SOURCE: BRICK BREWING CO. LIMITED

Brick Brewing Co. Limited

April 13, 2017 06:30 ET

Brick Brewing Reports Record Full-year EBITDA of $8.8M

KITCHENER, ON--(Marketwired - April 13, 2017) -

Fourth Quarter Highlights:

  • Net Revenue for the quarter increased to $10.5 million compared to $9.0 million in the fourth quarter of fiscal 2016.
  • Gross profit margin for the quarter was 32.2%, an increase from 31.1% in prior year.
  • Selling, Marketing and Administration ("SM&A") of $2.3 million, compared to prior year at $1.7 million.
  • EBITDA* for the quarter was $1.8 million, compared to EBITDA* in the fourth quarter of fiscal 2016 of $1.6 million.
  • The Board of Directors re-affirmed the quarterly dividend, at $0.016/share, payable May 23, 2017 to shareholders of record as of May 9, 2017. The dividend is classified as an eligible dividend.

Full Year Highlights:

  • Net revenue increased to $45.2 million, from $37.6 million in the prior year.
  • Gross margin improved to 34.8% from 28.0% prior year.
  • Selling, Marketing and Administration ("SM&A") expenses increased to $9.2 million from $7.4 million, driven by increased investment in core brands.
  • EBITDA* improved to $8.8 million for the full year, up from $5.6 million in the prior year ($6.0 million excluding one-time costs).

Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), Ontario's largest Canadian-owned brewery, today released results for the fourth quarter and full year ended January 31, 2017. Brick posted record annual EBITDA of $8.8 million on net revenue of $45.2 million. EBITDA for the fourth quarter was $1.8 million.

"This past year was clearly an inflection point for Brick Brewing," noted George Croft, President and Chief Executive Officer. "The step up in performance we've been able to deliver for our shareholders has been significant. We have been able to drive double digit growth in volume, expand margins, while increasing our investment in both our brands and our facility. To be able to achieve these goals and still report step change growth in EBITDA is a testament to the quality of the team here at Brick Brewing."

Waterloo premium craft volume increased 15% in fiscal 2017, while Laker also posted gains of 15%. The initial year for LandShark Lager was a tremendous success, achieving volume in excess of 15,000 hectoliters. In addition, Brick reported 20% growth in contract manufacturing revenue for the year, the result of growth with both current and new customers.

Croft added, "While we're enormously pleased with the year we've just reported, there is now the same degree of urgency and commitment to continue to deliver in the year ahead. We have set out a plan that we fully expect will allow us to achieve another year of double-digit growth. Our Kitchener expansion project is well underway, and on track for completion this summer with expected full year recurring savings of $0.6 million. We have introduced a number of new products and packages, including Waterloo Citrus Radler and Margaritaville Classic Margarita, products that we are confident will resonate with our consumers. We are also excited about the upcoming packaging redesign on the core Waterloo brand, and believe it will be a key element in realizing our growth targets in the year ahead. All of these contribute to our confidence in our ability to deliver value and growth to our shareholders for the long term."

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, 2017.

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, 2017 January 31, 2016
     
Net income $3,997 $1,594
       
Add (deduct):      
 Income tax expense  1,345  658
 Depreciation and amortization  2,876  2,983
 Gain on disposal of property, plant and equipment  -  (206)
 Share-based payments  147  125
 Finance costs  478  479
Subtotal  4,846  4,039
       
EBITDA*  8,843  5,633
       
 
STATEMENTS OF COMPREHENSIVE INCOME
Years ended January 31, 2017 and 2016
       
    
   January 31, 2017  January 31, 2016
       
Revenue  $45,176,380  $37,609,568
Cost of sales   29,464,917   27,075,078
Gross profit   15,711,463   10,534,490
       
Selling, marketing and administration expenses   9,248,039   7,367,411
Other expenses   643,273   641,474
Finance costs   478,181   478,945
Gain on disposal of property, plant and equipment   -   (205,912)
Income before tax   5,341,970   2,252,572
       
Income tax expense   1,345,158   658,392
Net income and comprehensive income for the year  $3,996,812  $1,594,180
         
         
Basic earnings per share  $0.11  $0.05
Diluted earnings per share  $0.11  $0.05
       
     
STATEMENTS OF FINANCIAL POSITION      
As at January 31, 2017 and 2016    
       
   January 31, 2017  January 31, 2016
ASSETS      
 Non-current assets      
  Property, plant and equipment  $21,709,425  $21,986,070
  Intangible assets   15,499,186   15,375,392
  Construction deposits   2,462,328   -
  Deferred income tax assets   -   1,262,769
    39,670,939   38,624,231
 Current assets        
  Cash   2,831,959   393,645
  Accounts receivable   7,035,714   6,176,421
  Inventories   5,619,329   3,291,529
  Prepaid expenses   593,180   354,650
    16,080,182   10,216,245
TOTAL ASSETS  $55,751,121  $48,840,476
         
LIABILITIES AND EQUITY        
 Equity        
  Share capital   39,651,096   39,526,573
  Share-based payments reserves   943,565   932,201
  Deficit   (2,758,560)   (4,933,195)
 TOTAL EQUITY   37,836,101   35,525,579
         
 Non-current liabilities        
  Provisions   411,599   388,548
  Obligation under finance lease   3,781,855   4,523,152
  Long-term debt   2,498,580   1,548,584
  Deferred income tax liabilities   82,389   -
    6,774,423   6,460,284
 Current liabilities        
  Accounts payable and accrued liabilities   9,655,405   4,908,722
  Current portion of obligation under finance lease   741,297   713,699
  Current portion of long-term debt   743,895   1,232,192
    11,140,597   6,854,613
TOTAL LIABILITIES   17,915,020   13,314,897
COMMITMENTS        
         
TOTAL LIABILITIES AND EQUITY  $55,751,121  $48,840,476
     
       
STATEMENTS OF CASH FLOWS      
Years ended January 31, 2017 and 2016
     
    
   January 31, 2017  January 31, 2016
       
Operating activities      
  Net income  $3,996,812   $1,594,180  
  Adjustments for:           
   Income tax expense   1,345,158    658,392  
   Finance costs   478,181    478,945  
   Depreciation and amortization of property, plant and equipment and intangibles   2,875,958    2,983,271  
   Gain on disposal of property, plant and equipment   -    (205,912 )
   Share-based payments   147,292    125,257  
   Change in non-cash working capital related to operations   1,320,659    689,069  
  Less:           
   Interest paid   (395,851 )  (441,196 )
Cash provided by operating activities   9,768,209    5,882,006  
            
Investing activities           
  Purchase of property, plant and equipment   (2,578,913 )  (2,806,182 )
  Construction deposit paid   (2,462,328 )  (936,595 )
  Proceeds from sale of property, plant and equipment, net   -    331,490  
  Purchase of intangible assets   (144,194 )  (281,545 )
Cash used in investing activities   (5,185,435 )  (3,692,832 )
            
Financing activities           
  Issuance of long-term debt   2,000,000    -  
  Repayment of long-term debt   (1,597,179 )  (1,507,957 )
  Repayment of obligation under finance lease   (713,699 )  (306,975 )
  Dividends paid   (1,822,177 )  (419,900 )
  Issuance of shares, net of fees   45,867    21,520  
  Shares repurchased and cancelled, including fees   (266,856 )  (384,602 )
  Proceeds from stock option exercise   209,584    207,409  
Cash used in financing activities   (2,144,460 )  (2,390,505 )
            
Net increase/(decrease) in cash   2,438,314    (201,331 )
            
Cash, beginning of year   393,645    594,976  
Cash, end of year  $2,831,959   $393,645  
            
Non-cash investing and financing activities:           
  Acquisition of assets under finance lease  $-   $4,169,156  

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