Sleeman Breweries Ltd.
TSX : ALE

Sleeman Breweries Ltd.

January 24, 2006 08:30 ET

Sleeman Lowers its Full Year Outlook for Fiscal 2005

GUELPH, ONTARIO--(CCNMatthews - Jan. 24, 2006) - Sleeman Breweries Ltd. (TSX:ALE) today announced that it expects its 2005 earnings per share excluding non-recurring items ("normalized earnings per share") to be between $0.60 and $0.64, which is lower than previously announced guidance of between $0.81 and $0.85 earnings per share.

These expected results are preliminary and have not been reviewed by the Company's external auditors. Please refer to the information set out under "Forward-Looking Statements" concerning the material factors and assumptions upon which such expectations are based.

The principle reason for the reduced outlook was competitive pricing, which increased in key markets through most of the fourth quarter.

"The industry experienced compressed margins during the quarter, most notably in the province of Quebec. On a positive note, Sleeman market share and volumes remained consistent with prior year levels in the face of this pricing environment," said John Sleeman, Chairman and Chief Executive Officer. "We will look for additional cost reductions as we address the pricing pressures characterizing the beer industry throughout Canada. In 2006 the Company will take all necessary steps to reduce controllable per hectoliter costs, specifically production, distribution and selling, general and administrative costs. The long term goal for Sleeman is unchanged; to create shareholder value. We will continue to focus on the premium beer category where we will introduce new products and new sales and marketing programs. At the same time we recognize that the value category is growing, so we will be more competitive in this area. Sleeman remains a profitable company that will take meaningful action to address current market challenges," added Mr. Sleeman.

The Company said the pricing environment will likely continue to impact earnings for the first part of 2006. As the company realizes the benefits from its operational and cost reduction programs, it expects to deliver earnings to which shareholders are more accustomed.

Additional information will be available with the fourth-quarter/full year 2005 earnings announcement and conference call scheduled for 11:00 a.m. on March 2, 2006.

Sleeman Breweries Ltd. is the leading brewer and distributor of premium beer in Canada and the third largest brewing company nation-wide. The Company has supplemented its core Sleeman brands, which are available in every province, with a family of exceptional regional brands. These include Okanagan Spring and Shaftebury in British Columbia and Alberta, Upper Canada in Ontario, Unibroue and Seigneuriale in Quebec and Maritime Beer in Atlantic Canada. Sleeman entered the rapidly growing value price category in 1999 by acquiring the Stroh portfolio of brands in Canada. The company markets and/or distributes world-class imported products such as Guinness, Grolsch, Samuel Adams, Scottish & Newcastle (including Bulmers Strongbow English Cider), Sapporo, Sol and Pilsner Urquell, and provides contract production for Japan's Sapporo Breweries' products. The Company's products are also available in selected international markets. Please visit our website at www.sleeman.ca.

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. These forward-looking statements include the statements concerning expected 2005 normalized earnings per share and 2006 cost and earnings expectations. These forward-looking statements are not guarantees. Although the Company believes that these forward-looking statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. The statements concerning expected 2005 normalized earnings per share and 2006 cost and earnings expectations are based on the following material factors or assumptions: continued price discounting by major competitors, no significant changes in consumer preferences, continued increasing competition from current and new competitors, the continuation of Company's current relationship with its employees including successful labour negotiations of collective bargaining agreements, no significant changes to the regulatory environment in which the Company operates, continuing performance of third party service providers, the continuing ability of the Company to attract and retain key executives and no significant supply and quality control issues with vendors. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including in the Risks and Uncertainties section of the management's discussion and analysis included in the Company's 2004 Annual Report. Potential investors and other readers are urged to consider these factors carefully in evaluating these forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements or material factors or assumptions to reflect new information, future events or otherwise. The Company has included in this news release a non-GAAP earnings measure. Normalized earnings per share does not have a standardized meaning prescribed by GAAP and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should it be construed as an alternative to other financial measures determined in accordance with GAAP. The Company uses this earnings measure because it believes it provides useful information to both management and investors with respect to the operating and financial performance of the Company.

Contact Information

  • Sleeman Breweries Ltd.
    John Sleeman - Investor/Media Relations
    Chairman & CEO
    (519) 822-1834
    or
    Sleeman Breweries Ltd.
    Murray Mateyk - Investor/Media Relations
    CFO
    (519) 826-5437
    sleemanir@sleeman.ca
    www.sleeman.ca