Trust Announces Year-End Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BIG ROCK BREWERY INCOME TRUST

TSX SYMBOL: BR.UN

AND BIG ROCK BREWERY LTD.

MARCH 17, 2005 - 16:43 ET

Big Rock Brewery Income Trust Announces Year-End
Results

CALGARY, ALBERTA--(CCNMatthews - March 17, 2005) - Big Rock Brewery
Income Trust (TSX:BR.UN) (the "Trust") is pleased to report to
Unitholders its consolidated financial results for its year ended
December 31, 2004. These results reflect the consolidated operations of
the Trust, Big Rock Brewery Ltd. and its wholly owned subsidiaries
Kamloops Brewery Ltd. and Whistler Brewing Company Ltd.

Financial Highlights for the year ended December 31, 2004 are as follows:

Net income for the year ended December 31, 2004 was $6,766,908 compared
to $4,555,856 for the nine months ended December 31, 2003 and $5,094,964
for the year ended December 31, 2003, a 33% increase.

Net income per unit increased to $1.17 for the year ended December 31,
2004 from $0.92 for the year ended December 31, 2003, a 27% increase.

Cash distributions declared to Unitholders for the year ended December
31, 2004 were $5,671,544 or $0.98 per unit. The Trust declared total
cash distributions of $0.70 per trust unit for the year ending December
31, 2003 amounting to $3,890,615 in total.

Big Rock's balance sheet continued to strengthen during the year ended
December 31, 2004 as $3,367,247 of long term debt was eliminated and
Unitholders' equity increased by $2,833,632 (11%) after deducting cash
distributions of $5,671,544. At December 31, 2004 the Trust had cash of
$2,093,695 and no bank indebtedness.

Sales volume in hectoliters for the year ended December 31, 2004
increased to 192,674 from 180,451 for the same period last year, a 7%
increase.

Significant growth of our core brands in the B.C. market and the
popularity of Jack Rabbit Lager in western Canadian markets have
resulted in Big Rock significantly outperforming the industry which
experienced no growth during the period.

For the year ended December 31, 2004, net sales revenue rose to
$38,789,564 from $35,053,324 for the year ended December 31, 2003, an
11% increase resulting from an increase in sales volume and a beneficial
increase in sale of premium beers vs value beers.

In September, the Alberta Gaming and Liquor Commission established a new
transitional provision in policy whereby small brewers with an annual
worldwide production of less than 400,000 HL are now assessed a markup
rate of $0.40 per liter on the first 200,000 HL sold in Alberta and
$0.98 per liter on the next 200,000 HL sold in Alberta up to and
including 400,000 HL of worldwide production. Once a small brewer
exceeds 400,000 HL the markup rate will be $0.98 per liter on all
Alberta sales. The revision to this policy provides Big Rock with the
ability to increase its volume up to 400,000 HL while maintaining the
small brewer mark-up benefit on the first 200,000 HL of production. The
potential for continued profitable growth of the Company's business is
enhanced as a result of this policy revision.

Cost of sales increased from $12,845,096 last year to $13,696,549 for
the year ending December 31, 2004. Cost of sales as a percentage of
sales was 35% for the year which is consistent with last year.

Gross profit for the year was up 13% from $22,208,228 last year to
$25,093,015 this year commensurate with the volume increase and
favourable shifting sales mix.

Selling expenses for the year ended December 31, 2004 increased to
$11,149,364 compared to $10,315,397 last year, an 8% increase.
Increasingly competitive promotional programs require constant
innovation by Big Rock marketing and sales staff to encourage the pull
through of Big Rock products both on-premise and off-premise. Selling
expenses also include the cost of delivering beer. Increasing common
carrier charges and higher sales volumes in British Columbia have
resulted in an increase in delivery expense this year.

During the year ended December 31, 2004, general and administrative
expenses increased to $4,193,387 from $4,098,325 for the year ending
December 31, 2003, a 2% increase.

Amortization increased from $1,754,151 to $1,926,195. Major capital
additions during the year included canning line and bottling line
upgrades as well as the purchase of additional fermentation tanks.

Income tax expense for the year of $928,858 (year ended December 31,
2003 - $438,910) is comprised of $433,799 in current income tax expense
and $495,059 in future income tax expense.

In 2003, Big Rock changed its fiscal year end from March 31 to December
31. Presented below are financial statements as at and for the year
ended December 31, 2004 with comparatives as at and for the nine months
ended December 31, 2003.



CONSOLIDATED BALANCE SHEETS
(Unaudited)

As at December 31,
2004 2003
$ $
---------------------------------------------------------------------
ASSETS
Current
Cash 2,093,695 257,258
Accounts receivable 2,758,246 2,629,219
Income tax recoverable - 2,195,000
Inventories 4,667,950 4,512,097
Prepaid expenses and other 427,169 380,165
Investments 33,008 33,008
---------------------------------------------------------------------
9,980,068 10,006,747
Property, plant and equipment 29,897,468 29,745,239
Deferred charges and other assets 323,714 331,972
Goodwill 727,218 727,218
---------------------------------------------------------------------
40,928,468 40,811,176
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES AND UNITHOLDERS' EQUITY
Current
Bank indebtedness - 1,574,393
Accounts payable and accrued liabilities 3,176,104 1,948,094
Income taxes payable 252,140 -
Distributions payable 585,942 335,851
Current portion of long-term debt - 1,100,000
---------------------------------------------------------------------
4,014,186 4,958,338

Long-term debt - 2,267,247
Future income taxes 7,394,131 6,899,072
---------------------------------------------------------------------
Total liabilities 11,408,317 14,124,657
---------------------------------------------------------------------

Unitholders' equity
Trust unitholders' capital 16,754,964 15,051,988
Contributed surplus 59,442 24,150
Undistributed income 12,705,745 11,610,381
---------------------------------------------------------------------
29,520,151 26,686,519
---------------------------------------------------------------------
40,928,468 40,811,176
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---------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS AND UNDISTRIBUTED INCOME
(Unaudited)

Period ended December 31
2004 2003
$ $
(12 months) (9 months)
---------------------------------------------------------------------

Revenue
Net sales 38,789,564 28,503,840
Cost of sales 13,696,549 10,298,575
---------------------------------------------------------------------
Gross profit 25,093,015 18,205,265
---------------------------------------------------------------------

Expenses
Selling 11,149,364 8,155,972
General and administrative 4,193,387 3,095,802
Interest on long-term debt 120,578 190,727
Interest on short-term debt 7,725 58,175
Amortization 1,926,195 1,257,190
---------------------------------------------------------------------
17,397,249 12,757,866
---------------------------------------------------------------------

Income before income taxes 7,695,766 5,447,399
Income tax expense 928,858 891,543
---------------------------------------------------------------------

Net income for the period 6,766,908 4,555,856

Undistributed income, beginning of period 11,610,381 10,058,529
Cash distributions declared (5,671,544) (3,004,004)
---------------------------------------------------------------------
Undistributed income, end of period 12,705,745 11,610,381
---------------------------------------------------------------------

Net income per unit
Basic 1.17 0.82
Diluted 1.15 0.81
---------------------------------------------------------------------
---------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Period ended December 31
2004 2003
$ $
(12 months) (9 months)
---------------------------------------------------------------------

OPERATING ACTIVITIES
Net income for the period 6,766,908 4,555,856
Items not affecting cash
Amortization 1,926,195 1,257,190
Stock based compensation 225,292 24,150
Future income taxes 495,059 2,074,653
---------------------------------------------------------------------
9,413,454 7,911,849
Net change in non-cash working capital 3,153,266 (3,210,814)
---------------------------------------------------------------------
Cash provided by operating activities 12,566,720 4,701,035
---------------------------------------------------------------------

FINANCING ACTIVITIES
Decrease in bank indebtedness (1,574,393) (226,347)
Increase (repayment) of long-term debt (3,367,247) 688,500
Distribution payments (5,421,453) (3,000,686)
Cash received on exercise of options 1,702,976 361,637
---------------------------------------------------------------------
Cash used in financing activities (8,660,117) (2,176,896)
---------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,078,424) (2,102,096)
Deferred charges and other assets, net 38,258 47,463
Other assets (30,000) (220,025)
Increase (decrease) in investments - 7,777
---------------------------------------------------------------------
Cash used in investing activities (2,070,166) (2,266,881)
---------------------------------------------------------------------

Net increase in cash 1,836,437 257,258
Cash, beginning of period 257,258 -
---------------------------------------------------------------------
Cash, end of period 2,093,695 257,258
---------------------------------------------------------------------
---------------------------------------------------------------------


Big Rock is a regional producer and marketer of premium quality beers,
headquartered in Calgary, Alberta, Canada. Big Rock's products are
available in draught, bottles and cans. The Company also produces or
distributes cider and cooler products. Big Rock products are marketed in
seven provinces and three territories in Canada.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Big Rock Brewery Income Trust
    Ed McNally
    Chairman
    (403) 720-3239
    or
    Big Rock Brewery Income Trust
    Bob King
    President
    (403) 720-3239
    or
    Big Rock Brewery Income Trust
    Tim Duffin, C.A.
    Vice President Corporate Services, Chief Financial Officer
    (403) 720-3239