Big Rock Brewery Income Trust
TSX : BR.UN

Big Rock Brewery Income Trust
BIG ROCK BREWERY LTD.

BIG ROCK BREWERY LTD.

March 28, 2008 08:00 ET

Big Rock Brewery Income Trust Announces 2007 Results

CALGARY, ALBERTA--(Marketwire - March 28, 2008) - Big Rock Brewery Income Trust (the "Trust") (TSX:BR.UN) is pleased to report to Unitholders its consolidated financial results for the three months and year ended December 31st, 2007. These results reflect the consolidated operations of the Trust, Big Rock Brewery Operations Corp. and Big Rock Brewery Limited Partnership.

Financial Highlights for the year ended December 31, 2007 are as follows:

Net income for the year ending December 31, 2007 was $5,468,026 compared to $8,380,065 for the year ended December 31, 2006.

Net income per unit decreased to $0.91 for the year ended December 31, 2007 compared to $1.39 last year.

Distributable cash per unit decreased to $1.03 for the year ended December 31, 2007 compared to $1.54 last year (after providing for productive capacity maintenance).

Cash distributions declared to Unitholders for the year ended December 31, 2007 were $9,001,035 or $1.50 per unit (145% of distributable cash) up from $7,947,575 or $1.32 per unit (86% of distributable cash) in 2006.

During the year ended December 31, 2007, cash distributed exceeded distributable cash primarily due to: current tax expense of $4,055,960 incurred in the year due to the internal Reorganization (the "Reorganization"); decreases in sales in 2007; and one time expenses relating to the Reorganization.

For the year ended December 31, 2007, sales revenue decreased $2,249,803 (6%) to $36,450,872 from $38,700,675 in 2006. The reduction in sales revenue resulted from a planned reduction in the production and sale of value priced beers.

Big Rock has $798,382 in cash and cash equivalents at year-end (December 31, 2006 $4,336,830) and no drawings on its operating loan facility.

On November 15, 2006 the Toronto Stock Exchange approved a Normal Course Issuer Bid whereby the Trust may repurchase up to 2% of the outstanding trust units in any 30 day period to a maximum of 5% of the issued and outstanding trust units during any 12 month period. During 2007, the Trust expended $160,066 to repurchase and cancel 11,404 units at an average price of $14.04/unit (2006 - 34,600 units at an average price of $13.58 per unit).

Financial Highlights for the three months ended December 31, 2007 are as follows:

Net income for the fourth quarter was $1,440,081, down from the same quarter in 2006 ($1,883,998). Net revenues were $8,294,790 (2006 - $8,603,228) for the three month period ended December 31, 2007. The decline in net revenues is primarily due to reduced value product sales. Cost of goods sold were $3,294,695, (2006 - $2,558,700) for the three month period ended December 31, 2007. The increase in cost of goods sold is primarily due to continued cost increases in materials, labour and overhead. In addition, material rebates received for the fiscal year 2006 were allocated to the fourth quarter, for a net reduction in 2006 cost of goods sold of $394,700. Selling expenses were $2,651,689 ($2,240,567 in 2006) and included increased promotional materials, sponsorships and retail spending, as well as a write-down of promotional inventory of $148,272. Provisions for current and future income taxes were booked resulting in a net recovery of $721,992 for the quarter.



Selected financial information follows:

Consolidated Balance Sheets
Big Rock Brewery Income Trust
As at December 31
2007 2006
$ $
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ASSETS
Current
Cash and cash equivalents 798,382 4,336,830
Accounts receivable 1,641,777 3,233,671
Inventories 2,910,027 3,710,427
Prepaid expenses and other 248,103 273,100
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5,598,289 11,554,028

Property, plant and equipment 30,036,548 30,171,939
Deferred charges and other assets 226,307 444,762
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Total assets 35,861,144 42,170,729
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LIABILITIES AND UNITHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 1,476,041 2,819,987
Income taxes payable 3,255,217 896,004
Distributions payable 780,353 660,692
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5,511,611 4,376,683
Future income taxes 3,201,820 7,426,762
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8,713,431 11,803,445
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Unitholders' equity

Trust unitholders' capital 18,317,483 18,282,507
Contributed surplus 746,508 345,948
Undistributed income 8,083,722 11,738,829
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27,147,713 30,367,284
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35,861,144 42,170,729
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Consolidated Statements of Operations & Undistributed Income
Big Rock Brewery Income Trust
Year ended December 31 Three months ended Twelve months ended
2007 2006 2007 2006
$ $ $ $
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Revenue

Net Sales 8,294,790 8,603,228 36,450,872 38,700,675

Cost of sales 3,294,695 2,558,700 14,191,579 13,773,219
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Gross profit 5,000,095 6,044,528 22,259,293 24,927,456
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Expenses

Selling 2,651,689 2,240,567 9,909,381 10,146,950

General and administrative 1,114,291 1,074,271 4,936,000 3,883,020

Amortization 516,026 612,113 2,114,868 2,152,826
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4,282,006 3,926,951 16,960,249 16,182,796
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Income before income taxes 718,089 2,117,577 5,299,044 8,744,660

Income tax expense (recovery) (721,992) 233,579 (168,982) 364,595
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Net income and comprehensive
income for the year 1,440,081 1,883,998 5,468,026 8,380,065

Undistributed income,
beginning of year 8,984,760 12,208,510 11,738,829 11,670,413

Cash distributions declared (2,341,119) (1,989,605) (9,001,035) (7,947,575)

Excess of consideration paid
over the carrying value
of Trust Units repurchased - (364,074) (122,098) (364,074)
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Undistributed income, end of
year 8,083,722 11,738,829 8,083,722 11,738,829
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Net income per unit

Basic 0.24 0.38 0.91 1.39

Diluted 0.23 0.29 0.87 1.38
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Consolidated Statements of Cash Flows
Big Rock Brewery Income Trust
Year ended December 31
Three months ended Twelve months ended
2007 2006 2007 2006
$ $ $ $
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OPERATING ACTIVITIES
Net income for the year $1,440,081 $1,883,998 $5,468,026 $8,380,065
Items not affecting cash
Amortization 516,026 612,113 2,114,868 2,152,826
Unit based compensation (140,365) 22,521 402,600 76,000
Future income tax recovery (4,172,774) 142,670 (4,224,942) (633,405)
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(2,357,032) 2,661,302 3,760,552 9,975,486
Net change in non-cash
working capital 3,437,326 (1,087,826) 3,432,558 310,338
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Cash provided by operating
activities 1,080,294 1,573,476 7,193,110 10,285,824
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FINANCING ACTIVITIES
Distribution payments (2,341,119) (1,992,630) (8,881,374) (7,946,639)

Trust Unit repurchase - (470,000) (160,066) (470,000)

Cash received on exercise of
options - 128,311 70,904 498,687
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Cash used in financing
activities (2,341,119) (2,334,319) (8,970,536) (7,917,952)
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INVESTING ACTIVITIES
Purchase of property, plant
and equipment (462,990) (1,045,230) (1,979,477) (3,709,519)
Deferred charges and other
assets, net 201,875 (5,000) 218,455 (43,988)
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Cash used in investing
activities (261,115) (1,050,230) (1,761,022) (3,753,507)
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Net decrease in cash (1,521,940) (1,811,073) (3,538,448) (1,385,635)
Cash and cash equivalents,
beginning of year 2,320,322 6,147,903 4,336,830 5,722,465
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Cash and cash equivalents,
end of year 798,382 4,336,830 798,382 4,336,830
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Big Rock is a regional producer, marketer, and distributor of bottles, cans, and kegs of premium quality specialty beers, also known as craft beers, with a brewery located in Calgary, Alberta. Big Rock has sales and distribution facilities at its brewery in Calgary, Alberta as well as in Edmonton, Alberta and has sales representatives resident in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. Big Rock products are available in Newfoundland, New Brunswick, and Nova Scotia through third party agents. Big Rock also exports its products to Korea and to Canadian Embassies throughout the world.

Contact Information

  • Big Rock Brewery Income Trust
    Ed McNally
    Chairman, Interim President and CEO
    (403) 720-3239 (FAX)
    or
    Big Rock Brewery Income Trust
    Colleen McLeod, CMA
    Chief Financial Officer
    (403) 720-3239 (FAX)