SOURCE: BRICK BREWING CO. LIMITED

Brick Brewing Co. Limited

June 04, 2015 06:00 ET

Brick Brewing Reports First Quarter F2016 EBITDA of $0.9M

KITCHENER, ON--(Marketwired - June 04, 2015) -

  • Net revenue increased to $7.7 million, from $7.5 million in the prior year
  • Gross margin improved to 27.1% from 21.7%
  • Selling, Marketing and Administration ("SM&A") expenses increased nominally to $1.8 million from $1.7 million
  • EBITDA improved to $0.9 million in the quarter, vs. $0.7 million

Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), the largest Canadian-owned brewery in Ontario, today released financial results for the first quarter ended April 26, 2015. Brick reported first quarter EBITDA of $0.9 million on net revenue of $7.7 million.

"Our owner brand volume was flat in the first quarter, against a backdrop of approximately 2% volume decline for the overall category," noted Brick President and Chief Executive Officer George Croft. "Despite the impact of a long cold winter, Waterloo volume growth vs prior year was over 11% while Laker volume grew over 3%, both strong results in light of the category headwinds. Seagram volume was down approximately 27%, the result of fewer brand listings at LCBO and timing of new product launches set for Q2 in F16 vs Q1 in the prior year. We have recently launched attractive new flavors in Seagram malt based coolers, and as we move into summer we are looking for improved performance in Seagram coolers and cider."

Sound cost control, improved product mix and pricing all contributed to improvement in margins and EBITDA in the quarter. Croft added, "The business is performing very well, and we are seeing great execution against our plan. As we head into the key summer months, we believe we are well positioned for continued strong results. Our new product introductions are resonating with consumers, Kitchener expansion is on track, and the coming changes to the beer channel in Ontario, including the introduction of beer into grocery, all seem to be clear positives for Brick Brewing."

The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2015.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*

    
    Quarter ended  
(in thousands of dollars)   April 26, 2015   April 27, 2014  
   
Net income $ 31 $ (207 )
   
Add (deduct):          
 Income tax expense (recovery)   18   (76 )
 Depreciation and amortization   683   765  
 Loss on disposal of property, plant and equipment   -   7  
 Share-based payments   30   49  
 Finance costs   112   120  
Subtotal   843   865  
   
EBITDA*   874   658  
      
      
STATEMENTS OF COMPREHENSIVE INCOME            
For the quarters ended April 26, 2015 and April 27, 2014            
(Not audited or reviewed by the Company's external auditor)            
   
   
     Quarter ended   
     April 26, 2015    April 27, 2014  
   
   
Revenue  $ 7,706,933  $ 7,537,407  
Cost of sales    5,615,177    5,897,603  
Gross profit    2,091,756    1,639,804  
   
Selling, marketing and administration expenses    1,774,445    1,698,461  
Other expenses    157,121    96,789  
Finance costs    111,602    120,443  
Loss on disposal of property, plant and equipment    -    7,345  
Income (loss) before tax    48,588    (283,234 )
   
Income tax expense (recovery)    17,810    (76,445 )
Net income (loss) and comprehensive income (loss) for the period  $ 30,778  $ (206,789 )
   
   
   
Basic earnings (loss) per share  $ -  $ (0.01 )
Diluted earnings (loss) per share  $ -  $ (0.01 )
        
        
STATEMENTS OF FINANCIAL POSITION             
As at April 26, 2015 and January 31, 2015             
(Not audited or reviewed by the Company's external auditor)             
   
   
     April 26, 2015     January 31, 2015  
ASSETS             
 Non-current assets             
  Property, plant and equipment  $ 17,896,184   $ 15,582,051  
  Intangible assets    15,386,974     15,114,247  
  Deferred income tax assets    1,903,351     1,921,161  
  Construction deposit    2,098,403     1,478,220  
     37,284,912     34,095,679  
 Current assets             
  Cash    368,172     594,976  
  Accounts receivable    6,128,661     6,492,461  
  Inventories    4,844,629     3,400,821  
  Prepaid expenses    489,236     350,154  
     11,830,698     10,838,412  
   
TOTAL ASSETS    49,115,610   $ 44,934,091  
   
LIABILITIES AND EQUITY             
 Equity             
  Share capital    39,400,380     39,413,636  
  Share-based payments reserves    1,105,080     1,075,554  
  Deficit    (6,076,697 )   (6,107,475 )
TOTAL EQUITY    34,428,763     34,381,715  
   
 Non-current liabilities             
  Provisions    311,773     307,235  
  Obligation under finance lease    3,495,553     1,266,996  
  Long-term debt    2,389,312     2,642,676  
     6,196,638     4,216,907  
   
 Current liabilities             
  Accounts payable and accrued liabilities    6,578,547     4,665,784  
  Current portion of obligation under finance lease    257,424     46,925  
  Current portion of long-term debt    1,654,238     1,622,760  
     8,490,209     6,335,469  
   
TOTAL LIABILITIES    14,686,847     10,552,376  
COMMITMENTS             
   
TOTAL LIABILITIES AND EQUITY  $ 49,115,610   $ 44,934,091  
         
         
STATEMENTS OF CASH FLOWS             
For the quarters ended April 26, 2015 and April 27, 2014             
(Not audited or reviewed by the Company's external auditor)             
   
   
   
     Quarter ended  
   
     April 26, 2015     April 27, 2014  
   
Operating activities             
 Net income (loss)  $ 30,778   $ (206,789 )
 Adjustments for:             
  Income tax expense (recovery)    17,810     (76,445 )
  Finance costs    111,602     120,443  
  Depreciation and amortization of property, plant and equipment and intangibles    682,684     764,527  
  Loss on disposal of property, plant and equipment    -     7,345  
  Share-based payments    29,526     49,324  
  Change in non-cash working capital related to operations    681,674     (1,539,945 )
 Less:             
  Interest paid    (93,847 )   (94,047 )
Cash provided by (used in) operating activities    1,460,225     (975,587 )
   
Investing activities             
 Purchase of property, plant and equipment    (552,663 )   (657,688 )
 Construction deposit paid    (620,183 )   -  
 Purchase of intangible assets    (277,827 )   (145,789 )
Cash used in investing activities    (1,450,671 )   (803,477 )
   
Financing activities             
 Increase in bank indebtedness    -     1,983,675  
 Repayment of long-term debt    (223,102 )   (211,596 )
 Issuance of shares, net of fees    (13,256 )   6,985  
Cash provided by (used in) financing activities    (236,358 )   1,779,064  
   
Net increase/(decrease) in cash    (226,804 )   -  
   
Cash, beginning of period    594,976     -  
   
Cash, end of period  $ 368,172   $ -  
         
         

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended April 26, 2015 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. This and additional information relating to the Company, including its Annual Information Form, is or will be available on the Company's website and on SEDAR at www.sedar.com.

About Brick Brewing

Brick is the largest Canadian-owned brewery in Ontario. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under British Retail Consortium (BRC) Global Standards for Food Safety, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Brick Brewing Co. 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 Waterloo brand premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft. In March 2011, Brick purchased the Canadian rights to the Seagram Coolers and now produces, sells, markets and distributes Seagram Coolers across Canada. 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 Corporation 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 included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Corporation does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.

* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization, gain on disposal of property, plant, and equipment, and share based payments. 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.

Contact Information

  • For further information:
    Sean Byrne
    Chief Financial Officer
    (519) 742-2732 Ext.132
    E-mail: info@brickbeer.com