SOURCE: BRICK BREWING CO. LIMITED

Brick Brewing Co. Limited

June 02, 2016 06:00 ET

Brick Brewing Reports First Quarter F2017 EBITDA of $1.9M

KITCHENER, ON--(Marketwired - June 02, 2016) -

Highlights:

  • Net revenue increased to $9.5 million, from $7.7 million in the prior year.
  • Gross margin improved to 35.0% from 27.1%.
  • Selling, Marketing and Administration ("SM&A") expenses increased nominally to $1.9 million from $1.8 million.
  • EBITDA* improved to $1.9 million in the quarter, more than double the $0.9 million in prior year.
  • The Board of Directors re-affirmed the quarterly dividend, $0.012/share, payable July 25, 2016 to shareholders of record as of July 11, 2016. The dividend is classified as an eligible dividend.

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 May 1, 2016. Brick reported first quarter EBITDA of $1.9 million on net revenue of $9.5 million.

"Quite simply, the first quarter was a tremendous start to the year," noted George Croft, Brick's President and Chief Executive Officer. "We are now starting to reap the rewards from many of the tough choices and challenging projects we have devoted considerable time and resources to in recent years -- the brewhouse expansion, the increased commercial support for our focus brands, the continued focus on controlling costs, and ensuring our products are well positioned for the changing retail landscape for beer in Ontario. Our first quarter results benefited from all of these."

Brick reported broad based volume growth in its branded business, with Seagram up 16% and Laker up 13% vs prior year, while Waterloo increased over 30%. "This is great brand performance, by any measure," added Croft. "Recent modifications in The Beer Store, enhancing both shelf and display space, are supporting our growth. We also continued to strengthen our business through improvements to our sales execution which has resulted in successful expansion into the grocery channel. Brick Brewing is now listed at all of the currently licensed grocery stores in Ontario. Our improved cost position has given us the flexibility to invest in growth, with both new products and attractive consumer promotions, while still generating margin expansion. As a result, Brick Brewing reported significantly improved gross margin, along with more than doubling underlying EBITDA versus a year ago."

Brick also reported increased revenue in contract manufacturing, up over 50% compared to the prior year. Russell Tabata, Brick's Chief Operating Officer remarked, "Contract manufacturing is a key and meaningful element of our business model. With last year's expansion project complete, the competiveness of our brewery continues to improve. Against this backdrop, we've been successful in expanding our co-pack business with current customers, and in winning new customers."

Brick's board of directors has also re-affirmed the quarterly dividend, at $0.012/share. The dividend was first introduced in December of 2015. The July payment will mark the third consecutive quarter for the dividend.

In closing, Mr. Croft added, "Late in the first quarter we began shipping LandShark Lager and Margaritaville coolers to The Beer Store, and the initial response from consumers has been outstanding. With summer fast approaching, these additions to our lineup should help us to continue the trajectory of growth we have seen to start the year, with the intent to drive total shareholder value."

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, 2016.

 
Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*
     
    Quarter ended
(in thousands of dollars)   May 1, 2016   April 26, 2015
         
Net income   $ 788   $ 31
             
Add (deduct):            
  Income tax expense     338     18
  Depreciation and amortization     667     683
  Share-based payments     27     30
  Finance costs     118     112
Subtotal     1,150     843
             
EBITDA*     1,938     874
             
 
 
STATEMENTS OF COMPREHENSIVE INCOME
For the quarters ended May 1, 2016 and April 26, 2015
(Not audited or reviewed by the Company's external auditor)
         
    Quarter ended
    May 1, 2016   April 26, 2015
             
Revenue   $ 9,519,934   $ 7,706,933
Cost of sales     6,187,732     5,615,177
Gross profit     3,332,202     2,091,756
             
Selling, marketing and administration expenses     1,881,202     1,774,445
Other expenses     206,420     157,121
Finance costs     118,362     111,602
Income before tax     1,126,218     48,587
             
Income tax expense     337,865     17,810
Net income and comprehensive income for the quarter   $ 788,353   $ 30,778
             
Basic earnings per share     0.02     -
Diluted earnings per share     0.02     -
             
 
 
STATEMENTS OF FINANCIAL POSITION
As at May 1, 2016 and January 31, 2016
(Not audited or reviewed by the Company's external auditor)
             
    May 1, 2016     January 31, 2016  
                 
ASSETS                
  Non-current assets                
    Property, plant and equipment   $ 21,940,120     $ 21,986,070  
    Intangible assets     15,436,312       15,375,392  
    Deferred income tax assets     924,904       1,262,769  
      38,301,336       38,624,231  
                 
  Current assets                
    Cash     1,902,470       393,645  
    Accounts receivable     8,604,727       6,176,421  
    Inventories     4,252,256       3,291,529  
    Prepaid expenses     504,302       354,650  
      15,263,755       10,216,245  
TOTAL ASSETS     53,565,091       48,840,476  
                 
LIABILITIES AND EQUITY                
  Equity                
    Share capital     39,537,420       39,526,573  
    Share-based payments reserves     958,960       932,201  
    Deficit     (4,144,842 )     (4,933,195 )
TOTAL EQUITY     36,351,538       35,525,579  
                 
  Non-current liabilities                
    Provisions     394,311       388,548  
    Obligation under finance lease     4,340,456       4,523,152  
    Long-term debt     3,017,135       1,548,584  
      7,751,902       6,460,284  
                 
  Current liabilities                
    Accounts payable and accrued liabilities     7,607,617       4,908,722  
    Current portion of obligation under finance lease     720,501       713,699  
    Current portion of long-term debt     1,133,533       1,232,192  
      9,461,651       6,854,613  
TOTAL LIABILITIES     17,213,553       13,314,897  
                 
COMMITMENTS                
                 
TOTAL LIABILITIES AND EQUITY   $ 53,565,091     $ 48,840,476  
                 
 
 
STATEMENTS OF CASH FLOWS 
For the quarters ended May 1, 2016 and April 26, 2015
(Not audited or reviewed by the Company's external auditor)
       
    Quarter ended  
    May 1, 2016     April 26, 2015  
                 
Operating activities                
  Net income   $ 788,353     $ 30,778  
  Adjustments for:                
    Income tax expense     337,865       17,810  
    Finance costs     118,362       111,602  
    Depreciation and amortization of property, plant and equipment and intangibles     666,768       682,684  
    Gain on disposal of property, plant and equipment     -       -  
    Share-based payments     26,759       29,526  
    Change in non-cash working capital related to operations     (1,048,232 )     681,674  
  Less:                
    Interest paid     104,121       (93,847 )
Cash provided by operating activities     993,996       1,460,227  
                 
Investing activities                
  Purchase of property, plant and equipment     (615,718 )     (552,663 )
  Construction deposit paid     -       (620,183 )
  Proceeds from sale of property, plant and equipment, net     -       -  
  Purchase of intangible assets     (66,020 )     (277,827 )
Cash used in investing activities     (681,738 )     (1,450,673 )
                 
Financing activities                
  Issuance of long-term debt     2,000,000       -  
  Repayment of long-term debt     (638,386 )     (223,102 )
  Repayment of obligation under finance lease     (175,894 )     -  
  Issuance of shares, net of fees     7,968       (13,256 )
  Shares repurchased and cancelled, including fees     (1,055 )     -  
  Proceeds from stock option exercise     3,934       -  
Cash generated (used) by financing activities     1,196,567       (236,358 )
                 
Net increase/(decrease) in cash     1,508,825       (226,804 )
                 
Cash, beginning of the period     393,645       594,976  
                 
Cash, end of the period   $ 1,902,470     $ 368,172  
                 

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended May 1, 2016 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 Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, 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 premium craft beers with the popular Laker brand. In 2011, Brick purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Brick utilizes its leading edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers and ciders. 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

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