SOURCE: BRICK BREWING CO. LIMITED

Brick Brewing Co. Limited

April 07, 2016 06:00 ET

Brick Brewing Reports Record EBITDA for Fiscal 2016

KITCHENER, ON--(Marketwired - April 07, 2016) -

Fiscal 2016 Highlights: 

  • Net Revenues for the full year increased to $37.6 million, compared to $36.3 million for fiscal 2015.
  • Fiscal 2016 gross margin improved to 29.0% (excluding one-time costs) vs. 28.1% prior year.
  • SM&A expenses decreased to $7.4 million, down from $7.6 million the prior year.
  • Fiscal 2016 EBITDA* increased to $6.0 million (excluding one-time costs) compared to EBITDA* reported for fiscal 2015 of $5.4 million.
  • The Board of Directors re-affirmed the quarterly dividend, $0.012/share, payable May 24, 2016 to shareholders of record as of May 10, 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 year ended January 31, 2016. Brick posted record annual EBITDA of $6.0 million (excluding $0.4 million of one-time costs) on net revenue of $37.6 million. In the fourth quarter, Brick achieved EBITDA of $1.6 million on net revenue of $9.0 million.

George Croft, President and Chief Executive Officer remarked, "Quite simply, we are thrilled with the results for F2016. We've been able to grow revenues, expand margins, keep cost under control, all to deliver record EBITDA in what has clearly been a tumultuous year in the industry. Equally impressive, the team delivered these results while flawlessly executing the Kitchener brewhouse expansion project, finishing on budget, and two months ahead of schedule. The new brewhouse, the most efficient in North America from a utility and material utilization perspective, will pay dividends for years to come, while we continue to grow our business right here at home in Ontario."

Brick's premium craft beer brand, Waterloo, posted full year volume growth of 31%. Mr. Croft remarked, "This was another great year for our Waterloo Craft Brewing division. We saw strength in our core portfolio -- Dark, IPA, Pilsner, Amber and Radler -- while also delighting consumers with our compelling seasonal offerings. With improved access for small brewers in both grocery and The Beer Store, we believe the year ahead will show continued growth for our Waterloo craft brands." In the Seagram brand, volume was down 18% for the year, driven by LCBO delists and malt cooler category declines at The Beer Store. Seagram cider continues as a standout, growing over 40% in the year. As well, the packaging re-design on Seagram Wildberry vodka coolers has been successful, leading to improving results in recent months. Laker volume was down 4% vs prior year, as increased competitive pricing pressure from the large international brewers eroded volumes across the category. "Our brewhouse investment was very timely," added Croft. "The savings we're realizing -- on materials, energy and labour productivity -- all of these allow us to respond to the competitive pricing pressures we see in the marketplace."

Brick's board of directors has also re-affirmed the quarterly dividend, at $0.012/share. The dividend is an eligible dividend and is payable May 24, 2016 to shareholders of record as of May 10, 2016. "When we launched the dividend in December 2015, it was with the intention to begin a practice of continuously returning cash to our shareholders. We're pleased to continue on this path, with the May 2016 dividend," noted Sean Byrne, Brick's Chief Financial Officer.

"Looking ahead, we're excited to continue this trajectory of growth into fiscal 2017," added Croft. "Our commercial launch of LandShark Lager and Margaritaville coolers will be hitting shelves this month, the roll out of beer into grocery is gaining momentum, and we're beginning to see the positive impact of changes in The Beer Store channel. With the diversity of our business model, the efficiency of our operations, and the strength of our brands, we think F2017 will be another great year 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, 2016.

   
Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*  
       
    Fiscal year ended  
(in thousands of dollars)   January 31, 2016     January 31, 2015  
                 
Net income   $ 1,594     $ 1,395  
                 
Add (deduct):                
  Income tax expense     658       628  
  Depreciation and amortization     2,983       3,147  
  Gain on disposal of property, plant and equipment     (206 )     (436 )
  Share-based payments     125       122  
  Finance costs     479       535  
Subtotal     4,039       3,996  
                 
EBITDA*     5,633       5,391  
                 
   
STATEMENTS OF COMPREHENSIVE INCOME  
Years ended January 31, 2016 and 2015  
       
    January 31, 2016     January 31, 2015  
                 
Revenue   $ 37,609,568     $ 36,332,507  
Cost of sales     27,075,078       26,135,860  
Gross profit     10,534,490       10,196,647  
                 
Selling, marketing and administration expenses     7,367,411       7,563,543  
Other expenses     641,474       511,719  
Finance costs     478,945       535,110  
Gain on disposal of property, plant and equipment     (205,912 )     (436,365 )
Income before tax     2,252,572       2,022,640  
                 
Income tax expense     658,392       627,571  
Net income and comprehensive income for the year   $ 1,594,180     $ 1,395,069  
                 
                 
Basic earnings per share   $ 0.05     $ 0.04  
Diluted earnings per share   $ 0.05     $ 0.04  
                 
   
STATEMENTS OF FINANCIAL POSITION  
As at January 31, 2016 and 2015  
    January 31, 2016     January 31, 2015  
                 
ASSETS                
  Non-current assets                
    Property, plant and equipment   $ 21,986,070     $ 15,582,051  
    Intangible assets     15,375,392       15,114,247  
    Deferred income tax assets     1,262,769       1,921,161  
    Construction deposit     -       1,478,220  
          38,624,231       34,095,679  
  Current assets                
    Cash     393,645       594,976  
    Accounts receivable     6,176,421       6,492,461  
    Inventories     3,291,529       3,400,821  
    Prepaid expenses     354,650       350,154  
      10,216,245       10,838,412  
TOTAL ASSETS     48,840,476     $ 44,934,091  
                 
LIABILITIES AND EQUITY                
  Equity                
    Share capital     39,526,573       39,413,636  
    Share-based payments reserves     932,201       1,075,554  
    Deficit     (4,933,195 )     (6,107,475 )
  TOTAL EQUITY     35,525,579       34,381,715  
                     
  Non-current liabilities                
    Provisions     388,548       307,235  
    Obligation under finance lease     4,523,152       1,266,996  
    Long-term debt     1,548,584       2,642,676  
          6,460,284       4,216,907  
                   
  Current liabilities                
    Accounts payable and accrued liabilities     4,908,722       4,665,784  
    Current portion of obligation under finance lease     713,699       46,925  
    Current portion of long-term debt     1,232,192       1,622,760  
      6,854,613       6,335,469  
TOTAL LIABILITIES     13,314,897       10,552,376  
                 
COMMITMENTS                
                 
TOTAL LIABILITIES AND EQUITY   $ 48,840,476     $ 44,934,091  
                 
                 
STATEMENTS OF CASH FLOWS  
Years ended January 31, 2016 and 2015  
             
    January 31, 2016     January 31, 2015  
             
Operating activities                
  Net income   $ 1,594,180     $ 1,395,069  
  Adjustments for:                
    Income tax expense     658,392       627,571  
    Finance costs     478,945       535,110  
    Depreciation and amortization of property, plant and equipment and intangibles     2,983,271       3,146,717  
    Gain on disposal of property, plant and equipment     (205,912 )     (436,365 )
    Share-based payments     125,257       121,521  
    Change in non-cash working capital related to operations     689,069       (969,392 )
  Less:                
    Interest paid     (441,196 )     (460,496 )
Cash provided by operating activities     5,882,006       3,959,735  
                 
Investing activities                
  Purchase of property, plant and equipment     (2,806,182 )     (1,968,373 )
  Construction deposit paid     (936,595 )     (1,478,220 )
  Proceeds from sale of property, plant and equipment, net     331,490       3,370,397  
  Purchase of intangible assets     (281,545 )     (379,992 )
Cash used in investing activities     (3,692,832 )     (456,188 )
                 
Financing activities                
  Decrease in bank indebtedness     -       (1,694,178 )
  Repayment of long-term debt     (1,507,957 )     (1,566,293 )
  Repayment of obligation under finance lease     (306,975 )     -  
  Dividends paid     (419,900 )     -  
  Issuance of shares, net of fees     21,520       26,900  
  Shares repurchased and cancelled, including fees     (384,602 )     -  
  Proceeds from stock option exercise     207,409       325,000  
Cash used in financing activities     (2,390,505 )     (2,908,571 )
                 
Net increase/(decrease) in cash     (201,331 )     594,976  
                 
Cash, beginning of year     594,976       -  
                 
Cash, end of year   $ 393,645     $ 594,976  
                 
Non-cash investing and financing activities:                
                 
  Acquisition of assets under finance lease   $ 4,169,156     $ 1,313,921  
                 

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the year ended January 31, 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 x132
    E-mail: info@brickbeer.com