Russell Breweries Inc.
TSX VENTURE : RB

Russell Breweries Inc.

November 19, 2008 19:10 ET

CORRECTION FROM SOURCE: Russell Breweries Inc. Reports Positive EBITDA in Q1 2009 Results

Overall Net Sales Increased by 276%, Driven by Acquisition of Fort Garry Brewing Company in Manitoba and 85% Year Over Year Quarterly Increase in Sales in B.C.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 19, 2008) - A correction from source is issued with respect to the news release that was disseminated for Russell Breweries Inc. (TSX VENTURE:RB) today at 4:35 PM ET. In paragraphs 1 and 6, EBITA was changed to EBITDA and in sentence 1 of paragraph 5, 48% was changed to 4.8%. The corrected release follows:

Russell Breweries Inc., a producer of premium craft beer, today reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $32,675 for the three month period ending September 30, 2008. Consolidated results for its first quarter ("Q1 2009") include the operations of Russell Brewing Company Ltd. in British Columbia and Fort Garry Brewing Company in Manitoba from July 1, 2008 to September 30, 2008.

Net sales for Q1 2009 were $1,699,000 which was an increase of $1,247,000 or 276% compared to $452,000 for Q1 2008. This is a result of $863,000 net sales contribution from operations in Manitoba and $836,000 net sales contribution from operations in British Columbia.

Net loss for Q1 2009 decreased by $369,000 to $302,000 or $0.01 loss per share compared to $671,000 or $0.03 loss per share for Q1 2008. Net loss decreased principally as a result of an increase in sales and a decrease in selling, general and administration costs.

Gross margin for Q1 2009 declined by 23% to 55% compared to 78% in Q1 2008 as a result of the impact of lower margin products sold in the Manitoba market and increased materials, freight and amortization of keg costs in British Columbia operations.

Selling, general and administration expense for Q1 2009 decreased by $39,000 or 4.8% to $903,000 compared to $942,000 for Q1 2008. The significant decreases in the operating subsidiary Russell Brewing Company and the holding company were stock based compensation decrease of $281,000 to $nil compared to $281,000 in Q1 2008, consulting fees decrease of $4,000 to $nil compared to $4,000 in Q1 2008, transfer agent and filing fees decrease of $19,000 to $5,000 compared to $24,000 in Q1 2008, which were offset by advertising and promotion expense increase of $38,000 to $309,000 compared to $271,000 in Q1 2008, labor expense increase of $87,000 to $255,000 compared to $168,000 in Q1 2008, automotive increase of $16,000 to $43,000 compared to $27,000 in Q1 2008, professional fees increase of $5,000 to $39,000 compared to $34,000 in Q1 2008, and various other increases across most expense categories, reflecting the larger facilities and business operations compared to Q1 2008.

"We are very pleased that we achieved our goal of turning a positive EBITDA this quarter," says Brian Harris, CEO. "With a commitment to delivering premium products and excellent service, we are pleased with our growth and the progress we are making in reaching our goal of becoming a leading Western Canadian beer producer."

For further details the Company's complete MD&A and financial statements for the three and twelve months ended June 30, 2008 will be available on SEDAR at www.sedar.com and the Company's web site at www.russellbeer.com.

Russell Brewing Company Ltd. produces premium beer in British Columbia. Products include: Russell Cream Ale, Russell Pale Ale, Russell Honey Blonde Ale, Russell Extra Special Lager plus two seasonal brews, Russell Lemon Ale and Russell Porter. Fort Garry Brewing Company Ltd. is Manitoba's largest brewer and distributor of premium quality beers including Fort Garry Dark Ale, Fort Garry Pale Ale, Fort Garry Premium Light, Two Rivers Red and Stone Cold. Russell Brewing Company Ltd. and Fort Garry Brewing Company Ltd. are wholly owned subsidiaries of Russell Breweries Inc. (TSX VENTURE:RB).

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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